nep-sea New Economics Papers
on South East Asia
Issue of 2014‒08‒28
53 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. The Inter-Regional System of Analysis for ASEAN: A Manual By Ditya A. Nurdianto; Budy Resosudarmo
  2. Asia Bond Monitor June 2013 By Asian Development Bank (ADB); ; ;
  3. Economic Implications of Deeper South Asian-Southeast Asian Integration: A CGE Approach By Wignaraja, Ganeshan; Morgan, Peter; Plummer, Michael; Zhai, Fan
  4. Asian Development Outlook Suplement (July 2013) By Asian Development Bank (ADB); ; ;
  5. ADB Briefs 12: The Irrigation Service Fee Waiver in Viet Nam By Asian Development Bank (ADB); ; ;
  6. Food Security in Asia and the Pacific By Asian Development Bank (ADB); ; ;
  7. Cost of Adaptation to Rising Coastal Water Levels for PRC, Japan, and the Republic of Korea By Asian Development Bank (ADB); ; ;
  8. Improving Service Delivery through Decentralization: A Challenge for Asia By Brosio, Giorgio
  9. Oil Security Issues in Asia and the Pacific By Isaak, David
  10. Same Energy, More power: Accelerating Energy Efficiency in Asia By Asian Development Bank (ADB); ; ;
  11. Trade Facilitation, Value Creation, and Competiveness : Policy Implications for Vietnam's Economic Growth, Volume 1 By Duc Minh Pham; Deepak Mishra; Kee-Cheok Cheong; John Arnold; Anh Minh Trinh; Huyen Thi Ngoc Ngo; Hien Thi Phuong Nguyen
  12. Has Regional Integration Led to Greater Risk-Sharing in Asia? By Ng, Thiam Hee; Yarcia, Damaris Lee
  13. Dynamic spanning trees in stock market networks: The case of Asia-Pacific By Ahmet Sensoy; Benjamin M. Tabak
  14. Indonesia Economic Quarterly FY13 By World Bank
  15. Trade Facilitation, Value Creation, and Competiveness : Policy Implications for Vietnam's Economic Growth, Summary Report By Duc Minh Pham; Deepak Mishra; Kee-Cheok Cheong; John Arnold; Anh Minh Trinh; Huyen Thi Ngoc Ngo; Hien Thi Phuong Nguyen
  16. Diversification of Energy Supply: Prospects for Emerging Energy Sources By Ross, Michael M. D.
  17. Indonesia Economic Quarterly, July 2013 : Adjusting to Pressures By World Bank
  18. Viet Nam: Environment and Climate Change Assessment By Asian Development Bank (ADB); ; ;
  19. Explaining the Regional Heterogeneity of Poverty: Evidence from Decentralized Indonesia. By Sumarto, Sudarno; Vothknecht, Marc; Wijaya, Laura
  20. Addressing the Impact of the Global Financial Crisis on Asia-Pacific Economiess By Trade Policy Section, Trade and Investment Division, and the Macroeconomic Policy and Analysis Section, Macroeconomic Policy and Development Division, ESCAP.
  21. Asia’s Energy Adequacy, Environmental Sustainability, and Affordability: An Overview By Lee, Minsoo; Park, Donghyun; Saunders, Harry
  22. Remittances after natural disasters: Evidence from the 2004 Indian tsunami By Mitrut, Andreea; Wolff, François-Charles
  23. The Effect of Tariffs on Imports : A Sector-Wise Analysis of Indonesia in 2001-2012 By Ardiansyah Romadhon; Yutaka Ito; Keisuke Kawata; Yuichiro Yoshida
  24. Energy Security, Sustainability, and Affordability in Asia and the Pacific By Fueyo, Norberto; Gómez, Antonio; Dopazo, César
  25. Taking Stock : An Update on Vietnam's Recent Economic Developments By World Bank
  26. Urban Sanitation Review : Indonesia Country Study By World Bank
  27. Voice, Choice, and Decision 2 : A Study of Local Basic Service Delivery in Cambodia By World Bank; The Asia Foundation
  28. Rising food prices and inflation in the Asia-Pacific region: causes, impact and policy response By Development Policy Section
  29. Economic and Environmental Impacts of Harmful Non-Indigenous Species in Southeast Asia By Nghiem, Le T.P.; Soliman, Tarek; Yeo, Darren C. J.; Tan, Hugh T. W.; Evans, Theodore A.; Mumford, John D.; Keller, Reuben P.; Baker, Richard H. A.; Corlett, Richard T.; Carrasco, Luis R.
  30. Vietnam Urban Wastewater Review By World Bank
  31. Asymmetric Price Transmission in Indonesia’s Wheat Flour Market By Varela, Gonzalo J.; Taniguchi, Kiyoshi
  32. Child Poverty in the Philippines By Tabuga, Aubrey D.; Reyes, Celia M.; Asis, Ronina D.; Mondez, Maria Blesila D.
  33. Labor Policy Analysis for Jobs Expansion and Development By Orbeta, Aniceto Jr. C.; Paqueo, Vicente B.; Lanzona, Leonardo Jr. A.; Dulay, Dean Gerard C.
