The disagreement among studies of the employment effects of minimum wages in the United States is well known. What is less well known, and more puzzling, is the absence of agreement on what the research literature says – that is, how economists even summarize the body of evidence on the employment effects of minimum wages. Summaries range from “it is now well-established that higher minimum wages do not reduce employment,” to “the evidence is very mixed with effects centered on zero so there is no basis for a strong conclusion one way or the other,” to “most evidence points to adverse employment effects.” We explore the question of what conclusions can be drawn from the literature, focusing on the evidence using subnational minimum wage variation within the United States that has dominated the research landscape since the early 1990s. To accomplish this, we assembled the entire set of published studies in this literature and identified the core estimates that support the conclusions from each study, in most cases relying on responses from the researchers who wrote these papers. Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided.
{"title":"Myth or Measurement: What Does the New Minimum Wage Research Say About Minimum Wages and Job Loss in the United States?","authors":"D. Neumark, Peter Shirley","doi":"10.3386/W28388","DOIUrl":"https://doi.org/10.3386/W28388","url":null,"abstract":"The disagreement among studies of the employment effects of minimum wages in the United States is well known. What is less well known, and more puzzling, is the absence of agreement on what the research literature says – that is, how economists even summarize the body of evidence on the employment effects of minimum wages. Summaries range from “it is now well-established that higher minimum wages do not reduce employment,” to “the evidence is very mixed with effects centered on zero so there is no basis for a strong conclusion one way or the other,” to “most evidence points to adverse employment effects.” We explore the question of what conclusions can be drawn from the literature, focusing on the evidence using subnational minimum wage variation within the United States that has dominated the research landscape since the early 1990s. To accomplish this, we assembled the entire set of published studies in this literature and identified the core estimates that support the conclusions from each study, in most cases relying on responses from the researchers who wrote these papers. Our key conclusions are: (i) there is a clear preponderance of negative estimates in the literature; (ii) this evidence is stronger for teens and young adults as well as the less-educated; (iii) the evidence from studies of directly-affected workers points even more strongly to negative employment effects; and (iv) the evidence from studies of low-wage industries is less one-sided.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"18 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76474389","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The COVID-19 crisis is a seemingly all-encompassing shock to supply and demand. These negative shocks affected industries differently: some switched to remote work, maintaining employment and production, while others reduced capacity and shed workers. We consider a stripped-down version of the model in Baqaee and Farhi (2020). The model allows for an arbitrary input-output network, complementarities, incomplete markets, downward wage rigidity, and a zero lower bound. Nevertheless, the model has a stark property: factor income shares at the initial equilibrium are global sufficient statistics for the production network, clarifying assumptions that must be broken if the network is to matter.
{"title":"Keynesian Production Networks and the Covid-19 Crisis: A Simple Benchmark","authors":"D. Baqaee, Robert B. Mendelson","doi":"10.1257/PANDP.20211107","DOIUrl":"https://doi.org/10.1257/PANDP.20211107","url":null,"abstract":"The COVID-19 crisis is a seemingly all-encompassing shock to supply and demand. These negative shocks affected industries differently: some switched to remote work, maintaining employment and production, while others reduced capacity and shed workers. We consider a stripped-down version of the model in Baqaee and Farhi (2020). The model allows for an arbitrary input-output network, complementarities, incomplete markets, downward wage rigidity, and a zero lower bound. Nevertheless, the model has a stark property: factor income shares at the initial equilibrium are global sufficient statistics for the production network, clarifying assumptions that must be broken if the network is to matter.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"177 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82993417","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This essay reviews Deaths of Despair and the Future of Capitalism (hereafter, DEATHS) by Anne Case and Angus Deaton, a fascinating account of life and death in the United States during the late twentieth and early twenty-first centuries. While primarily targeted toward a popular audience, the volume will be of interest to many economists and other social scientists. It postulates how American capitalism run amok—combined with and partially causing the declining economic circumstances of the less educated—has increased mortality from drugs, suicide, and chronic liver disease. After describing the material in DEATHS in considerable detail, I suggest a variety of research questions that need to be answered to confirm or refute Case and Deaton’s arguments and describe challenges to their key hypotheses. Among the latter are the ability of the postulated relationships to explain the sharply differing mortality trajectories of non-Hispanic Whites, compared with other groups, and the timing of the observed mortality changes. Along the way, I raise doubts about the usefulness of the “deaths of despair” conceptualization, with its strong implications about causality. (JEL I12, I14, I18, J11, J18)
