1. A. Gomberg, "Revealed Votes", Social Choice and Welfare Volume 51, 2018.
Abstract:
In this paper I consider choice correspondences defined on a novel domain: the decisions are assumed to be taken not by individuals, but by committees, whose membership is observable and variable. In particular, for the case of two alternatives I provide a full characterization of committee choice structures that may be rationalized with two common decision rules: unanimity with a default and weighted majority.
2. I. Lobato and C. Velasco, "Efficiency Improvements for Minimum Distance Estimation of Causal and Invertible ARMA Model", Economics Letters Volume 162, Pages 150-152, 2018.
Abstract:
In this note we analyze efficiency improvements over the Gaussian maximum likelihood (ML) estimator for frequency domain minimum distance (MD) estimation for causal and invertible autoregressive moving average (ARMA) models. The analysis complements Velasco and Lobato (2017) where optimal MD estimation, which employs information in higher order moments, is studied for the general possibly non causal or non-invertible case. We consider MD estimation that combines in two manners the information contained in second, third, and fourth moments. We show that for both MD estimators efficiency improvements over the Gaussian ML occur when the distribution of the innovations is platykurtic. In addition, we show that asymmetry alone is not associated with efficiency improvements.
3. E. Gutierrez and K. Teshima, "Abatement Expenditures, Technology Choice, and Environmental Performance: Evidence from Firm Responses to Import Competition in Mexico", Journal of Development Economics Volume 133, Pages 264-274, 2018.
Abstract:
Abatement expenditures are not the only available tool for firms to decrease emissions. Technology choice can also indirectly affect environmental performance. We assess the impact of import competition on plants' environmental outcomes. In particular, exploiting a unique combination of Mexican plant-level and satellite imagery data, we measure the effect of tariff changes due to free-trade agreements on three main outcomes: plants' fuel use, plants' abatement expenditures, and measures of air pollution around plants' location. Our findings show that import competition induced plants in Mexico to increase energy efficiency, reduce emissions, and in turn reduce direct investment in environmental protection. Our findings suggest that the general technology upgrading effect of any policy could be an important determinant of environmental performance in developing countries and that this effect may not be captured in abatement data.
4. A. Nikandrova and R. Pancs, "Dynamic Project Selection", Theoretical Economics13, 2018.
Abstract:
We study a normative model of an internal capital market, used by a company to choose between its two devisions’ pet projects. Each project’s value is initially unknown to all but can be dynamically learned by the corresponding division. Learning can be suspended or resumed at any time and is costly. We characterize an internal capital market that maximizes the company’s expected cash flow. This market has indicative bidding by the two divisions, followed by a spell of learning and then firm bidding, which occurs at an endogenous deadline or as soon as either division requests it.
5. Debasis Mishra, Tridib Sharma "A simple budget-balanced mechanism", Social Choice and Welfare, Volume 50, 2018.
Abstract:
In the private values single object auction model, we construct a satisfactory mechanism - a dominant strategy incentive compatible and budget-balanced mechanism satisfying equal treatment of equals. Our mechanism allocates the object with positive probability to only those agents who have the highest value and satisfies ex-post individual rationality. This probability is at least (1 − 2/n ), where n is the number of agents. Hence, our mechanism converges to efficiency at a linear rate as the number of agents grow. Our mechanism has a simple interpretation: a fixed allocation probability is allocated using a second-price Vickrey auction whose revenue is redistributed among all the agents in a simple way. We show that our mechanism maximizes the utilitarian welfare among all satisfactory mechanisms that allocate the object only to the highest-valued agents.
6. B. Turhan, "Welfare and Incentives in Partitioned School Choice Markets" , Games and Economic Behavior. February, 2018.
Abstract:
Divided enrollment systems cause school assignments to be unfair and wasteful. The iterative version of the student-optimal stable mechanism (I-SOSM), proposed byManjunath and Turhan (2016), achieves individually rational and fair assignments in such partitioned school choice markets for any number of iterations. It also reaches anon-wasteful matching when iterated sufficiently many times. This paper examines the effects of partition structure of schools on students’ welfare and on incentives students face under the I-SOSM. I find that when school partition gets coarser students’ welfare weakly increases under the I-SOSM for any number of iterations. I also show that under coarser school partitions the I-SOSM becomes weakly less manipulable for students (when iterated sufficiently many times to reach a stable assignment) according to the “as strongly manipulable as” criteria defined by Pathak and Sönmez (2013). These results suggest that when full integration is not possible keeping school partition as coarse as possible benefits students with respect to their welfare and incentives they face if stability is a concern for policymakers.
7. Pierre Bachas, Paul Gertler, Sean Higgins and Enrique Seira "Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion", American Economic Review P&P, 108, May 2018.
Abstract:
Debit cards reduce the travel distance to access bank accounts and can increase financial inclusion. We show that in Mexico, cash transfer beneficiaries who already received their transfers in bank accounts and subsequently received debit cards reduce their median distance to access the account from 4.8 to 1.3 kilometers and report being less likely to forgo important activities (childcare, work) to withdraw their transfer. Using account level data, we find a strong negative correlation between the reduction in travel distance and financial activity: beneficiaries facing the largest reductions in distance increase both their number of withdrawals and their savings balances.
8. Igor L. Kheifets "Multivariate specification tests based on a dynamic Rosenblatt transform", Computational Statistics & Data Analysis, vol. 124, p. 1-14, 2018.
Abstract:
This paper considers parametric model adequacy tests for nonlinear multivariate dynamic models. It is shown that commonly used Kolmogorov-type tests do not take into account cross-sectional nor time-dependence structure, and a test, based on multi-parameter empirical processes, is proposed that overcomes these problems. The tests are applied to a nonlinear LSTAR-type model of joint movements of UK output growth and interest rate spreads. A simulation experiment illustrates the properties of the tests in finite samples. Asymptotic properties of the test statistics under the null of correct specification and under the local alternative, and justification of a parametric bootstrap to obtain critical values, are provided.
