nep-dev New Economics Papers
on Development
Issue of 2009‒02‒22
28 papers chosen by
Jeong-Joon Lee
Towson University

  1. Price Elasticity Estimates for Cigarette Demand in Vietnam By Patrick Eozenou; Burke Fishburn
  2. Optimal Risk Sharing Under Limited Commitment: Evidence From Rural Vietnam By Patrick Eozenou
  3. Intergovernmental Transfers and Elementary Education: Quasi-Experimental Evidence from Brazil By Stephan Litschig
  4. Globalization and Culture Shaping the Gender Gap: A Comparative Analysis of Urban Latin America and East Asia (1970 - 2000) By Enriqueta Camps
  5. Public Pension and Household Saving: Evidence from urban China By Jin Feng; Lixin He; Hiroshi Sato
  6. Source of Finance, Growth and Firm Size ? Evidence from China By Du, Jun; Girma, Sourafel
  7. Inequality and the Impact of Growth on Poverty: Comparative Evidence for Sub-Saharan Africa By Fosu, Augustin Kwasi
  8. The Financial Crisis of 2008 and the Developing Countries By Naude, Wim
  9. Access to Higher Education and Inequality: The Chinese Experiment By Belton Fleisher; Xiaojun Wang; Haizheng Li; Shi Li
  10. Information, Institutions and Banking Sector Development in West Africa By Panicos Demetriades; David Fielding
  11. Economic Freedom as a Driver for Growth in Transition By Pääkkönen, Jenni
  12. Licensing Regulation and the Supervisory Structure of Private Pensions: International Experience and Implications for China By Yu-Wei Hu; Fiona Stewart
  13. Measuring China's Innovation System: National Specificities and International Comparisons By Martin Schaaper
  14. On a Class of human development index measures By Srijit Mishra; Hippu Salk Kristle Nathan
  15. A conceptual framework for development of sustainable development indicators By Hippu Salk Kristle Nathan; B. Sudhakara Reddy
  16. Gender-based indicators in human development: Correcting for missing women By Hippu Salk Kristle Nathan
  17. Impact of imported intermediate and capital goods on economic growth: A Cross country analysis By C. Veeramani
  18. Policy dilemmas in India: The Impact of changes in agricultural prices on rural and urban poverty By Sandra Polaski et al
  19. THE BALASSA-SAMUELSON HYPOTHESIS AND ELDERLY MIGRATION By Hernando Zuleta; Oscar Avila; Mauricio Rodriguez
  20. Income Shocks, Coping Strategies, and Consumption Smoothing. An Application to Indonesian Data By Gabriella Berloffa; Francesca Modena
  21. The Role of the Real Exchange Rate Adjustment in Expanding Service Employment in China By Xu, Yingfeng; Yan, Xiaoyi
  22. Does money affect happiness and self-esteem? The poor borrowers' perspective in a quasi-natural experiment By Becchetti, Leonardo; Castriota, Stefano
  23. Savings, Credit and Insurance: Household Demand for Formal Financial Services in Rural Ghana By Mirko Bendig; Lena Giesbert; Susan Steiner
  24. The Impact of AIDS on Income and Human Capital By Ferreira, Pedro Cavalcanti; Santos, Marcelo; Pessoa, Samuel
  25. Conditioned Export-Led Growth Hypothesis: A Panel Threshold Regressions Approach By Galimberti, Jaqueson K.
  26. Access to land and rural poverty in developing countries: theory and evidence from Guatemala By Bandeira, Pablo; Sumpsi, Jose Maria
  27. Perception towards the Importance of Education among Muslim Women in Papar, Sabah (Malaysia) By Mansur, Kasim; Abd. Rahim, Dayangku Aslinah; Lim, Beatrice; Mahmud, Roslinah
  28. Regression Discontinuity Designs in Economics By David S. Lee; Thomas Lemieux

  1. By: Patrick Eozenou (European University Institute, Villa San Paolo, Via Della Piazzuola 43, 50133 Florence, Italy); Burke Fishburn (World Health Organization and Center for Disease Control.)