  34. KEYNOTE ADDRESS: Developing opportunities and challenges for mining and agriculture By Pezzini, Mario
  35. Least Developed Sucos: Timor-Leste By Asian Development Bank (ADB); ; ;
  36. It's All in the Timing:Household Expenditure and Labor Supply Responses to Unconditional Cash Transfers. By Bazzi, Samuel; Sumarto, Sudarno; Suryahadi, Asep
  37. Women’s representation in local politics: Evidence from The Philippines By Valente, Jordan; Moreno, Frede
  38. Thailand Economic Monitor, February 2014 By World Bank
  39. Philippine Economic Update : Accelerating Reforms to Meet the Jobs Challenge By World Bank
  40. Myanmar : Capitalizing on Rice Export Opportunities By World Bank
  41. When Commitment Fails - Evidence from a Regular Saver Product in the Philippines By Anett John (née Hofmann)
  42. Myanmar Economic Monitor, October 2013 By World Bank
  43. Lao PDR Economic Monitor, January 2014 : Managing Risks for Macroeconomic Stability By World Bank
  44. Philippine Development Report : Creating More and Better Jobs By World Bank
  45. Putting Citizens First in Fragile and Conflict-Affected Situations : Open Development Missions to Afghanistan and Myanmar By Kate Henvey
  46. Lao People's Democratic Republic Nam Theun 2 Multipurpose Project : Reports 21A and 21B of the International Environmental and Social Panel of Experts By David McDowell; Taylor Scudder; Lee M. Talbot
  47. Maternal Health Out-of-Pocket Expenditure and Service Readiness in Lao PDR : Evidence for the National Free Maternal and Child Health Policy from a Household and Health Center Survey By World Bank
  48. A Combined Approach to the Inference of Conditional Factor Models By Yan Li; Liangjun Su; Yuewu Xu
  49. Specification Test for Panel Data Models with Interactive Fixed Effects By Liangjun Su; Sainan Jin; Yonghui Zhang
  50. Household Sharing and Commitment: Evidence from Panel Data on Individual Expenditures and Time Use By Ken Yamada; Jeremy Lise
  51. Maternal Health, Child Health and Nutrition in Lao PDR : Evidence from a Household Survey in Six Central and Southern Provinces By World Bank
  52. School Based Management in Lao P.D.R. : Crrent Conditions and Recommendations for the Future By World Bank
  53. Jackknife Model Averaging for Quantile Regressions By Xun Lu; Liangjun Su

  1. By: Ditya A. Nurdianto (Ministry of Foreign Affairs, Republic of Indonesia, Jakarta, Indonesia); Budy Resosudarmo (Indonesia Project, Arndt-Corden Department of Economics, Crawford School of Public Policy, Australian National University, Canberra, Australia)
    Abstract: The Inter-Regional System of Analysis for ASEAN (IRSA-ASEAN) is a static, multi-country, computable general equilibrium (CGE) model. It is a unique model constructed to understand the impact of coordinated and non-coordinated policies, e.g. energy subsidy reduction and carbon tax implementation, on the economic and environmental performances of six of the ten member countriesof ASEAN, namely Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. Although it is robust enough to be an insightful tool for policy analysis in other issues, e.g. trade, the IRSA-ASEAN model contains a unique feature that makes it particularly valuable for policies related to environment and energy sectors, namely endogenized revenue recycling mechanisms. This paper is intended to become a technical manual for the IRSA-ASEAN model that will help to better analyze empirical results in the authors’ other papers.
    Keywords: CGE, ASEAN
    JEL: D58
    Date: 2014–08
  2. By: Asian Development Bank (ADB); (Office of Regional Economic Integration, ADB); ;
    Abstract: This publication reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. It covers the 10 members of the Association of Southeast Asian Nations plus the People’s Republic of China; Hong Kong, China; and the Republic of Korea.
    Keywords: east asia outlook, east asia economy, east asia bonds, LCY bond market, asean plus 3, asean + 3, asia bonds, government bonds, corporate bonds, interest rates, asia currency, asia investment, asia capital flows
    Date: 2013–06
  3. By: Wignaraja, Ganeshan (Asian Development Bank Institute); Morgan, Peter (Asian Development Bank Institute); Plummer, Michael (Asian Development Bank Institute); Zhai, Fan (Asian Development Bank Institute)
    Abstract: South and Southeast Asian economic integration via increased trade flows has been increasing significantly over the past 2 decades, but the level of trade continues to be relatively low. This underperformance has been due to both policy-related variables—relatively high tariff and non-tariff barriers—and high trade costs due to inefficient "hard" and "soft" infrastructure (costly transport links and problems related to trade facilitation). The goal of this study is to estimate the potential gains from South Asian–Southeast Asian economic integration using an advanced computable general equilibrium (CGE) model. The paper estimates the potential gains to be large, particularly for South Asia, assuming that the policy- and infrastructure-related variables that increase trade costs are reduced via economic cooperation and investment in connectivity. As Myanmar is a key inter-regional bridge and has recently launched ambitious, outward-oriented policy reforms, the prospects for making progress in these areas are strong. If the two regions succeed in dropping inter-regional tariffs, reducing non-tariff barriers by 50%, and decreasing South Asian–Southeast Asian trade costs by 15%—which this paper suggests is ambitious but attainable—welfare in South Asia and Southeast Asia would rise by 8.9% and 6.4% of gross domestic product, respectively, by 2030 relative to the baseline. These gains would be driven by rising exports and competitiveness, particularly for South Asia, whose exports would rise by two thirds (64% relative to the baseline). Hence, the paper concludes that improvements in connectivity would justify a high level of investment. Moreover, it supports a two-track approach to integration in South Asia, i.e., deepening intra-regional cooperation together with building links to Southeast Asia.
    Keywords: south asia-southeast asian regional integration; inter-regional trade; cge analysis; tariff and non-tariff barriers
    JEL: C68 F12 F13 F15 F17
    Date: 2014–08–12
  4. By: Asian Development Bank (ADB); (Economics and Research Department, ADB); ;
    Abstract: The Asian Development Outlook (ADO) envisaged tepid growth in the major industrial economies over the forecast horizon.
    Keywords: Economics, Macroeconomy, Finance, major industrial economies, developing Asia, ADO forecasts
    Date: 2013–07
  5. By: Asian Development Bank (ADB); (East Asia Department, ADB); ;
    Abstract: This policy brief aims to inform policy makers in the Government of Viet Nam and development partners involved in developing the water and irrigation subsector about the irrigation service fee waiver and related issues. This is intended to stimulate debate and plan for rational solutions to unintended impacts of government policy. The policy brief is the summary of a larger study, Review of the Impact of the Viet Nam Government’s Waiver of Irrigation Service Fees (31 August 2012), which was financed with a grant from the Water Financing Partnership Facility.
    Keywords: adb, asian development bank, asdb, asia, pacific, poverty asia, viet nam, vietnam, agriculture, irrigation, agricultural production, farmers, farms, irrigation management, crops, crop yields, rice, rice paddies, cereals, irrigation service fee waiver, participatory irrigation management
    Date: 2013–04
  6. By: Asian Development Bank (ADB); (Economics and Research Department, ADB); ;
    Abstract: This synthesis report is the result of close, collaborative research initiated by the Asian Development Bank in partnership with Foreign Affairs, Trade and Development Canada; the Asia-Pacific Economic Cooperation; and the Liu Institute for Global Issues at the University of British Columbia. Fourteen background papers were commissioned to investigate food security issues particularly pertinent for Asia and the Pacific. The report synthesizes and collates the primary findings from these papers to articulate key policy challenges and opportunities related to food security in the region.
