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  • (2020) Chen, Jie
    Thesis
    This thesis consists of three chapters. It studies, as a broad theme, the effectiveness of several institutional changes on individual decision-making based on experimental evidence. Chapter 1 is self-contained, with results purely based on a laboratory experiment. Chapter 2 and Chapter 3 are based on one field experiment in education. Chapter 2 describes the experimental settings and presents the overall results of the experiment, whereas Chapter 3 extends the analysis and focuses on treatment effects on women and men respectively. Chapter 1 shows how reward or punishment opportunities change contributions in a public goods game with 'privileged' members, where 'privilege' indicates that one's per-unit contribution to the public good produces a higher monetary return than is the case for others in the group. The main finding is that reward opportunities strongly increase group contributions in such groups while punishment opportunities do not. Reward also mitigates contribution decay over successive periods and improves social welfare. Chapter 2 mainly studies how rank incentives (i.e., relative performance information) in a milestone-based online assignment system affect students' academic performance. I find that rank incentives increase the likelihood of a student putting more effort in the online assignment. Rank incentives also have positive effects on low-performing students' exam marks while they have negative effects on high-performing students' exam marks. The positive effects seem driven by increased self-perceived stress, increased effort, and decreased procrastination. The negative effects seem driven by increased self-perceived happiness and re-allocation of effort. Chapter 3 studies how rank incentives and milestone information (i.e., information with reference to achievement milestones corresponding to different amounts of points earned) affect men's and women's academic performance differently. Women with access to the rank incentives experience a 0.19 SDs mark decrease in the first midterm, compared to women without this access. In the absence of relative performance information, men with access to the milestone information experience a 0.26 SDs mark increase in the final exam, compared to men without the access. The negative effects on women seem driven by their increased stress level, whereas men's improved exam performance seem driven by increased effort.

  • (2021) Tian, Wei
    Thesis
    In Chapter 1, we provide conditions for the synthetic control estimator to be asymptotically unbiased when the outcome is nonlinear, and propose a flexible and data-driven method to choose the synthetic control weights. In the empirical application, we illustrate the method by estimating the impact of the 2019 anti-extradition law amendments bill protests on Hong Kong's economy, and find that the year-long protests reduced real GDP per capita in Hong Kong by 11.27% in the first quarter of 2020, which was larger in magnitude than the economic decline during the 1997 Asian financial crisis or the 2008 global financial crisis. In Chapter 2, we generalise the conventional synthetic control method to a multiple-outcome framework, where the time dimension is supplemented with the extra dimension of related outcomes. As a result, the synthetic control method can now be used even if only a small number of pretreatment periods are available or if we worry about structural breaks over a longer time span. We show that the bound on the bias of the multiple-outcome synthetic control estimator is of a smaller stochastic order than that of the single-outcome synthetic control estimator, provided that the unit of interest can be closely approximated by the synthetic control in terms of the observed predictors and the multiple related outcomes before the treatment. In the empirical application, we illustrate our method by estimating the effects of non-pharmaceutical interventions on various outcomes in Sweden in the first 3 quarters of 2020. Our results suggest that if Sweden had implemented stricter NPIs like the other European countries by March, then (1) there would have been about 70% fewer cumulative COVID-19 infection cases and deaths by July, and 20% fewer weekly deaths from all causes in early May; (2) temporary absence from work would increase by 76% and total hours worked would decrease by 12% among the employed in the second quarter, but the impact would vanish in the third quarter, and there would be no discernable effect on the employment rate throughout; (3) the volume of retail sales would shrink by 5%-13% from March to May, while the other economic outcomes including GDP, import, export, industrial production, and CPI would not be affected. In Chapter 3, we propose a method based on the interactive fixed effects model to estimate treatment effects at the individual level, which allows both the treatment assignment and the potential outcomes to be correlated with the unobserved individual characteristics. This method is suitable for panel datasets where multiple related outcomes are observed for a large number of individuals over a small number of time periods. To illustrate our method, we provide an example of estimating the effect of health insurance coverage on individual usage of hospital emergency departments using the Oregon Health Insurance Experiment data.