    Abstract: In this paper, we analyze a complete demand system to estimate the price elasticity for cigarette demand in Vietnam. Following Deaton (1990), we build a spatial panel using cross sectional household survey data. We consider a model of simultaneous choice of quantity and quality. This allows us to exploit unit values from cigarette consumption in order to disentangle quality choice from exogenous price variations. We then rely on spatial variations in prices and quantities demanded to estimate an Almost Ideal Demand System. The estimated price elasticity for cigarette demand is centered around -0.53, which is in line with previous empirical studies for developing countries.
    Keywords: Price elasticity, Cigarette Demand, Taxation, Consumption, Vietnam.
    JEL: D12 H31 I12 O23
    Date: 2009
  2. By: Patrick Eozenou (European University Institute, Villa San Paolo, Via Della Piazzuola 43, 50133 Florence, Italy)
    Abstract: We use panel data from a household survey conducted in Vietnam to analyze the effectiveness of informal risk sharing arrangements in protecting household consumption from idiosyncratic income shocks. We focus on the effects of reported harvest shocks and of estimated shocks to agricultural revenues on adult equivalent consumption. The full-insurance allocation is tested against a specified alternative under which contracts are not fully enforceable ex-post. We find that farmers hit by unfavorable events stabilize their consumption level below the village aggregate level, irrespective of the level of realized shocks. At the same time, farmers experiencing more favorable shocks enjoy higher consumption in proportion to the realized value of idiosyncratic shocks. Together, these finding are consistent with a simple 2-period model of optimal risk sharing with one-sided limited commitment. These results hold for total consumption and for non-durable consumption. We also find however some evidence supporting the full insurance hypothesis for food consumption.
    Keywords: Consumption, Risk-sharing, Informal Insurance,Vietnam.
    JEL: D8 I3 O1
    Date: 2009
  3. By: Stephan Litschig
    Abstract: Whether providing additional resources to local communities leads to improved public services and better outcomes more generally, given existing management capacity and incentive and accountability structures, is an unresolved yet important question for public policy. This paper uses a regression-discontinuity design to evaluate the effect of unrestricted fiscal transfers on local spending (including on education), schooling and learning in Brazil. Results show that transfers increase local public spending almost one for one with no evidence of crowding out own revenue or other revenue sources. Extra per capita transfers of 1000 Reais lead to about 0.42 additional years of elementary schooling and student literacy rates increase by about 5.6 percentage points on average. Part of this effect arises through higher teacher-student ratios in municipal elementary school systems. Results also suggest that additional resources have stronger effects in more rural and less developed parts of Brazil.
    Keywords: Intergovernmental grants, school finance, foreign aid effectiveness
    JEL: H7 I2 O15
    Date: 2008–08
  4. By: Enriqueta Camps
    Abstract: In this paper we present: 1. the available data on gender inequality at the macroeconomic and comparative level and 2. Gender inequality measures at the microeconomic and case study level. We see that market openness has a very significant effect on the diminution of the human capital gender gap. Globalization and market openness is a fist factor that improves the human capital endowments of women and also their economic position. But we also see that the effects of religious beliefs are more hybrids. While Catholicism has an statistically significant influence on the improvement of the human capital gender gap, Muslim and Buddhist religions have the opposite negative effect of increasing gender differences. In the second global era Catholic Latin American countries benefited from market openness in terms of the human capital gender gap, while we find the opposite impact in Buddhist and Muslim countries like China, were the position of women even worsened.
