Knowledge that Transforms

Agricultural and Food Policy, Research Methods/Statistical Methods

[We consider the nature of the inferences that can be made when all variables in a linear regression are measured with error. Assuming that the measurement errors are orthogonal to each other and the unobserved correctly measured regressors, we demonstrate that the true regression coefficient vector can be restricted to the convex hull of all possible regressions iff all these regressions yield coefficient vectors lying in the same orthant. Otherwise, the set of feasible coefficient vectors is unbounded. For the unbounded case, we demonstrate that prior information concerning the "seriousness" of the measurement errors in the variables can bound the feasible region. Two diagnostics are proposed to indicate the sensitivity of conventional inferences to measurement error in the regressors, and an illustrative example is presented.]

We specify and estimate a small fix-price model with quantity rationing on both the goods and labor markets. The side of the market which is rationed is random. The model is able to generate a productivity cycle and the degree of capacity utilization is endogenous. The rationing scheme, allocating supply between the various components of demand is estimated. The probabilities of being in the various regimes, the intensity of the disequilibrium on the markets, and the results of policy exercises are discussed.

"This paper discusses two approaches that economists have taken in analyzing the timing of births. It formulates an empirical model appropriate for one of these approaches and demonstrates its usefulness using household survey data from Costa Rica. The hazard rate technique employed in this paper is a natural way of modeling a broad class of problems where the occurrence of an event is uncertain." The study also indicates that "historical data can be used to determine whether the strong trend in the relationship between regional mortality levels and the age at first birth is real or the result of inappropriate data. Additionally, data from other countries might be employed to determine whether the significant effect of male education levels on the risk of subsequent births is a general result. Finally..., the predictions of theoretical models dealing with the number and pace of births can be tested using data from younger women."

[The consensus in the literature is that the use of only lump-sum taxation is a necessary and sufficient condition for the dynamic consistency of optimal open-loop government policies. We show that this does not hold for models with nonhomogeneous agents. Then the stated condition is neither necessary nor sufficient. Dynamic inconsistency arises because of a shortage of appropriate government policy instruments which amounts to the consensus condition only in special cases.]

[This paper shows how to test firm demand and supply data for consistency with profit maximization and cost minimization models; test for special restrictions on technology such as constant returns to scale, homotheticity, and separability; recover estimates of the underlying technology; and forecast firm behavior in new situations without making any assumptions concerning the parametric form of underlying production technology.]