Theoretical and empirical essays on microeconometrics

This Master Thesis consists of one theoretical article and one empirical article on the field of Microeconometrics. The first chapter\footnote{We also thank useful suggestions by Marinho Bertanha, Gabriel Cepaluni, Brigham Frandsen, Dalia Ghanem, Ricardo Masini, Marcela Mello, Áureo de Paula, Cristine Pinto, Edson Severnini and seminar participants at São Paulo School of Economics, the California Econometrics Conference 2015 and the 37\textsuperscript{th} Brazilian Meeting of Econometrics.}, called \emph{Synthetic Control Estimator: A Generalized Inference Procedure and Confidence Sets}, contributes to the literature about inference techniques of the Synthetic Control Method. This methodology was proposed to answer questions involving counterfactuals when only one treated unit and a few control units are observed. Although this method was applied in many empirical works, the formal theory behind its inference procedure is still an open question. In order to fulfill this lacuna, we make clear the sufficient hypotheses that guarantee the adequacy of Fisher's Exact Hypothesis Testing Procedure for panel data, allowing us to test any \emph{sharp null hypothesis} and, consequently, to propose a new way to estimate Confidence Sets for the Synthetic Control Estimator by inverting a test statistic, the first confidence set when we have access only to finite sample, aggregate level data whose cross-sectional dimension may be larger than its time dimension. Moreover, we analyze the size and the power of the proposed test with a Monte Carlo experiment and find that test statistics that use the synthetic control method outperforms test statistics commonly used in the evaluation literature. We also extend our framework for the cases when we observe more than one outcome of interest (simultaneous hypothesis testing) or more than one treated unit (pooled intervention effect) and when heteroskedasticity is present. The second chapter, called \emph{Free Economic Area of Manaus: An Impact Evaluation using the Synthetic Control Method}, is an empirical article. We apply the synthetic control method for Brazilian city-level data during the 20\textsuperscript{th} Century in order to evaluate the economic impact of the Free Economic Area of Manaus (FEAM). We find that this enterprise zone had positive significant effects on Real GDP per capita and Services Total Production per capita, but it also had negative significant effects on Agriculture Total Production per capita. Our results suggest that this subsidy policy achieve its goal of promoting regional economic growth, even though it may have provoked mis-allocation of resources among economic sectors.

Green and competitive: empirical evidence from ISO 9001 certified Brazilian companies

There are many arguments in the literature on environmental management stating that companies that have a significant environmental performance tend to be more competitive, because environmental management tends to generate positive effects on their operational performance. Despite the fact that such arguments are widely accepted, there is little empirical evidence yet of such a relationship in manufacturing contexts that are rarely studied thus far, such as those of developing countries. The paper aims to discuss these issues. Design/methodology/approach – With the objective of testing the positive relationship between environmental performance and operational performance, this research presents the data of a survey conducted with 75 ISO 9001-certified Brazilian companies. Such data were analyzed by means of structural equation modeling. Findings – The paper discovered that, indeed, environmental management relates in a positive, significant manner and large effect to the operational performance of companies.

Infrastructure Support for Controlled Experimentation with Software Testing and Regression Testing Techniques

Where the creation, understanding, and assessment of software testing and regression testing techniques are concerned, controlled experimentation is an indispensable research methodology. Obtaining the infrastructure necessary to support such experimentation, however, is difficult and expensive. As a result, progress in experimentation with testing techniques has been slow, and empirical data on the costs and effectiveness of techniques remains relatively scarce. To help address this problem, we have been designing and constructing infrastructure to support controlled experimentation with testing and regression testing techniques. This paper reports on the challenges faced by researchers experimenting with testing techniques, including those that inform the design of our infrastructure. The paper then describes the infrastructure that we are creating in response to these challenges, and that we are now making available to other researchers, and discusses the impact that this infrastructure has and can be expected to have.

Testing phenomenological and theoretical models of dark matter density profiles with galaxy clusters

We use the stacked gravitational lensingmass profile of four high-mass (M 1015M ) galaxy clusters around z≈0.3 from Umetsu et al. to fit density profiles of phenomenological [Navarro– Frenk–White (NFW), Einasto, S´ersic, Stadel, Baltz–Marshall–Oguri (BMO) and Hernquist] and theoretical (non-singular Isothermal Sphere, DARKexp and Kang & He) models of the dark matter distribution. We account for large-scale structure effects, including a two-halo term in the analysis.We find that the BMO model provides the best fit to the data as measured by the reduced χ2. It is followed by the Stadel profile, the generalized NFW profile with a free inner slope and by the Einasto profile. The NFW model provides the best fit if we neglect the two-halo term, in agreement with results from Umetsu et al. Among the theoretical profiles, the DARKexp model with a single form parameter has the best performance, very close to that of the BMO profile. This may indicate a connection between this theoretical model and the phenomenology of dark matter haloes, shedding light on the dynamical basis of empirical profiles which emerge from numerical simulations.

