Further results on bias in dynamic unbalanced panel data models with an application to firm R&D investment

This paper extends the LSDV bias-corrected estimator in [Bun, M., Carree, M.A. 2005. Bias-corrected estimation in dynamic panel data models, Journal of Business and Economic Statistics, 23(2): 200-10] to unbalanced panels and discusses the analytic method of obtaining the solution. Using a Monte Carlo approach the paper compares the performance of this estimator with three other available techniques for dynamic panel data models. Simulation reveals that LSDV-bc estimator is a good choice except for samples with small T, where it may be unpractical. The methodology is applied to examine the impact of internal and external R&D on labor productivity in an unbalanced panel of innovating firms.Bias Correction, Unbalanced Panel Data, GMM, Dynamic Models

Monte-Carlo comparison of alternative estimators for dynamic panel data models

This paper compares the performance of three recently proposed estimators for dynamic panel data models (LSDV bias-corrected, MLE and MDE) along with GMM. Using Monte-Carlo, we find that MLE and biascorrected estimators have the smallest bias and are good alternatives for the GMM. System-GMM outperforms the rest in ‘difficult’ designs. Unfortunately, bias-corrected estimator is not reliable in these designs which may limit its applicability.econometrics;

Does poverty research in Russia follow the scientific method?

This paper presents the first critical review of literature on poverty published in Russia between 1992 and 2006. Using a dataset of about 250 publications in Russian scientific journals, the authors assess whether the poverty research in Russia satisfies the general criteria of a scientific publication and if such studies could provide reliable guidance to the Russian government as it maps out its anti-poverty policies. The findings indicate that only a small proportion of papers on poverty published in Russia in 1992-2006 follow the universally-recognized principles of the scientific method. The utility of policy advice based on such research is questionable. The authors also suggest steps that could, in their view, improve the quality of poverty research in Russia.Tertiary Education,Population Policies,Poverty Monitoring&Analysis,Science Education,Scientific Research&Science Parks

Evaluating the impact of infrastructure rehabilitation projects on household welfare in rural Georgia

The authors evaluate the effect of various community level infrastructure rehabilitation projects undertaken in rural Georgia on household well-being. Their analysis is based on combining household and community level survey data. The authors'empirical approach uses the panel structure of the data to control for time-invariant un-observables at the community level by applying propensity-score-matched double difference comparison. The results indicate that improvements in school and road infrastructure produce nontrivial welfare gains for the poor at the village and country levels. The impact of water rehabilitation projects is ambiguous. School rehabilitation projects produce the largest gains for the poor. The methodological lesson from this analysis is that ad hoc community surveys matched with ongoing nationally representative surveys can provide a feasible and low cost impact evaluation tool.Public Health Promotion,Housing&Human Habitats,Health Economics&Finance,Decentralization,Poverty Monitoring&Analysis,Health Economics&Finance,Poverty Monitoring&Analysis,Housing&Human Habitats,Health Monitoring&Evaluation,Urban Services to the Poor

Who cares about relative deprivation ?

Theories of relative deprivation predict negative welfare effects when friends and neighbors become better-off. Other theories point to likely positive benefits. The authors encompass both views within a single model, which motivates their tests using a survey for Malawi that collected data on satisfaction with life, own economic welfare, and the perceived welfare of friends and neighbors. Their methods help address likely biases in past tests found in the literature. In marked contrast to research for industrial countries, the authors find that relative deprivation is generally not a concern for most of their sample, although it does appear to matter to the comparatively well off. Their results provide a welfarist explanation for the priority given to absolute poverty in poor countries. The pattern of externalities also suggests that there will be too much poverty and inequality in this economy, even judged solely from the point of view of aggregate efficiency.Economic Theory&Research,Poverty Diagnostics,Inequality,Biodiversity,Insurance&Risk Mitigation

"Obstacles to School Progression in Rural Pakistan: An Analysis of Gender and Sibling Rivalry Using Field Survey Data"

This paper aims to identify the obstacles to school progression by integrating field surveys conducted in twenty-five Pakistani villages, using economic theory and econometric analysis. The full-information maximum likelihood (FIML) estimation of the sequential schooling decision model reveals important dynamics of the gender difference in educational attainment, intrahousehold resource-allocation patterns, and transitory income and wealth effects. We find a high educational retention rate and observe that school progression rates between male and female students after secondary school are comparable. In particular, we find gender-specific and schooling-stage-specific birth-order effects on education. Our overall findings are consistent with the theoretical implications of optimal schooling behavior under binding credit constraints and the self-selection in education-friendly households. Finally, we find serious supply-side constraints on primary education for females.

