Jiarui Tian, Tom Coupé, Sayak Khatua, W. R. Reed, Benjamin D. K. Wood
This study demonstrates a simple and reliable method for calculating ex post power. We first conduct a series of Monte Carlo experiments to assess its performance. The experiments are designed to produce artificial datasets that resemble actual data from 23 studies funded by the International Initiative for Impact Evaluation (3ie). After determining that the method performs adequately, we then apply it to the 23 studies and compare their ex post power with the ex‐ante power claimed on their funding applications. We find the average ex post power of the 3ie studies is close to 80%. However, there are more estimates of low power than would be expected if all studies had 80% true power. Most of the differences between ex post and ex ante power can be explained by differences between planned and actual total observations, number of clusters, and the degree of intracluster correlation. This demonstrates how ex post power can be used by funders to evaluate previously funded research and identify areas for improved power estimation in future research. We further show how ex post power can aid in the interpretation of both insignificant and significant estimates.
{"title":"Power to the researchers: Calculating power after estimation","authors":"Jiarui Tian, Tom Coupé, Sayak Khatua, W. R. Reed, Benjamin D. K. Wood","doi":"10.1111/rode.13130","DOIUrl":"https://doi.org/10.1111/rode.13130","url":null,"abstract":"This study demonstrates a simple and reliable method for calculating ex post power. We first conduct a series of Monte Carlo experiments to assess its performance. The experiments are designed to produce artificial datasets that resemble actual data from 23 studies funded by the International Initiative for Impact Evaluation (3ie). After determining that the method performs adequately, we then apply it to the 23 studies and compare their ex post power with the ex‐ante power claimed on their funding applications. We find the average ex post power of the 3ie studies is close to 80%. However, there are more estimates of low power than would be expected if all studies had 80% true power. Most of the differences between ex post and ex ante power can be explained by differences between planned and actual total observations, number of clusters, and the degree of intracluster correlation. This demonstrates how ex post power can be used by funders to evaluate previously funded research and identify areas for improved power estimation in future research. We further show how ex post power can aid in the interpretation of both insignificant and significant estimates.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141647684","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}
Elisa Meneghello, Martina Menon, F. Perali, Furio Rosati
This paper describes a new method for estimating shadow wages and identifying the shadow contribution of child labor to household income. The approach enables a direct test for recursivity by comparing the estimated shadow wages with the market wage. This is a novel option to test for non‐separability that complements traditional indirect tests based on constraining production or consumption decisions. Our innovative identification strategy is not specific to child labor but can also be used to identify gender‐specific shadow wages for women and men. The estimated shadow wages are meaningful in the context of Nepal's rural economy. Based on the results of our direct test for separability, we conclude that the separable representation of farm households is inconsistent with the Nepalese data. We also estimate the contribution of child labor to household income at both the household and national levels. A series of simulations illustrates the role that child labor plays in household livelihoods and how it affects Nepal's income distribution.
{"title":"The shadow wage of child labor: An application to Nepal","authors":"Elisa Meneghello, Martina Menon, F. Perali, Furio Rosati","doi":"10.1111/rode.13132","DOIUrl":"https://doi.org/10.1111/rode.13132","url":null,"abstract":"This paper describes a new method for estimating shadow wages and identifying the shadow contribution of child labor to household income. The approach enables a direct test for recursivity by comparing the estimated shadow wages with the market wage. This is a novel option to test for non‐separability that complements traditional indirect tests based on constraining production or consumption decisions. Our innovative identification strategy is not specific to child labor but can also be used to identify gender‐specific shadow wages for women and men. The estimated shadow wages are meaningful in the context of Nepal's rural economy. Based on the results of our direct test for separability, we conclude that the separable representation of farm households is inconsistent with the Nepalese data. We also estimate the contribution of child labor to household income at both the household and national levels. A series of simulations illustrates the role that child labor plays in household livelihoods and how it affects Nepal's income distribution.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141644336","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}
In recent years, there have been calls for policy makers to do more to fight climate change. Indeed, there are growing concerns that climate could exert a serious detrimental impact on financial stability, and thus the wider economy. Empirically, a limited number of studies have highlighted the inflationary effects of climate‐related variables. This study is an attempt to contribute to this literature. More specifically, the article investigates the dynamic inflationary effect of climate in a case study of Belize. Results derived from quarterly data, over the period 1994–2019, and local linear projections suggest that inflation responds positively and significantly to temperature and rainfall shocks. Further disaggregation of inflation into its subindices reveals that this increase in inflation is mainly driven by the effect of climate on food, alcohol and tobacco, household, hospitality, and other goods and services inflation. The findings remain robust even when accounting for temperature and rainfall deviations from historical means. The results suggest that, while inflation control might not be a core element of monetary policy in Belize, policy makers should be aware that these climate‐related effects may have ramifications for the Belize economy.