    Keywords: Wage inequality, gender gap, market openness, human capital
    JEL: J22 J13 J16
    Date: 2009–02
  5. By: Jin Feng; Lixin He; Hiroshi Sato
    Abstract: We relate household saving to pension reform, to explain the high household saving rates in urban China from a new perspective. We use the exogenous-policy induced-variation in pension wealth to explicitly estimate the impact of pension wealth on household saving, and obtain a significant offset effect of pension wealth on household saving. Our estimations show that pension reform boosted the household saving rate in 1999 by about 6 percentage points for cohort aged 25-29 and by about 3 percentage points for cohort aged 50-59. Our results also indicate that declining pension wealth reduces expenditure on education and health more than on other consumption items.
    Keywords: pension reform, pension wealth, household saving rate, urban China
    JEL: E21 H55 P43
    Date: 2009–02
  6. By: Du, Jun; Girma, Sourafel
    Abstract: Using a comprehensive firm-level dataset spanning the period 1998-2005, this paper provides a thorough investigation of the relationship between firm size, total factor productivity growth and financial structure in China, controlling for the endogeneity of the latter. Generally, it finds financing source matters for firms of different size, and the extent to which financing source matters for firm growth is greater for small firms than big firms. Self-raised finance appears to be most effective in promoting small firms to grow, and bank loan seems to be more supportive to big firms. The relationship between size, finance and growth also depends on ownership. In addition, there exist strong complementarities between formal and informal finance, as well as between indigenous and foreign finance.
    Keywords: China, finance, firm size, growth
    Date: 2009
  7. By: Fosu, Augustin Kwasi
    Abstract: This study explores the extent to which inequality affects the impact of income growth on the rates of poverty changes in sub-Saharan Africa (SSA) comparatively with non-SSA, based on a global sample of 1977?2004 unbalanced panel data. For both regions and all three measures of poverty?headcount, gap, and squared gap?the paper finds the impact of GDP growth on poverty reduction as a decreasing function of initial inequality. The impacts are similar in direction for SSA and non-SSA, so that within both regions there are considerable disparities in the responsiveness of poverty to income growth, depending on inequality. Nevertheless, the income?growth elasticity is substantially less for SSA, implying relatively small poverty-reduction sensitiveness to growth compared with the rest of the developing world. Furthermore, the paper finds a considerable variation in the predicted values of the income?growth elasticity across a large number of SSA countries, implying the need for understanding country-specific inequality attributes for effective poverty-reduction strategies.
    Keywords: inequality, income growth, poverty, sub-Saharan Africa
    Date: 2008
  8. By: Naude, Wim
    Abstract: Following the financial crisis that broke in the US and other Western economies in late 2008, there is now serious concern about its impact on the developing countries. The world media almost daily reports scenarios of gloom and doom, with many predicting a deep global recession. This paper critically discusses this and concludes that as far as the developing countries are concerned, a bit more optimism may be warranted. Although without doubt there are particular countries that will be adversely affected, there will also be countries that may be less affected, may avoid recession, and may recover sooner than expected. Six major reasons for this conclusion are discussed. Without this resilience in the developing world, prospects for the world?s richer countries would be much bleaker. Finally, some options available to the developing countries for minimizing the impact of the crisis are discussed. The crisis accentuates the urgent need for accelerating financial development in developing countries, both through domestic financial deepening, domestic resource mobilization, and reform of the international financial system.
    Keywords: financial crisis, developing countries, development finance, financial development
    Date: 2009
  9. By: Belton Fleisher (Department of Economics, Ohio State University); Xiaojun Wang (Department of Economics, University of Hawaii at Manoa); Haizheng Li (School of Economics, Georgia Institute of Technology); Shi Li (School of Economics and Business, Beijing Normal University)
    Abstract: We apply a semi-parametric latent variable model to estimate selection and sorting effects on the evolution of private returns to schooling for college graduates during China’s reform between 1988 and 2002. We find that there were substantial sorting gains under the traditional system, but they have decreased drastically and are negligible in the most recent data. We take this as evidence of growing influence of private financial constraints on decisions to attend college as tuition costs have risen and the relative importance of government subsidies has declined. The main policy implication of our results is that labor and education reform without concomitant capital market reform and government support for the financially disadvantaged exacerbates increases in inequality inherent in elimination of the traditional "wage-grid."
