Government Spending and Re-election

Does additional government spending improve the electoral chances of incumbent political parties? This paper provides the first quasi-experimental evidence on this question. Our research design exploits discontinuities in federal funding to local governments in Brazil around several population cutoffs over the period 1982-1985. We find that extra fiscal transfers resulted in a 20% increase in local government spending per capita, and an increase of about 10 percentage points in the re-election probability of local incumbent parties. We also find positive effects of the government spending on education outcomes and earnings, which we interpret as indirect evidence of public service improvements. Together, our results provide evidence that electoral rewards encourage incumbents to spend part of additional revenues on public services valued by voters, a finding in line with agency models of electoral accountability.

The emergence of biofuels and the co-movement between crude oil and agricultural prices

Biofuels are becoming an alternative to non-renewable energy sources but we know little about the economic mechanisms influencing their prices. This paper studies the interrelationships between the spot prices of oil and those of agricultural commodities used as biofuel feedstocks. Using daily data since 1988, we identify a co-movement after 2005 that does not appear for other food-related commodities and is not due to general economic variables. We also find traces of the co-movement in the prices of a large biofuel stock. The results amount to the first systematic piece of empirical evidence linking spot oil and agricultural markets via the emergence of biofuels.

What do women do? World population growth and fertility patterns, 1960-2000

In this paper we attempt to describe the general picture reasons behind the world population explosion during the 20th century. In general we comment that if, according to some, at the end of the 20th century there were too many people, this was has a consequence of scientific innovation, circulation of information, and economic growth, leading to a dramatic improvement in life expectancies. Nevertheless, a crucial variable shaping differences in demographic growth is fertility. In this paper we identify as important exogenous variables affecting fertility female education levels, infant mortality, and racial identity and diversity. It is estimated that three additional years of schooling for mothers leads on average (at the world level ) to one child less per couple. Even if we can identify a worldwide trend towards convergence in demographic trends, the African case needs to be given more attention, not only because of its different demographic patterns, but also because this is the continent where the worldwide movement towards a higher quality of life has not yet been achieved for an important share of the world's population.

Intergovernmental Transfers and Elementary Education: Quasi-Experimental Evidence from Brazil

Whether providing additional resources to local communities leads to improved public services and better outcomes more generally, given existing management capacity and incentive and accountability structures, is an unresolved yet important question for public policy. This paper uses a regression-discontinuity design to evaluate the effect of unrestricted fiscal transfers on local spending (including on education), schooling and learning in Brazil. Results show that transfers increase local public spending almost one for one with no evidence of crowding out own revenue or other revenue sources. Extra per capita transfers of 1000 Reais lead to about 0.42 additional years of elementary schooling and student literacy rates increase by about 5.6 percentage points on average. Part of this effect arises through higher teacher-student ratios in municipal elementary school systems. Results also suggest that additional resources have stronger effects in more rural and less developed parts of Brazil.

Measures of fit in multiple correspondence analysis of crisp and fuzzy coded data

When continuous data are coded to categorical variables, two types of coding are possible: crisp coding in the form of indicator, or dummy, variables with values either 0 or 1; or fuzzy coding where each observation is transformed to a set of "degrees of membership" between 0 and 1, using co-called membership functions. It is well known that the correspondence analysis of crisp coded data, namely multiple correspondence analysis, yields principal inertias (eigenvalues) that considerably underestimate the quality of the solution in a low-dimensional space. Since the crisp data only code the categories to which each individual case belongs, an alternative measure of fit is simply to count how well these categories are predicted by the solution. Another approach is to consider multiple correspondence analysis equivalently as the analysis of the Burt matrix (i.e., the matrix of all two-way cross-tabulations of the categorical variables), and then perform a joint correspondence analysis to fit just the off-diagonal tables of the Burt matrix - the measure of fit is then computed as the quality of explaining these tables only. The correspondence analysis of fuzzy coded data, called "fuzzy multiple correspondence analysis", suffers from the same problem, albeit attenuated. Again, one can count how many correct predictions are made of the categories which have highest degree of membership. But here one can also defuzzify the results of the analysis to obtain estimated values of the original data, and then calculate a measure of fit in the familiar percentage form, thanks to the resultant orthogonal decomposition of variance. Furthermore, if one thinks of fuzzy multiple correspondence analysis as explaining the two-way associations between variables, a fuzzy Burt matrix can be computed and the same strategy as in the crisp case can be applied to analyse the off-diagonal part of this matrix. In this paper these alternative measures of fit are defined and applied to a data set of continuous meteorological variables, which are coded crisply and fuzzily into three categories. Measuring the fit is further discussed when the data set consists of a mixture of discrete and continuous variables.