    Keywords: food security, poverty, sustainable development, hunger, food prices, food safety, subsistence farming, agricultural trade, access to food, food systems, food markets and stocks, two faces of asia
    Date: 2013–08
  7. By: Asian Development Bank (ADB); (East Asia Department, ADB); ;
    Abstract: This publication explores the potential costs for coastal adaptation from 2010 until 2050 in East Asia due to climate-induced sea-level rise and possibly more intense tropical cyclones. The results are estimates of possible adaptation needs, which illustrate the possible magnitude of adapting to the future impacts of climate change on three important coastal countries: the People’s Republic of China, Japan, and the Republic of Korea. This study is part of the technical assistance Economics of Climate Change and Low Carbon Growth Strategies in Northeast Asia, financed by ADB and the Korea International Cooperation Agency.
    Keywords: adb, asian development bank, asdb, asia, pacific, poverty asia, climate change adaptation, floods, china, korea, japan, sea level rise, tropical cyclone, dynamic interactive vulnerability assessment, coastal waters, tsunami, disasters, damage costs, wetlands, drylands, ports, typhoons, SEA, sea-dikes, sea-dikes
    Date: 2013–05
  8. By: Brosio, Giorgio (University of Torino)
    Abstract: This paper assesses how decentralization can contribute, if proper political and fiscal institutions are present, to improving service delivery in Asia. In other words, decentralization is an opportunity and a challenge at the same time. The paper presents the salient characteristics of decentralized government in Asia and then focuses on the analysis of critical issues leading to “partial decentralization” that is common to most models. Consideration is also given to the emerging challenges common to most Asian systems. Finally, the paper addresses the issue of decentralization in the education sector. This is a crucial sector in terms of costliness and of impact on national growth and individual opportunities, where, however, the outcomes of decentralization are difficult to assess.
    Keywords: decentralization; service delivery; fiscal federalism
    JEL: H75 H77
    Date: 2014–03–01
  9. By: Isaak, David (FGE-FACTS Global Energy)
    Abstract: By 2010, demand for oil in developing Asia substantially exceeded that of North America and Europe combined, but demand for natural gas has been expanding rapidly and countries with large coal resources have used them instead of oil wherever possible. The goal of oil security is to make domestic economies and the international market adaptable to changes in availability and price. Increasing oil production and decreasing demand; producing more alternatives; and increasing stocks, fungibility, and market responsiveness augment security while subsidies diminish it. The threat today is not targeted cutoffs; it is price spikes, and strategic reserves can help counter them. Lack of specification restricts the free flow of petroleum products and therefore decreases regional energy security; fungibility would be greatly increased if there were some degree of standardization. In 2010, 76% of all Middle East exports went to Asia, but oil from the Middle East and Africa will not satisfy the growing Asian demand. Asian refining capacity cannot, however, cope with the large undeveloped resources in the Americas from super-heavy deposits or tar sands. A flourishing benchmark futures market east of Suez would help to ensure fair pricing and to moderate long-term price fluctuations.
    Keywords: oil security; energy; Asia and the Pacific
    JEL: Q31 Q40 Q41
    Date: 2014–07–01
  10. By: Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ;
    Abstract: Energy efficiency is often defined as delivered energy service per unit of energy supplied into a system. Supply-side energy efficiency refers to decreasing energy losses in the supply chain, for improved performance in the production and delivery of electricity and heat. Demandside energy efficiency (DSEE) is achieved through consuming less energy for the same level of service, for improved efficiencies at the point of final energy use. DSEE, in particular, offers vast potential to meet regional energy needs in Asia, yet supply-side strategies tend to be prioritized as a focus of investment and planning. Over the past decade, the Asian Development Bank (ADB) has succeeded in quickly scaling up its investment in energy efficiency and the development of renewable resources within its developing member countries through ADB’s Clean Energy Program. This report examines prospects to accelerate lending and investment for DSEE in Asia, in light of trends that are driving energy use and policy and regulatory change in developing countries. Such efforts can help realize the full potential of DSEE as a least-cost, low-carbon resource for energy security, environmental protection, and sustainable and inclusive growth benefiting all Asians.
    Keywords: energy, developing Asia, energy efficiency, energy policy, demand side energy efficiency, supply side energy efficiency, end use energy efficiency, clean energy, energy supply, energy savings, fossil fuels, renewables, renewable energy, energy portfolio, CO2, ghg, greenhouse gas emissions, energy mix, energy efficiency standards, building codes
    Date: 2013–06
  11. By: Duc Minh Pham; Deepak Mishra; Kee-Cheok Cheong; John Arnold; Anh Minh Trinh; Huyen Thi Ngoc Ngo; Hien Thi Phuong Nguyen
    Keywords: International Economics and Trade - Trade Policy International Economics and Trade - Free Trade Economic Theory and Research Private Sector Development - E-Business Transport Economics Policy and Planning Transport Macroeconomics and Economic Growth
    Date: 2013–07
  12. By: Ng, Thiam Hee (Asian Development Bank); Yarcia, Damaris Lee
    Abstract: The 1997–1998 Asian financial crisis revealed the latent risks present in an increasingly integrated global economy and how virulent these risks can be when roused from dormancy. Given the inevitability of integration, the challenge is how to maximize its benefits while minimizing its costs. One benefit of greater integration, particularly financial integration, is that countries can diversify their risks, thus allowing them to smooth out their consumption. This paper analyzes whether the degree of risk-sharing in East Asia has improved along with the observed rise in integration in the region. Higher risk-sharing is expected to result in (i) higher intraregional correlation of consumption across time and relative to output, and (ii) a higher residual in the panel regression of consumption on output. The results show that risk-sharing continues to be low in Asia. The increase in cross-economy correlation in consumption coincided with an even higher cross-economy correlation in output. Furthermore, the correlation between domestic consumption and domestic output growth remains high. And finally, correlation within the region is lower than correlation with the global economy. These findings suggest that higher consumption correlation is the result of stronger economic ties rather than greater risk-sharing.
