24.4.14

Community Radio

From the paper "Mass media and public education: The effects of access to community radio in Benin" by Philip Keefer & Stuti Khemani (Journal of Development Economics, July 2014). A draft (Feb. 2011) is here. The abstract:
Prior research on mass media and government accountability has not examined the effects of citizen media access on broad public services, such as education. At the same time, research has abstracted from the potentially influential role of mass media on parental investments in children's education. We address both issues using a “natural experiment” in radio access in Benin and find that school children's literacy rates are higher in villages exposed to a larger number of community radio stations. There is no evidence that this effect operates through greater government responsiveness. Instead, households with greater media access make larger private investments in their children's education. 
From the conclusions
Among households with children, those that listen to more community radio because of their access to a larger number of community radio stations are more likely to buy books and to make informal or private tuition payments to schools. P. 42.
And more from the conclusions
Community radio has unique attributes that enable it to provide information that influences household decision making with regard to education. On the one hand, these broadcasters, unlike the national radio station, are established to cater to the local audience. On the other hand, the scarcity of commercial advertising means that these radio stations have to sell their broadcasting time to ministries and donors interested in disseminating public interest programming, particularly on education and health. Because they play programming that people like, people are more likely to hear this public interest programming. Because stations cannot turn to commercial advertisers for financial support, they are more likely to broadcast this type of programming. P. 42.
The authors mention that lack of independence is one problem when radios depend on government funding, but the data from the case in Benin does not allow them to determine how funding from the government affects independence. 

Why Giving Cash Helps Alleviate Poverty

This is an interesting piece on cash transfers by Christopher Blattman and Paul Niehaus. They mention and discuss some issues new to me, such as a possible effect of cash transfers on inflation, and why transfers do not work in certain instances: when there are positive externalities of specific types of aid, for example. 
... the forms of aid most likely to outperform cash will be those that address collective problems, or what economists term “public goods.” Consider health, for example. Say you were buying a vaccine to reduce your child’s risk of getting sick. A big part of the social value of this purchase would be reducing your neighbors’ risk of illness, too. If you had little cash to spare, the vaccine might cost more than it was worth to you but less than it was worth to the community at large. In this case, an outside group would be better placed to tend to the greater good by subsidizing the vaccine or even providing it for free. A cash transfer wouldn’t solve the social problem if the recipient had more pressing needs to spend the money on than the vaccine.
 And
Another concern about rolling out cash transfers on a large scale in developing economies is that an influx of money could lead to disruptive inflation. Whether that fear will materialize remains unclear. It will depend in large part on what the macroeconomic effects of cash transfers are compared to -- whether food aid, universal education, or other goods and services. Any large-scale influx of goods or currency has the potential to be disruptive, and so the real question is whether giving cash is worse than giving something else.
As the authors mention there is a long way ahead before transfers become the norm. The incentives, motivations, and mental models of individuals working for aid agencies are important. They might see cash transfers as simple, which takes "the fun" out of aid. That might not be the most important barrier, but worth considering. 

23.4.14

My reading

I finished recently:
1- Between Shades of Gray
It is a novel that relates the story of a family that, among countless others, was taken from Lithuania during the Russian invasion of 1939. Although it is fiction, the author, Ruta Sepetys, researched the historical events. Thousands, if not more, Lithuanians went  through the horrors of forced-work in concentration camps in Siberia. The main character, Lina, a talented artist, is a girl who leaves a trace of drawings for his father to follow with the expectation that he rescues them. 

2- Living with Water Scarcity
Using examples and micro-economic concepts, David Zetland, argues that we now live in times of water scarcity but have the rules of the past, when water was abundant. A change is necessary: prices are the best way to deal with water scarcity and prevent shortage. 

Maria Konnikova takes the reader on a journey of rationality and emotions contrasting the ways in which Holmes and Watson think. Careful reflection characterizes Holmes while cuasi-emotional impulses characterize Watson. Using the stories of the quintessential investigator the author applies concepts from psychology and neuroscience to illustrate how we think and why we can do better-or worse.

21.4.14

Adolescent Motherhood and Education (Chile)

More education for women is highly desirable. A recent study, for example, shows that "municipalities ruled by female mayors in Brazil have better health outcomes, receive more federal discretionary transfers, and have lower corruption." Indeed, broadly speaking, it seems that women tend to be less corrupt than men. As a consequence one of the key tools to improve welfare is to provide women with more education. This paper (March 2014) identifies the main reason for not to attend to school among adolescent girls in Chile: adolescent motherhood. 