Astronomical site testing in the era of the extremely large telescopes

The quality of astronomical sites is the first step to be considered to have the best performances from the telescopes. In particular, the efficiency of large telescopes in UV, IR, radio etc. is critically dependent on atmospheric transparency. It is well known that the random optical effects induced on the light propagation by turbulent atmosphere also limit telescope’s performances. Nowadays, clear appears the importance to correlate the main atmospheric physical parameters with the optical quality reachable by large aperture telescopes. The sky quality evaluation improved with the introduction of new techniques, new instrumentations and with the understanding of the link between the meteorological (or synoptical parameters and the observational conditions thanks to the application of the theories of electromagnetic waves propagation in turbulent medias: what we actually call astroclimatology. At the present the site campaigns are evolved and are performed using the classical scheme of optical seeing properties, meteorological parameters, sky transparency, sky darkness and cloudiness. New concept are added and are related to the geophysical properties such as seismicity, microseismicity, local variability of the climate, atmospheric conditions related to the ground optical turbulence and ground wind regimes, aerosol presence, use of satellite data. The purpose of this project is to provide reliable methods to analyze the atmospheric properties that affect ground-based optical astronomical observations and to correlate them with the main atmospheric parameters generating turbulence and affecting the photometric accuracy. The first part of the research concerns the analysis and interpretation of longand short-time scale meteorological data at two of the most important astronomical sites located in very different environments: the Paranal Observatory in the Atacama Desert (Chile), and the Observatorio del Roque de Los Muchachos(ORM) located in La Palma (Canary Islands, Spain). The optical properties of airborne dust at ORM have been investigated collecting outdoor data using a ground-based dust monitor. Because of its dryness, Paranal is a suitable observatory for near-IR observations, thus the extinction properties in the spectral range 1.00-2.30 um have been investigated using an empirical method. Furthermore, this PhD research has been developed using several turbulence profilers in the selection of the site for the European Extremely Large Telescope(E-ELT). During the campaigns the properties of the turbulence at different heights at Paranal and in the sites located in northern Chile and Argentina have been studied. This given the possibility to characterize the surface layer turbulence at Paranal and its connection with local meteorological conditions.

Essays in Macroecometrics: methodological aspects and empirical applications

In the first chapter, I develop a panel no-cointegration test which extends Pesaran, Shin and Smith (2001)'s bounds test to the panel framework by considering the individual regressions in a Seemingly Unrelated Regression (SUR) system. This allows to take into account unobserved common factors that contemporaneously affect all the units of the panel and provides, at the same time, unit-specific test statistics. Moreover, the approach is particularly suited when the number of individuals of the panel is small relatively to the number of time series observations. I develop the algorithm to implement the test and I use Monte Carlo simulation to analyze the properties of the test. The small sample properties of the test are remarkable, compared to its single equation counterpart. I illustrate the use of the test through a test of Purchasing Power Parity in a panel of EU15 countries. In the second chapter of my PhD thesis, I verify the Expectation Hypothesis of the Term Structure in the repurchasing agreements (repo) market with a new testing approach. I consider an "inexact" formulation of the EHTS, which models a time-varying component in the risk premia and I treat the interest rates as a non-stationary cointegrated system. The effect of the heteroskedasticity is controlled by means of testing procedures (bootstrap and heteroskedasticity correction) which are robust to variance and covariance shifts over time. I fi#nd that the long-run implications of EHTS are verified. A rolling window analysis clarifies that the EHTS is only rejected in periods of turbulence of #financial markets. The third chapter introduces the Stata command "bootrank" which implements the bootstrap likelihood ratio rank test algorithm developed by Cavaliere et al. (2012). The command is illustrated through an empirical application on the term structure of interest rates in the US.

