Estimating Production Functions with Robustness Against Errors in the Proxy Variables

This paper proposes a new semi-nonparametric maximum likelihood estimation method for estimating production functions. The method extends the literature on structural estimation of production functions, started by the seminal work of Olley and Pakes (1996), by relaxing the scalar-unobservable assumption about the proxy variables. The key additional assumption needed in the identification argument is the existence of two conditionally independent proxy variables. The assumption seems reasonable in many important cases. The new method is straightforward to apply, and a consistent estimate of the asymptotic covariance matrix of the structural parameters can be easily computed.

Estimating production functions with robustness against errors in the proxy variables

This paper proposes a new semi-nonparametric maximum likelihood estimation method for estimating production functions. The method extends the literature on structural estimation of production functions, started by the seminal work of Olley and Pakes (1996), by relaxing the scalar-unobservable assumption about the proxy variables. The key additional assumption needed in the identification argument is the existence of two conditionally independent proxy variables. The assumption seems reasonable in many important cases. The new method is straightforward to apply, and a consistent estimate of the asymptotic covariance matrix of the structural parameters can be easily computed.

The Causal Effect of Service Satisfaction on Customer Loyalty

We propose an instrumental-variable (IV) approach to estimate the causal effect of service satisfaction on customer loyalty, by exploiting a common source of randomness in the assignment of service employees to customers in service queues. Our approach can be applied at no incremental cost by using routine repeated cross-sectional customer survey data collected by firms. The IV approach addresses multiple sources of biases that pose challenges in estimating the causal effect using cross-sectional data: (i) the upward bias from common-method variance due to the joint measurement of service satisfaction and loyalty intent in surveys; (ii) the attenuation bias caused by measurement errors in service satisfaction; and (iii) the omitted-variable bias that may be in either direction. In contrast to the common concern about the upward common-method bias in the estimates using cross-sectional survey data, we find that ordinary-least-squares (OLS) substantially underestimates the casual effect, suggesting that the downward bias due to measurement errors and/or omitted variables is dominant. The underestimation is even more significant with a behavioral measure of loyalty–where there is no common methods bias. This downward bias leads to significant underestimation of the positive profit impact from improving service satisfaction and can lead to under-investment by firms in service satisfaction. Finally, we find that the causal effect of service satisfaction on loyalty is greater for more difficult types of services

Short Run Needs and Long Term Goals: A Dynamic Model of Thirst Management

Beverage consumption occurs many times a day in response to a variety of needs that change throughout the day. In making their choices, consumers self-regulate their consumption by managing short run needs (e.g., hydration and mood pickup) with long-term goals (e.g., health). Using unique intra-day beverage consumption, activity and psychological needs data, we develop and estimate a model of high frequency consumption choices that accounts for both intra-day changes in short run needs and individual level unobserved heterogeneity in the degree of self-regulation. A novel feature of the model is that it allows for dynamics of consumption and stockpiling at the level of product attributes. The model is used to evaluate introduction of new products in the beverage category and gain insight into the linkage between self-regulation and excess consumption. Broadly, the modeling framework of balancing short run needs with long-term goals has wide ranging applications in choices where long term effects are gradual (e.g., nutrition, exercise, smoking and preventive health care)

Is pharmaceutical detailing informative? Evidence from contraindicated drug prescriptions

Crestor, an important but controversial cholesterol-lowering drug, is contraindicated for use by senior and Asian patients. In this paper, we exploit this fact along with unique physician-level prescription and detailing data for statin drugs to examine the hypothesis that detailing is informative. Our tests are based on a simple model in which detailing impacts physicians’ expected match utility of Crestor for different types of patients. We find strong evidence for the informative-detailing hypothesis: relative to the other patients, detailing significantly reduces physicians’ likelihood of prescribing Crestor to contraindicated patients. Our results are robust to detailing being correlated with physician-specific unobserved factors and/or differential trends in individual physicians’ attitudes toward Crestor

Multiple abiotic and biotic drivers of long-term wood decomposition within and among species in the semi-arid inland dunes:A dual role for stem diameter

Litter decomposition in sunny, semi-arid and arid ecosystems is controlled by both biotic factors including litter traits and abiotic factors including UV light, but for wood decomposition it still remains uncertain which of these environmental factors are the predominant controls among different woody species. In these dry ecosystems, it is likely that the stem diameter and spatial position of the dead wood are of particular importance especially where wood can be buried versus exposed due to substrate displacement by wind. Here we focus on the fact that stem diameter can affect decomposition rates both via the relative surface exposure to sunlight or soil and via higher resource quality of narrower stems to decomposers. In a field manipulation experiment, we investigated the relative importance of litter position (sand burial vs. surface vs. suspended above the surface), UV radiation (block versus pass) and stem diameter class (<2, 2–4, 4–8, 8–13 and 13–20 mm) on the mass loss of woody litters of four shrub species in an inland dune ecosystem in northern China. We found that after 34 months of in situ incubation, the mass loss of buried woody litters was three times faster than those of suspended and surface woody litters (53.5 ± 2.7%, 17.0 ± 1.0% and 14.4 ± 1.2%, respectively). In surface and suspended positions, litter decomposition rates were almost equally low and most mass loss was during the first 2 years, when bark was still attached and UV radiation had no significant effect on woody litter mass loss. These findings suggest that sand burial is the main environmental driver of wood decomposition via its control on microbial activity. Moreover, wood N and diameter class were the predominant factors driving woody litter decomposition. A key finding was that wider stems had slower litter decomposition rates not only directly (presumably via greater relative surface exposure) but also indirectly via their higher wood dry matter content or lower wood N; these effects were modulated by litter position. Our findings highlight a dual role of stem diameter on wood decomposition, that is, via relative surface exposure and via wood traits. The accuracy and confidence of global carbon cycling models would be improved by incorporating the different effects of stem diameter on woody litter decomposition and below-ground wood decomposition processes in drylands