    Keywords: risk-sharing; ASEAN; integration
    JEL: F36 F51
    Date: 2014–07–01
  13. By: Ahmet Sensoy; Benjamin M. Tabak
    Abstract: This article proposes a new procedure to evaluate Asia Pacific stock market interconnections using a dynamic setting. Dynamic Spanning Trees (DST) are constructed using an ARMA-FIEGARCH-cDCC process. The main results show that: 1. The DST significantly shrinks over time; 2. Hong Kong is found to be the key financial market; 3. The DST has a significantly increased stability in the last few years; 4. The removal of the key player has two effects: there is no clear key market any longer and the stability of the DST significantly decreases. These results are important for the design of policies that help develop stock markets and for academics and practitioners
    Date: 2014–03
  14. By: World Bank
    Keywords: Banks and Banking Reform Finance and Financial Sector Development - Currencies and Exchange Rates Economic Theory and Research Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Macroeconomics and Economic Growth
    Date: 2013–05
  15. By: Duc Minh Pham; Deepak Mishra; Kee-Cheok Cheong; John Arnold; Anh Minh Trinh; Huyen Thi Ngoc Ngo; Hien Thi Phuong Nguyen
    Keywords: Environmental Economics and Policies International Economics and Trade - Trade Policy Economic Theory and Research Private Sector Development - E-Business Transport Economics Policy and Planning Environment Transport Macroeconomics and Economic Growth
    Date: 2013–07
  16. By: Ross, Michael M. D. (RER Energy)
    Abstract: Asia’s burgeoning energy demand has stimulated interest in photovoltaics, wind power, and unconventional gas (shale gas, tight gas, coal-bed methane, and coal-mine methane). For each of these, the resource, current status, future prospects, environmental implications, investment and infrastructure requirements, and risks are examined. Shale gas has revolutionized North American gas supply, but may develop slowly in Asia due to challenging geological conditions, lack of geological data, dense populations, and pipeline and service industry limitations. In the People’s Republic of China (PRC), with technically recoverable resources estimated at 20 gigatons of oil equivalent (20% of the world total), significant production may start around 2017–2020, followed 5 years later by India and possibly Pakistan, which have much smaller resources. Even by 2035, unconventional gas is unlikely to supply more than 4%–8% of primary energy in the PRC, India, and Indonesia. Environmental concerns include methane emissions during combustion and production, water and land requirements, and water contamination. The solar resource is excellent across developing Asia; the wind resource is strong in Afghanistan, the PRC, Kazakhstan, Mongolia, and Viet Nam. Levelized costs of electricity are higher for wind and photovoltaics than for domestic gas and coal, and low-cost hydro and nuclear, although by 2020 to 2030 the renewables will beat imported gas and coal, and higher-cost nuclear and hydro. To supply around 10% of developing Asia’s electricity in 2035, an investment of $900 billion would be required for wind and $1.4 trillion for photovoltaics, excluding infrastructure upgrades. The PRC and India are already world leaders in wind and photovoltaics.
    Keywords: energy supply; energy sources; Asia
    JEL: Q20 Q40 Q42
    Date: 2014–08–01
  17. By: World Bank
    Keywords: Finance and Financial Sector Development - Debt Markets Economic Theory and Research Private Sector Development - Emerging Markets Macroeconomics and Economic Growth - Markets and Market Access Finance and Financial Sector Development - Currencies and Exchange Rates
    Date: 2013–07
  18. By: Asian Development Bank (ADB); (Southeast Asia Department, ADB); ;
    Abstract: The Asian Development Bank (ADB) is preparing sector assessments, thematic papers, strategies, and road maps to help align future ADB support with the needs and strategies of developing member countries and other development partners. A thematic paper is a working document that addresses a crosscutting theme to help inform the development of country partnership strategies (CPSs). This environment and climate change thematic paper highlights development issues, needs, and strategic assistance priorities of Viet Nam and ADB, focusing on environmentally sustainable growth during the 2012–2015 CPS period. It analyzes priority development constraints, the government’s strategy and plans, other development partner support, lessons learned from past ADB support, and possible future ADB assistance. The product serves as a basis for further dialogue on how ADB and the government can work together to tackle the challenges of climate change and environmental sustainability in the coming years.
    Keywords: Viet Nam, vietnam, climate change, environment, climate change resilience, environmental degradation, greenhouse gas emissions, ghg emissions, coastline, river deltas, highlands, global warming, climate threats
    Date: 2013–06
  19. By: Sumarto, Sudarno; Vothknecht, Marc; Wijaya, Laura
    Abstract: This study presents evidence from Indonesia on how the country’s recent periods of economic growth have contributed to poverty reduction at the regional level, with a particular emphasis on the role of decentralization. Over the past decade Indonesia has made significant progress in reducing poverty, from 23% of the population in 1999 to less than 12% in 2013. However, substantial differences in regional poverty are observed. In this paper, we discuss the factors that drive the evolution of poverty in a decentralized Indonesia, and relate kabupaten (district) performance in poverty reduction to a wide range of social, economic, and political characteristics within the area. The study finds gross domestic product (GDP) percapita to be one of the major driving forces behind the decline in regional poverty. Additionally, results from a panel data analysis covering the period of 2005 to 2010 show that poverty has decreased in particular in those kabupaten with (i) a larger share of local leaders with secondary education; (ii) a higher average educational attainment; (iii) an established local office for the coordination of poverty reduction initiatives (TKPKD); (iv) a higher share of fiscal revenues; and (v) a higher share of urban population. Furthermore, there appears to be a positive link between regional inequality and poverty, suggesting that a successful poverty reduction strategy requires both economic growth and sound social policies.
    Keywords: Poverty, Decentralization, Economic Growth, Indonesia
    JEL: I3 I32 I38
    Date: 2014–03–11
  20. By: Trade Policy Section, Trade and Investment Division, and the Macroeconomic Policy and Analysis Section, Macroeconomic Policy and Development Division, ESCAP.
    Abstract: In the current global financial crisis, 15 September 2008 marked a decisive turning point. It was the day that the American investment bank Lehman Brothers Holdings, Inc. collapsed, exacerbating the financial turmoil and causing an extraordinary downward spiral in confidence. It was also the day on which the crisis truly hit Asia- Pacific shores, spreading beyond its equity markets and posing the greatest threat to development since the financial collapse of 1997. The impact on the region was seen most immediately in the financial sector, while the medium-term impact on growth will become evident in the coming months. Countries will be able to avoid the worst of the consequences by bolstering national policy actions with key concerted regional cooperation initiatives.
