Dale Rothman and Neha Khanna
Macro- and Micro- Perspectives of Economic Development and Biodiversity: Linking the Dialogues
Neha Khanna and Duane Chapman
An Analysis of Conventional Weapons Trade in the Post-Cold War Era
Daniel J. Henderson
A Test for Multimodality of Regression Derivatives with an Application to Nonparametric Growth Regressions
Daniel J. Henderson, John A. List, Daniel L. Millimet, Christopher F. Parmeter and Michael K. Price
Imposing Monotonicity Nonparametrically in First-Price Auctions
Daniel J. Henderson, Chris Papageorgiou and Christopher F. Parmeter
Are any growth theories linear? Why we should care about what the evidence tells us
Additional sensitivity analyses for, Guns and Oil: An Analysis of Conventional Weapons Trade in the Post-Cold War Era
Nicolaus Tideman and Florenz Plassmann
The Source of Election Results: An Empirical Analysis of Statistical Models of Voter Behavior
Oleg Badunenko, Daniel J. Henderson and R. Robert Russell
Bias-Corrected Production Frontiers: Application to Productivity Growth and Convergence
Microfinance in Colonial India
Authors: Dale Rothman and Neha Khanna
Title: Macro- and Micro- Perspectives of Economic Development and Biodiversity: Linking the Dialogues
What is the relationship between economic development and biodiversity? Is this relationship characterized primarily by compatibilities or conflicts, and does the nature of the relationship change as development proceeds? Two distinct dialogues on these issues can be found, one operating at a macro-scale and the other at a micro-scale. The former, focusing on the environmental Kuznets curve hypothesis, explores the connection between levels of economic development and biodiversity at national and international scales. The latter, part of the broader dialogue on poverty and the environment, examines the relationships between poverty and biodiversity, most commonly at a much more local scale. To date the two dialogues have occurred almost completely independently. Both suffer from a lack of consistent, strong empirical data, which prevents clear conclusions from being drawn about the nature of the relationships between economic development and biodiversity at either the micro- or macro-level, much less across them. Both, however, point to the need to go beyond a narrow focus on income levels, be it at the level of an individual or a society as a whole, in order to understand the complexities in these relationships. Further and better designed integrated research is required to not only improve our understanding of these relationships at both the micro- and macro-scales, but also across these scales.
File: Working paper 0801
Authors: Neha Khanna and Duane Chapman
Title: An Analysis of Conventional Weapons Trade in the Post-Cold War Era
Abstract:This paper analyzes the global conventional weapons trade between 1989 and 1999. We postulate that a key reason for the huge transfer of weapons to the Persian Gulf region is the enormous value of the oil wealth there along with the dependence of Western economies on access to the relatively cheap and steady supply of crude oil. We find a strong, positive, and robust empirical association between arms trade and crude oil trade and explain it as the result of a target price band arrangement that was responsible for the remarkably stable crude oil prices during our study period.
File: Working paper 0802
Authors: Daniel J. Henderson
Title: A Test for Multimodality of Regression Derivatives with an Application to Nonparametric Growth Regressions
Abstract:This paper presents a method to test for multimodality of an estimated kernel density of parameter estimates from a local-linear least-squares regression derivative. The procedure is laid out in seven simple steps and a suggestion for implementation is proposed. A Monte Carlo exercise is used to examine the finite sample properties of the test along with those from a calibrated version of it which corrects for the conservative nature of Silverman-type tests. The test is included in a study on nonparametric growth regressions. The results show that in the estimation of unconditional -convergence, the distribution of the parameter estimates is multimodal with one mode in the negative region (primarily OECD economies) and possibly two modes in the positive region (primarily non-OECD economies) of the parameter estimates. The results for conditional -convergence show that the density is predominantly negative and unimodal. Finally, the application attempts to determine why particular observations possess positive marginal effects on initial income in both the unconditional and conditional frameworks.
File: Working paper 0803
Authors: Daniel J. Henderson, John A. List, Daniel L. Millimet, Christopher F. Parmeter and Michael K. Price
Title: Imposing Monotonicity Nonparametrically in First-Price Auctions
Monotonicity of the equilibrium bidding strategy is a key property of structural auction models. Traditional nonparametric estimators provide a flexible means of uncovering salient features of auction data, but do not formally impose the monotonicity assumption that is inherent in the models during estimation. Here, we develop a nonparametric estimator which imposes the monotonicity assumption. We accomplish this by employing the constraint weighted bootstrapping theory developed in the statistics literature. The finite sample performance of our estimator is examined using simulated data, experimental data, as well as a naturally occurring data set composed of thousands of bids from Canadian timber auctions.