{"title":"Living and Dying in America: An Essay on Deaths of Despair and the Future of Capitalism","authors":"C. Ruhm","doi":"10.3386/W28358","DOIUrl":"https://doi.org/10.3386/W28358","url":null,"abstract":"This essay reviews Deaths of Despair and the Future of Capitalism (hereafter, DEATHS) by Anne Case and Angus Deaton, a fascinating account of life and death in the United States during the late twentieth and early twenty-first centuries. While primarily targeted toward a popular audience, the volume will be of interest to many economists and other social scientists. It postulates how American capitalism run amok—combined with and partially causing the declining economic circumstances of the less educated—has increased mortality from drugs, suicide, and chronic liver disease. After describing the material in DEATHS in considerable detail, I suggest a variety of research questions that need to be answered to confirm or refute Case and Deaton’s arguments and describe challenges to their key hypotheses. Among the latter are the ability of the postulated relationships to explain the sharply differing mortality trajectories of non-Hispanic Whites, compared with other groups, and the timing of the observed mortality changes. Along the way, I raise doubts about the usefulness of the “deaths of despair” conceptualization, with its strong implications about causality. (JEL I12, I14, I18, J11, J18)","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"98 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80917196","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Lorenzo Caliendo, R. Feenstra, John Romalis, Alan M. Taylor
We derive a new formula for the optimal uniform tariff in a small-country, heterogeneous-firm model with roundabout production and a nontraded good. Tariffs are applied on imported intermediate inputs. First-best policy requires that markups on domestic intermediate inputs are offset by subsidies. In a second-best setting where such subsidies are not used, the double- marginalization of domestic markups creates a strong incentive to lower the optimal tariff on imported inputs. In a 186-country quantitative model, the median optimal tariff is 10%, and negative for five countries, as compared to 27% in manufacturing from the one-sector, optimal tariff formula without roundabout production.
{"title":"A Second-Best Argument for Low Optimal Tariffs","authors":"Lorenzo Caliendo, R. Feenstra, John Romalis, Alan M. Taylor","doi":"10.3386/W28380","DOIUrl":"https://doi.org/10.3386/W28380","url":null,"abstract":"We derive a new formula for the optimal uniform tariff in a small-country, heterogeneous-firm model with roundabout production and a nontraded good. Tariffs are applied on imported intermediate inputs. First-best policy requires that markups on domestic intermediate inputs are offset by subsidies. In a second-best setting where such subsidies are not used, the double- marginalization of domestic markups creates a strong incentive to lower the optimal tariff on imported inputs. In a 186-country quantitative model, the median optimal tariff is 10%, and negative for five countries, as compared to 27% in manufacturing from the one-sector, optimal tariff formula without roundabout production.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"116 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76875413","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
N. de Roux, Marcela Eslava, Santiago Franco, E. Verhoogen
This paper develops a new method for estimating production-function parameters that can be applied in differentiated-product industries with endogenous quality and variety choice. We take advantage of data on physical quantities of outputs and inputs from the Colombian manufacturing survey, focusing on producers of rubber and plastic products. Assuming constant elasticities of substitution of outputs and inputs within firms, we aggregate from the firm-product to the firm level and show how quality and variety choices may bias standard estimators. Using real exchange rates and variation in the "bite" of the national minimum wage, we construct external instruments for materials and labor choices. We implement a simple two-step instrumental-variables method, first estimating a difference equation to recover the materials and labor coefficients and then estimating a levels equation to recover the capital coefficient. Under the assumption that the instruments are uncorrelated with firms' quality and variety choices, this method yields consistent estimates, free of the quality and variety biases we have identified. Our point estimates differ from those of existing methods and changes in our preferred productivity estimator perform relatively well in predicting future export growth.