{"title":"Climate threat and price stability: A case study of Belize","authors":"B. Ouattara, C. Soutar, G. Waight","doi":"10.1111/rode.13135","DOIUrl":"https://doi.org/10.1111/rode.13135","url":null,"abstract":"In recent years, there have been calls for policy makers to do more to fight climate change. Indeed, there are growing concerns that climate could exert a serious detrimental impact on financial stability, and thus the wider economy. Empirically, a limited number of studies have highlighted the inflationary effects of climate‐related variables. This study is an attempt to contribute to this literature. More specifically, the article investigates the dynamic inflationary effect of climate in a case study of Belize. Results derived from quarterly data, over the period 1994–2019, and local linear projections suggest that inflation responds positively and significantly to temperature and rainfall shocks. Further disaggregation of inflation into its subindices reveals that this increase in inflation is mainly driven by the effect of climate on food, alcohol and tobacco, household, hospitality, and other goods and services inflation. The findings remain robust even when accounting for temperature and rainfall deviations from historical means. The results suggest that, while inflation control might not be a core element of monetary policy in Belize, policy makers should be aware that these climate‐related effects may have ramifications for the Belize economy.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-07-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141645007","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}
Oil price volatility can significantly affect the growth and development of oil exporting developing countries. Given the widespread use of stabilization funds as a risk management tool by such countries and the potential of futures hedging to function in a similar vein, no study has effectively compared both mechanisms. This article hence uses the hedging effectiveness measure to examine the potential of each mechanism to smooth the volatile revenues of oil exporting developing countries. The results show that stabilization funds performed best with larger deposit rates and using benchmark prices with larger moving averages. However, the volatility reduction capabilities of optimal futures hedging were found to be far superior and should thus be adopted by oil dependent developing countries as their prime revenue smoothening mechanism.
{"title":"An empirical comparison of stabilization funds and futures hedging for oil exporting developing countries","authors":"Ricardo Lalloo","doi":"10.1111/rode.13126","DOIUrl":"https://doi.org/10.1111/rode.13126","url":null,"abstract":"Oil price volatility can significantly affect the growth and development of oil exporting developing countries. Given the widespread use of stabilization funds as a risk management tool by such countries and the potential of futures hedging to function in a similar vein, no study has effectively compared both mechanisms. This article hence uses the hedging effectiveness measure to examine the potential of each mechanism to smooth the volatile revenues of oil exporting developing countries. The results show that stabilization funds performed best with larger deposit rates and using benchmark prices with larger moving averages. However, the volatility reduction capabilities of optimal futures hedging were found to be far superior and should thus be adopted by oil dependent developing countries as their prime revenue smoothening mechanism.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-07-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141661056","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}
In the Internet age, income inequality within peer groups has raised attention. We examine the effect of Internet penetration on peer income inequality and investigate whether the Internet penetration and peer income inequality relationship can be reinforced by human capital. Using a combination of macro and microdatabases of China over the period 2010–2018, we find that peer income inequality in China generally follows a downward trend from 2010. In addition, we show that Internet penetration significantly reduces peer income inequality. Internet penetration has a negative effect on peer income inequality among those under 40 years old, while the effect is reversed among those aged 40–60. Furthermore, human capital can reinforce the links between Internet penetration and peer income inequality. Our results confirm that a mixed indicator of Internet penetration and human capital investment should be part of an active economic policy aimed at reducing peer income inequality.
{"title":"Income inequality among peers in China: Does internet penetration have a role?","authors":"Yulin Liu, Xiaomei Li, Xin Fang","doi":"10.1111/rode.13090","DOIUrl":"https://doi.org/10.1111/rode.13090","url":null,"abstract":"In the Internet age, income inequality within peer groups has raised attention. We examine the effect of Internet penetration on peer income inequality and investigate whether the Internet penetration and peer income inequality relationship can be reinforced by human capital. Using a combination of macro and microdatabases of China over the period 2010–2018, we find that peer income inequality in China generally follows a downward trend from 2010. In addition, we show that Internet penetration significantly reduces peer income inequality. Internet penetration has a negative effect on peer income inequality among those under 40 years old, while the effect is reversed among those aged 40–60. Furthermore, human capital can reinforce the links between Internet penetration and peer income inequality. Our results confirm that a mixed indicator of Internet penetration and human capital investment should be part of an active economic policy aimed at reducing peer income inequality.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-01-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140491953","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 study investigates the influence of digital financial inclusion (DFI) on the investment efficiency of small‐ and medium‐sized enterprises (SMEs) in China. Employing a dataset of listed National Equities Exchange and Quotations firms over the period from 2011 to 2020, we find robust evidence that the development of DFI improves the investment efficiency of underinvested SMEs. However, no such effect is observed for overinvested SMEs. The mechanism analysis indicates that DFI can mitigate the underinvestment problem of SMEs by restraining their risk‐taking behaviors and easing their financial constraints. Furthermore, we find that the positive effect of DFI on underinvestment is more pronounced for SMEs with weaker financial statuses or in less competitive industries.