Can wild ungulate carcasses provide enough biomass to maintain avian scavenger populations? An empirical assessment using a bio-inspired computational model

Background The reduction in the amount of food available for European avian scavengers as a consequence of restrictive public health policies is a concern for managers and conservationists. Since 2002, the application of several sanitary regulations has limited the availability of feeding resources provided by domestic carcasses, but theoretical studies assessing whether the availability of food resources provided by wild ungulates are enough to cover energetic requirements are lacking. Methodology/Findings We assessed food provided by a wild ungulate population in two areas of NE Spain inhabited by three vulture species and developed a P System computational model to assess the effects of the carrion resources provided on their population dynamics. We compared the real population trend with to a hypothetical scenario in which only food provided by wild ungulates was available. Simulation testing of the model suggests that wild ungulates constitute an important food resource in the Pyrenees and the vulture population inhabiting this area could grow if only the food provided by wild ungulates would be available. On the contrary, in the Pre-Pyrenees there is insufficient food to cover the energy requirements of avian scavenger guilds, declining sharply if biomass from domestic animals would not be available. Conclusions/Significance Our results suggest that public health legislation can modify scavenger population trends if a large number of domestic ungulate carcasses disappear from the mountains. In this case, food provided by wild ungulates could be not enough and supplementary feeding could be necessary if other alternative food resources are not available (i.e. the reintroduction of wild ungulates), preferably in European Mediterranean scenarios sharing similar and socio-economic conditions where there are low densities of wild ungulates. Managers should anticipate the conservation actions required by assessing food availability and the possible scenarios in order to make the most suitable decisions.

Advantages and Applications of Transforming Empirical Model Input Space with Dimensional Models

Model-based calibration of steady-state engine operation is commonly performed with highly parameterized empirical models that are accurate but not very robust, particularly when predicting highly nonlinear responses such as diesel smoke emissions. To address this problem, and to boost the accuracy of more robust non-parametric methods to the same level, GT-Power was used to transform the empirical model input space into multiple input spaces that simplified the input-output relationship and improved the accuracy and robustness of smoke predictions made by three commonly used empirical modeling methods: Multivariate Regression, Neural Networks and the k-Nearest Neighbor method. The availability of multiple input spaces allowed the development of two committee techniques: a 'Simple Committee' technique that used averaged predictions from a set of 10 pre-selected input spaces chosen by the training data and the "Minimum Variance Committee" technique where the input spaces for each prediction were chosen on the basis of disagreement between the three modeling methods. This latter technique equalized the performance of the three modeling methods. The successively increasing improvements resulting from the use of a single best transformed input space (Best Combination Technique), Simple Committee Technique and Minimum Variance Committee Technique were verified with hypothesis testing. The transformed input spaces were also shown to improve outlier detection and to improve k-Nearest Neighbor performance when predicting dynamic emissions with steady-state training data. An unexpected finding was that the benefits of input space transformation were unaffected by changes in the hardware or the calibration of the underlying GT-Power model.

Testing Wisconsin asphalt mixtures for the 2002 AASHTO mechanistic design procedure

There has been a continuous evolutionary process in asphalt pavement design. In the beginning it was crude and based on past experience. Through research, empirical methods were developed based on materials response to specific loading at the AASHO Road Test. Today, pavement design has progressed to a mechanistic-empirical method. This methodology takes into account the mechanical properties of the individual layers and uses empirical relationships to relate them to performance. The mechanical tests that are used as part of this methodology include dynamic modulus and flow number, which have been shown to correlate with field pavement performance. This thesis was based on a portion of a research project being conducted at Michigan Technological University (MTU) for the Wisconsin Department of Transportation (WisDOT). The global scope of this project dealt with the development of a library of values as they pertain to the mechanical properties of the asphalt pavement mixtures paved in Wisconsin. Additionally, a comparison with the current associated pavement design to that of the new AASHTO Design Guide was conducted. This thesis describes the development of the current pavement design methodology as well as the associated tests as part of a literature review. This report also details the materials that were sampled from field operations around the state of Wisconsin and their testing preparation and procedures. Testing was conducted on available round robin and three Wisconsin mixtures and the main results of the research were: The test history of the Superpave SPT (fatigue and permanent deformation dynamic modulus) does not affect the mean response for both dynamic modulus and flow number, but does increase the variability in the test results of the flow number. The method of specimen preparation, compacting to test geometry versus sawing/coring to test geometry, does not statistically appear to affect the intermediate and high temperature dynamic modulus and flow number test results. The 2002 AASHTO Design Guide simulations support the findings of the statistical analyses that the method of specimen preparation did not impact the performance of the HMA as a structural layer as predicted by the Design Guide software. The methodologies for determining the temperature-viscosity relationship as stipulated by Witczak are sensitive to the viscosity test temperatures employed. The increase in asphalt binder content by 0.3% was found to actually increase the dynamic modulus at the intermediate and high test temperature as well as flow number. This result was based the testing that was conducted and was contradictory to previous research and the hypothesis that was put forth for this thesis. This result should be used with caution and requires further review. Based on the limited results presented herein, the asphalt binder grade appears to have a greater impact on performance in the Superpave SPT than aggregate angularity. Dynamic modulus and flow number was shown to increase with traffic level (requiring an increase in aggregate angularity) and with a decrease in air voids and confirm the hypotheses regarding these two factors. Accumulated micro-strain at flow number as opposed to the use of flow number appeared to be a promising measure for comparing the quality of specimens within a specific mixture. At the current time the Design Guide and its associate software needs to be further improved prior to implementation by owner/agencies.