    Keywords: Return to schooling, selection bias, sorting gains, heterogeneity, financial constraints, comparative advantage, China
    JEL: J31 J24 O15
    Date: 2009–02
  10. By: Panicos Demetriades; David Fielding
    Abstract: Using a new panel dataset for banks in eight West African countries, we explore the factors that exacerbate or alleviate excess liquidity, and the factors that promote or retard the rate of growth of banks’ assets. Loan default rates in the region are high, and variations in the rate impact on liquidity and asset growth. However, the size of this effect is very sensitive to bank age. Some types of improvement in the quality of governance reduce excess liquidity and promote asset growth. However, the impact of other types of improvement, particularly with regard to corruption, is ambiguous. We uncover evidence that provides an explanation for this ambiguity.
    Keywords: Africa; Banking; Default; Institutions; Liquidity
    JEL: G21 O16
    Date: 2009–02
  11. By: Pääkkönen, Jenni (BOFIT)
    Abstract: This paper reviews the political economy view of economic growth in post-communist economies making the transition to free markets, focusing on the role of economic policy and institutions. We test the hypothesis that better institutions, measured in terms of economic freedom, contribute to growth. The empirical results from the cross-section of transition economies confirm this hypothesis. The paper concludes that non-linearities are present in the growth model and that differences arise depending on how economic well-being is defined.
    Keywords: growth; institutions; human capital
    JEL: O17 O40 O57
    Date: 2009–02–12
  12. By: Yu-Wei Hu; Fiona Stewart
    Abstract: China currently has a highly diversified structure of pension regulation and supervision. In this paper we first review the legal framework of private pension fund regulation and supervision in other economies, including Australia, Chile, Hong Kong China, Poland, Turkey, the United Kingdom and the United States. Then, based on international practices and experiences identified, and taking into account China‘s unique situation, we examine potential ways to improve the current private pension regulatory and supervisory structure in the country.<P>Réglementation des agréments et structure de contrôle des pensions privées : Pratiques à l’échelle internationale et implications pour la Chine<BR>La structure actuelle de réglementation et de contrôle des pensions en Chine est très hétérogène. Le présent rapport examine, dans un premier temps, le cadre juridique de la réglementation et du contrôle des pensions privées dans d'autres pays, comme l'Australie, le Chili, Hong Kong-Chine, la Pologne, la Turquie, le Royaume-Uni et les États-Unis. Ensuite, en s'appuyant sur les pratiques recensées à l'échelle internationale et sur la situation particulière de la Chine, il étudie les possibilités d'amélioration de la structure de réglementation et de contrôle des pensions privées actuellement en vigueur dans le pays.
    Keywords: private pensions, pension privée, licensing, China, plans de pensions professionnelles, enterprise annuity, Chine, pension regulation, réglementation des pensions, supervisory structure, structure de contrôle, agrément
    JEL: G23 I32
    Date: 2009–01
  13. By: Martin Schaaper
    Abstract: This working paper provides input to the OECD Review of Innovation Policy for China (OECD, 2008), which was released in September 2008. Science and technology (S&T) have been pinpointed by the Chinese State Council as a key driving force for sustainable economic growth and the transformation of China into an innovation-oriented nation on the basis of the development of a national innovation system with strong indigenous innovation capacity. One of the targets set in the National Guidelines for the Medium- and Long-term Plan for Science and Technology Development (2006-20) is to raise the ratio of R&D to GDP to 2% by 2010 and to 2.5% or more by 2020. This is an extremely ambitious target, as it implies the need for R&D expenditure to increase by at least 10-15% annually.<P>Évaluation du système d'innovation de la Chine : Spécificités nationales et comparaisons internationales<BR>Ce document de travail est une contribution à la Revue de l’OCDE sur les politiques d’innovation pour la Chine (OCDE, 2008) qui a été publiée en septembre. La science et la technologie (S-T) ont été identifiées par le Conseil d’État chinois comme étant des ressorts essentiels pour l’instauration d’une croissance économique durable et la transformation de la Chine en un pays orienté vers l’innovation grâce à la mise en oeuvre d’un système national d’innovation doté d’une solide capacité d’innovation propre. Les lignes directrices nationales pour les programmes à moyen et long termes de développement de la science et de la technologie (2006-2020) ont notamment pour objectif de porter la R-D à 2 % du PIB d’ici 2010 et à 2,5 % ou plus d’ici 2020. Il s’agit là d’un objectif extrêmement ambitieux qui suppose que les dépenses de R-D augmentent d’au moins 10 à 15 % par an de manière continue.