{"title":"Estimating Production Functions in Differentiated-Product Industries with Quantity Information and External Instruments","authors":"N. de Roux, Marcela Eslava, Santiago Franco, E. Verhoogen","doi":"10.2139/ssrn.3774458","DOIUrl":"https://doi.org/10.2139/ssrn.3774458","url":null,"abstract":"This paper develops a new method for estimating production-function parameters that can be applied in differentiated-product industries with endogenous quality and variety choice. We take advantage of data on physical quantities of outputs and inputs from the Colombian manufacturing survey, focusing on producers of rubber and plastic products. Assuming constant elasticities of substitution of outputs and inputs within firms, we aggregate from the firm-product to the firm level and show how quality and variety choices may bias standard estimators. Using real exchange rates and variation in the \"bite\" of the national minimum wage, we construct external instruments for materials and labor choices. We implement a simple two-step instrumental-variables method, first estimating a difference equation to recover the materials and labor coefficients and then estimating a levels equation to recover the capital coefficient. Under the assumption that the instruments are uncorrelated with firms' quality and variety choices, this method yields consistent estimates, free of the quality and variety biases we have identified. Our point estimates differ from those of existing methods and changes in our preferred productivity estimator perform relatively well in predicting future export growth.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"13 20 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72638317","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose a supply-side channel for the transmission of monetary policy. We show that if, as is consistent with the empirical evidence, bigger firms have higher markups and lower pass-throughs than smaller firms, then a monetary easing endogenously increases aggregate TFP and improves allocative efficiency. This endogenous positive "supply shock" amplifies the effects of the positive "demand shock" on output and employment. The result is a flattening of the Phillips curve. This effect is distinct from another mechanism discussed at length in the real rigidities literature: a monetary easing leads to a reduction in desired markups because of strategic complementarities in pricing. We calibrate the model to match firm-level pass-throughs and find that the misallocation channel of monetary policy is quantitatively important, flattening the Phillips curve by about 70% compared to a model with no supply-side effects. We derive a tractable four-equation dynamic model and show that monetary easing generates a procyclical hump-shaped response in aggregate TFP and countercyclical dispersion in firm-level TFPR. The improvements in allocative efficiency amplify both the impact and persistence of interest rate shocks on output.
{"title":"The Supply-Side Effects of Monetary Policy","authors":"D. Baqaee, Robert B. Mendelson, K. Sangani","doi":"10.3386/W28345","DOIUrl":"https://doi.org/10.3386/W28345","url":null,"abstract":"We propose a supply-side channel for the transmission of monetary policy. We show that if, as is consistent with the empirical evidence, bigger firms have higher markups and lower pass-throughs than smaller firms, then a monetary easing endogenously increases aggregate TFP and improves allocative efficiency. This endogenous positive \"supply shock\" amplifies the effects of the positive \"demand shock\" on output and employment. The result is a flattening of the Phillips curve. This effect is distinct from another mechanism discussed at length in the real rigidities literature: a monetary easing leads to a reduction in desired markups because of strategic complementarities in pricing. We calibrate the model to match firm-level pass-throughs and find that the misallocation channel of monetary policy is quantitatively important, flattening the Phillips curve by about 70% compared to a model with no supply-side effects. We derive a tractable four-equation dynamic model and show that monetary easing generates a procyclical hump-shaped response in aggregate TFP and countercyclical dispersion in firm-level TFPR. The improvements in allocative efficiency amplify both the impact and persistence of interest rate shocks on output.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"13 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75096164","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Timothy N. Bond, J. Carr, Analisa Packham, Jonathan Smith
Monthly government transfer programs create cycles of consumption that track the timing of benefit receipt. If these cycles correspond to critical moments for student learning and achievement, the timing of transfers may have important long-run implications for low-income students. In this paper we exploit state-level variation in the staggered timing of nutritional assistance benefit issuance to analyze effects on academic achievement. Using individual-level data from a large national college admission exam, we find taking this high-stakes exam during the last two weeks of the SNAP benefit cycle reduces test scores and lowers the probability of attending a four-year college. (JEL H75, I18, I21, I23, I38)