  21. By: Lee, Minsoo (Asian Development Bank); Park, Donghyun (Asian Development Bank); Saunders, Harry (Decision Processes Incorporated)
    Abstract: The three pillars of Asian energy security are an adequate, reliable supply; environmental sustainability; and affordable access for all. As Asians become more affluent, managing demand by tackling outmoded subsidies so prices reflect true costs, exploring green innovations in technology and prudent infrastructure design, and changing behavior will be crucial to achieving security as will expanding both renewable and nonrenewable sources in an environmentally sound and cost-effective manner. Without radical changes to the region’s energy mix, oil consumption will double, natural gas consumption will triple, and coal consumption will increase by 81%. This would double carbon dioxide emissions to nearly 24 billion tons per year by 2035 which is more than the 22 billion tons experts see as the maximum sustainable emissions for the whole world. To fully manage demand and explore new sources, cooperative programs that integrate energy delivery systems regionally must be implemented. Jointly promoting energy savings and security does not require new technology or pose high costs, but it does require the political will to cooperate and the confidence that makes cooperation possible. Cross-border collaboration is technologically and commercially viable. What is missing is the political commitment to cooperate in energy markets and to build the necessary infrastructure.
    Keywords: energy security; environmental sustainability; affordable access; economic growth; regional energy market
    JEL: Q30 Q32 Q47 Q48 Q51 Q56
    Date: 2014–06–01
  22. By: Mitrut, Andreea (Department of Economics, School of Business, Economics and Law, Göteborg University); Wolff, François-Charles (LEMNA, Université de Nantes and INED Paris)
    Abstract: We examine the impact of the 2004 Indian tsunami on international remittance transfers using aggregate country data and synthetic control methodology. This procedure implies identifying the causal impact of the disaster by comparing the share of remittances to GDP in Indonesia, the country most affected by the shock, with a counterfactual group constructed using synthetic controls of countries that were not affected by the tsunami but that had a very similar pre-shock trend in international remittance flows. Our results indicate a large impact on remittances in Indonesia just after the tsunami, with 1.35 additional points in share of remittances to GDP in 2005 (compared to the synthetic control group). However, the gap in remittances observed between Indonesia and the synthetic control decreased steadily over the succeeding years and amounted to 0.5 percentage points in 2011.
    Keywords: natural disasters; remittances; synthetic control; Indonesia
    JEL: F24 Q54
    Date: 2014–08
  23. By: Ardiansyah Romadhon (Graduate School for International Development and Cooperation, Hiroshima University); Yutaka Ito (Graduate School for International Development and Cooperation, Hiroshima University); Keisuke Kawata (Graduate School for International Development and Cooperation, Hiroshima University); Yuichiro Yoshida (Graduate School for International Development and Cooperation, Hiroshima University)
    Abstract: This paper examines the validity of the commonly accepted paradigm that tariffs discourage imports in Indonesia. Specifically, this paper investigates the effect of tariffs on imports by industry using six-digit sectoral trade data for the 2001-2012 period. We also measure the welfare cost of a marginal change in tariff rates in each industry using Harberger's approach. The results show that tariffs negatively affect only certain industries, such as chemical, stone/glass, and metals, but not other industries. The findings demonstrate that in these three industries, the welfare gain from a 1% decrease in the 2012 tariff rate amounts to approximately 3% of tariff revenue.
    Keywords: Tariff, Indonesian import, Harberger's approach
    Date: 2014–08
  24. By: Fueyo, Norberto (University of Zaragoza); Gómez, Antonio (University of Zaragoza); Dopazo, César (University of Zaragoza)
    Abstract: We calculate primary energy intensity (PEI), the carbon dioxide intensity of the primary energy mix (CIX), energy self-sufficiency (ESS), affordability of electricity (EOL), and primary energy diversification (DIV) from 2010 to 2035 for individual economies and for the Asia and Pacific region as a whole under business-as-usual and alternative scenarios. The PEI will decrease in most economies usually by more than 20% while the CIX will increase. The ESS will decrease except in Japan because of renewables while the DIV will increase slightly. By 2035, energy will be much more affordable in Asia because of strong economic growth. The EOL will be four times that of Europe and North America and twice that of Latin America. As regional aggregates, the PEI will decrease except in the Pacific, but the CIX will generally increase. The ESS will decrease substantially from 100% in 2009 to 59.8% in 2035; the DIV will remain at 2010 levels. Central Asia offers the best benefits for regional integration. Regionally integrating the power grid would make the system more manageable for larger shares of renewables and would alleviate the cost of importing fuel for economies without indigenous resources and for those whose fossil fuel reserves will be depleted by 2035.
    Keywords: energy security; energy sustainability; energy affordability; the Asia and Pacific
    JEL: Q40 Q50 Q56
    Date: 2014–07–01
  25. By: World Bank
    Keywords: Environmental Economics and Policies Banks and Banking Reform Economic Theory and Research Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Macroeconomics and Economic Growth Environment
    Date: 2013–12
  26. By: World Bank
    Keywords: Water Supply and Sanitation - Wastewater Treatment Water Supply and Sanitation - Sanitation and Sewerage Water Supply and Sanitation - Urban Water Supply and Sanitation Health, Nutrition and Population - Health and Sanitation Water Resources - Water and Industry
    Date: 2013–09
  27. By: World Bank; The Asia Foundation
    Keywords: Health Monitoring and Evaluation Public Sector Corruption and Anticorruption Measures Social Development - Social Accountability Housing and Human Habitats Governance - Governance Indicators Communities and Human Settlements Public Sector Development Health Nutrition and Population
    Date: 2013–03
  28. By: Development Policy Section (Macroeconomic Policy and Development Division, United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: High food prices have put increasing inflationary pressures across the Asia-Pacific region and are seen as a key downside risk to sustaining recovery in 2011. Bad weather in important food-producing countries, increasing use of crops in biofuels and speculation in commodity markets have added to a long-term decline in agriculture investment and affected global food supplies. In 2010, high food prices kept 19.4 million people in poverty in the region, who otherwise would be out of poverty. Estimates considering different scenarios for the year ahead suggest that high food and oil prices may slow down poverty reduction even further affecting from 10 to 42 million additional people and postponing the achievement of the MDG on poverty reduction by half a decade in many countries, including Bangladesh, India, Lao Peoples Democratic Republic and Nepal. This policy brief outlines short-, medium- and long-term policy responses and interventions that governments and central banks in the region can make to counter the adverse impact of food inflation in the Asia-Pacific region for such an effort in the context of the Fourth United Nations Conference on the Least Developed Countries (LDC-IV).
  29. By: Nghiem, Le T.P.; Soliman, Tarek; Yeo, Darren C. J.; Tan, Hugh T. W.; Evans, Theodore A.; Mumford, John D.; Keller, Reuben P.; Baker, Richard H. A.; Corlett, Richard T.; Carrasco, Luis R.