Poor, Hungry and Stupid: Numeracy and the Impact of High Food Prices in Industrializing Britain, 1780-1850

This paper argues that low levels of nutrition impaired cognitive development in industrializing England, and that welfare transfers mitigated the adverse effects of high food prices. Age heaping is used as an indicator of numeracy, as derived from census data. For the cohorts from 1780-1850, we analyse the effect of high grain prices during the Napoleonic Wars. We show that numeracy declined markedly for those born during the war years, especially when wheat was dear. Crucially, where the Old Poor Law provided for generous relief payments, the adverse impact of high prices for foodstuffs was mitigated. Finally, we show some tentative evidence that Englishmen born in areas with low income support selected into occupations with lower cognitive requirements.

Incorporating waiting time in competitive location models: formulations and heuristics

In this paper we propose a metaheuristic to solve a new version of the Maximum Capture Problem. In the original MCP, market capture is obtained by lower traveling distances or lower traveling time, in this new version not only the traveling time but also the waiting time will affect the market share. This problem is hard to solve using standard optimization techniques. Metaheuristics are shown to offer accurate results within acceptable computing times.

Behavioral Assumptions and Management Ability: A Tentative Test

The paper explores the consequences that relying on different behavioral assumptions in training managers may have on their future performance. We argue that training with an emphasis on the standard assumptions used in economics (rationality and self-interest) leads future managers to rely excessively on rational and explicit safeguarding, crowding out instinctive contractual heuristics and signaling a 'bad' type to potential partners. In contrast, human assumptions used in management theories, because of their diverse, implicit and even contradictory nature, do not conflict with the innate set of cooperative tools and may provide a good training ground for such tools. We present tentative confirmatory evidence by examining how the weight given to behavioral assumptions in the core courses of the top 100 business schools influences the average salaries of their MBA graduates. Controlling for the average quality of their students and some other schools' characteristics, average salaries are significantly greater for those schools whose core MBA courses contain a higher proportion of management courses as opposed to courses based on economics or technical disciplines.

Adjustment to Target Capital, Finance, and Growth

Does financial development result in capital being reallocated more rapidly to industries where it is most productive? We argue that if this was the case, financially developed countries should see faster growth in industries with investment opportunities due to global demand and productivity shifts. Testing this cross-industry cross-country growth implication requires proxies for (latent) global industry investment opportunities. We show that tests relying only on data from specific (benchmark) countries may yield spurious evidence for or against the hypothesis. We therefore develop an alternative approach that combines benchmark-country proxies with a proxy that does not reflect opportunities specific to a country or level of financial development. Our empirical results yield clear support for the capital reallocation hypothesis.

Financial Crises and International Portfolio Dynamics

This paper analyzes the behavior of international capital flows by foreigners and domestic agents, especially during financial crises. We show that gross capital flows by foreigners and domestic agents are very large and volatile, especially relative to net capital flows. This is because when foreigners invest in a country domestic agents tend to invest abroad and vice versa. Gross capital flows are also pro-cyclical. During expansions, foreigners tend to bring in more capital and domestic agents tend to invest more abroad. During crises, there is retrenchment, i.e. a reduction in capital inflows by foreigners and an increase in capital inflows by domestic agents. This is especially true during severe crises and during systemic crises. The evidence can shed light on the nature of shocks driving international capital flows. It seems to favor shocks that affect foreigners and domestic agents asymmetrically -e.g. sovereign risk and asymmetric information- over productivity shocks.

Skill, Luck, Overconfidence, and Risk Taking

In most naturally occurring situations, success depends on both skill and chance. We compare experimental market entry decisions where payoffs depend on skill alone and combinations of skill and luck. We find more risk taking with skill and luck as opposed to skill alone, particularly for males, and little overconfidence. Our data support an explanation based on differential attitudes toward luck by those whose self-assessed skills are low and high. Making luck more important induces greater optimism for the former, while the latter maintain a belief that high levels of skill are sufficient to overcome the vagaries of chance.

