Sharp Bounds on Heterogeneous Individual Treatment Responses

This paper discusses how to identify individual-specific causal effects of an ordered discrete endogenous variable. The counterfactual heterogeneous causal information is recovered by identifying the partial differences of a structural relation. The proposed refutable nonparametric local restrictions exploit the fact that the pattern of endogeneity may vary across the level of the unobserved variable. The restrictions adopted in this paper impose a sense of order to an unordered binary endogeneous variable. This allows for a uni.ed structural approach to studying various treatment effects when self-selection on unobservables is present. The usefulness of the identi.cation results is illustrated using the data on the Vietnam-era veterans. The empirical findings reveal that when other observable characteristics are identical, military service had positive impacts for individuals with low (unobservable) earnings potential, while it had negative impacts for those with high earnings potential. This heterogeneity would not be detected by average effects which would underestimate the actual effects because different signs would be cancelled out. This partial identification result can be used to test homogeneity in response. When homogeneity is rejected, many parameters based on averages may deliver misleading information.

Complexity and Bounded Rationality in Individual Decision Problemsing.

I develop a model of endogenous bounded rationality due to search costs, arising implicitly from the problems complexity. The decision maker is not required to know the entire structure of the problem when making choices but can think ahead, through costly search, to reveal more of it. However, the costs of search are not assumed exogenously; they are inferred from revealed preferences through her choices. Thus, bounded rationality and its extent emerge endogenously: as problems become simpler or as the benefits of deeper search become larger relative to its costs, the choices more closely resemble those of a rational agent. For a fixed decision problem, the costs of search will vary across agents. For a given decision maker, they will vary across problems. The model explains, therefore, why the disparity, between observed choices and those prescribed under rationality, varies across agents and problems. It also suggests, under reasonable assumptions, an identifying prediction: a relation between the benefits of deeper search and the depth of the search. As long as calibration of the search costs is possible, this can be tested on any agent-problem pair. My approach provides a common framework for depicting the underlying limitations that force departures from rationality in different and unrelated decision-making situations. Specifically, I show that it is consistent with violations of timing independence in temporal framing problems, dynamic inconsistency and diversification bias in sequential versus simultaneous choice problems, and with plausible but contrasting risk attitudes across small- and large-stakes gambles.

Coordination in Public Good Provision: How Individual Volunteering is Impacted by the Volunteering of Others

In this analysis, we examine the relationship between an individual's decision to volunteer and the average level of volunteering in the community where the individual resides. Our theoretical model is based on a coordination game , in which volunteering by others is informative regarding the benefit from volunteering. We demonstrate that the interaction between this information and one's private information makes it more likely that he or she will volunteer, given a higher level of contributions by his or her peers. We complement this theoretical work with an empirical analysis using Census 2000 Summary File 3 and Current Population Survey (CPS) 2004-2007 September supplement file data. We control for various individual and community characteristics, and employ robustness checks to verify the results of the baseline analysis. We additionally use an innovative instrumental variables strategy to account for reflection bias and endogeneity caused by selective sorting by individuals into neighborhoods, which allows us to argue for a causal interpretation. The empirical results in the baseline, as well as all robustness analyses, verify the main result of our theoretical model, and we employ a more general structure to further strengthen our results.

An investigation of the determinants of household demand for bushmeat in the Serengeti using an open-ended choice experiment

Illegal hunting for bushmeat is regarded as an important cause of biodiversity decline in Africa. We use a stated preferences method to obtain information on determinants of demand for bushmeat in villages around the Serengeti National Park, Tanzania. We estimate the effects of changes in the own price of bushmeat and in the prices of two substitute protein sources – fish and chicken. Promoting the availability of protein substitutes at lower prices would be effective at reducing pressures on wildlife. Supply-side measures that raise the price of bushmeat would also be effective.

Coordination in Public Good Provision: How Individual Volunteering is Impacted by the Volunteering of Others

In this analysis, we examine the relationship between an individual’s decision to volunteer and the average level of volunteering in the community where the individual resides. Our theoretical model is based on a coordination game , in which volunteering by others is informative regarding the benefit from volunteering. We demonstrate that the interaction between this information and one’s private information makes it more likely that he or she will volunteer, given a higher level of contributions by his or her peers. We complement this theoretical work with an empirical analysis using Census 2000 Summary File 3 and Current Population Survey (CPS) 2004-2007 September supplement file data. We control for various individual and community characteristics, and employ robustness checks to verify the results of the baseline analysis. We additionally use an innovative instrumental variables strategy to account for reflection bias and endogeneity caused by selective sorting by individuals into neighbourhoods, which allows us to argue for a causal interpretation. The empirical results in the baseline, as well as all robustness analyses, verify the main result of our theoretical model, and we employ a more general structure to further strengthen our results.

Determinants of public education expenditure: Evidence from Indian states

Public education expenditure varies significantly across Indian states. Using data on sixteen Indian states from 2001-2010, the paper tries to identify the determinants of per capita education expenditure of state governments in India. The econometric findings indicate that richer states spend more on education compared to the poorer states. A lower share of child population (0-14 years) is found to significantly enhance education expenditure at the state level. We do not find any evidence that political factors such as political ideology of the ruling party and level of corruption affect education expenditure of state governments.