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Essays on Methods of Demand and Production Function Estimation
No full textEstimating consumer demand is fundamental to analyzing pricing decisions, welfare gains from new products, and changes in market structure. The first two chapters of this dissertation analyze econometric methods that allow researchers to estimate richer distributions of heterogeneity, and therefore more flexible demand models. The first chapter compares several newly developed methods for estimating individual heterogeneity by Monte Carlo simulations. I use them to estimate a simplified mixed logit model without price endogeneity. I find the method from Malone et al. (2019) achieves good performances with a significantly lower computational cost, and the method from Cheng et al. (2019) is well-suited for scenarios with sparse type interactions. I provide some recommendations on how an empirical researcher could use these methods in practice. The second chapter extends the first chapter by adapting the fixed-grid likelihood method (from Malone et al. 2019, henceforth FG) and a clustering method (from Cheng et al. 2019, henceforth CSS) to the full mixed logit model with price endogeneity and unobserved consumer demographics. I compare FG, CSS, and a conventional parametric MLE procedure using real panel data. I compare their predictions on welfare estimates in three hypothetical scenarios: a new product, a merger, and a divestiture. I find that the parametric approach distorts the welfare predictions. The third chapter estimates how weather affects Chinese manufacturers\u27 productivity during 1998-2007 and predicts how climate change would affect their productivity by 2040-2042. We use Abito (2020)’s production function estimation method, allowing firm-specific fixed effects in productivity. We find most industries in our sample exhibit persistent differences in firm-level productivity, and that weather significantly affects a firm’s productivity. We use the estimated effects to predict the mean productivity level in 2040-2042 for each firm. Comparing to the firms’ historical mean productivity levels, we find the productivity will be lowered by about -4% by 2040-2042 on average across firms. We also find several industries where Ackerberg et al. (2015)’s productivity estimates induce significantly biased climate predictions. These industries amount to a large portion of the real value-added output, and are where the productivity heterogeneity is the largest and most persistent
Essays on Networks in Macroeconomics and Finance
No full textThis thesis consists of three essays that examine theoretically and empirically the implications of networks in business cycles, economic recovery, systemic risk, corporate finance and governance, and asset pricing. This first chapter emphasizes the role of networks in driving economic recovery from recessions and its role in asset pricing. It is based on a joint work with Yucheng Yang. The speed at which the US economy has recovered from recessions ranges from months to years. We propose a model incorporating the innovation network, the production network, and cross-sectional shocks and show that their interactions jointly explain large variations in the recovery speed across recessions in the US. We show that when the innovation network has low-rank, there exists one key direction: the impact of a shock becomes persistent only if the shock is parallel to this key direction; in contrast, the impact diminishes quickly if the shock parallels to other directions. Empirically, we estimate the model in a state-space form and document a set of new stylized facts of the US economy. First, the innovation network among sectors has low-rank. Second, the innovation network has non-negligible overlap with the production network. Third, recessions with slow recovery are those witnessing sizable negative shock to sectors central to the innovation network. Such network structures and the time-varying sectoral distribution of the shocks can well explain the large variation in the recovery speed across recessions in the US. Finally, we show that the force driving a slow-recovery yields a small but persistent process in consumption growth, and we use this process to explain several puzzles in asset pricing. The second chapter is based on the joint work with Yiqing Xing and Rakesh Vohra where we explore the agency conflicts in amplifying and propagating a shock in equity cross-holding networks. Unlike the first chapter, here, we emphasize the role of financial network and agency conflicts within the firm. We argue that firm-level agency conflicts and not just the network of interdependencies between firms, play a crucial role in amplifying or muting the propagation of exogenous shocks. Suppose firms can make investment decisions in response to an exogenous shock. If they are subject to default costs or limited liability, their investment decisions mitigate the spread of an initial shock. In the face of interest conflicts or moral hazard, firm-level investment choices amplify an initial shock. Agency conflicts counter the role of network structure in the propagation of shocks. For example, prior work argues that more integrated networks facilitate the propagation of shocks. In the presence of interest conflicts, this effect can be reversed. Under some condition, in a fully diversified network, the aggregate effect of an idiosyncratic shock via propagation does not diminish. This suggests a potentially important role that corporate governance plays in macro