{"title":"Hungry for Success? Snap Timing, High-Stakes Exam Performance, and College Attendance","authors":"Timothy N. Bond, J. Carr, Analisa Packham, Jonathan Smith","doi":"10.3386/W28386","DOIUrl":"https://doi.org/10.3386/W28386","url":null,"abstract":"Monthly government transfer programs create cycles of consumption that track the timing of benefit receipt. If these cycles correspond to critical moments for student learning and achievement, the timing of transfers may have important long-run implications for low-income students. In this paper we exploit state-level variation in the staggered timing of nutritional assistance benefit issuance to analyze effects on academic achievement. Using individual-level data from a large national college admission exam, we find taking this high-stakes exam during the last two weeks of the SNAP benefit cycle reduces test scores and lowers the probability of attending a four-year college. (JEL H75, I18, I21, I23, I38)","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"32 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79016794","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Judd B. Kessler, Sarah Tahamont, Alexander M. Gelber, A. Isen
Recent policy discussions have proposed government-guaranteed jobs, including for youth. One key potential benefit of youth employment is a reduction in criminal justice contact. Prior work on summer youth employment programs has documented little-to-no effect of the program on crime during the program but has found decreases in violent and other serious crimes among “at-risk” youth in the year or two after the program. We add to this picture by studying randomized lotteries for access to the New York City Summer Youth Employment Program (SYEP), the largest such program in the United States. We link SYEP data to New York State criminal records data to investigate outcomes of 163,447 youth who participated in a SYEP lottery between 2005 and 2008. We find evidence that SYEP participation decreases arrests and convictions during the program summer, effects that are driven by the small fraction (3 percent) of SYEP youth who are at-risk, as defined by having been arrested before the start of the program. We conclude that an important benefit of SYEPs is the contemporaneous effect during the program summer and that the effect is concentrated among individuals with prior contact with the criminal justice system.
{"title":"The Effects of Youth Employment on Crime: Evidence from New York City Lotteries","authors":"Judd B. Kessler, Sarah Tahamont, Alexander M. Gelber, A. Isen","doi":"10.3386/W28373","DOIUrl":"https://doi.org/10.3386/W28373","url":null,"abstract":"Recent policy discussions have proposed government-guaranteed jobs, including for youth. One key potential benefit of youth employment is a reduction in criminal justice contact. Prior work on summer youth employment programs has documented little-to-no effect of the program on crime during the program but has found decreases in violent and other serious crimes among “at-risk” youth in the year or two after the program. We add to this picture by studying randomized lotteries for access to the New York City Summer Youth Employment Program (SYEP), the largest such program in the United States. We link SYEP data to New York State criminal records data to investigate outcomes of 163,447 youth who participated in a SYEP lottery between 2005 and 2008. We find evidence that SYEP participation decreases arrests and convictions during the program summer, effects that are driven by the small fraction (3 percent) of SYEP youth who are at-risk, as defined by having been arrested before the start of the program. We conclude that an important benefit of SYEPs is the contemporaneous effect during the program summer and that the effect is concentrated among individuals with prior contact with the criminal justice system.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"54 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82949624","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study how investors' preferences for robustness influence corporate investment, financing, and compensation decisions and valuation in a financial contracting model with agency. We characterize the robust contract and show that early liquidation can be optimal when investors are sufficiently ambiguity averse. We implement the robust contract by debt, equity, cash, and a financial derivative asset. The derivative is used to hedge against the investors' concern that the entrepreneur may be overly optimistic. Our calibrated model generates sizable equity premium and credit spread, and implies that ambiguity aversion lowers Tobin's q; the average investment, and investment volatility. The entrepreneur values the project at an internal rate of return of 3.5% per annum higher than investors do.