  • (2020) Hong, Na Ry
    Thesis
    In this thesis, I examine the economic choices of people with disabilities. The thesis consists of four essays, each looking at different aspects of human capital or welfare outcomes for the disabled population in Australia. I use repeated cross sections of the Australian Bureau of Statistics (ABS) Survey of Disability, Ageing and Carers (SDAC) data for all of the four essays. The first essay explores the choice of relative occupational groups between disabled and non-disabled workers. I employ a multinomial logit model, using five SDAC cross sectional surveys from 1993 to 2012. I find that for men, the average marginal effects are relatively stable in magnitude over time, indicating that being disabled is positively associated with being a labourer and being in sales while negatively associated with being a manager or a technician. The largest effects tend to be for labourers (2 to 6 percentage points) and for managers (-2 to -6 percentage points). For women, the magnitude of the effects tends to be smaller although the signs are broadly like those for males. The only statistically significant effects for females appear for labourers where being disabled is positively associated with estimates in the range 1 to 3 percentage points. The second essay analyses the effect of reading and writing assistance on take-up of the Disability Support Pension (DSP). I employ age at onset of the disability as an instrumental variable to account for potential selection problems present in receiving the assistance. Using SDAC data (2003, 2009, 2015), a recursive bivariate probit estimation is carried out to allow for the supposed correlation representing common unobservables that capture the selection effects. I find that reading and writing assistance substantially increases the probability of receiving the DSP. The goal of the third essay is to see whether the implementation of the Disability Standards for Education in 2005 has resulted in improvement in educational outcomes for disabled students. I use a difference-in-differences (DD) method, using three waves of the data (2003 as pre-policy, 2009 and 2015 as post-policy). While there is no significant effect in school enrolment, a significant negative effect is observed for enrolment and completion of bachelor or above degrees relative to Year 11 or below. Overall, I find no significant effect of the policy on educational outcomes and that any observed increase in enrolment or completion is due to a general increase over time. The fourth essay investigates the wage differential observed between the disabled and non-disabled Australians. I use the Blinder-Oaxaca decomposition method to examine the wage gap each separately for men and women. Using the 2012 data, I employ the Heckman selection process to account for any potential selection into the labour market. I find a significant negative effect of mental health on employment and earnings for the disabled population. I also find that the proportion of the wage gap between disabled and non-disabled workers that is not explained by productivity-related characteristics is very large.

  • (2021) Lee, Barton
    Thesis
    This thesis consists of three essays in political economics. In the first essay “Feigning Politicians,’’ I explore a model of politics where politicians have limited ability to influence policy. In this environment, I show that politicians face limited accountability and have an incentive to feign support for policies that voters demand: proposing policies that voters demand but then exerting little effort toward enacting such policies. A key implication of this feigning behavior is that, in some instances, less effective politicians will be reelected with a higher probability than more effective politicians. I provide empirical support for this key implication in U.S. House elections. In the second essay “Gridlock, Leverage, and Policy Bundling,” I explore a dynamic model of legislative bargaining where alternatives to the status-quo arrive stochastically during the bargaining process and the proposer can bundle multiple alternatives into a single proposal. Contrary to the prevailing wisdom that policy bundling reduces legislative gridlock, I show that policy bundling can increase gridlock via a leverage incentive; I call gridlock of this form leverage-based gridlock. Leverage-based gridlock is more likely to occur during periods of economic or political stability and, when it occurs, causes traditional measures of legislator ideology to overstate the true level of polarization between legislators. In the final essay “Political Capital,” we explore a two-period model of organizational decision making where the leader of the organization has a stock of political capital that she can choose to spend to influence decisions. The leader’s stock of political capital evolves dynamically and may increase or decrease depending on the leader’s decision to spend her capital and if her decision to spend was correct ex-post. This presents the leader with an intertemporal choice problem: spending political capital today will improve today’s decision (in expectation) but may result in less political capital—and hence less influence over organization decisions—in the future. We characterize the optimal use of political capital by the leader, the evolution of political capital over time, and identify different leadership styles that can emerge. We also explore the implications of our results for organizational design.

