The Nonexistence of Instrumental Variables

The method of instrumental variables (IV) and the generalized method of moments (GMM) has become a central technique in health economics as a method to help to disentangle the complex question of causality. However the application of these techniques require data on a sufficient number of instrumental variables which are both independent and relevant. We argue that in general such instruments cannot exist. This is a reason for the widespread finding of weak instruments.

Is the relationship between prices and exchange rates homogeneous?

Empirical tests of purchasing power parity (PPP) are implicitly based on the conditions of symmetry and proportionality of the price coefficients. We investigate a separate condition, which we term homogeneity. Specifically, while there may be factors that drive a wedge between prices and exchange rates, when these factors are held constant we would expect a change in exchange rates to be associated with a proportional, or homogeneous, change in prices. To test for the existence of homogeneity in prices, we conduct two experiments. First, we apply a time-varying-coefficient procedure to nine euro-area countries as well as the euro area as a whole during the (monthly) sample period, 1999:M1 to 2011:M3. Second we apply the same procedure to the same group of countries, plus Canada, Japan and Mexico, over the longer period, 1957:M4 to 2011:M3. We find that averages of the price coefficients, corrected for specification biases, are uniformly homogeneous in the long run, providing strong support for PPP

Is screening for diabetes among tuberculosis patients feasible at the field level?

Supported by the TB Union/MSF Course on Operational Researc

Specific-Heat Exponent of Random-Field Systems via Ground-State Calculations

Exact ground states of three-dimensional random field Ising magnets (RFIM) with Gaussian distribution of the disorder are calculated using graph-theoretical algorithms. Systems for different strengths h of the random fields and sizes up to N=96^3 are considered. By numerically differentiating the bond-energy with respect to h a specific-heat like quantity is obtained, which does not appear to diverge at the critical point but rather exhibits a cusp. We also consider the effect of a small uniform magnetic field, which allows us to calculate the T=0 susceptibility. From a finite-size scaling analysis, we obtain the critical exponents \nu=1.32(7), \alpha=-0.63(7), \eta=0.50(3) and find that the critical strength of the random field is h_c=2.28(1). We discuss the significance of the result that \alpha appears to be strongly negative.Comment: 9 pages, 9 figures, 1 table, revtex revised version, slightly extende

Maximum gradient embeddings and monotone clustering

Let (X,d_X) be an n-point metric space. We show that there exists a distribution D over non-contractive embeddings into trees f:X-->T such that for every x in X, the expectation with respect to D of the maximum over y in X of the ratio d_T(f(x),f(y)) / d_X(x,y) is at most C (log n)^2, where C is a universal constant. Conversely we show that the above quadratic dependence on log n cannot be improved in general. Such embeddings, which we call maximum gradient embeddings, yield a framework for the design of approximation algorithms for a wide range of clustering problems with monotone costs, including fault-tolerant versions of k-median and facility location.Comment: 25 pages, 2 figures. Final version, minor revision of the previous one. To appear in "Combinatorica

Women and Illegal Activities: Gender Differences and Women's Willingness to Comply Over Time

In recent years the topics of illegal activities such as corruption or tax evasion have attracted a great deal of attention. However, there is still a lack of substantial empirical evidence about the determinants of compliance. The aim of this paper is to investigate empirically whether women are more willing to be compliant than men and whether we observe (among women and in general) differences in attitudes among similar age groups in different time periods (cohort effect) or changing attitudes of the same cohorts over time (age effect) using data from eight Western European countries from the World Values Survey and the European Values Survey that span the period from 1981 to 1999. The results reveal higher willingness to comply among women and an age rather than a cohort effect. Working Paper 06-5

First-principles calculations of the phase stability of TiO2

Published versio