Title: Robust Estimation and Inference in Panels with Interactive Fixed Effects (with Timothy B. Armstrong and Martin Weidner)

Abstract We consider estimation and inference for a regression coefficient in a panel setting with time and individual specific effects which follow a factor structure. Previous approaches to this model require a "strong factor" assumption, which allows the factors to be consistently estimated, thereby removing omitted variable bias due to the unobserved factors. We propose confidence intervals (CIs) that are robust to failure of this assumption, along with estimators that achieve better rates of convergence than previous methods when factors may be weak. Our approach applies the theory of minimax linear estimation to form a debiased estimate using a nuclear norm bound on the error of an initial estimate of the individual effects. In Monte Carlo experiments, we find a substantial improvement over conventional approaches when factors are weak, with little cost to estimation error when factors are strong.

Title: Assessment of Learning

Irene asks the question 'How do you know that students are actually learning what you said they would learn and at what level are they learning it?'

Title: The Puzzle of Educated Unemployment in West Africa (with Romuald Meango).

Title: Understanding the Effects of Labor Market Entry Conditions: The Role of Skill Match

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Title to be advised.

A preliminary title is "Self-Insurance in Turbulent Labor Markets" (joint with Ana Figueiredo, Cristiano Mantovani, and Alireza Sepahsalari).

Title: CPI releases and inflation expectations: Evidence from the Decision Maker Panel

Title: Educated Leaders through Legislation but at What Cost?

Abstract: Many societies have tried to design incentives and restrictions to improve the quality of their political leaders. In this paper, we use a legislation introduced in 2014 that mandated minimum education requirements– a correlate of quality, in the context of local village council elections in Rajasthan to look at the impact of such restrictions on the selection of elected leaders. We show that there was a higher probability of under-representation of disadvantaged groups where such legislation hit the hardest in terms of the incumbent not meeting the education criteria. These results are robust to accounting for differential trends by education and population characteristics. Furthermore, we find that this legislation did not lead to demonstrable improvement in performance of public program (NREGS), economic development as measured by night time luminosity or investment in education as measured by new school openings.

TITLE Optimal Public Transportation Networks: Evidence from the World's Largest Bus Rapid Transit System in Jakarta
joint with Arya Gaduh, Rema Hanna, Tilman Graff, Benjamin O. Olken

ABSTRACT Designing public transport networks involves tradeoffs between extensive geographic coverage, frequent service on each route, and relying on interconnections as opposed to direct service. These choices, in turn, depend on individual preferences for waiting for busses, travel time on the bus, and transfers. We study these tradeoffs by examining the world's largest bus rapid transit system, in Jakarta, Indonesia, leveraging a large-scale bus network expansion between 2016-2020. Using detailed ridership data and aggregate travel flows from smartphone data, we analyze how new direct connections, changes in bus travel time, and wait time reductions increase ridership and overall trips. We set up and estimate a transit network demand model with multi-dimensional travel costs, idiosyncratic heterogeneity induced by random wait times, and inattention, matching moments from the route launches. Commuters in Jakarta are 2-4 times more sensitive to wait time compared to time on the bus, and inattentive to long bus route options, To study the implications for network design, we introduce a new framework to describe optimal networks in terms of their characteristics and how these depend on preference parameters. Our results suggest that a less concentrated TransJakarta network would increase ridership and commuter welfare.

Iacopo Monterosa (University of Turin) is a visiting research student until July 2023.

Iacopo graduated from our department with an MSc in Economics in 2021. Please find the title and abstract of his presentation below.

Title: Environmental Degradation and Social Unrest: an Analysis of Open-Air Waste Burning in Italy

Although environmental activism has been increasing worldwide in recent years, less is known about what drives variation among and within countries in such activism. In this project, I examine the role of exposure to local episodes of pollution as a potential driver. I ask if exposure to environmental degradation fosters pro-environmental protests as well as the intensity of social unrest in general. Using granular data on open-air fires of industrial waste and protests in Italy, I document an increase in environmental protests and violence (i.e. riots) following a fire. To account for the endogeneity of fire location, I rely on the fact that some industrial waste containing copper is burned by copper thieves when trying to get hold of this valuable metal. I thus exploit exogenous variation in the world price of copper to confirm that open-air fires are consequential for both environmental protests and violent events. 