  • (2021) Zeng, Shipei
    Thesis
    The productivity slowdown across industrialised countries since 2004 is a persistent puzzle. This thesis proposes new productivity decompositions, using both industry and firm-level administrative data sets, with a focus on innovative techniques to advance understanding of the drivers of firm, industry, and country productivity performance. Particular attention is paid to micro-theoretic foundations of the proposed techniques, and to the rigorous application of appropriate econometric and data science techniques. At the industry level, drivers of productivity change are identified from a micro-theoretic framework implemented using an index number approach. Drawing on a non-parametric model, Chapter 2 decomposes productivity growth into explanatory factors for 12 selected industries and 16 market sector industries in Australia. Technical progress is found to support increasing productivity, though its contribution is partly offset by production inefficiency. Production inefficiency is interpreted as lagged output, inactive operation or possible measurement errors on a case-by-case basis. The overall performance of productivity growth and its explanatory factors is affected by the market shares based on a weighted average industry aggregation. In addition to the industry-level productivity decomposition in Chapter 2, a firm-level productivity decomposition is developed in Chapter 3 for a market that consists of incumbents, entrants and exiters. This new method enables decompositions of productivity into components to be merged with firm dynamics. The framework is applied to Australian firm-level data and reveals the dominant contribution of incumbent firms to industry productivity and industry efficiency. A difference-in-differences approach is proposed that validates the firm dynamics from the counterfactual perspective. Price imputation is essential when detailed price information is unavailable to support productivity decompositions. Chapter 4 introduces tree-based machine learning models for estimating missing prices in cases where there is product entry and exit, or product “churn”. Model performance metrics from (electronic-point-of-sale) scanner data confirm the prediction accuracy of tree-based models. An economic explanation is proposed to link the decision tree structure and consumer preferences. Tree-based models are recommended for price imputation due to their prediction accuracy and compatibility with consumer utility types.

  • (2021) Banh, Thi Hang
    Thesis
    In this thesis, I examine the impacts of foreign competition and tariff liberalization on skill premium and product quality in developing countries. The first essay studies the effect of the growth in China's exports on the value, quantity, and quality of exports from Asian developing countries in the US market by applying the instrumental variable method on product-level trade data. I find that Chinese competition has a non-negative effect on the value and quantity of exports from Bangladesh, Vietnam, and Sri Lanka but a negative effect on exports from Indonesia, Malaysia, Philippines, India, Pakistan, and Thailand. All countries upgrade product quality when facing tougher competition from China, but a rise in China's exports leads to more quality upgrading for products close to the world frontier for Bangladesh, Vietnam, and Sri Lanka and short-ladder products for Indonesia, Malaysia, Philippines, India, Pakistan, and Thailand. The second essay investigates the effect of the rise of China's exports on the skill premium of Mexican firms by applying the instrumental variable method to the plant-level production data from Mexico and product-level trade data. We find that Mexican firms reduce their skill premium when facing a rise in Chinese exports, and the effect is more pronounced among non-exporters. We develop a model linking competition and wage inequality between skilled and unskilled workers by introducing a labor market with skilled and unskilled workers and endogenous wages of skilled workers to the model of heterogeneous plants and quality differentiation. Our model predicts that tougher competition leads plants to downgrade quality, which induces a decline in the skill premium. We document a downgrading effect of the rise of China on product quality, and the effect is less strong for exported products. These findings support the predictions of our model. The third essay analyses the effect of tariff reductions under the North American Free Trade Agreement on the product quality and skill premium of Mexican firms using plant-level production data from Mexico and bilateral tariff data between the US and Mexico. We find that output tariff reduction leads to the quality downgrading of domestic products, while there is no statistical association between tariff cuts and skill premium paid by Mexican exporters and non-exporters. It appears that there is no connection between tariff declines and skill premium through changes in product quality.