    Date: 2009–01–15
  14. By: Srijit Mishra (Indira Gandhi Institute of Development Research); Hippu Salk Kristle Nathan (Indira Gandhi Institute of Development Research)
    Abstract: Using Minkowski distance function we propose a class of Human Development Index measures. Special cases of this turn out to be the popularly used linear average method as also a newly proposed displaced ideal method. Two measures of penalty are suggested. One captures the non-uniform attainment across dimensions and the other captures the deviation from the ideal path. A method of adjusting for unequal weights is also provided.
    Keywords: Ideal path, Penalty, Minkowski distance function, Multiple dimensions, Uniform development
    JEL: D63 I31 O15
    Date: 2008–10
  15. By: Hippu Salk Kristle Nathan (Indira Gandhi Institute of Development Research); B. Sudhakara Reddy (Indira Gandhi Institute of Development Research)
    Abstract: There was a boom in the development of sustainable development indicators (SDIs) after notion of sustainability became popular through Bruntland Commission's report. Since then numerous efforts have been made worldwide in constructing SDIs at global, national and local scales, but in India not a single city has registered any initiative for indicator development . Motivated by this dearth of studies added to the prevailing sustainability risks in million plus cities in India, a research is being undertaken at the Indira Gandhi Institute of Development and Research (IGIDR), Mumbai, India, to develop a set of sustainable indicators to study the resource dynamics of the city of Mumbai. As a first step in the process, the ground for development of SDIs is prepared through the development of a framework. A multi-view black box (MVBB) framework has been constructed by eliminating the system component from the extended urban metabolism model (EUMM) and introducing three-dimensional views of economic efficiency (EE), social wellbeing (SW), and ecological acceptability (EA). Domain-based classification was adopted to facilitate a scientifically credible set of indicators. The important domain areas are identified and applying MVBB framework, a model has been developed for each domain.
    Keywords: Urban metabolism, Resources transformation, Economic efficiency, Society, Ecology, Monitoring and evaluation, City development, Black box, Productization of process
    JEL: Q01 Q56 O18
    Date: 2008–03
  16. By: Hippu Salk Kristle Nathan (Indira Gandhi Institute of Development Research; Indira Gandhi Institute of Development Research)
    Abstract: Gender Development Index and Gender Empowerment Measure are two gender-based indicators provided by the United Nations Development Program. Population share of the genders enter the formulation of these indicators in such a way that it favours the better performing gender. This can lead to further additions to `missing women'. A correction is proposed to capture this anomaly. This alternative satisfies an axiom of Monotonicity with its two corollaries, that is, given attainments the measure maximizes at ideal sex ratio and vanishes when one of the genders becomes extinct. An empirical illustration by taking life expectancy data of countries is given.
