A Dynamic “Fixed Effects” Model for Heterogeneous Panel Data

This paper introduces a dynamic panel data model in which the intercepts and the coefficients on the lagged endogenous variables are specific to the cross section units, while the coefficients on the exogenous variables are assumed to be normally distributed across the cross section. Thus the model includes mixture of fixed coefficients and random coefficients, which I call the “MFR” model. The paper shows that this model has several desirable characteristics. In particular, the model allows for a considerable degree of heterogeneity across the cross section both in the dynamics and in the relationship between the independent and dependent variables. Estimation of the MFR model produces an estimate of the variance of the coefficients across the cross section units which can be used as a diagnostic tool to judge how widespread a relationship is and whether pooling of the data is appropriate. In addition, unlike LSDV estimation of dynamic panel models, the MFR model does not produce severely biased estimates when T is small.dynamic fixed effects panel data, heterogenous coefficients

Land Use and Transportation Costs in the Brazilian Amazon

In this paper we put forth some empirical evidence from the Brazilian Amazon that the relationship between roads and land clearing may be much more complex than the conventional wisdom implies. In particular we find that in areas that already at least partially cleared, improving the road network (i.e. decreasing transport costs) may actually decrease the rate of deforestation. We argue that our methodology of explicitly modeling the dynamics should be preferred to the more common static, contemporaneous analyses found in the literature. Furthermore, we endeavor to provide an encompassing explanation of our results. In other words, not only do we show that dynamic modeling yields different conclusions from the conventional wisdom, but using our dynamic approach we are able to explain why so many other studies came to (possibly erroneous) conclusions using more traditional methods.

Do Conservation Easements Reduce Land Prices? The Case of South Central Wisconsin

While theory strongly suggests that restricting development rights should reduce land prices, empirical evidence of this effect has been notoriously hard to obtain. Indeed, largely based on this difficulty a Congressional committee has recently recommended that tax benefits for such restrictions be severely curtailed. We collect data on 131 land transactions in South Central Wisconsin, including 19 cases of developmentrestricted parcels. When we use the whole sample to estimate the impact of conservation easements we replicate the results of Nickerson and Lynch (2001), finding a negative but statistically insignificant effect. However we then show that when the sample is appropriately restricted to a more homogenous group of land parcels, our ability to detect an effect increases dramatically. In particular, for vacant agricultural land we find a statistically significant negative impact of conservation easements that ranges up to 50% of land values.

Land Use and Transportation Costs in the Brazilian Amazon

Transport infrastructure improvements are considered to be one of the most effective tools for stimulating economic activity; at the same time environmentalists have largely condemned most road building as being one of the greatest threats to tropical forests. In this paper we put forth some empirical evidence from the Brazilian Amazon that the relationship between roads and land clearing may be much more complex. In particular, we find that decreasing transport costs in areas that have established settlements is associated with lower rates of land clearing. Constructing roads into relatively pristine areas, however, has the expected effect of increasing agricultural land use and the rate of deforestation. Furthermore, our out of sample model evaluation exercises suggested that changes in land clearing tend to precede, rather than follow, changes in transport costs. Taken together our results suggest that intensifying road networks in settled areas of the Amazon region(as opposed to road building in virgin forest) may be a “win-win” strategy, both enhancing economic development and reducing environmental destruction.transport costs, roads, deforestation, Amazon

Do Conservation Easements Reduce Land Prices? The Case of South Central Wisconsin

While theory strongly suggests that restricting development rights should reduce land prices, empirical evidence of this effect has been notoriously hard to obtain. Indeed, largely based on this difficulty a Congressional committee has recently recommended that tax benefits for such restrictions be severely curtailed. We collect data on 131 land transactions in South Central Wisconsin, including 19 cases of development-restricted parcels. When we use the whole sample to estimate the impact of conservation easements we replicate the results of Nickerson and Lynch (2001), finding a negative but statistically insignificant effect. However we then show that when the sample is appropriately restricted to a more homogenous group of land parcels, our ability to detect an effect increases dramatically. In particular, for vacant agricultural land we find a statistically significant negative impact of conservation easements that ranges up to 50% of land valuesland use, valuation of development rights, conservation easements, hedonic regression