9. Velasco C., Lobato I. "Frequency domain minimum distance inference for possibly noninvertible and noncausal ARMA models" The Annals of Statistics Volume 46 No. 2, p. 555 - 579, 2018.
Abstract:
This article introduces frequency domain minimum distance procedures for performing inference in general, possibly non causal and/or noninvertible, autoregressive moving average (ARMA) models. We use information from higher order moments to achieve identification on the location of the roots of the AR and MA polynomials for non-Gaussian time series. We propose a minimum distance estimator that optimally combines the information contained in second, third, and fourth moments. Contrary to existing estimators, the proposed one is consistent under general assumptions, and may improve on the efficiency of estimators based on only second order moments. Our procedures are also applicable for processes for which either the third or the fourth order spectral density is the zero function.
10. Fakos, A., Sakellaris, P. and Tavares, T. "Investment Slumps during Financial Crises: The Role of Credit Constraints", 2018
Abstract:
How much do credit constraints contribute to investment slumps during financial crises? For the Greek crisis that erupted in 2010, we find that tightened credit constraints contributed to about half of the observed collapse in investment rates. The remainder is explained by diminished demand and productivity facing the firms. We use a novel census-type dataset of manufacturing firms and show that standard dynamic investment models abstracting from credit constraints cannot reproduce the observed investment dynamics. Enhanced with borrowing constraints subject to an aggregate shock to eligible collateral, such models can account for the observed collapse in investment rates.
11. Gertler P., Galiani S. and Romero M. "How to make replication the norm" Nature 554, p. 417-419, 2018.
Abstract:
The publishing system builds in resistance to replication. Paul Gertler, Sebastian Galiani and Mauricio Romero surveyed economics journals to find out how to fix it.
12. Riascos A., Romero M. and Serna N. "Risk Adjustment Revisited using Machine Learning Techniques" Proceeding Series of the Brazilian Society of Computational and Applied Mathematics Volume 6, No. 2, 2018
Abstract:
Risk adjustment is vital in health policy design. Risk adjustment defines the annual capitation payments to health insurers and is a key determinant of insolvency risk for health insurers. In this study we compare the current risk adjustment formula used by Colombia’s Ministry of Health and Social Protection against alternative specifications that adjust for additional factors. We show that the current risk adjustment formula, which conditions on demographic factors and their interactions, can only predict 30% of total health expenditures in the upper quintile of the expenditure distribution. We also show the government’s formula can improve significantly by conditioning ex ante on measures indicators of 29 long-term diseases. We contribute to the risk adjustment literature by estimating machine learning based models and showing non-parametric methodologies (e.g., boosted trees models) outperform linear regressions even when fitted in a smaller set of regressors.
13. Alonso, J., Colla, E., Da-Rocha, J., "The Productivity Cost of Sovereign Default: Evidence from the European Debt Crisis”, Economic Theory, August, 2018.
Abstract:
We calibrate the cost of sovereign defaults using a continuous time model, where government default decisions may trigger a change in the regime of a stochastic TFP process. We calibrate the model to a sample of European countries from 2009 to 2012. By comparing the estimated drift in default relative to that in no-default, we find that TFP falls in the range of 3.70-5.88%. The model is consistent with observed falls in GDP growth rates and subsequent recoveries and illustrates why fiscal multipliers are small during sovereign debt crises.
14. P. Bag and T. Sharma, "Sequential Expert Advice: Superiority of Closed-Door Meetings", The International Economic Review. March 2 2018.
Abstract:
Two career-concerned experts sequentially give advice to a Bayesian decision maker (D).
We find that secrecy dominates transparency, yielding superior decisions for D. Secrecy empowers the expert moving late to be pivotal more often. Further, (i) only secrecy enables the second expert to partially communicate her information and its high precision to D and swing the decision away from first expert’s recommendation; (ii) if experts have high average precision, then the second expert is effective only under secrecy. These results are obtained when experts only recommend decisions. If they also report the quality of advice, fully revealing equilibrium may exist.
15. E. Seira, P. Bachas, P. Gertler, S. Higgins, "Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion", American Economic Review P&P, 108, May 2018.
Abstract:
Debit cards reduce the travel distance to access bank accounts and can increase financial inclusion. We show that in Mexico, cash transfer beneficiaries who already received their transfers in bank accounts and subsequently received debit cards reduce their median distance to access the account from 4.8 to 1.3 kilometers and report being less likely to forgo important activities (childcare, work) to withdraw their transfer. Using account level data, we find a strong negative correlation between the reduction in travel distance and financial activity: beneficiaries facing the largest reductions in distance increase both their number of withdrawals and their savings balances.
16. Enrique Seira, Alberto Simpser and Cristian Challú. "The Quality of Vote Tallies: Causes and Consequences", American Journal of Political Science, 114 - December 26, 2018, pp. 1071-1085.
Abstract:
The credibility of election outcomes hinges on the accuracy of vote tallies. Most democracies count votes by hand, yet we know little about the causes and consequences of inaccuracies in the vote tallies. Using data for the universe of polling stations in Mexico in five national elections, we show that over forty percent of polling-station-level tallies display arithmetic inconsistencies. Inconsistencies appear to be non-partisan, but they are a major cause of recounts and they erode public trust in electoral institutions. Drivers of inconsistencies include the education of those in charge of tallying the votes, their workload, and the complexity of the tallying tasks. Our findings highlight an unsuspected connection between socioeconomic development and election quality, and they speak to ongoing debates about human vs. machine-based vote counting.