fluctuations. The third chapter is based on the joint work with Yu Shi and Robert Townsend where we show the business groups can significantly change the effect of credit supply shock through the equity-holding networks. Using business registry data from China, we show that internal capital markets in business groups can play the role of a financial intermediary and propagate corporate shareholders’ credit supply shocks to their subsidiaries. An average of 10% local bank credit growth where corporate shareholders are located would increase subsidiaries\u27 investment by 0.6% of their tangible fixed asset value, which accounts for 42.5% (4.3%) of the median (average) investment rateamong these firms. We argue that equity exchanges is one channel through which corporate shareholders transmit bank credit supply shocks to the subsidiaries and provide evidence tosupport the channel
Essays on Economic Behavior under Uncertainty
No full textI study individuals\u27 behavior under uncertainty and its implications for economies. In Chapter 1, I study a decision problem under uncertainty about multiple issues. In this environment, a decision maker may avoid uncertain acts that depend on many issues since it can be harder to form a belief about multiple issues jointly than about individual issues separately. I provide a novel behavioral property, Multi-issue Uncertainty Aversion, which captures this idea. I show that, for invariant biseparable preferences, exhibiting Multi-issue Uncertainty Aversion is equivalent to having a belief satisfying two conditions: richness of the core of the joint belief and superadditivity of the marginal beliefs. The richness condition provides a novel way of comparing a decision maker\u27s degrees of uncertainty aversion about different sets of issues. In Chapter 2, I develop a signaling model to examine the idea that when there is more than one sender, a receiver may evaluate their signaling choices relatively. This idea is related to whether students will choose their education levels competitively based on what others choose even if there is no direct competition between them. My model extends the job market signaling game of Spence (1973) so that there are two workers, and each worker has a two-dimensional type, one dimension of which is positively correlated across workers. It is shown that, in this game, there exists an equilibrium in which a worker\u27s wage is decreasing in the other\u27s education level, which may result in competitive behavior in signaling. Chapter 3 provides novel axiomatizations of Choquet Expected Utility functions with convex capacities and disjointly superadditive capacities, respectively. I first show that one can characterize the two properties in alternative ways using the rank-dependent probabilities associated with a capacity. These new characterizations elucidate the tight connections between the properties and a decision maker\u27s pessimistic belief faced with uncertainty
Enrollment, Labor, and Effort: An Analysis of the Educational Choices of Students in Mexico
No full textThis thesis consists of two chapters and examines questions centered around the educational choices of students in Mexico. When school-age children work, their education competes for their time and effort, which may lead to lower educational attainment and academic achievement. Chapter 1 develops and estimates a model of student achievement in Mexico, in which students make decisions on school enrollment, study effort and labor supply, taking into account local schooling options and wages. These decisions affect their academic achievement in math and Spanish, which is modeled using a value-added framework. The model is a random utility model over discrete school-work alternatives, where study effort is the outcome of an optimization problem under each alternatives. The model is estimated using an administrative test score database on Mexican 6th grade students combined with survey data on students, parents and schools, geocode data on school locations, and wage data from the Mexican census. The empirical results show that if students were prohibited from working while in school, the national dropout rate would increase by approximately 20%, while achievement would increase in math and Spanish. Expanding the conditional cash transfer, either in the magnitude of the benefits or the coverage, in conjunction with prohibiting working while in school is an operational policy that would greatly reduce dropout while maintaining the achievement gains. In Chapter 2, my coauthor Emilio Borghesan and I analyze a large-scale and long-running distance education program in Mexico. We use an empirical framework that combines value-added modeling with a sample selection model to estimate Marginal Treatment Effects (MTEs) for learning in telesecundarias relative to traditional secondary schools. The estimated MTEs reveal that school choice is not random, and that the effect of telesecundaria attendance is positive for nearly everyone. Using performance on nationally standardized exams as a measure of knowledge, we find that the average student experiences a 0.34 standard deviation improvement in math and a 0.21 standard deviation improvement in Spanish after one year of attending a telesecundaria. We conclude by estimating the effects of counterfactual policies that expand telesecundaria availability and find that they generate improvements in academic performance
Cultivating Communities on the Eastern Frontier: Agrarian Landscapes and Life in Downeast Maine (1760–1860)