{"title":"Digital financial inclusion and corporate investment efficiency: Evidence from small‐ and medium‐sized enterprises in China","authors":"Yong Ma, Yiqing Jiang","doi":"10.1111/rode.13089","DOIUrl":"https://doi.org/10.1111/rode.13089","url":null,"abstract":"This study investigates the influence of digital financial inclusion (DFI) on the investment efficiency of small‐ and medium‐sized enterprises (SMEs) in China. Employing a dataset of listed National Equities Exchange and Quotations firms over the period from 2011 to 2020, we find robust evidence that the development of DFI improves the investment efficiency of underinvested SMEs. However, no such effect is observed for overinvested SMEs. The mechanism analysis indicates that DFI can mitigate the underinvestment problem of SMEs by restraining their risk‐taking behaviors and easing their financial constraints. Furthermore, we find that the positive effect of DFI on underinvestment is more pronounced for SMEs with weaker financial statuses or in less competitive industries.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139526256","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 paper examines the impact of manufacturing servitization, service trade openness, and their interaction on the total factor productivity (TFP) of the manufacturing industry. Using panel data covering 43 economies, the study finds that higher levels of manufacturing servitization and service trade openness lead to higher TFP in the manufacturing industry. In addition, the positive impact of manufacturing servitization on TFP is greater in economies with higher levels of service trade openness. The study also shows that trade creation and research and development innovation mediate the relationship between manufacturing servitization, service trade openness, and TFP. Finally, the paper finds that the positive impact of manufacturing servitization, service trade openness, and their interaction on TFP is greater in developing countries and in low‐ and high‐TFP manufacturing industries. This research contributes to understanding the intricate relationship between manufacturing servitization, service trade openness, and manufacturing TFP.
{"title":"Impact of manufacturing servitization on total factor productivity under global trade openness","authors":"Hongsen Wang, Shuanxi Fang, Qing Guo, Bo Meng","doi":"10.1111/rode.13087","DOIUrl":"https://doi.org/10.1111/rode.13087","url":null,"abstract":"This paper examines the impact of manufacturing servitization, service trade openness, and their interaction on the total factor productivity (TFP) of the manufacturing industry. Using panel data covering 43 economies, the study finds that higher levels of manufacturing servitization and service trade openness lead to higher TFP in the manufacturing industry. In addition, the positive impact of manufacturing servitization on TFP is greater in economies with higher levels of service trade openness. The study also shows that trade creation and research and development innovation mediate the relationship between manufacturing servitization, service trade openness, and TFP. Finally, the paper finds that the positive impact of manufacturing servitization, service trade openness, and their interaction on TFP is greater in developing countries and in low‐ and high‐TFP manufacturing industries. This research contributes to understanding the intricate relationship between manufacturing servitization, service trade openness, and manufacturing TFP.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139527424","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}
Containment measures implemented to curb the spread of coronavirus (COVID‐19) disrupted labour markets across the world. While several studies focus on the impact of containment measures on job losses, this paper documents the effect of containment measures (specifically variation in the strictness of these measures) on employment patterns or transitions. COVID disruption can be viewed as multiple shocks to the labour market (as against a single shock). This is important because labour income is a key driver of aggregate inequality in developing countries, and such disruption has a knock‐on effect on the achievement of the Sustainable Development Goals. Therefore, we estimate the causal relationship between coronavirus containment measures and employment dynamics in South Africa. Exploiting the timing of interviews and within individual variation, we find that containment measures impact employment transitions. Specifically, stricter containment measures have a positive effect on the transition into unemployment, and the converse is true for the transition into employment. The implication of this causal relationship for development, ongoing management of COVID‐19 and future pandemics is discussed.