Anti-inflammatory Effects of α7-nicotinic ACh Receptors are Exerted Through Interactions with Adenylyl Cyclase-6

Background and purpose Alpha 7 nicotinic acetylcholine receptors (CHRNA7) suppress inflammation through diverse pathways in immune cells, so is potentially involved in a number of inflammatory diseases. However, the detailed mechanisms underlying CHRNA7’s anti‐inflammatory effects remain elusive. Experimental approach The anti‐inflammatory effects of CHRNA7 agonists in both murine macrophages (RAW 264.7) and bone marrow‐derived macrophages (BMDM) stimulated with LPS were examined. The role of adenylyl cyclase 6 (AC6) in Toll‐like Receptor 4 (TLR4) degradation was explored via overexpression and knockdown. A mouse model of chronic obstructive pulmonary disease was used to confirm key findings. Results Anti‐inflammatory effects of CHRNA7 were largely dependent on AC6 activation, as knockdown of AC6 considerably abnegated the effects of CHRNA7 agonists while AC6 overexpression promoted them. We found that CHRNA7 and AC6 are co‐localized in lipid rafts of macrophages and directly interact. Activation of AC6 led to the promotion of TLR4 degradation. Administration of CHRNA7 agonist PNU‐282987 attenuated pathological and inflammatory end points in a mouse model of chronic obstructive pulmonary disease (COPD). Conclusion and implications CHRNA7 inhibits inflammation through activating AC6 and promoting degradation of TLR4. The use of CHRNA7 agonists may represent a novel therapeutic approach for treating COPD and likely other inflammatory diseases

Seed Germination Responses to Seasonal Temperature and Drought Stress Are Species‐Specific but Not Related to Seed Size in a Desert Steppe: Implications for Effect of Climate Change on Community Structure

Investigating how seed germination of multiple species in an ecosystem responds to environmental conditions is crucial for understanding the mechanisms for community structure and biodiversity maintenance. However, knowledge of seed germination response of species to environmental conditions is still scarce at the community level. We hypothesized that responses of seed germination to environmental conditions differ among species at the community level, and that germination response is not correlated with seed size. To test this hypothesis, we determined the response of seed germination of 20 common species in the Siziwang Desert Steppe, China, to seasonal temperature regimes (representing April, May, June, and July) and drought stress (0, −0.003, −0.027, −0.155, and −0.87 MPa). Seed germination percentage increased with increasing temperature regime, but Allium ramosum, Allium tenuissimum, Artemisia annua, Artemisia mongolica, Artemisia scoparia, Artemisia sieversiana, Bassia dasyphylla, Kochia prastrata, and Neopallasia pectinata germinated to \u3e60% in the lowest temperature regime (April). Germination decreased with increasing water stress, but Allium ramosum, Artemisia annua, Artemisia scoparia, Bassia dasyphylla, Heteropappus altaicus, Kochia prastrata, Neopallasia pectinata, and Potentilla tanacetifolia germinated to near 60% at −0.87 MPa. Among these eight species, germination of six was tolerant to both temperature and water stress. Mean germination percentage in the four temperature regimes and the five water potentials was not significantly correlated with seed mass or seed area, which were highly correlated. Our results suggest that the species‐specific germination responses to environmental conditions are important in structuring the desert steppe community and have implications for predicting community structure under climate change. Thus, the predicted warmer and dryer climate will favor germination of drought‐tolerant species, resulting in altered proportions of germinants of different species and subsequently change in community composition of the desert steppe

Teacher cognition in teaching intercultural communicative competence: A qualitative study on preservice Chinese language teachers in Hong Kong SAR, China

The purpose of this study is to examine preservice Chinese language teachers’ cognition in teaching intercultural communicative competence. In the study we collected data through in-depth interviews with seven preservice teachers in a Master of Education program (Teaching Chinese as a Second Language, TCSL) at a university in Hong Kong SAR, China. The findings indicated that the participants had a relatively positive attitude and inclination toward the development of students’ intercultural communicative competence, while their conceptualizations of culture tended to be static and ambiguous. In addition, the participants’ objectives in teaching intercultural communicative competence were found to be more attitude-than knowledge- or skill-oriented. The study offers valuable insights that preservice language teachers’ cognition plays a crucial role in their future professional development and calls for curricular innovations with intercultural aims in teacher education programs