Innovation, Inequality and Intellectual Property Rights

The existing literature on the sources and nature of productivity growth during the early industrialization stages of U.S. has identified the combination of intellectual property rights (IPRs) with a large middle class and broad participation in markets as explanations for the extraordinary level and growth of patenting. This paper considers whether these factors could play a role in the contemporaneous evolution of innovation in a broad cross section of countries today. Our results indicate that IPRs and the size of the middle class help explain patterns of resident, but not non-resident patenting. Overall, the evidence suggests that non-resident patenting patterns are driven more by exogenous factors and global integration, while 'home grown' innovation is more sensitive to internal structural and institutional factors.intellectual property rights, innovation, income inequality

The Choice of Institutions: The Role of Risk and Risk-Aversion

Institutions can affect individual behavior both via their efficiency impact and via their risk reducing mechanisms. However there has been little study of the relative importance of these two channels in how individuals choose between simultaneously extant institutions. This paper presents a simple model of institutional choice in a labor market when there is a risk/reward trade-off, and tests the predictions of the theory. Using a novel empirical approach that adapts an ARCH-in-mean to cross-sectional survey data from China, we find that risk and risk aversion are strongly related to the choice of a labor market institution. Further, risk and risk aversion are quantitatively more important than the sectoral wage differential in explaining employment institution choices. Specifically, we find that wage risk has two orders of magnitude greater impact on labor market institutional choice than the wage difference, with a one standard deviation increase in earnings risk reducing the number of workers choosing jobs in the private (risky) sector by 22%.Institutions, Risk, Labor Market, Risk Aversion

A Worksite Translation of the Diabetes Prevention Program among Employees with Prediabetes

Education and Human Ecology: 3rd Place (The Ohio State University Edward F. Hayes Graduate Research Forum)INTRODUCTION: Type 2 diabetes mellitus (T2DM) is a serious medical condition affecting over 12% of Americans and is associated with $58 billion in work-related annual costs. Prediabetes increases risk for T2DM, and is estimated to affect over one third of U.S. adults. There is an evident need to prevent the development of T2DM in at-risk individuals. Adults spend a significant portion of their time at the workplace, suggesting its utility for efforts at health promotion and disease prevention. The Diabetes Prevention Program (DPP) is a lifestyle intervention program that has demonstrated efficacy in preventing or delaying T2DM in at-risk adults, however there is a lack of well-designed research studies evaluating the efficacy of the DPP in the workplace. The primary aim of this study was to implement and evaluate the efficacy of the group-based DPP intervention at The Ohio State University (OSU). METHODS: Seventy-eight employees with prediabetes recruited from OSU were randomized to the 16-week group-based DPP intervention group or a usual care control group. Sixty-eight participants completed data collection at baseline and post-intervention. Clinical and anthropometric measures included body weight, waist circumference, fasting blood glucose and lipids, and blood pressure. Statistical analyses included Pearson chi-square tests for baseline demographic characteristics and Student t-tests within an ANOVA for between and within-group analyses. For data not meeting normality assumptions, Wilcoxon signed rank tests were used for within-group and Wilcoxon rank sum 2-sample test for between-group comparisons. Multivariate analyses between variables were completed using Spearman nonparametric correlations. RESULTS: There were no significant differences in primary outcomes between treatment groups at baseline except for occupation. Mean (±SE) change in body weight for experimental versus control groups was -5.25 kg (±0.55) vs. -0.37 kg (±0.56), (p<0.0001). Fasting glucose was reduced by a mean (±SE) of -8.56 mg/dL (±1.52) and -4.48 mg/dL (±1.79), (p=0.0293), for the experimental versus control groups, respectively. CONCLUSIONS: The worksite was an effective setting to implement the DPP intervention, and facilitated significant reductions in body weight and blood glucose. Evaluation of cost-effectiveness of the intervention for employers and long-term maintenance of weight loss and prevention of T2DM are warranted.A three-year embargo was granted for this item