Time variation in the inflation passthrough of energy prices

From Bayesian estimates of a vector autoregression (VAR) which allows for both coefficient drift and stochastic volatility, we obtain the following three results. First, beginning in approximately 1975, the responsiveness of core inflation to changes in energy prices in the United States fell rapidly and remains muted. Second, this decline in the passthrough of energy inflation to core prices has been sustained through a recent period of markedly higher volatility of shocks to energy inflation. Finally, reduced energy inflation passthrough has persisted in the face of monetary policy which quickly became less responsive to energy inflation starting around 1985.

A Note on Adapting Propensity Score Matching and Selection Models to Choice Based Samples

The probability of selection into treatment plays an important role in matching and selection models. However, this probability can often not be consistently estimated, because of choice-based sampling designs with unknown sampling weights. This note establishes that the selection and matching procedures can be implemented using propensity scores fit on choice-based samples with misspecified weights, because the odds ratio of the propensity score fit on the choice-based sample is monotonically related to the odds ratio of the true propensity scores.choice-based sampling, matching models, propensity scores, selection models

Fifty Years of Mincer Earnings Regressions

The Mincer earnings function is the cornerstone of a large literature in empirical economics. This paper discusses the theoretical foundations of the Mincer model and examines the empirical support for it using data from Decennial Censuses and Current Population Surveys. While data from 1940 and 1950 Censuses provide some support for Mincer's model, data from later decades are inconsistent with it. We examine the importance of relaxing functional form assumptions in estimating internal rates of return to schooling and of accounting for taxes, tuition, nonlinearity in schooling, and nonseparability between schooling and work experience. Inferences about trends in rates of return to high school and college obtained from our more general model differ substantially from inferences drawn from estimates based on a Mincer earnings regression. Important differences also arise between cohort-based and cross-sectional estimates of the rate of return to schooling. In the recent period of rapid technological progress, widely used cross-sectional applications of the Mincer model produce dramatically biased estimates of cohort returns to schooling. We also examine the implications of accounting for uncertainty and agent expectation formation. Even when the static framework of Mincer is maintained, accounting for uncertainty substantially affects the return estimates. Considering the sequential resolution of uncertainty over time in a dynamic setting gives rise to option values, which fundamentally changes the analysis of schooling decisions. In the presence of sequential resolution of uncertainty and option values, the internal rate of return - a cornerstone of classical human capital theory - is not a useful guide to policy analysis.

EARNINGS FUNCTIONS AND RATES OF RETURN

The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.

Earnings Functions and Rates of Return

The internal rate of return to schooling is a fundamental economic parameter that is often used to assess whether expenditure on education should be increased or decreased. This paper considers alternative approaches to estimating marginal internal rates of return for different schooling levels. We implement a general nonparametric approach to estimate marginal internal rates of return that take into account tuition costs, income taxes and nonlinearities in the earnings-schooling-experience relationship. The returns obtained by the more general method differ substantially from Mincer returns in levels and in their evolution over time. They indicate relatively larger returns to graduating from high school than from graduating from college, although both have been increasing over time.schooling, marginal internal rate of return, nonparametric estimation

Social learning and information sharing: an evolutionary simulation model of foraging in Norway rats

Social learning is distinguished from innate behaviour and individual learning as a behavioural strategy. We investigate simple mechanisms for social learning in an evolutionary simulation of food-preference copying in Norway rats. These animals learn preferences by interacting with conspecifics, but, unexpectedly, they fail to learn aversions after interacting with a poisoned demonstrator. They also follow each other for food sites. Simulation results show that failure to discriminate between sick and healthy demonstrators may be due to food toxicity in foraging environments. A seemingly complex instance of social information transmission is explained through the action of simple behaviours in an appropriately structured environment

Unexplained Gaps and Oaxaca-Blinder Decompositions

We analyze four methods to measure unexplained gaps in mean outcomes: three decompositions based on the seminal work of Oaxaca (1973) and Blinder (1973) and an approach involving a seemingly naïve regression that includes a group indicator variable. Our analysis yields two principal findings. We show that the coefficient on a group indicator variable from an OLS regression is an attractive approach for obtaining a single measure of the unexplained gap. We also show that a commonly-used pooling decomposition systematically overstates the contribution of observable characteristics to mean outcome differences when compared to OLS regression, therefore understating unexplained differences. We then provide three empirical examples that explore the practical importance of our analytic results.discrimination, decompositions

Relativistic Jets and Long-Duration Gamma-ray Bursts from the Birth of Magnetars

We present time-dependent axisymmetric magnetohydrodynamic simulations of the interaction of a relativistic magnetized wind produced by a proto-magnetar with a surrounding stellar envelope, in the first $\sim 10$ seconds after core collapse. We inject a super-magnetosonic wind with $\dot E = 10^{51}$ ergs s$^{-1}$ into a cavity created by an outgoing supernova shock. A strong toroidal magnetic field builds up in the bubble of plasma and magnetic field that is at first inertially confined by the progenitor star. This drives a jet out along the polar axis of the star, even though the star and the magnetar wind are each spherically symmetric. The jet has the properties needed to produce a long-duration gamma-ray burst (GRB). At $\sim 5$ s after core bounce, the jet has escaped the host star and the Lorentz factor of the material in the jet at large radii $\sim 10^{11}$ cm is similar to that in the magnetar wind near the source. Most of the spindown power of the central magnetar escapes via the relativistic jet. There are fluctuations in the Lorentz factor and energy flux in the jet on $\sim 0.01-0.1$ second timescale. These may contribute to variability in GRB emission (e.g., via internal shocks).Comment: 5 pages, 3 figures, accepted in MNRAS letter, presented at the conference "Astrophysics of Compact Objects", 1-7 July, Huangshan, Chin