    Keywords: Ideality, Extinction, Index, Inequality, Sex-ratio
    JEL: D63 J16 I31 O15
    Date: 2008–09
  17. By: C. Veeramani (Indira Gandhi Institute of Development Research; Indira Gandhi Institute of Development Research)
    Abstract: Knowledge accumulation in the richer countries provides them with comparative advantages in higher productivity products. The countries that import the higher productivity intermediate products and capital equipments produced in the richer countries, however, derive benefits from knowledge spillovers. The empirical analysis in this paper shows that what type of intermediate goods and capital equipments a country imports and from where it imports indeed matters for its long-run growth. Using highly disaggregated trade data for a large number of countries, we construct an index (denoted as IMPY) that measures the productivity level associated with a country's imports. Using instrumental variable method (to address the endogeneity problems), we find that a higher initial value of the IMPY index (for the year 1995) leads to a faster growth rate of income per capita in the subsequent years (during 1995-2005) and vice versa. The results imply that a 10 increase in IMPY increases growth by about 1.3 to 1.9 percentage points, which is quite large.
    Keywords: Imports, Intermediate and Capital Goods, Economic Growth, Productivity
    JEL: F10 F43 O40 O47
    Date: 2008–12
  18. By: Sandra Polaski et al (Carnegie Endowment for International Peace; Indira Gandhi Institute of Development Research)
    Abstract: Trade policy reforms which lead to changes in world prices of agricultural commodities or domestic policies aimed at affecting agricultural prices are often seen as causing a policy dilemma: a fall in agricultural prices benefits poor urban consumers but hurts poor rural producers, while a rise yields the converse. Poor countries have argued that they need to be able to use import protection and/or price support policies to protect themselves against volatility in world agricultural prices in order to dampen these effects. In this paper, we explore this dilemma in a CGE model of India that uses a new social accounting matrix (SAM) developed at the Indira Ghandi Institute of Development Research (IGIDR) in Mumbai. The SAM includes extensive disaggregation of agricultural activities, commodity markets, labor markets, and rural and urban households. This SAM includes 115 commodities, 48 labor types and 352 types of households, (classified by social group, income class, region, and urban/rural). The CGE model based on this SAM can be used to explore the linkages between changes in world prices of agriculture and the incomes of poor rural and urban households, capturing rural-urban linkages in both commodity and factor markets. The results indicate that the inclusion of linkages between rural and urban labor markets is necessary to fully explore, and potentially eliminate, the dilemma. A fall in agricultural prices hurts agricultural producers, lowers wages and/or employment of rural labor, and in some cases spills over into urban labor markets, depressing wages and incomes of poor urban households as well. In these cases both rural and urban poverty increases. The paper explores the strength of these commodity and factor market linkages, and the potential spillover effects of policies affecting agricultural prices.
    Keywords: Doha negotiations, India trade policy, World prices, Labour market, CGE model
    JEL: F13 F14 F16 O24 O53
    Date: 2008–06
  19. By: Hernando Zuleta; Oscar Avila; Mauricio Rodriguez
    Abstract: We present an Overlapping Generations Model with two final goods: tradable goods are produced with a standard Cobb-Douglas production function and non-tradable goods are produced with linear production function where the only factor is labor. We maintain the fundamental assumption of factor mobility between sectors so model is consistent with the Balassa-Samuelson hypothesis. Given the general equilibrium structure of our model we can examine the effect of the saving rate on migration and non-tradable relative prices. Under this setting, we find that the elderly have incentives to migrate from economies where productivity is high to economies with low productivity because of the lower cost of living. In more general terms the elderly migration is likely to go from rich to poor countries. We also find that, for poor countries, the elderly migration has a positive effect in wages and capital accumulation.
    Date: 2009–02–06
  20. By: Gabriella Berloffa; Francesca Modena
    Abstract: Using the Indonesian Family Life Survey, this study investigates whether Indonesian farmers respond differently to income shocks (crop loss) depending on the level of their asset ownership, and whether their responses are aimed at preserving consumption levels or at accumulating assets. We consider a framework in which assets contribute directly to the income generation process. In this context the need to accumulate assets to ensure future income may lead poor farmers (those with a low level of productive assets) to behave quite differently in terms of both their responses to shocks and their consumption decisions. For them transitory shocks may have long term consequences when the income loss leads to changes in their asset investment decisions. Our results suggest that while non-poor farmers smooth consumption relative to income, poor households use labor supply to compensate the income loss and, on average, they save half of this extra income. These results confirm the importance of savings for poor households, and highlight a crucial role for policies that support savings or, more precisely, the accumulation of productive assets.
