Canadian Journal of Economics-Revue Canadienne D Economique最新文献

We suggest an explanation for the existence of “mission drift,” the tendency for Microfinance Institutions (MFIs) to lend money to wealthier borrowers rather than to the very poor. We focus on the relationship between MFIs and external funding institutions. We assume that both the MFIs and the funding institutions are pro-poor. However, asymmetric information on the effort chosen by the MFI to identify higher-quality projects may increase the share of loans attributed to wealthier borrowers. This occurs because funding institutions have to build incentives for MFIs, creating a trade-off between the quality of the funded projects and the attribution of loans to poorer borrowers.

We experimentally study the interaction between a persuader and a decision-maker. The former would like to persuade the latter to approve a project by providing evidence on the project's value. He may choose a selective disclosure strategy on the basis of his private information. Our experimental design contrasts situations where the persuader observes private information or not and where the decision-maker interacts with a human or robot persuader. The experimental results confirm the theoretical prediction that the human persuader manipulates the production of evidence. Although the decision-maker does not adequately take into account such manipulation, the comparative static analysis across treatments is mostly consistent with theoretical predictions with a rational decision-maker. Our findings on the welfare effect of the persuader's manipulation on the decision-maker are consistent with theory. In particular, the decision-maker may benefit from such manipulation. However, the welfare effect on the persuader is not always consistent with theory, in that there are instances in which the persuader is not hurt by manipulation even though theory predicts that he is.

We test the reproducibility and replicability of M. Dincecco, J. Fenske, A. Menon and S. Mukherjee (2022), which reports a positive relationship between pre-colonial interstate warfare and long-run development patterns across India. Overall, we confirm that all of the study's estimates are computationally reproducible using the provided replication package in Stata, but note that the ease of replication could be improved by the provision of code and intermediate data sets for the conflict exposure measure. We test for and find no evidence of data manipulation in the final data sets. Concerning direct replicability, we consider different ways of measuring distance to conflicts and also alternative proxies for both the dependent variable and variables that capture channels by which the main effects operate. We find that some estimates are sensitive to the type of conflict considered. Other estimates are sensitive to the time period considered, most likely due to time heterogeneity in the number of conflicts recorded. Nevertheless, most estimates are substantially in line with the original study.

We explore portfolio allocation in Great Britain by introducing a latent class modelling approach using household panel data based on a nationally representative sample of the population, namely the Wealth and Assets Survey. The latent class aspect of the model splits households into four groups, from lowest-wealth and least-diversified through to highest-wealth and most-diversified, which serves to unveil a more detailed picture of the determinants of portfolio diversification than existing econometric approaches. A pattern of class heterogeneity is revealed that conventional econometric models are unable to identify because the statistical significance and the direction of the effect of some explanatory variables vary across the groups. For example, the effect of labour income on the number of financial assets held influences the level of diversification for the two middle classes, whereas no effect is found for households with the lowest or the highest levels of diversification. Noticeable differences in the magnitude of the effects of pension wealth and occupation are also revealed across the four classes. Such findings demonstrate the importance of accounting for latent heterogeneity when modelling financial behaviour. Ultimately, treating the population as a single homogeneous group may lead to biased parameter estimates, whereby policy based on such models could be inappropriate or erroneous.

In this paper we study the macroeconomic effects of changes in federal taxes for the Canadian economy for the time period 1961–2014. We document all legislated tax changes and the motivations behind them. We then employ the narrative methodology of Romer and Romer (2010) and Cloyne (2013) to identify exogenous changes in federal taxes. Our main empirical result shows that a tax cut of 1% of GDP leads to an increase in GDP of 2.1% on impact and a peak increase of 2.68% after three quarters of the initial shock. Disaggregated analysis shows that the response of output is driven by consumption and investment. We also find changes in personal income and other (sales and production) taxes to have strong effects on output.

This paper presents evidence on the effect of the introduction of Canadian Tax-Free Savings Accounts (TFSAs) on the savings of families with children. Contributions to TFSAs are not tax-deductible but capital income earned in the account accrues tax-free and withdrawals are not taxed. Using a difference-in-differences instrumental variables research design that exploits the sharp change in a family's cumulative TFSA contribution room that arises when a child turns 18 years old, I find that a $1 increase in family-level TFSA balances lowers taxable financial asset holdings by approximately $0.25 to $0.45 and has no statistically significant effect on holdings in traditional tax-deferred accounts. My results suggest that having an additional adult family member eligible to open a TFSA increases the TFSA contributions and account balances of both adult children and their parents.

This paper examines a statistical model of choice in which individual decisions have no preferential basis or optimizing behaviour. Individual consumption is chosen at random, while respecting a linear budget set. All the properties of classical demand theory, including symmetry and negative (semi)definiteness of the Slutsky matrix, are shown to be generally satisfied by mean (i.e., market) demands. Despite the fact that individuals are “irrational,” mean demands can be rationalized as the outcome of utility-maximizing behaviour, even when demands are interior. The severity and frequency of revealed preference violations are unable to reject economic rationality in irrational individuals.

Food insecurity is prevalent in northern Canada, especially among Indigenous peoples. As one approach to address this issue, the federal government subsidizes the shipping of necessities to remote northern communities, initially through the Food Mail Program and then Nutrition North Canada as of April 2011. We use the Canadian Community Health Survey (2007 to 2016) and a difference-in-differences model to estimate the impact of the policy change on food insecurity, testing for heterogeneity between Indigenous and non-Indigenous families. Our results, which withstand several robustness checks, indicate that the policy change increased the likelihood of overall food insecurity by 8.9 percentage points (77.3% relative to the sample mean) and moderate/severe food insecurity by 7.1 percentage points (89.3% relative to the sample mean). It also increased severe food insecurity among Indigenous families by 7.3 percentage points (more than three times the sample mean). There was, however, variation across regions and subsamples of families with children. Specifically, the policy change was particularly harmful to Indigenous families in the territories and Inuit Nunangat. The detrimental impact was also heightened in the presence of children, especially when considering severe food insecurity among Indigenous families.

Utilizing industry-level foreign direct investment (FDI) from 72 source markets to 122 destination markets between 2003 to 2018, we evaluate how cross-border technology investments respond to economic recessions. We find that FDI embedded with intensive research and development (R&D) drops when the destination market is in a recession and the source market is in a normal state and recovers to the pre-recession levels when both destination and source markets are in recession. However, there is little evidence that recessions affect cross-border investments in other aspects of technology measured by the penetration of robots, intellectual property products and information and communications technology (ICT). The response of R&D-intensive FDI to recessions is particularly pronounced in deep and long recessions, during the propagation stage of recessions and in destination markets with relatively weak institutional protection of intellectual property and rule of law, loose FDI regulation and high financial development. Our findings are limited to advanced markets: there is no evidence that R&D-intensive FDI from or to emerging markets responds to either destination or source market recessions.