    Abstract: Harmful non-indigenous species (NIS) impose great economic and environmental impacts globally, but little is known about their impacts in Southeast Asia. Lack of knowledge of the magnitude of the problem hinders the allocation of appropriate resources for NIS prevention and management. We used benefit-cost analysis embedded in a Monte-Carlo simulation model and analysed economic and environmental impacts of NIS in the region to estimate the total burden of NIS in Southeast Asia. The total annual loss caused by NIS to agriculture, human health and the environment in Southeast Asia is estimated to be US$33.5 billion (5th and 95th percentile US$25.8–39.8 billion). Losses and costs to the agricultural sector are estimated to be nearly 90% of the total (US$23.4–33.9 billion), while the annual costs associated with human health and the environment are US$1.85 billion (US$1.4–2.5 billion) and US$2.1 billion (US$0.9–3.3 billion), respectively, although these estimates are based on conservative assumptions. We demonstrate that the economic and environmental impacts of NIS in low and middle-income regions can be considerable and that further measures, such as the adoption of regional risk assessment protocols to inform decisions on prevention and control of NIS in Southeast Asia, could be beneficial.
    Keywords: Environmental Modelling, Invasive Species, Biological Conservation
    JEL: Q1 Q51 Q56 Q57
    Date: 2013–06–27
  30. By: World Bank
    Keywords: Water Supply and Sanitation - Wastewater Treatment Water Supply and Sanitation - Town Water Supply and Sanitation Water Supply and Sanitation - Urban Water Supply and Sanitation Water Resources - Water and Industry Water Supply and Sanitation - Sanitation and Sewerage
    Date: 2013–12
  31. By: Varela, Gonzalo J. (World Bank); Taniguchi, Kiyoshi (Asian Development Bank)
    Abstract: Data indicate that its domestic price in Indonesia has been increasing regardless of movements in the international price of wheat. A test for asymmetric price transmission from international wheat to domestic wheat flour markets is conducted using an error correction model and find the presence of asymmetric price transmission. The upward adjustment in the domestic price of wheat flour is much faster than its adjustment downward when it deviates from long-run equilibrium. Our results are robust to use of disaggregated data as well as to inclusion of additional of control variables such as prices of other inputs. We argue that asymmetric transmission occurs due to market concentration of wheat flour milling. We offer some policy suggestions for correcting these.
    Keywords: spatial integration; asymmetric price transmission; monopolistic competition; commodity prices; agricultural market; wheat flour
    JEL: F12 L11 Q11 Q13 Q17
    Date: 2014–03–01
  32. By: Tabuga, Aubrey D.; Reyes, Celia M.; Asis, Ronina D.; Mondez, Maria Blesila D.
    Abstract: Despite the remarkable economic performance of the Philippines in recent years, poverty remains a core policy issue. And with a relatively young population, the poverty situation concerns largely children who are at the critical stages of their physical, mental, and social development. This report provides a comprehensive profile of children who are living in poverty through data collected from national surveys and administrative records of government agencies. The estimations show that in 2009, 13.4 million or over a third of all children aged below 18 are living below the poverty line. Both the incidence and magnitude of poor children are increasing through years. Moreover, around 10 million face at least two overlapping types of severe deprivation in basic amenities while an estimated three quarters of a million face at least five kinds of deprivation simultaneously. Although these children can be found in the different regions of the country, several areas that consistently lag behind in many poverty aspects have been identified. Meanwhile, longitudinal data show that a non-negligible number of families move in and out of poverty and this vulnerability poses risks on children's well-being. With the recent trend in population growth, the lack of inclusivity of economic growth, and the exposure of the country to natural calamities, we would expect that the number of children in dire condition would not be significantly reduced within the next few years.
    Keywords: poverty, Philippines, panel data, children, deprivation
    Date: 2014
  33. By: Orbeta, Aniceto Jr. C.; Paqueo, Vicente B.; Lanzona, Leonardo Jr. A.; Dulay, Dean Gerard C.
    Abstract: The Philippines is at a crossroad. It can choose to continue to follow current unrealistic policies that despite good intentions have been shown to be actually detrimental to the poor. Or, it can elect to try another development path to get a better chance at reducing poverty. This study proposes a 12-point agenda, conveniently referred to as the Jobs Expansion and Development Initiative (JEDI) for poverty reduction. JEDI has two objectives. One is to expand gainful jobs through the acceleration of labor intensive production, particularly, the manufacturing of tradable commodities. The other is to improve investments in education and other human capital development and sustain total factor productivity gains. These objectives require inter alia minimum wage reform, which should be undertaken immediately, while investors are looking for new places to locate labor-intensive production and the Philippine economy is getting another look as a potential destination. The study recognizes the Filipinos` aspirations for secure jobs with decent wages. But it challenges the idea that imposing minimum wages and other current labor regulations should be the weapons of choice. They do not work; worse, there is preponderant evidence of its detrimental consequences. Alternatives should, therefore, be considered, such as better education, increased labor-intensive manufacturing, and greater opportunities for training on the job. Arguably, alternatives like these might take time. Consequently, bridging social protection programs need to be implemented in the meantime to help the poor directly with their subsistence needs. For this, instead of imposing mandatory minimum wages, the paper points out that it would be better to use direct and temporary income subsidy, carefully targeted to extremely poor households to meet suitable norms that society considers a public good. Such an approach would be both efficient and equitable, conforming to the general principle of public economics that a public good should be financed by general tax revenues. The study concludes that the time has come for the country to leave the beaten path and try new approaches that would rebalance current labor laws and practices to expand gainful jobs and minimize unintended consequences detrimental to the poor, the young, the women, the less educated, and the unorganized workers.