Subjective economic welfare

Paradoxically, when economists analyze a policy's impact on welfare they typically assume that people are the best judges of their own welfare, yet resist directly asking them if they are better off. Early ideas of"utility"were explicitly subjective, but modern economists generally ignore people's expressed views about their own welfare. Even using a broad set of conventional socioeconomic data may not reflect well people's subjective perceptions of their poverty. The authors examine the determinants of subjective economic welfare in Russia, including its relationship to conventional objective indicators. For data on subjective perceptions, they use survey responses in which respondents rate their level of welfare from"poor"to"rich"on a nine-point ladder. As an objective indicator of economic welfare, they use the most common poverty indicator in Russia today, in which household incomes are deflated by household-specific poverty lines. Paradoxically, when economists analyze a policy's impact on welfare they typically assume that people are the best judges of their own welfare, yet resist directly asking them if they are better off. Early ideas of"utility"were explicitly subjective, but modern economists generally ignore people's expressed views about their own welfare. Even using a broad set of conventional socioeconomic data may not reflect well people's subjective perceptions of their poverty. The authors examine the determinants of subjective economic welfare in Russia, including its relationship to conventional objective indicators. For data on subjective perceptions, they use survey responses in which respondents rate their level of welfare from"poor"to"rich"on a nine-point ladder. As an objective indicator of economic welfare, they use the most common poverty indicator in Russia today, in which household incomes are deflated by household-specific poverty lines.Environmental Economics&Policies,Public Health Promotion,Economic Theory&Research,Health Economics&Finance,Services&Transfers to Poor,Environmental Economics&Policies,Economic Theory&Research,Poverty Diagnostics,Inequality,Health Economics&Finance

On the utility consistency of poverty lines

Although poverty lines are widely used as deflators for inter-group welfare comparisons, their internal consistency is rarely given close scrutiny. A priori considerations suggest that commonly used methods cannot be relied on to yield poverty lines that are consistent in terms of utility, or for capabilities more generally. The theory of revealed preference offers testable implications of utility consistency for"poverty baskets"under homogeneous preferences. A case study of Russia's official poverty lines reveals numerous violations of revealed preference criteria-violations that are not solely attributable to heterogeneity in preferences associated with climatic differences.Health Information&Communications Technologies,Environmental Economics&Policies,Poverty Reduction Strategies,Services&Transfers to Poor,Health Indicators,Poverty Lines,Poverty Assessment,Environmental Economics&Policies,Achieving Shared Growth,Urban Partnerships&Poverty

Child care and women's labor force participation in Romania

The authors model the household demand for child care, the mother's participation in the labor force, and her working hours in Romania. Their model estimates the effects of the price of child care, the mother's wage, and household income on household behavior relating to child care and mothers working outside the home. They find that: Both the maternal decision to take a job and the decision to use out-of-home care are sensitive to the price of child care. A decrease in the price of child care can increase the number of mothers who work and thus reduce poverty in some households. The potential market wage of the mother has a significant positive effect on the decision to purchase market care and the decision to engage in paid employment. The level of household nonwage income has little effect on maternal employment and the demand for child care. In addition to facilitating women's work, kindergartens and cr?hes appear to provide educational and social benefits for children. Close to half the children in these facilities have mothers who do not work. Further research is needed to assess the cost and nature of these benefits and to determine the appropriate roles for the private and public sectors in providing, financing, and regulating such services for working and nonworking mothers.Primary Education,Health Systems Development&Reform,Early Childhood Development,Children and Youth,Public Health Promotion,Street Children,Primary Education,Health Systems Development&Reform,Youth and Governance,Children and Youth

Measuring welfare gains from better quality infrastructure

Projects and reforms targeting infrastructure services can affect consumer welfare through changes in the price, coverage, or quality of the services provided. The benefits of improved service quality-while significant-are often overlooked because they are difficult to quantify. This paper reviews methods of evaluating the welfare implications of changes in the quality of infrastructure services within the broader theoretical perspective of welfare measurement. The study outlines the theoretical assumptions and data requirements involved, illustrating each method with examples that highlight common methodological features and differences. The paper also presents the theoretical underpinnings and potential applications of a new approach to analyzing the effects of interruptions in the supply of infrastructure services on household welfare.Energy Production and Transportation,Town Water Supply and Sanitation,Markets and Market Access,Economic Theory&Research,Water and Industry