{"title":"Robust Financial Contracting and Investment","authors":"Ai-fan Ling, Jianjun Miao, Neng Wang","doi":"10.2139/ssrn.3763212","DOIUrl":"https://doi.org/10.2139/ssrn.3763212","url":null,"abstract":"We study how investors' preferences for robustness influence corporate investment, financing, and compensation decisions and valuation in a financial contracting model with agency. We characterize the robust contract and show that early liquidation can be optimal when investors are sufficiently ambiguity averse. We implement the robust contract by debt, equity, cash, and a financial derivative asset. The derivative is used to hedge against the investors' concern that the entrepreneur may be overly optimistic. Our calibrated model generates sizable equity premium and credit spread, and implies that ambiguity aversion lowers Tobin's q; the average investment, and investment volatility. The entrepreneur values the project at an internal rate of return of 3.5% per annum higher than investors do.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"40 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83773982","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Let $i=1,ldots,N$ index a simple random sample of units drawn from some large population. For each unit we observe the vector of regressors $X_{i}$ and, for each of the $Nleft(N-1right)$ ordered pairs of units, an outcome $Y_{ij}$. The outcomes $Y_{ij}$ and $Y_{kl}$ are independent if their indices are disjoint, but dependent otherwise (i.e., "dyadically dependent"). Let $W_{ij}=left(X_{i}',X_{j}'right)'$; using the sampled data we seek to construct a nonparametric estimate of the mean regression function $gleft(W_{ij}right)overset{def}{equiv}mathbb{E}left[left.Y_{ij}right|X_{i},X_{j}right].$ We present two sets of results. First, we calculate lower bounds on the minimax risk for estimating the regression function at (i) a point and (ii) under the infinity norm. Second, we calculate (i) pointwise and (ii) uniform convergence rates for the dyadic analog of the familiar Nadaraya-Watson (NW) kernel regression estimator. We show that the NW kernel regression estimator achieves the optimal rates suggested by our risk bounds when an appropriate bandwidth sequence is chosen. This optimal rate differs from the one available under iid data: the effective sample size is smaller and $d_W=mathrm{dim}(W_{ij})$ influences the rate differently.
{"title":"Minimax Risk and Uniform Convergence Rates for Nonparametric Dyadic Regression","authors":"B. Graham, Fengshi Niu, J. Powell","doi":"10.3386/W28548","DOIUrl":"https://doi.org/10.3386/W28548","url":null,"abstract":"Let $i=1,ldots,N$ index a simple random sample of units drawn from some large population. For each unit we observe the vector of regressors $X_{i}$ and, for each of the $Nleft(N-1right)$ ordered pairs of units, an outcome $Y_{ij}$. The outcomes $Y_{ij}$ and $Y_{kl}$ are independent if their indices are disjoint, but dependent otherwise (i.e., \"dyadically dependent\"). Let $W_{ij}=left(X_{i}',X_{j}'right)'$; using the sampled data we seek to construct a nonparametric estimate of the mean regression function $gleft(W_{ij}right)overset{def}{equiv}mathbb{E}left[left.Y_{ij}right|X_{i},X_{j}right].$ \u0000We present two sets of results. First, we calculate lower bounds on the minimax risk for estimating the regression function at (i) a point and (ii) under the infinity norm. Second, we calculate (i) pointwise and (ii) uniform convergence rates for the dyadic analog of the familiar Nadaraya-Watson (NW) kernel regression estimator. We show that the NW kernel regression estimator achieves the optimal rates suggested by our risk bounds when an appropriate bandwidth sequence is chosen. This optimal rate differs from the one available under iid data: the effective sample size is smaller and $d_W=mathrm{dim}(W_{ij})$ influences the rate differently.","PeriodicalId":19091,"journal":{"name":"NBER Working Paper Series","volume":"20 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81220013","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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