    Keywords: income shocks, consumption smoothing, asset smoothing
    Date: 2009
  21. By: Xu, Yingfeng (University of Alberta, Department of Economics); Yan, Xiaoyi (Department of Human Resources and Social Development Canada)
    Abstract: It is widely accepted that China needs to shift from its past mode of export-led growth and start to rely more on domestic demand. What role could the real appreciation of the Chinese yuan play in this regard? We attempt to quantify the impact on the structure of the Chinese economy of the real appreciation of the Chinese yuan. We argue that the potential of the service sector to generate income and jobs may be significantly under-estimated by official statistics, as a result of the under-estimation of household consumption of services. While there is no evidence of large under-valuation for the Chinese yuan, we do find that a real appreciation in the order of 20% would bring the Chinese price level in line with the world average level, after the Balassa-Samuelson effect is factored in. In turn, such a real appreciation could increase the service share of employment by 7%.
    Keywords: China; real exchange rate; service sector
    JEL: E01 E21 F31 O53
    Date: 2009–02–10
  22. By: Becchetti, Leonardo (Associazione Italiana per la Cultura della Cooperazione e del Non Profit); Castriota, Stefano (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: Research on the nexus between life satisfaction and income has looked at lottery winners or postcommunism transition to document that exogenous changes in income generate effects of the same sign on happiness. In this paper we consider the unfortunate tsunami event as a negative lottery and examine the effects of the tsunami related income losses, net of the most ample possible set of concurring factors, on life satisfaction and self-esteem of a sample of Sri Lankan microfinance borrowers. Our empirical findings help to discriminate between various effects of material damages and monetary losses, both having strong significant impact on the dependent variables. Our contribution to the literature is in: i) identifying an exogenous shock which is temporary and does not suffer from voluntary participation bias (unfortunate "winners" of the negative lottery, exactly as control sample, did not decide to buy the lottery ticket); ii) testing the money-happiness nexus on a sample of individuals close to the poverty line.
    Keywords: life satisfaction; quasi natural experiment; tsunami; natural catastrophe
    JEL: I31 I32
    Date: 2008–02–06
  23. By: Mirko Bendig (GIGA German Institute of Global and Area Studies); Lena Giesbert (GIGA Institute of African Affairs); Susan Steiner (GIGA Institute of Latin American Studies)
    Abstract: This paper argues that the study of the demand for financial services in developing countries leaves out part of the story, if it looks at only one of the three elements of the so called finance trinity, i.e. savings products, loans, or insurances, as is largely done in the literature. In contrast to previous research, it is assumed that households’ choice for any of these services is strongly interconnected. Therefore, the paper simultaneously estimates the determinants of household demand for savings, loans and insurances by applying a multivariate probit model on household survey data from rural Ghana. On the one hand, the estimation results confirm the common finding that poorer households are less likely to participate in the formal financial sector than better off households. On the other hand, there is empirical evidence that the usage of savings products, loans and insurances does not only depend on the socio-economic status of households, but also on various other factors, such as households’ risk assessment and the past exposure to shocks. In addition, trust in the providing institution and its products appear to play a key role.