    Keywords: Philippines, jobs, minimum wages, labor market policy, human resource policy
    Date: 2014
  34. By: Pezzini, Mario
    Abstract: Countries in sub-Saharan Africa have experienced growth in gross domestic product (GDP) averaging 5% per annum over the last ten years. It is a growth rate that outstrips that of many other countries except some in South-East Asia, but unlike in Asian countries the growth has not translated into employment. Very large numbers of young people across Africa hope to enter the workforce with salaried jobs and career prospects, but though jobs have increased it has been at too slow a rate to absorb these people. This is ‘the Africa challenge’, and it could lead to increasing social tension unless growth can create jobs soon based on the economic advantages that have flowed from Africa’s wealth of natural resources. One solution is for African countries to strengthen their existing local economic fabric, such as by focusing support on small to medium-size firms and farms. Structural transformation in Africa cannot rely only on traditional job creation or direct foreign investment: too many thousands of people need work. Mineral and agricultural resources in Africa are actually underdeveloped in comparison to similarly resource-rich countries in other continents which have invested more heavily in exploration and export initiatives. African economies should encourage diverse primary production activities, to take advantage of their resource wealth without becoming dependent on a dominant natural resource: for example, by developing new plant and animal industries as well as mining, and by cross-investment and using revenue to create strong secondary and tertiary sectors. Industrial development needs wellstructured public services and business environments which can support mining and agriculture as well as manufacturing and knowledge industries. Such development may require more fiscal revenue as a percentage of GDP than may be available. Government investment in development projects to build local capacity, with or without contributions from foreign mining companies, will have social, environmental and economic implications.
    Keywords: Agricultural and Food Policy, International Development, Research and Development/Tech Change/Emerging Technologies,
    Date: 2013
  35. By: Asian Development Bank (ADB); (Pacific Department, ADB); ;
    Abstract: Timor-Leste has committed to creating fair and inclusive opportunity. To assist the pursuit of this goal, the paper assesses the distribution of opportunity in the sucos (i.e. village) level. This publication identifies the least developed sucos that mostly need extra support.
    Keywords: timor-leste, villages, fair and inclusive development, living standards, dili, development planning, human development index, Sensus Fo Fila Fali, sucos, timor, public services, wealth gap
    Date: 2013–08
  36. By: Bazzi, Samuel; Sumarto, Sudarno; Suryahadi, Asep
    Abstract: Targeted cash transfer programs have been an important policy tool in developing countries. This paper considers (i) how the timing of transfers affects household expenditure and labor supply responses, and (ii) how household expectations shape our interpretation of those responses. We study these issues in the context of a short-term program that provided quarterly unconditional transfers of US$30 to over 19 million households in Indonesia. Our empirical strategy relies on nationally representative panel data, difference-in-difference re-weighting estimators, and the staggered rollout of the second quarterly transfer. On average, beneficiary households that received the two full transfers by early 2006 did not differ from comparable nonbeneficiaries in terms of per capita expenditure growth and changes in labor supply per adult. However, beneficiaries still awaiting their second transfer reported a 7 percentage point lower expenditure growth and a reduction in labor supply by an additional 1.5 hours per adult per week. The expenditure differences dissipated by early 2007, several months after the final transfer were received by all beneficiaries. We also exploit variation in transfers per capita to identify a small marginal propensity to consume out of transfer income (around 0.10). We reconcile the empirical results with the predictions of a simple permanent income model, consider rival (missing) data-driven explanations, and document similar household responses to other transitory changes in income.
    Keywords: Household expenditure, unconditional cash transfer, Indonesia
    JEL: D1 I3 I38
    Date: 2013–02–07
  37. By: Valente, Jordan; Moreno, Frede
    Abstract: Although at the beginning of the 21st century, over 95 percent of all countries in the world have granted women the right to vote and the right to stand for election (Ballington & Karam, 2005), gender equality in terms of representation in political structures remains to be a challenge around the world. This study seeks to determine the level of political representation of women at the level of the smallest unit of Philippine government—the village or barangay. Data comparison—within a span of 11 years—using the results of the July 15, 2002 and October 28, 2013 barangay elections, shows an increase of women’s representation in the 98 barangays of Zamboanga City, Philippines. After the 2013 barangay elections, the total number of female Barangay Captains increased to 14 compared to 8 in the 2002 election results. A total of 159 female Barangay Councilors were also elected in 2013, an increase of 14 percent compared to the 139 female councilors who won in the 2002 elections. The increasing number of elected female barangay officials in 2013 reached 173 women (22 percent) compared to 147 (19 percent) in 2002. In year 2013, a total of 147 women (18.75 percent) were elected as barangay officials out of 784 barangay positions throughout the city. The study concludes that women’s participation in politics at the barangay level is directly and inversely proportional to the representation of men in the same political structures. While existing laws and pertinent public policies promoting women’s equal representation with men in local politics and the efforts to improve the political landscape for women around the world, still the political structures, even at the smallest unit of the government, is a male-dominated arena.
    Keywords: women, politics, gender, governance, election
    JEL: I3 I31 I38 I39 L2 Y8 Y80 Z1 Z13 Z18
    Date: 2014–08–08
  38. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Public Sector Expenditure Policy Economic Theory and Research Finance and Financial Sector Development - Debt Markets Transport Economics Policy and Planning Public Sector Development Transport Macroeconomics and Economic Growth
    Date: 2014–02
  39. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Banks and Banking Reform Economic Theory and Research Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Macroeconomics and Economic Growth
    Date: 2013–05
  40. By: World Bank
    Keywords: Crops and Crop Management Systems Food and Beverage Industry Health, Nutrition and Population - Nutrition Economic Theory and Research Agriculture - Climate Change and Agriculture Macroeconomics and Economic Growth Industry
    Date: 2014–02
  41. By: Anett John (née Hofmann)
    Abstract: Recent literature promotes commitment products as a new remedy for overcoming self-control problems and savings constraints. Committing to a welfare-improving contract requires knowledge about one's preferences, including biases and inconsistencies. If agents are imperfectly informed about their preferences, they may choose ill-suited commitment contracts. I designed a regular-instalment commitment savings product, intended to improve on pure withdrawal-restriction products by mimicking the fixed-instalment nature of loan repayment contracts. I conduct a randomised experiment in the Philippines, where individuals from a general low-income population were randomly offered to take up the product. Individuals chose the stakes of the contract (in the form of a default penalty) themselves. The result is that a majority appears to choose a harmful contract: While the intent-to-treat effect on bank savings for individuals assigned to the treatment group is four times that of a withdrawal-restriction product (offered as a control treatment), 55 percent of clients default on their savings contract. The explanation most strongly supported by the data is that the chosen stakes were too low (the commitment was too weak) to overcome clients' self-control problems. Moreover, both take-up and default are negatively predicted by measures of sophisticated hyperbolic discounting, suggesting that those who are fully aware of their bias realise the commitment is too weak for them, and avoid the product. The study suggests that research on new commitment products should carefully consider the risk of adverse welfare effects, particularly for naïve and partially sophisticated hyperbolic discounters.
    Keywords: commitment savings, hyperbolic discounting, partial sophistication, regular instalments, Philippines.