No full textThis dissertation explores how people transform “new” and unfamiliar environments through colonization. While adaptationist perspectives typically stress how the environment shapes human behavior and communities, I integrate historical ecology and settlement ecology to examine how people mold, maintain, and manage landscapes. Rather than passive backdrops, landscapes are dynamic, produced as humans actively modify the environment. Boundaries, whether stable or fluid, divide and structure landscapes. As a type of boundary, frontiers can be understood as centers of social interaction and exchange, but more often are viewed as peripheries, remote but ripe for settlement, or wild zones where pioneers struggled to survive. Given factors like severe winters, poor soils, and warfare, the latter portrayal dominates narratives of America’s Eastern frontier during the 18th and 19th centuries. To interrogate notions of a largely static, intractable frontier environment, I assess how Euroamericans transformed the Downeast Maine region through settlement and enclosure. To determine how they colonized, cleared, bounded, and cultivated the landscape, I analyze archival, archaeological, and geospatial data from nine towns. First, I trace changes in the landscape and agricultural production between 1792 and 1811 using historical tax valuations. Statistical and geospatial analyses of this data suggest some town landscapes were more thoroughly improved and refined through agriculture than others. Initial parallels between frontier agricultural production and that of southern New England challenge notions of the intractable frontier environment. Second, I juxtapose 18th- and 19th-century maps with Google Earth and Light Detection and Ranging imagery to explore how the frontier landscape was settled, divided, and enclosed. By identifying historical landscape features that endure in the modern landscape, I chart continuity and change in the structure of these towns through the present. Finally, I examine the Foster Farmstead in Deer Isle, Maine as a case study to investigate how settlement and agrarian activities became physically embedded in the landscape at a small scale. My archaeological survey and excavation reveal settlement and landscape features like foundations, stone walls, and stone piles, which attest to how descendants of the Fosters continued to inhabit, transform, and enclose the land through time
Korean EFL Learners’ Morpheme Developmental Order: Embracing Semantic Aspects and the Poststructuralist Perspective
No full textThis study revisited L2 morpheme development order among Korean young learners of English. Taking into account the spirit of the current English curriculum in South Korea, the current study examined L2 morpheme development from two different perspectives: accuracy and fluency aspects. In the field of second language development, many studies have claimed the L1 effect in the acquisition of English morphemes, opining that the absence or presence of the corresponding morphemes in L1 affects the advancement or delay of the L2 morphemes. However, L1 effect appeared to be morpheme-specific in these previous studies, which raised a question if L1 alone is truly a definitive factor to explain the variability in L2 morpheme development. Thus, semantic aspects of morphemes, specifically semantic interpretability at LF, was additionally considered as part of factors in order to explicate the interlanguage variability. The Interpretability Hypothesis and Levinson’s Mapping problem inspired this model testing. Investigating the fluency aspect, the current study adopted a poststructuralist perspective in interpreting learners’ interlanguage, in order to understand their language use as processes of meaning making and communication from a more emic approach. Wug test is widely used to measure first language learners’ morphological metalinguistic knowledge, but has not been adopted much for EFL learners. As the current study focused on morphemes, the applicability of this test among EFL learners was also tested to discuss its appropriateness for EFL contexts. The present study revealed semantic interpretability affects learners’ morpheme development even more than L1 effect alone does, and when interpretability was combined with L1 effect as an independent factor, it was found to explain morpheme developmental patterns considerably. The poststructuralist analyses uncovered many cases where linguistic strategies/tools were appropriated to negotiate with the gap between the learners’ L2 linguistic knowledge and conventional use of L2. However, when quantitatively approached, even the poststructuralist perspective was found not to reduce the potential of misunderstanding caused by the incorrect morpheme uses by far. Wug test demonstrated a reliable predictability on how precisely EFL learners produced morphemes in the natural speech data. Based on these findings, the present study suggested some theoretical and pedagogical implications
Human Capital and Startup Financing
No full textWe establish the relevance of human capital to startup financing. Using administrative databases from the Central Bank of Brazil, we obtain information on private firms, their founders and their access to bank credit. Our empirical strategy is based on the premature death of founders, which allows us to identify how losing founders\u27 human capital affects startup financing. The results show that once a founder dies unexpectedly, there is a decrease in the amount of credit and an increase in interest rates and default rates. These findings are mainly driven by the death of founders who are also managers in the firm, which is consistent with the theory of founders contributing critical resources to their firms
