Agricultural Prices, Food Consumption and the Health and Productivity of Farmers

Demand and Price Analysis, Farm Management, Food Consumption/Nutrition/Food Safety,

The Selectivity of Fertility and the Determinants of Human Capital Investments: Parametric and Semi-Parametric Estimates

In this paper we assess the importance of heterogeneity and selective fertility in altering estimates and interpretations of the determinants of the human capital of children. We set out a sequential model of human capital investments in children incorporating endogenous fertility and heterogeneity in human capital endowments to illustrate the fertility selection problem and issues of identification. Empirical results based on parametric and semi-parametric estimates of selectivity models applied to data on birthweight and schooling in Malaysia indicate that the hypothesis of no fertility selection is strongly rejected, with mothers having higher birthweight children tending to have substantially lower birth probabilities (negative birth selectivity). As a consequence, the positive association between mother's schooling and birthweight is substantially underestimated and the positive effects of delaying childbearing overestimated when birth selectivity is not taken into account. The schooling results indicate strong rejection of the "efficient schooling" model, in which schooling is allocated efficiently across children, but only when the selectivity of fertility is taken into account.Labor and Human Capital,

Estimating the Intrafamily Incidence of Health: Child Illness and Gender Inequality in Indonesian Households

In this paper, we demonstrate the difficulties of identifying both the own- and cross-effects of health on the allocation of time within a household, and develop and implement a method for estimating the effects of infant morbidity on the differential allocation of time by other family members based on discrete indicators of health and of activity participation commonly available in survey data. Estimates obtained from Indonesian household data indicate that inattention to problems of the measurement and endogeneity of health leads to a substantial underestimate of the effects of variations in child morbidity on the intrahousehold division of labor, and our estimates that take into account the "simultaneity" of health-activity associations indicate that increased levels of infant morbidity significantly exacerbate existing differentials in work-home time allocations across teenage boys and girls in Indonesia.Consumer/Household Economics, Health Economics and Policy,

Human Capital Investment and the Gender Division of Labor

We use a model of human capital investment and activity choice to explain facts describing gender differentials in the levels and returns to human capital investments. These include the higher return to and level of schooling, the small effect of healthiness on wages, and the large effect of healthiness on schooling for females relative to males. The model incorporates gender differences in the level and responsiveness of brawn to nutrition in a Roy-economy setting in which activities reward skill and brawn differentially. Empirical evidence from rural Bangladesh provides support for the model and the importance of the distribution of brawn.brawn, health, schooling, gender

The Determinants of Rice Variety Choice in Indonesia

This paper investigates the determinants of rice seed variety choice in Indonesia with respect to a meta-profit function. Varietal choice is modeled as depending on the profitability of high yielding varieties of seed relative to traditional varieties of seed, the schooling of cultivators and factors associated with yield uncertainty and risk aversion. Careful attention is paid to the stochastic structure of the estimated simultaneous equations switching regimes model. The maximum likehood method applied to Indonesian farm-level data is complicated by endogenous regressors and heteroskedastic errors. Adoption of high yielding varieties was found to be positively associated with its relative profitability, the likelihood of flooding, quality of irrigation conditional on its effect on relative profit, and the availability of credit, and negatively associated with land owned and the likelihood of drought. Schooling was not found to be a significant determinant of variety choice. Sources of interregional differences in cultivator behaviors in Indonesia were calculated as an application of the estimated model. Interregional differences in employment in rice cultivation but not HYV adoption were largely due to differences in wages.Crop Production/Industries,

Spatial Decentralization and Program Evaluation: Theory and an Example from Indonesia

This paper proposes a novel instrumental variable method for program evaluation that only requires a single cross-section of data on the spatial intensity of programs and outcomes. The instruments are derived from a simple theoretical model of government decision-making in which governments are responsive to the attributes of places and their populations, rather than to the attributes of individuals, in making allocation decisions across space, and have a social welfare function that is spatially weakly separable, that is, that the budgeting process is multi-stage with respect to administrative districts and sub-districts. The spatial instrumental variables model is then estimated and tested by GMM with a single cross-section of Indonesian census data. The results offer support to the identification strategy proposed.Spatial Decentralization, Program Evaluation, Instrumental Variables, Indonesia

The Compliance Cost of Itemizing Deductions: Evidence from Individual Tax Returns

The resource cost of operating the income tax system is large, totaling as much as seven to eight percent of revenue raised. One source of this cost is the system of itemized deductions, which can require extensive record keeping and calculation. This paper estimates the resource cost of itemizing deductions. In contrast to previous studies of compliance cost which rely an survey evidence, we infer this evidence from data reported on tax returns which suggest that there exists taxpayers who would save money by itemizing but who choose not to. We find that in 1982 the private cost of itemizing totaled $1.44 billon, or$43 per itemizing taxpayer. The compliance cost dissuaded from itemizing aver 650,000 taxpayers who would have thereby saved taxes, causing an extra tax liability of nearly $200 million. Increasing the standard deduction by$1,000 would save $100 million in resources that would otherwise have been devoted to itemizing.

Spatial Decentralization and Program Evaluation: Theory and an Example from Indonesia

This paper proposes a novel instrumental variable method for program evaluation that only requires a single cross-section of data on the spatial intensity of programs and outcomes. The instruments are derived from a simple theoretical model of government decision-making in which governments are responsive to the attributes of places and their populations, rather than to the attributes of individuals, in making allocation decisions across space, and have a social welfare function that is spatially weakly separable, that is, that the budgeting process is multi-stage with respect to administrative districts and sub-districts. The spatial instrumental variables model is then estimated and tested by GMM with a single cross-section of Indonesian census data. The results offer support to the identification strategy proposed.spatial decentralization, program evaluation, instrumental variables, Indonesia

Microeconometric Models of Rationing, Imperfect Markets, and Non-Negativity Constraints

This paper provides a theoretically consistent approach to estimating demand relationships in which kink points occur either in the interior or on the vertices of the budget set. There are important classes of problems in developing countries which demonstrate such kinked budget sets including binding non-negativity constraints. This paper also extends these methods to the estimation of production structures. As an application a translog cost function for three energy inputs is estimated from cross-sections of individual Indonesian firms.Political Economy,

Re-Re-Reply to “The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence”

The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence,' by David Roodman and Jonathan Morduch (2014) is the most recent of a sequence of papers and postings that seeks to refute the findings of the Pitt and Khandker (1998) article 'The Impact of Group-Based Credit on Poor Households in Bangladesh: Does the Gender of Participants Matter?' that microcredit for women had significant, favorable effects on poverty reduction. This response paper refutes the claims of Roodman and Morduch that were not addressed in the earlier World Bank working paper of Pitt and Khandker (2012). This response paper, like the Pitt and Khandker (2012) paper and others that preceeded it, shows that many of the Roodman and Morduch claims are based on a flawed econometric understanding and a lack of due diligence in formulating and interpreting statistical models