New Economics Papers
on Central and South America
Issue of 2011‒01‒23
five papers chosen by

  1. Race and income distribution: Evidence from the US, Brazil and South Africa By Carlos Gradín
  2. Impact Evaluation of a Program of Public Funding of Private Innovation Activities. An Econometric Study of FONTAR in Argentina By Andres Lopez; Ana Maria Reynoso; Martin Rossi
  3. Does Owning Your Home Make You Happier? Impact Evidence from Latin America By Inder Ruprah
  4. Do Social Housing Programs Increase Poverty? An Empirical Analysis of Shelter Induced Poverty in Latin America By Inder Ruprah
  5. The Impact of Modernization of Justice on Court Efficiency in Costa Rica By Yuri S. D. Soares; Maria Michaela Sviatschi

  1. By: Carlos Gradín (Universidade de Vigo)
    Abstract: The aim of this paper is to provide some empirical evidence about black-white differentials in the distribution of income and wellbeing in three different countries: Brazil, US and South Africa. In all cases, people of African descent are in a variety of ways socially disadvantaged compared with the relatively more affluent whites. We investigate the extent of these gaps in comparative perspective, and analyze to what degree they can be explained by differences in the observed characteristics of races, such as where they live, the types of household they have, or their performance in the labor market. We undertake this analysis with the Oaxaca-Blinder approach at the means and with the DiNardo-Fortin-Lemieux approach at the entire distribution. Our results show how the factors underlying the racial divide vary across countries and income quantiles.
    Keywords: racial inequalities, income distribution, United States, Brazil, South Africa.
    JEL: D31 D63 J15 J82 O15
    Date: 2010
  2. By: Andres Lopez (Centro de Investigaciones para la Transformación (CENIT), Buenos Aires, Argentina); Ana Maria Reynoso; Martin Rossi (Universidad de San Andrés, Buenos Aires, Argentina)
    Abstract: The main finding of this impact evaluation is that beneficiary firms of FONTAR as a whole and of ANR in particular, spend more on innovation activities such as research and development and purchase of technology. Increments in innovation expenditures are found even when the amount received by the program is netted out from the total amount spent, indicating that beneficiary firms are caused to privately finance part of the increment on innovation expenditures. This would support the additionality hypothesis against the crowding out hypothesis. What is more, empirical evidence suggests that funds spent on innovation activities are efficient in the sense that subsidized firm actually accomplish more innovations. Long run effects on productive performance could not be detected.
    Keywords: Innovation and R&D, Policy Evalution
    JEL: O32 O38
    Date: 2010–11
  3. By: Inder Ruprah (Inter-American Development Bank, Washington, DC, USA)
    Abstract: In this paper we present evidence that homeowners are happier than nonhomeowners and it is homeownership that causes the difference in happiness. The data used is for seventeen Latin American countries obtained from the LatinBarometer surveys. The association between homeownership and happiness is measured by an ordered logit regression with a comprehensive set of sociodemographic control variable with errors clustered at year and country. Happiness and ownership are positively and statistically significantly related. Causality is determined through nonparametric impact measure via the propensity score matching technique. Homeownership causes increased happiness. The impact result is robust to the problem of hidden bias. The impact conclusion also holds in a meta-impact approach where impacts are calculated for each country separately. Owning your home makes you happier, at least in Latin America.
    Keywords: Home Ownership, Happiness
    JEL: R30 I00
    Date: 2010–11
  4. By: Inder Ruprah (Interamerican Development Bank, Washington, DC)
    Abstract: In this paper we estimate the size of shelter induced poverty by housing tenure in Latin America and determine whether public housing programs of the ABC type (programs that require savings, provide vouchers and with the residual financed through a public or privately provided mortgage for a given valued program house) increase or decrease shelter induced poverty. Shelter induced poverty describes the situation where a household, after paying for housing (rent or mortgage plus utilities, property taxes and house maintenance), cannot afford the minimum poverty basket of non-housing goods. We find that shelter induced indigence and poverty is substantial. It varies across countries and more so according to the housing tenure. Housing programs, as currently designed, generally would further increase indigence and poverty rates. These findings suggest housing should be considered in poverty analysis and used as a mechanism in poverty reduction strategies. The findings also suggest that housing programs should use shelter induced poverty as a means to prioritise applicants for housing program but need to increase the size of the existing housing vouchers to avoid further increasing shelter induced poverty, particularly if targeted to the poor.
    Keywords: Housing Policy, Targeting, ABC, Poverty, Homeownership
    JEL: O2 I3
    Date: 2010–11
  5. By: Yuri S. D. Soares (Interamerican Development Bank, Washington, DC); Maria Michaela Sviatschi (Interamerican Development Bank, Washington, DC)
    Abstract: Over the last decade, there has been growing awareness regarding the importance of transparent and effective courts to achieve economic development. However, many Latin American countries find that their judicial system have important deficiencies in terms of access and efficiency. This paper studies the effect of court modernization on caseload clearance rates in Costa Rica. The analysis exploits the fact that the modernization occurred at different points in time. This observed variation in the allocation of the program across time and space provides a potential instrument to identify the causal effect of the modernization on courts efficiency. We find that the program is associated with an increase of 5 percent in clearance rates and with a reduction of 75 dollars per case disposed. The results are robust to alternative specifications.
    Keywords: Public Policy Evaluation, Justice, Court Efficiency, Difference in Differences, Propensity Score Matching, Costa Rica
    JEL: O1 C1
    Date: 2010–09

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