Innovation and Inclusion in the Armed Forces
No full textMilitary organizations around the world often struggle to integrate and utilize innovative changes in tactics and technology that would save lives and enhance military power. This dissertation explains why the integration of innovations often encounters resistance. I argue that resistance is most likely when innovations disrupt existing gender hierarchies. Accounting for the relationship between gender and changes in warfare can help us understand why some innovations are harder to integrate and why some militaries struggle more than others to integrate them. Such changes can also influence the inclusion (or exclusion) regimes of militaries. This dissertation builds a broad theory of military innovation and gender. It tests the theory through a nested case comparison of the integration of two military innovations that challenge the gender status quo by reducing exposure to risk and the need for physical strength: (1) drones by the Israel Air Force and Artillery Corps, and (2) population-based counterinsurgency (COIN) by the Turkish Armed Forces and Australian Defense Force. For each case, I rely on interviews with military personnel and defense experts, as well as the analysis of government documents, military journals, news articles, field manuals, and other primary sources. I find that in both cases military organizations with higher degrees of inclusion (the Israel Air Force and Australian Defense Force) more effectively integrated new innovations than military organizations that were less inclusive. Finally, I develop and utilize an original dataset of Institutional Commitments to Inclusion (ICI) across all NATO-member and partner countries from 1991 to 2016 to examine whether innovation integration drives gender inclusion reform. Given that data on gender in militaries worldwide is limited and often inconsistent, the collection of new data required a close analysis of government reports submitted to the NATO Committee on Gender Perspectives and a range of other primary sources for each country-year. The results show that innovative change is an important factor in understanding why and when gender policy reforms take place. This study suggests that policymakers and scholars interested in military innovation and its influence on the future security environment must account for the role of gender
Perspectives of Restorative Justice Through the Lens of the Title IX and Conduct Officer
No full textRestorative justice is grounded in conflict resolution practices with the goal of psychologically healing the victim while informing the respondent of the harm they inflicted. The purpose of this study was to examine the factors that inhibit or support the adoption of restorative justice practices at Institutions of Higher Education (IHE). The research looked at the views of Title IX and student conduct officers on restorative justice as an alternative to traditional conduct procedures in sexual misconduct cases at IHE’s. The study also examined how the recent changes to Title IX regulations influenced a university’s decision to adopt restorative practices. To answer the research questions, Title IX and conduct officers employed at American Association of Universities and Doctoral Research-Intensive Institutions were interviewed using a qualitative interview methodology. The research revealed that more schools used restorative practices than initially expected but primarily for non-sexual misconduct incidences. In addition, the 2020 change to the Title IX regulations was a major factor in Title IX and conduct officers’ consideration in applying restorative practices to sexual assault cases. The results indicate of those IHE’s interested in establishing restorative practices on their campuses for sexual misconduct cases, participants expressed various criteria and limitations to implementation
The Effects of a Closed-Cohort Model of Ged Preparation on Students’ Completion Rates & Dispositions toward Post-secondary Learning
No full textIn this qualitative study, adult students placed in an eight-week, closed-cohort GED preparation program were introduced to blended learning while attending in-person instruction five days a week during the COVID-19 pandemic. Participants had the opportunity to receive their curriculum in a blended format, which provided some convenience for the students. Unlike in most adult education programs, which are open entry in format, these students worked together to take the GED at the same time as a cohort. This study explored the students’ feelings about blended learning, their life challenges, past educational experiences and how the cohort model impacted their ability to complete the GED in a timely manner. Eleven students earned their GED and all but one student passed at least one section of GED by the end of the course. Further, only one student withdrew from the class. Eighteen students participated in individual interviews and a focus group to discuss their experience in the class. Students in the study attributed their success to a highly structured class, live instruction, and positive teacher and peer connections. Findings from this study also helped to restructure the program’s orientation processes, classroom instruction, and career services to better serve the adult education students of the Adult Learning Center of Osceola County, of Kissimmee, FL