Title: Embracing Artificial Intelligence in Assessment: designing in or designing out?

Title to be advised

Title: Cost Based Nonlinear Pricing with Tibor Heumann, Pontificia Universidad Católica de Chile, tibor.heumann@uc.cl.

Stephen Morris, Massachusetts Institute of Technology, semorris@mit.edu

Abstract: How should a monopolist offer quantity or quality differentiated products if they have no information about the distribution of demand and must price based on cost conditions alone? Specifically, we consider a monopolist who cares about the "profit guarantee" of a pricing rule, that is, the minimum ratio value of expected profits to expected surplus for any distribution of demand.

We show that the profit guarantee is maximized by setting the price markup over marginal cost equal to (describe) function of elasticity. We provide profit guarantees (and associated mechanisms) that the seller can achieve across all possible distributions of willingness to pay of the buyers. With a constant elasticity cost function, constant markup pricing provides the optimal revenue guarantee across all possible distributions of willingness to pay and the lower bound is attained under a Pareto distribution. We characterize how profits and consumer surplus vary with the distribution of values and show that Pareto distributions are extremal. We also provide a revenue guarantee for general cost functions. We establish equivalent results for optimal procurement policies that support maximal surplus guarantees for the buyer given all possible cost distributions of the sellers.

Title to be advised.

Title: Targeting Social Assistance with Machine Learning

Abstract: Targeting is a central challenge in the design of anti-poverty programs: given available data, how does one identify the individuals and households with the greatest need? Here we show that machine learning, applied to non-traditional data from satellites and mobile phones, can improve the targeting of anti-poverty programs. Our analysis is based on data from three field-based projects -- in Togo, Afghanistan, and Kenya -- that illustrate the promise, as well as some of the potential challenges, of this new approach to targeting. Collectively, the results highlight the potential for new data sources to improve humanitarian response efforts, particularly in crisis settings when traditional data are missing or out of date.

There will be two 30 min presentations. Details below: 

Priyama Majumdar is presenting "Women Political Leadership and Dowry: Evidence from India."

Albert Dudou, title TBD.

Title: Who Controls the Agenda Controls the Polity.

Title: Electoral Turnovers (with Benjamin Marx, Vincent Rollet)

Abstract: In most national elections, voters face a key choice between continuity and change. Electoral turnovers occur when the incumbent candidate or party fails to win reelection. To understand how turnovers affect national outcomes, we study the universe of presidential and parliamentary elections held since 1945. We document the prevalence of turnovers over time and estimate their effects on economic performance, trade, human development, conflict, and democracy. Using a close-elections regression dis-continuity design (RDD) across countries, we show that turnovers improve country performance. These effects are not driven by differences in the characteristics of challengers, or by the fact that challengers systematically increase the level of government intervention in the economy. Electing new leaders leads to more policy change, it improves governance, and it reduces perceived corruption, consistent with the expectation that recently elected leaders exert more effort due to stronger reputation concerns.

“The Effects of Business School Education on Manager Career Outcomes”

Title: State of the Art: Economic development through the lens of paintings (with Gorin and Heblich)

Title: Climate change and migration: the case of Africa.

Abstract:

This paper estimates the impacts of climate change in sub-Saharan Africa (SSA) on migration and other economic outcomes. I develop a quantitative spatial model that captures the role of trade networks, migration barriers, and agricultural yields on the geography of the economy. I combine the model with forecasts of future crop yields to find that climate change, by the end of the century, reduces SSA real GDP per capita by 1.8 percent and displaces 4 million individuals. Migration barriers in SSA are very stringent: if absent, climate-induced migration exceeds 100 million individuals. Still, migration and trade are powerful adaptation mechanisms. Reducing migration barriers to the European Union (EU) standards eliminates the aggregate economic losses of climate change in SSA, but at the cost of more climate migration and higher regional inequality. Also reducing trade frictions to the EU levels attenuates this cost and makes SSA better off on aggregate and distributional terms.