  • (2020) Hayek, Danielle
    Thesis
    This dissertation consists of three self-contained essays in Development Economics. The first investigates child mortality and household outcomes in sub-Saharan Africa. The second aims to estimate the impact religion plays in shaping social preferences towards women and the poor. The final examines the long lasting effects of conflict exposure in a multi-sectarian state. The recent substantial drops in child mortality in sub-Saharan Africa may be the start of a demographic transition. The pace of such a transition will depend on the subsequent trade-offs parents face, yet the evidence on these tradeoffs in Africa is limited and contradicts findings elsewhere. We provide reduced form support for the existence of the Beckerian quantity-quality tradeoff model by assessing the fertility and education responses to a large-scale measles vaccination program that averted nearly 500,000 child deaths each year over the past two decades. We causally identify these responses using quasi-experimental variation in the timing of the program across countries and differences across mothers and older children in the age composition of the young children in their families. We find substantive reductions in mothers’ fertility when their already born children are more likely to survive. At the same time, the older siblings of these children complete fewer years of schooling, as the shadow costs of their time rises. The findings provide limited evidence for Beckerian quantity-quality theories of demographic transition. The second essay aims to identify the effect of religion on individual cooperative behaviour towards women and the poor by focusing on Muslim immigrants. In particular, it attempts to shed light on whether religion or the social environment of immigration influences the distinct behaviour exhibited by Muslim immigrants inWestern destination countries. We test this by conducting a prisoner’s dilemma game with the Lebanese population in Australia (destination country) and the Lebanese population in Lebanon (native country). This unique sample allows us to remove the effects of confounds such as economic institutions of country of ancestry, ethnolinguistic groupings and culture. In both countries, we compare Lebanese Muslims to Lebanese Christians to isolate the effect of religion. We find that in Lebanon, Muslims and Christians behave similarly, while in Australia, when compared to Christians, Muslims are more cooperative (i.e., send a higher share of their endowment) towards the poor and especially towards poor females. These results hold even after controlling for altruistic behaviour. We conclude that distinct behaviours displayed by Muslims are not driven by religion but rather migration status. Differing levels of social capital between these two religious groups in Australia seem to explain these findings. The third essay considers the impact of conflict exposure on trust in a multi-sectarian society where all sects were exposed to the same violent conflict but were impacted differently. Our findings are based on survey data collected from a sample of 201 Lebanese citizens residing in Beirut, Lebanon. We find significant impacts of conflict exposure that differ heterogeneously across the three main sects: Christians, Sunni Muslims and Shia Muslims. Christians’ distrust towards other sects is heightened after exposure to conflict during the Lebanese Civil War while the opposite is true for both Sunni and Shia Muslims. These effects are strongest when exposure occurs before birth and during childhood providing evidence of the long lasting nature of the effects of war. We believe these results are driven by the nature of victimisation and more specifically the political resolutions brought about by the Lebanese Civil War. Christians lost political power after the conflict while both Sunni and Shia Muslims gained.

  • (2021) Menon, Shreeyesh
    Thesis
    I estimate the macroeconomic effects of monetary policy shocks between 1996-2013 using Inoue and Rossi (2018)'s functional shock approach based on identifying shocks as shifts in the entire term structure of the yield curve around monetary policy announcements. The empirical framework is unique in how it provides a tool to study monetary policy across conventional and unconventional periods within a unified model. The principal contribution of this work is documenting the relationship between the nature of shifts induced in the yield curve by a monetary policy announcement and its macroeconomic impact. I find that shocks in the conventional period that have a larger impact on the long-term yields elicit similar macroeconomic responses as those in the unconventional period, with the responses being in line with standard theory. I also find that shifts in the long-term rates are policy-relevant and cannot be ignored even in the conventional period. Additionally, I correct the shock measure for information frictions and find the results to be qualitatively similar, but with a roughly two-fold magnification of the responses.

  • (2021) Gorajek, Adam
    Thesis
    Most economic research aims to reveal truths about economic relationships. This thesis is different because it aims to progress how economists reveal those truths. It consists of three self-contained chapters, each about different elements of the research process. Chapter 1 explores a new econometric approach to data analysis. As the field of economics currently stands, researchers usually inform policymakers with conclusions that come from studying statistical expectations, or arithmetic means, of potential outcomes. Here I introduce other types of means to study, and show that often they will better respect the needs of policymakers. Chapter 2 is about a task that matters for macroeconomic research in particular: measuring price indexes that exclude the effects of quality change. I translate the task into the language of econometrics, showing that it amounts to estimating the fixed effects in a general model of quality adjustment. Earlier translations are less general and suffer from a misspecification relating to product weighting. To exemplify the value of the translation, I use it to challenge influential criticisms of the so-called "time-dummy hedonic" method of quality adjustment. Chapter 3 is about a behavioural element of research. With four collaborators, I investigate the credibility of central bank discussion papers by searching for traces of "researcher bias", which is a tendency to use undisclosed analytical procedures that raise measured levels of statistical significance in artificial ways. To conduct our investigation we compile a new dataset and borrow two popular bias detection methods. The results are mixed and, alone, do not call for changes in research practices. But they do challenge the merits of one of the bias detection methods we borrow.