Nonparametric estimation when data on derivatives are available

We consider settings where data are available on a nonparametric function and various partial derivatives. Such circumstances arise in practice, for example in the joint estimation of cost and input functions in economics. We show that when derivative data are available, local averages can be replaced in certain dimensions by nonlocal averages, thus reducing the nonparametric dimension of the problem. We derive optimal rates of convergence and conditions under which dimension reduction is achieved. Kernel estimators and their properties are analyzed, although other estimators, such as local polynomial, spline and nonparametric least squares, may also be used. Simulations and an application to the estimation of electricity distribution costs are included.Comment: Published at http://dx.doi.org/10.1214/009053606000001127 in the Annals of Statistics (http://www.imstat.org/aos/) by the Institute of Mathematical Statistics (http://www.imstat.org

Nonparametric Least Squares Regression and Testing in Economic Models

nonparametric regression, semiparametric regression, partial linear model, least squares, empirical processes, hypothesis testing, conditional moment tests, U-statistics, bootstrap, specification test, significance test, additive separability, multiplicative separability, homogeneity, monotonicity, concavity, demand theory, maximization hypothesis

The transition to Post-industrial BMI values among US children

Background: The trend in the BMI values of US children has not been estimated very convincingly because of the absence of longitudinal data. Our object is to estimate time series of BMI values by birth cohorts instead of measurement years. Methods: We use five regression models to estimate the BMI trends of non-Hispanic US-born black and white children and adolescents ages 2-19 between 1941 and 2004. Results: The increase in BMIZ values during the period considered was 1.3σ (95% CI: 1.16σ; 1.44σ) among black girls, 0.8σ for black boys, 0.7σ for white boys, and 0.6σ for white girls. This translates into an increase in BMI values of some 5.6, 3.3, 2.4, and 1.5 units respectively. While the increase in BMI values started among the birth cohorts of the 1940s among black girls, the rate of increase tended to accelerate among all four ethnic/gender groups born in the mid-1950s – early-1960s. Conclusion: Some regional evidence leads to the conjecture that the spread of automobiles and radios affected the BMI values of boys already in the interwar period. We suppose that the changes in lifestyle associated with the labor saving technological developments of the 20th century are associated with the weight gains observed. The increased popularity of television viewing was most prominently associated with the contemporaneous acceleration in BMI gain

Semiparametric Bayesian inference in smooth coefficient models

We describe procedures for Bayesian estimation and testing in cross-sectional, panel data and nonlinear smooth coefficient models. The smooth coefficient model is a generalization of the partially linear or additive model wherein coefficients on linear explanatory variables are treated as unknown functions of an observable covariate. In the approach we describe, points on the regression lines are regarded as unknown parameters and priors are placed on differences between adjacent points to introduce the potential for smoothing the curves. The algorithms we describe are quite simple to implement - for example, estimation, testing and smoothing parameter selection can be carried out analytically in the cross-sectional smooth coefficient model. We apply our methods using data from the National Longitudinal Survey of Youth (NLSY). Using the NLSY data we first explore the relationship between ability and log wages and flexibly model how returns to schooling vary with measured cognitive ability. We also examine a model of female labor supply and use this example to illustrate how the described techniques can been applied in nonlinear settings

A flexible approach to parametric inference in nonlinear and time varying time series models

Many structural break and regime-switching models have been used with macroeconomic and …nancial data. In this paper, we develop an extremely flexible parametric model which can accommodate virtually any of these speci…cations and does so in a simple way which allows for straightforward Bayesian inference. The basic idea underlying our model is that it adds two simple concepts to a standard state space framework. These ideas are ordering and distance. By ordering the data in various ways, we can accommodate a wide variety of nonlinear time series models, including those with regime-switching and structural breaks. By allowing the state equation variances to depend on the distance between observations, the parameters can evolve in a wide variety of ways, allowing for everything from models exhibiting abrupt change (e.g. threshold autoregressive models or standard structural break models) to those which allow for a gradual evolution of parameters (e.g. smooth transition autoregressive models or time varying parameter models). We show how our model will (approximately) nest virtually every popular model in the regime-switching and structural break literatures. Bayesian econometric methods for inference in this model are developed. Because we stay within a state space framework, these methods are relatively straightforward, drawing on the existing literature. We use arti…cial data to show the advantages of our approach, before providing two empirical illustrations involving the modeling of real GDP growth

Energy Projects, Social Licence, Public Acceptance and Regulatory Systems in Canada: A White Paper