What affects the survival of trade relationships? Evidence from road disruptions in Colombia

With climate change, weather patterns like El Niño Southern Oscillation (ENSO) are becoming more persistent and disruptive. It is crucial to understand how to adapt to extreme weather shocks. This paper investigates how extreme weather events can spread through trade channels, and it is the first one that focuses on the extensive margin of relationships. I use the rain season of La Niña in Colombia during 2010-2011, which caused major road closures that disrupted the transportation of goods. I focus in the Colombian flower sector and its main export market, the US. I find treated relationships exit less after the shock, but within treatment, links from larger and more connected exporters exit more relative to links with small and less-connected exporters. The shock also induced larger exporters to increase their matching after the shock relative to non-affected exporters. The empirical results point out that search frictions are a mechanism at play and the effect on firms varies depending on their size. In this sense, replacing buyers might be more costly to small firms, which explains the lower exit rates observed in the data, but other mechanisms are needed to explain the different responses when considering different network sizes.

Title: Historical Self-Governance and Norms of Cooperation

Abstract: Does self-governance, a hallmark of democratic societies, foster or erode norms of generalized cooperation? Does this effect persist, and if so, why? I investigate these questions using a natural experiment in Switzerland. In the middle-ages, the absence of an heir resulted in the extinction of a prominent noble dynasty. As a result, some Swiss municipalities became self-governing, whereas the others remained under feudalism for another 600 years. Evidence from a behavioral experiment, World Values Survey, and Swiss Household Panel consistently shows that individuals from historically self-governing municipalities exhibit stronger norms of cooperation today. Referenda data on voter-turnout, women's suffrage, and minority citizenship, allow me to trace these effects on individually costly and socially beneficial actions for over 150 years. Furthermore, norms of cooperation map into prosocial behaviors like charitable giving and environmental protection. Uniquely, Switzerland tracks every family's place of origin in registration data, which I use to demonstrate persistence from cultural transmission in a context of historically low migration.

Title: Accept this Paper" (with Andrea WilsonLink opens in a new window)

Title: Sectoral Development Multipliers, joint work with Francisco Buera (Washington University at St Louis).

Abstract: We study how technology adoption complementarities propagate through an input-output network of sector production. We devise a procedure to estimate both non-parametrically and structurally the incidence of distortions and the relevance of technology adoption across and within sectors. We then compute the response of aggregate output to sector revenue and adoption subsidies aimed to spur development through sector reallocation of production and technology adoption. Large multipliers occur for sectors that are central in both the production and adoption networks. Accounting for adoption greatly magnifies the relative importance of central sectors.

TItle: Frontier History and Gender Norms in the United StatesLink opens in a new window

The title of the talk is: How Biased are Observational Methods in Practice? Accumulating Evidence Using Randomised Controlled Trials with Imperfect Compliance, joint with David Rhys Bernard, Gharad Bryan, Sylvain Chabé-Ferret, Jon de Quidt and Roland Rathelot.

The abstract: Consider a policy maker choosing between programs of unknown impact. She can inform her decision using observational methods, or by running a randomised controlled trial (RCT). The proponents of RCTs would argue that observational approaches suffer from bias of an unknown size and direction, and so are uninformative. Our study treats this as an empirical claim that can be studied. By doing so we hope to increase the value of observational data and studies, as well as better inform the choice to undertake RCTs. We propose a large-scale, standardised, hands-off approach to assessing the performance of observational methods. First, we collect and categorise data from a large number of RCTs in the past 20 years. Second, we implement new methods to understand the size and direction of expected bias in observational studies, and how bias depends on measurable characteristics of programmes and settings. We find that the difference between observational estimators and the experimental benchmark is on average zero, but the resulting observational bias distribution has high variance.