    JEL: D03 D14 O12 O16
    Date: 2014–08
  42. By: World Bank
    Keywords: Public Sector Expenditure Policy Finance and Financial Sector Development - Currencies and Exchange Rates Economic Theory and Research Private Sector Development - Emerging Markets Finance and Financial Sector Development - Debt Markets Public Sector Development Macroeconomics and Economic Growth
    Date: 2013–10
  43. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Banks and Banking Reform Economic Theory and Research Finance and Financial Sector Development - Debt Markets Finance and Financial Sector Development - Currencies and Exchange Rates Macroeconomics and Economic Growth
    Date: 2014–01
  44. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Finance and Financial Sector Development - Debt Markets Social Protections and Labor - Labor Policies Social Protections and Labor - Labor Markets Private Sector Development - Emerging Markets
    Date: 2013–09
  45. By: Kate Henvey
    Keywords: Education - Knowledge for Development Public Sector Corruption and Anticorruption Measures Private Sector Development - E-Business Information and Communication Technologies - ICT Policy and Strategies Banks and Banking Reform Finance and Financial Sector Development Public Sector Development
    Date: 2013–12
  46. By: David McDowell; Taylor Scudder; Lee M. Talbot
    Keywords: Rural Development - Common Property Resource Development Rural Development - Forestry Water Resources - Dams and Reservoirs Rural Development Knowledge and Information Systems Environment - Wildlife Resources
    Date: 2013–03
  47. By: World Bank
    Keywords: Health Monitoring and Evaluation Transport Economics Policy and Planning Housing and Human Habitats Health Systems Development and Reform Health, Nutrition and Population - Population Policies Communities and Human Settlements Transport
    Date: 2013–10
  48. By: Yan Li (Department of Finance, Temple University, Philadelphia, PA 19122); Liangjun Su (School of Economics, Singapore Management University, Singapore, 178903); Yuewu Xu (School of Business, Fordham University, New York, NY 10019)
    Abstract: This paper develops a new methodology for estimating and testing conditional factor models in finance. We propose a two-stage procedure that naturally unifies the two existing approaches in the finance literature–the parametric approach and the nonparametric approach. Our combined approach possesses important advantages over both methods. Using our two-stage combined estimator, we derive new test statistics for investigating key hypotheses in the context of conditional factor models. Our tests can be performed on a single asset or jointly across multiple assets. We further propose a novel test to directly check whether the parametric model used in our first stage is correctly specified. Simulations indicate that our estimates and tests perform well in finite samples. In our empirical analysis, we use our new method to examine the performance of the conditional CAPM, which has generated controversial results in the recent asset-pricing literature.
    Keywords: Conditional Factor Models, Specification Tests, Semiparametric Method, Nonparametric Method, Conditional CAPM.
    JEL: C51 C52 G12
    Date: 2014–08
  49. By: Liangjun Su (Singapore Management University, School of Economics); Sainan Jin (Singapore Management University, School of Economics); Yonghui Zhang (School of Economics, Renmin University of China)
    Abstract: In this paper, we propose a consistent nonparametric test for linearity in a large dimensional panel data model with interactive fixed effects. Both lagged dependent variables and conditional heteroskedasticity of unknown form are allowed in the model. We estimate the model under the null hypothesis of linearity to obtain the restricted residuals which are then used to construct the test statistic. We show that after being appropriately centered and standardized, the test statistic is asymptotically normally distributed under both the null hypothesis and a sequence of Pitman local alternatives by using the concept of conditional strong mixing that was recently introduced by Prakasa Rao (2009). To improve the finite sample performance, we propose a bootstrap procedure to obtain the bootstrap p-value. A small set of Monte Carlo simulations illustrates that our test performs well in finite samples. An application to an economic growth panel dataset indicates significant nonlinear relationships between economic growth, initial income level and capital accumulation.
    Keywords: Common factors; Conditional strong mixing; Cross-sectional dependence; Economic Growth; Interactive fixed effects; Linearity; Panel data models; Specification test.
    JEL: C12 C14 C23
    Date: 2014–08
  50. By: Ken Yamada (Singapore Management University); Jeremy Lise (University College London)
    Abstract: We find that relative wages have a strong impact on the wife's weight in the household problem at the time of marriage. We also find that, during marriage, unpredicted deviations in the relative wage impact on this weight, but the magnitude is substantially smaller, and is only statistically significant for large realizations. These results are consistent with a model of household behavior in which husbands and wives remain committed to allocations agreed at the time of marriage, and only renegotiate in the face of binding participation constraints. Interestingly, the share of total consumption expenditure is essentially invariant to the wage share. The mix of husband and wife's hours in home production is affected by the wage share only through relative prices, but not directly through the household weight on the wife's utility.
    Date: 2014
  51. By: World Bank
    Keywords: Health Monitoring and Evaluation Health, Nutrition and Population - Population Policies Housing and Human Habitats Health Systems Development and Reform Disease Control and Prevention Communities and Human Settlements
    Date: 2013–06
  52. By: World Bank
    Keywords: Social Protections and Labor - Disability Teaching and Learning Education - Primary Education Education - Education For All Tertiary Education
    Date: 2014
  53. By: Xun Lu (Department of Finance, Hong Kong University of Science and Technology); Liangjun Su (School of Economics, Singapore Management University, Singapore, 178903)
    Abstract: In this paper we consider the problem of frequentist model averaging for quantile regression (QR) when all the M models under investigation are potentially misspecified and the number of parameters in some or all models is diverging with the sample size n. To allow for the dependence between the error terms and the regressors in the QR models, we propose a jackknife model averaging (JMA) estimator which selects the weights by minimizing a leave-one-out cross-validation criterion function and demonstrate that the jackknife selected weight vector is asymptotically optimal in terms of minimizing the out-of-sample final prediction error among the given set of weight vectors. We conduct Monte Carlo simulations to demonstrate the finite-sample performance of the proposed JMA QR estimator and compare it with other model selection and averaging methods. We find that in terms of out-of-sample forecasting, the JMA QR estimator can achieve significant efficiency gains over the other methods, especially for extreme quantiles. We apply our JMA method to forecast quantiles of excess stock returns and wages.
    Keywords: Final prediction error; High dimensionality; Model averaging; Model selection; Misspecification; Quantile regression
    JEL: C51 C52
    Date: 2014–08

This nep-sea issue is ©2014 by Kavita Iyengar. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.