The title of the paper is "The Impact of Adolescent Motherhood on Education in Chile." The abstract: 
We analyze the effect of having a child in adolescence on high school completion, educational attainment, and college enrollment in a developing country setting using nine repeated rounds of Chilean household surveys that span the 1990–2009 period. We control for selection bias and household unobservables of teen motherhood with two approaches: different estimation methods – propensity score matching and family fixed effects for a large sub-sample of sisters – and three different samples. Results reveal that adolescent motherhood reduces the probability of high school completion by between 18 to 37 percent. Furthermore, effects are heterogeneous across education groups: teen motherhood has larger negative effects on high school completion and years of schooling among poor and low-education households. Our results imply that policies aimed at reducing early childbearing will have important short-term effects on young women’s education outcomes. 

The authors are Matias Berthelon & Diana I. Kruger. 

19.4.14

Ontario needs better value for money in health care

Evidence is emerging that the effects of population aging on health-care spending are potentally overestimated, while the effects of care provided at the end of life are potentially underestimated. . .  
For starters, Ontario needs to develop a more effective and comprehensive system of paying for health care. The current pay-as-you-go structure imposes most of the fiscal burden on those currently working and fails to send any price signals to users. Diversification of the revenue base is needed to finance our system. Setting aside funds today to cover health-care costs in our senior years, just like we do for retirement, could ensure a more stable financing model and improve intergenerational fairness. Introducing income-tested co-payments for certain services may also mitigate cost issues.
There is more here.  

16.4.14

Diabetes and Labor Income

From a new paper by Xiaoou Liu & Chen Zhu: 
This paper analyzes the impact of diabetes awareness on labor income using data from a natural experiment in China. We find that diabetes in general leads to a 17.8% decrease in annual income after respondents being diagnosed, and the adverse impact is heterogeneous across different populations. Males and individuals with lower income are affected more, suggesting that social support may be necessary. The estimated income losses are primarily due to psychosocial consequences of diabetes, such as reduced productivity, diabetes-related distress, or discrimination in the workplace.

3.4.14

Germany: From Sick Man of Europe to Economic Superstar

Germany lost on average 11 days of work each year per 1,000 employees by strikes and lock-outs between 1991 and 1999, but only five days per 1,000 employees between 2000 and 2007. These figures for the earlier and later time period compare to 40 and 32 days per 1,000 employees in the United States, 30 and 30 days in the United Kingdom, 73 and 103 days in France, 158 and 93 days in Italy, and 220 and 164 days in Canada (Lesch 2009). (p. 177).
That is from this very interesting article that I should use in an institutional economics class. The title is "From Sick Man of Europe to Economic Superstar: Germany’s Resurgent Economy."


2.4.14

The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War

[In markets lacking third party enforcement]. . . scarcity increases unprotected revenue, meaning that violence increases as there are greater opportunities to prey on others and agents must resort to violence in order to avoid being preyed upon.
That is form this very interesting paper by Juan Camilo CastilloDaniel Mejia, & Pascual Restrepo . The argument is excellent.
The authors explain:
Using high frequency variation in the supply of cocaine generated by exogenous changes in Colombian enforcement, we find that violence increased in Mexico during months with supply shortages resulting from seizures in Colombia.
HT: Daniel Mejia

Women whose first child is a boy work less than women with first-born girls

Women whose first child is a boy work less than women with first-born girls. After a first-born boy the probability that women have more children increases. Higher fertility is a possible explanation for the lower labor supply of mothers.
The hypothesis is that a first-born boy increases marital stability. The paper is published here and a draft is here.  

Quantifying Some of the Impacts of Economics Blogs

The paper by McKenzie & Özler has been around for sometime, and it was recently published. The abstract:
Economics blogs represent a significant change in the way research on development economics is discussed and disseminated, yet little is known about the impact of this new medium. Using surveys of development researchers and practitioners, along with experimental and nonexperimental techniques, we try to quantify some of the blogs’ effects. We find that links from blogs cause a striking increase in the number of abstract views and downloads of economics papers. Furthermore, blogging raises the profile of the blogger and changes readers’ perceptions about his or her institution. Finally, we find some suggestive evidence that a blog can increase knowledge of the topics it covers for the average, but not the marginal, reader.