    Keywords: rural financial markets, financial services, Sub-Saharan Africa, Ghana
    JEL: G20 O16 R22
    Date: 2009–01
  24. By: Ferreira, Pedro Cavalcanti; Santos, Marcelo; Pessoa, Samuel
    Abstract: This paper studies the impact of HIV/AIDS on per capita income and education. It ex- plores two channels from HIV/AIDS to income that have not been sufficiently stressed by the literature: the reduction of the incentives to study due to shorter expected longevity and the reduction of productivity of experienced workers. In the model individuals live for three periods, may get infected in the second period and with some probability die of Aids before reaching the third period of their life. Parents care for the welfare of the future generations so that they will maximize lifetime utility of their dynasty. The simulations predict that the most affected countries in Sub-Saharan Africa will be in the future, on average, thirty percent poorer than they would be without AIDS. Schooling will decline in some cases by forty percent. These gures are dramatically reduced with widespread medical treatment, as it increases the survival probability and productivity of infected individuals.
    Date: 2009–02–12
  25. By: Galimberti, Jaqueson K.
    Abstract: This paper proposes a reassessment of the export-led growth hypothesis focusing on conditioning effects from countries initial level of GDP per worker, human capital stock, and exports share in GDP. For this purpose a panel threshold regression technique was applied over selected cross-country panel data, covering a broad sample of 72 countries and two sub-samples over the period from 1974 to 2003. Special attention was given to the 5-years data averaging procedure, using panel unit root tests, and to the variables measures choice, where a sensitivity analysis is proposed. Overall, the evidence reported favors the export-led growth hypothesis, where the relationship between exports and growth was showed to be not as trivial as linear specifications would indicate.
    Keywords: Export-led growth; panel threshold regressions; trade and growth.
    JEL: O11 O50 O40 F43
    Date: 2009–02–11
  26. By: Bandeira, Pablo; Sumpsi, Jose Maria
    Abstract: The lack of consensus on the social and economic impact from access to land continues to generate heated political and academic debates. The existing empirical literature does not consider possible opportunity costs, factors that can affect this impact and different time horizons. Toward solving this problem, this article elaborates a theoretical argument on the potential benefits, opportunity costs and asset accumulation dynamics that may derive from gaining access to or increasing the size of rural land in developing countries. Empirical tests of the argument and poverty reduction assessment are then carried out using household data from Guatemala. Finally, policy and future research implications are derived.
    Keywords: Access to land; rural poverty; off-farm income; Guatemala.
    JEL: Q15 O12
    Date: 2009–01–12
  27. By: Mansur, Kasim; Abd. Rahim, Dayangku Aslinah; Lim, Beatrice; Mahmud, Roslinah
    Abstract: Malaysian women have continued to play an increasingly important role in the national development of the country including greater participation in the economy and labor market. These improvements were made possible by the increasing numbers of females having access to education. Education provides better work opportunities and thus increases the level of income of an individual. Therefore education is perceived to be an important factor in human capital formation. In Islam, every Muslim is required to acquire knowledge as much as possible. Knowledge generates wealth. Thus, Islam condemns idleness, inactivity and poverty are condemned. A Muslim should be actively involved in the pursuit of increasing their knowledge and skill to ensure that their life is not of mere subsistence. This paper will look at the perception towards the importance of education among Muslim women. A total of 189 respondents were interviewed from selected kampongs in the district of Papar, Sabah. The data collected was analyzed and reported using descriptive statistics. About 42.4 percent respondents have obtained a diploma and degree level education. From the study, it is found that 78 percent of the total respondents perceived that education is very important. A total of 47.1 percent strongly agreed that education can influence future income. Essentially, a total of 78.8 per cent agreed that higher level of education leads to a higher level of income.
    Keywords: Women; Education
    JEL: I20 J20
    Date: 2009–02–16
  28. By: David S. Lee; Thomas Lemieux
    Abstract: This paper provides an introduction and "user guide" to Regression Discontinuity (RD) designs for empirical researchers. It presents the basic theory behind the research design, details when RD is likely to be valid or invalid given economic incentives, explains why it is considered a "quasi-experimental" design, and summarizes different ways (with their advantages and disadvantages) of estimating RD designs and the limitations of interpreting these estimates. Concepts are discussed using using examples drawn from the growing body of empirical research using RD.
    JEL: C1 H0 I0 J0
    Date: 2009–02

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