File: Working paper 0804
Authors: Daniel J. Henderson, Chris Papageorgiou and Christopher F. Parmeter
Title: Are any growth theories linear? Why we should care about what the evidence tells us
Recent research on macroeconomic growth has been focused on resolving several key issues, two of which, specification uncertainty of the growth process and variable uncertainty, have received much attention in the recent literature. The standard procedure has been to assume a linear growth process and then to proceed with investigating the relevant variables that determine growth across countries. However, a more appropriate approach would be to recognize that a misspecified model may lead one to conclude that a variable is relevant when in fact it is not. This paper takes a step in this direction by considering conditional variable uncertainty with full blown specification uncertainty. We use recently developed nonparametric model selection techniques to deal with nonlinearities and competing growth theories. We show how one can interpret our results and use them to motivate more intriguing specifications within the traditional studies that use Bayesian Model Averaging or other model selection criteria. We find that the inclusion of nonlinearities is necessary for determining the empirically relevant variables that dictate growth and that nonlinearities are especially important in uncovering key mechanism of the growth process.
File: Working paper 0805
Authors: Neha Khanna
Title: Additional sensitivity analyses for, Guns and Oil: An Analysis of Conventional Weapons Trade in the Post-Cold War Era
This paper is an addendum to Khanna and Chapman (Econ. Inq., forthcoming) and provides additional sensitivity analyses as suggested by the two anonymous reviewers. The models presented here are estimated (a) under a Heckman style sample selection specification instead of a Tobit specification, (b) replacing the binary conflict variable in Khanna and Chapman with the hostility weighted number of days a country was engaged in an interstate dispute using the information available in the Correlates of War database, and (c) under both (a) and (b) simultaneously. On the whole, the additional sensitivity analyses strongly support the results reported in Khanna and Chapman.
File: Working paper 0806
Authors: Nicolaus Tideman and Florenz Plassmann
Title: The Source of Election Results: An Empirical Analysis of Statistical Models of Voter Behavior
We consider six models of voter behavior that might govern the statistical process of vote-casting. From an empirical analysis of "election-like" data we conclude that a spatial model of voting, augmented by a specified error structure, describes this process much better than the other five models. An important benefit of identifying the properties of this process is that doing so permits one to evaluate voting methods in terms of their success in identifying the proper winners of elections, so that it is not necessary to rely entirely on comparisons of logical properties in evaluating voting methods.
File: Working paper 0807
Authors: Oleg Badunenko, Daniel J. Henderson and R. Robert Russell
Title: Bias-Corrected Production Frontiers: Application to Productivity Growth and Convergence
Data envelopment analysis (DEA), originally developed to study production efficiency of micro-level organizations, has recently been used to adopt a production-frontier approach to the analysis of international macroeconomic growth and convergence patterns. DEA methods, however, are known to provide biased estimates of the production frontier and efficiency. We employ recent results from the statistics/econometrics literature (and more recent, more extensive, and more accurate data than previously employed) to construct the unbiased convex production frontier and then use this construction to decompose productivity growth into components attributable to technological change (shift of the production frontier), efficiency change (movements toward or away from the frontier), physical capital deepening, and human capital accumulation. Using this decomposition, we analyze the evolution of the world productivity distribution, especially the shift from uni-modality to bimodality over the 1965-2000 period.
File: Working Paper 0808
Authors: Susan Wolcott
Title: Microfinance in Colonial India
Microfinance is viewed as a major innovation which will decrease cultivators’ reliance on moneylenders and expand agricultural production. Two defining characteristics are the elimination of collateral and collective liability for debt repayment. But moneylenders in colonial India operated similarly: credit was based on personal reputation, and the extended family and caste were held responsible for repayment. This paper shows that informal rural credit markets in colonial India were large, competitive and efficient. Indian agricultural productivity stagnated during the colonial period due to a lack of agricultural investment, but this analysis suggests it not due to a lack of credit. Indian cultivators spent large sums on ceremonial expenditures such as weddings and funerals. I estimate that agricultural investment could have increased 76 percent if these expenditures were eliminated. If similar factors remain important in India, which it appears they do, institutionalized microcredit will not have significant long run effects on development.
File: Working Paper 0809
Last Updated: 6/1/12