Transitory Economic Shocks and Civil Conflict

I examine whether civil conflict is triggered by transitory negative economic shocks. My approach follows Miguel, Satyanath, and Sergenti (2004) in using rainfall as an exogenous source of economic shocks in Sub-Saharan African countries. The main difference is that my empirical specifications take into account that rainfall shocks are transitory. Failure to do so may, for example, lead to the conclusion that civil conflict is more likely to break out following negative rainfall shocks when conflict is most probable following years with exceptionally high rainfall levels.

The Three Horsemen of Growth: Plague, War and Urbanization in Early Modern Europe

How did Europe overtake China? We construct a simple Malthusian model with two sectors, and use it to explain how European per capita incomes and urbanization rates could surge ahead of Chinese ones. That living standards could exceed subsistence levels at all in a Malthusian setting should be surprising. Rising fertility and falling mortality ought to have reversed any gains. We show that productivity growth in Europe can only explain a small fraction of rising living standards. Population dynamics - changes of the birth and death schedules - were far more important drivers of the longrun Malthusian equilibrium. The Black Death raised wages substantially, creating important knock-on effects. Because of Engel's Law, demand for urban products increased, raising urban wages and attracting migrants from rural areas. European cities were unhealthy, especially compared to Far Eastern ones. Urbanization pushed up aggregate death rates. This effect was reinforced by more frequent wars (fed by city wealth) and disease spread by trade. Thus, higher wages themselves reduced population pressure. Without technological change, our model can account for the sharp rise in European urbanization as well as permanently higher per capita incomes. We complement our calibration exercise with a detailed analysis of intra-European growth in the early modern period. Using a panel of European states in the period 1300-1700, we show that war frequency can explain a good share of the divergent fortunes within Europe.

Bioclimatic constraints to Andean cat distribution: a modelling application for rare species

AimTo identify the bioclimatic niche of the endangered Andean cat (Leopardus jacobita), one of the rarest and least known felids in the world, by developing a species distribution model.LocationSouth America, High Andes and Patagonian steppe. Peru, Bolivia, Chile, Argentina.MethodsWe used 108 Andean cat records to build the models, and 27 to test them, applying the Maxent algorithm to sets of uncorrelated bioclimatic variables from global databases, including elevation. We based our biogeographical interpretations on the examination of the predicted geographic range, the modelled response curves and latitudinal variations in climatic variables associated with the locality data.ResultsSimple bioclimatic models for Andean cats were highly predictive with only 3-4 explanatory variables. The climatic niche of the species was defined by extreme diurnal variations in temperature, cold minimum and moderate maximum temperatures, and aridity, characteristic not only of the Andean highlands but also of the Patagonian steppe. Argentina had the highest representation of suitable climates, and Chile the lowest. The most favourable conditions were centrally located and spanned across international boundaries. Discontinuities in suitable climatic conditions coincided with three biogeographical barriers associated with climatic or topographic transitions.Main conclusionsSimple bioclimatic models can produce useful predictions of suitable climatic conditions for rare species, including major biogeographical constraints. In our study case, these constraints are also known to affect the distribution of other Andean species and the genetic structure of Andean cat populations. We recommend surveys of areas with suitable climates and no Andean cat records, including the corridor connecting two core populations. The inclusion of landscape variables at finer scales, crucially the distribution of Andean cat prey, would contribute to refine our predictions for conservation applications.

Investigation of Maquoketa's Pit Bull Ban Ordinance and Enforcement, 2006

Case File 0603634 On September 13, 2006, Kelly Wilslef submitted a complaint to the Ombudsman about the Maquoketa City Council (Council). Ms. Wilslef stated a Maquoketa police officer served her an abatement notice for violating the city ordinance preventing owners from keeping pit bull terrier dogs in the city. The Council subsequently determined her dog was a pit bull mix, and ordered her to remove the dog from the city. Ms. Wilslef claimed the Council unreasonably relied on non-expert testimony supporting the city’s position her dog was a pit bull mix. She further claimed that if her dog was in fact a pit bull mix, the city ordinance did not apply to mixed-breed pit bulls; therefore, the Council acted contrary to law when it concluded she violated the city ordinance and ordered her to remove her dog from the city.