It has become increasingly difficult in Canada to gain and sustain public acceptance of energy projects. Increased levels of protest, combined with traditional media and social media coverage of opposition, combine to suggest decreased public acceptance of energy projects. Decision-makers have responded accordingly, and a variety of energy projects have either been delayed or put on hold indefinitely. This is true for both conventional and renewable energy projects and in many different regions across the country. A number of proposed energy projects have recently faced opposition from various stakeholder groups. For instance, the decision of the Joint Review Panel for the Northern Gateway Pipeline is being challenged in Canada’s court system. First Nations groups have issued an ultimatum to the Federal Government that it must choose between Site C (a proposed hydro dam) and liquefied natural gas development in B.C. Rapid expansion of wind energy projects in Ontario has engendered lengthy and costly appeals and the rise of an anti-wind social movement. In Nova Scotia, tidal energy development is being positioned as a new renewable energy option; gaining public acceptance is critical in light of recent opposition to wind energy development. As these experiences suggest, not only has the regulatory process become more contentious, but also an apparently new concept — social licence — has had popular appeal. This white paper reports on the results of a year-long interdisciplinary collaboration aimed at identifying and summarizing extant research regarding social licence and related concepts, with a particular emphasis on understanding its implications for public acceptance of energy projects in Canada, and their related regulatory processes. In particular, this research addressed the following questions: 1. What is the history and scope of the term ‘social licence’, both in the context of energy project development and more generally? What are the strengths and limitations of this term? How does it help or hinder energy policy, regulatory debates and decision-making? 2. What are the similarities and differences between the notion of social licence and established concepts and other concepts or frameworks? 3. From the standpoint of public acceptance of energy projects, is Canada’s regulatory system broken? From whose perspective? And what alternatives might be considered? 4. What are barriers to, and enablers of a licence within the regulatory process — legal, social or otherwise? 5. What role does social licence play in the larger picture: How valid is the concept of social licence? Can social licence actually stop a project, or determine the outcome of an election? Does it create a valuable dialogue about a project? When opposition to projects leads to the arrest of people breaching an injunction or violent confrontations, what role can social licence play in promoting an alternative approach? In addition to a comprehensive look at the concepts of public acceptance and social licence and their applications to Canada, this white paper arrives at certain conclusions (Section 5) and makes recommendations (Section 6) for improving Canada’s regulatory systems and improving public confidence in Canada’s various energy-related regulatory agencies. For instance, as the federal government embarks on its agenda to amend the regulatory process, the research presented here can inform how the government can best carry out its mandate of reform while balancing the economic, environmental, political, social, and security-related issues pertinent to regulators, federal and provincial governments, industry, First Nations, environmental groups and the general public. The appeal of the term “social licence” derives from the inclusivity and equitability that it seems to imply. But populist pressure for increased voice and regulatory or judicial intervention, arising out of a sense of disaffection or disenfranchisement, is hardly a novel phenomenon: historical context and the lessons learned therefrom are essential in evaluating the idea and situating the debate within a meaningful framework. Social licence entails an additional layer of ‘regulation’, albeit an amorphous one. A central lesson of the 20th century experience is that regulation comes at a cost, and that excessive regulation and intervention can lead to paralysis and ‘government failure’. The implication is that regulation should be relied upon where it is necessary, and should be implemented in sensible ways. One of the conclusions of this report is that public trust and confidence can be enhanced by rationalizing existing regulatory vehicles to reduce the common perception that decisions are sometimes politically motivated and ensuring that decisions are made at the right levels of government. The institutionalization of social licence also has identifiable risks. It is likely to increase incentives for “rent-seeking behaviour.” The threat of veto, or even obstruction, endows the affected group with leverage that can result in extraction of rents that are disproportionate to impacts. It also increases regulatory and political uncertainty associated with a given project, discouraging investment, or requiring returns higher than are merited by the inherent riskiness of the proposed undertaking. The term “social licence” needs to be further analyzed, and, if used, used with care. The concept originated in the mining sector as the “social licence to operate,” and as the concept has migrated to the energy sector, it appears to have broadened in scope so that its meaning has become unclear, amorphous and confusing. Other terms such as “acceptance,” “support” or “public confidence” may be more appropriate in the energy sphere. Regulators, policy-makers and politicians should refrain from the use of these terms without a clear understanding of their implications. Our specific recommendations include: 1. Governmental Coordination. Greater coordination of regulatory processes between the federal and provincial governments is required and should be directed towards enhancing beneficial outcomes for all affected stakeholders (Section 6.1). 2. Stakeholder Engagement. A consistent, transparent and rigorous system for identifying and reaching out to stakeholders is essential to regulatory efficiency and efficacy (Section 6.2). 3. Social Licence as a Concept. When it comes to energy development, the term “social licence” needs to be further analyzed, and, if used, used with care (Section 6.3). 4. First Nations. The federal and provincial governments should take ownership of this duty to consult and ensure that it is done in a comprehensive manner that has been set out by both domestic and international law (Section 6.4). 5. Changes to the NEB Act. An independent review of the changes to the NEB Act regarding time to consult and the list of those who can be consulted should be undertaken to ensure the NEB is unconstrained in its ability to regulate appropriately and has public confidence in its mandate and decisions (Section 6.5). 6. Make Broader Use of Information Gained during Assessment Processes. Energy regulators should consider mechanisms to report recurring concerns that are outside of the scope of their mandate (Section 6.6). 7. Compliance after Project Approval. There is a need for publicly available, timely and relevant data relating to the compliance and post-approval status of projects. Data should be placed on a government portal to increase accessibility to stakeholders (Section 6.7). 8. Cross-Examination in Regulatory Hearings. The extensiveness of permitted cross-examination, and indeed the entire regulatory proceeding, needs to be proportionate to the magnitude of the impacts of the ultimate decision (Section 6.8)

Psychosocial status and cognitive achievement in Peru

This paper assesses the importance of psychosocial status in the accumulation of cognitive skills during the transition from mid to late childhood. We use longitudinal data from a cohort of 700 Peruvian children drawn from a very rich dataset, the Young Lives Survey, to test the impact of children's perception of respect at the age of 8 on cognitive achievement 4 years later, controlling for cognitive skills at the age of 8, lagged child and household characteristics, and community fixed effects. This empirical specification is akin to estimating a conditional demand function for cognitive skills, which deals with some of the main pitfalls of skill endogeneity. We find that poorly respected children are linked to a lower rate of cognitive accumulation than their better‐respected counterparts. As expected, we also find that previously accumulated cognitive skills enable higher subsequent cognitive skill accumulation. We go one step further by testing and finding evidence of complementarities across skills. We show that cognitive differences amplify over time between children with low and high psychosocial skills. Overall, our results suggest that psychosocial status, an aspect little studied in the context of developing countries, plays an important role in the acquisition of cognitive skills during childhood

Log Odds and the Interpretation of Logit Models

Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/142912/1/hesr12712.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/142912/2/hesr12712_am.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/142912/3/hesr12712-sup-0001-AppendixSA1.pd