{"title":"Employment transitions and COVID‐19 containment measures: Evidence from a developing country","authors":"Adeola Oyenubi","doi":"10.1111/rode.13085","DOIUrl":"https://doi.org/10.1111/rode.13085","url":null,"abstract":"Containment measures implemented to curb the spread of coronavirus (COVID‐19) disrupted labour markets across the world. While several studies focus on the impact of containment measures on job losses, this paper documents the effect of containment measures (specifically variation in the strictness of these measures) on employment patterns or transitions. COVID disruption can be viewed as multiple shocks to the labour market (as against a single shock). This is important because labour income is a key driver of aggregate inequality in developing countries, and such disruption has a knock‐on effect on the achievement of the Sustainable Development Goals. Therefore, we estimate the causal relationship between coronavirus containment measures and employment dynamics in South Africa. Exploiting the timing of interviews and within individual variation, we find that containment measures impact employment transitions. Specifically, stricter containment measures have a positive effect on the transition into unemployment, and the converse is true for the transition into employment. The implication of this causal relationship for development, ongoing management of COVID‐19 and future pandemics is discussed.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-12-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139137815","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}
Paul Terhemer Iorember, Solomon Gbaka, Abdurrahman Işık, Chinazaekpere Nwani, Jaffar Abbas
Against the backdrop of persistent climate change and deteriorating environmental pressure, this study integrates financialization, human capital, and energy security risks to provide new insight into decoupling carbon emissions from economic growth. The study employs annual panel data on the BRICS (Brazil, Russia, India, China, and South Africa) countries for the period of 1990–2019. The research employs the C‐S ARDL approach and the Tapio decoupling index to assess the decoupling status of the BRICS countries. In addition, this study applies the recently developed Juodis, Karavias, and Sarafidis Granger noncausality test for robustness. The findings offer compelling evidence of an inverted U‐shaped curve, aligning with the environmental Kuznets curve hypothesis. Consequently, the results confirm the decoupling of carbon emissions in the BRICS nations. Furthermore, the Tapio decoupling elasticity index confirms different carbon decoupling statuses among the BRICS. The results show expansive negative decoupling for Brazil, weak decoupling for India and China, and strong decoupling for Russia and South Africa. In terms of policy, achieving strong decoupling status in the BRICS requires that financial institutions' lending and investing strategies align with environmental objectives. In addition, human capital development policies such as increased spending on education should be vigorously pursued to empower people to lead sustainable development projects.
在气候变化持续和环境压力不断恶化的背景下，本研究整合了金融化、人力资本和能源安全风险，为碳排放与经济增长脱钩提供了新的视角。研究采用了 1990-2019 年期间金砖国家（巴西、俄罗斯、印度、中国和南非）的年度面板数据。研究采用 C-S ARDL 方法和 Tapio 脱钩指数来评估金砖国家的脱钩状况。此外，本研究还采用了最近开发的 Juodis、Karavias 和 Sarafidis 格兰杰非因果关系检验法来进行稳健性检验。研究结果提供了令人信服的倒 U 型曲线证据，符合环境库兹涅茨曲线假设。因此，结果证实了金砖国家碳排放的脱钩。此外，塔皮奥脱钩弹性指数证实了金砖国家之间不同的碳脱钩状况。结果显示，巴西的脱钩率为负，印度和中国的脱钩率较弱，而俄罗斯和南非的脱钩率较强。在政策方面，金砖国家要实现强脱钩状态，需要金融机构的贷款和投资战略与环境目标保持一致。此外，应大力推行人力资本发展政策，如增加教育支出，以增强人民领导可持续发展项目的能力。
{"title":"New insight into decoupling carbon emissions from economic growth: Do financialization, human capital, and energy security risk matter?","authors":"Paul Terhemer Iorember, Solomon Gbaka, Abdurrahman Işık, Chinazaekpere Nwani, Jaffar Abbas","doi":"10.1111/rode.13077","DOIUrl":"https://doi.org/10.1111/rode.13077","url":null,"abstract":"Against the backdrop of persistent climate change and deteriorating environmental pressure, this study integrates financialization, human capital, and energy security risks to provide new insight into decoupling carbon emissions from economic growth. The study employs annual panel data on the BRICS (Brazil, Russia, India, China, and South Africa) countries for the period of 1990–2019. The research employs the C‐S ARDL approach and the Tapio decoupling index to assess the decoupling status of the BRICS countries. In addition, this study applies the recently developed Juodis, Karavias, and Sarafidis Granger noncausality test for robustness. The findings offer compelling evidence of an inverted U‐shaped curve, aligning with the environmental Kuznets curve hypothesis. Consequently, the results confirm the decoupling of carbon emissions in the BRICS nations. Furthermore, the Tapio decoupling elasticity index confirms different carbon decoupling statuses among the BRICS. The results show expansive negative decoupling for Brazil, weak decoupling for India and China, and strong decoupling for Russia and South Africa. In terms of policy, achieving strong decoupling status in the BRICS requires that financial institutions' lending and investing strategies align with environmental objectives. In addition, human capital development policies such as increased spending on education should be vigorously pursued to empower people to lead sustainable development projects.","PeriodicalId":507769,"journal":{"name":"Review of Development Economics","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-12-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139160017","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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