Potential clinical utility of polymerase chain reaction in microbiological testing for sepsis

OBJECTIVES: To evaluate the potential improvement of antimicrobial treatment by utilizing a new multiplex polymerase chain reaction (PCR) assay that identifies sepsis-relevant microorganisms in blood. DESIGN: Prospective, observational international multicentered trial. SETTING: University hospitals in Germany (n = 2), Spain (n = 1), and the United States (n = 1), and one Italian tertiary general hospital. PATIENTS: 436 sepsis patients with 467 episodes of antimicrobial treatment. METHODS: Whole blood for PCR and blood culture (BC) analysis was sampled independently for each episode. The potential impact of reporting microorganisms by PCR on adequacy and timeliness of antimicrobial therapy was analyzed. The number of gainable days on early adequate antimicrobial treatment attributable to PCR findings was assessed. MEASUREMENTS AND MAIN RESULTS: Sepsis criteria, days on antimicrobial therapy, antimicrobial substances administered, and microorganisms identified by PCR and BC susceptibility tests. RESULTS: BC diagnosed 117 clinically relevant microorganisms; PCR identified 154. Ninety-nine episodes were BC positive (BC+); 131 episodes were PCR positive (PCR+). Overall, 127.8 days of clinically inadequate empirical antibiotic treatment in the 99 BC+ episodes were observed. Utilization of PCR-aided diagnostics calculates to a potential reduction of 106.5 clinically inadequate treatment days. The ratio of gainable early adequate treatment days to number of PCR tests done is 22.8 days/100 tests overall (confidence interval 15-31) and 36.4 days/100 tests in the intensive care and surgical ward populations (confidence interval 22-51). CONCLUSIONS: Rapid PCR identification of microorganisms may contribute to a reduction of early inadequate antibiotic treatment in sepsis.

Cerebellar mechanisms for motor learning: Testing predictions from a large-scale computer simulation

The cerebellum is the major brain structure that contributes to our ability to improve movements through learning and experience. We have combined computer simulations with behavioral and lesion studies to investigate how modification of synaptic strength at two different sites within the cerebellum contributes to a simple form of motor learning—Pavlovian conditioning of the eyelid response. These studies are based on the wealth of knowledge about the intrinsic circuitry and physiology of the cerebellum and the straightforward manner in which this circuitry is engaged during eyelid conditioning. Thus, our simulations are constrained by the well-characterized synaptic organization of the cerebellum and further, the activity of cerebellar inputs during simulated eyelid conditioning is based on existing recording data. These simulations have allowed us to make two important predictions regarding the mechanisms underlying cerebellar function, which we have tested and confirmed with behavioral studies. The first prediction describes the mechanisms by which one of the sites of synaptic modification, the granule to Purkinje cell synapses (gr → Pkj) of the cerebellar cortex, could generate two time-dependent properties of eyelid conditioning—response timing and the ISI function. An empirical test of this prediction using small, electrolytic lesions of the cerebellar cortex revealed the pattern of results predicted by the simulations. The second prediction made by the simulations is that modification of synaptic strength at the other site of plasticity, the mossy fiber to deep nuclei synapses (mf → nuc), is under the control of Purkinje cell activity. The analysis predicts that this property should confer mf → nuc synapses with resistance to extinction. Thus, while extinction processes erase plasticity at the first site, residual plasticity at mf → nuc synapses remains. The residual plasticity at the mf → nuc site confers the cerebellum with the capability for rapid relearning long after the learned behavior has been extinguished. We confirmed this prediction using a lesion technique that reversibly disconnected the cerebellar cortex at various stages during extinction and reacquisition of eyelid responses. The results of these studies represent significant progress toward a complete understanding of how the cerebellum contributes to motor learning. ^

What Is Known about Testing for Discrimination: Lessons Learned by Comparing across Different Markets

The paper provides a fairly comprehensive examination of recent empirical work on discrimination within economics. The three major analytical approaches considered are traditional regression analysis of outcomes, paired testing or audits, and finally analysis of performance where higher group performance suggests that a group has been treated disfavorably. The review covers research in the labor, credit, and consumption markets, as well as recent studies of discrimination within the legal system. The review suggests that the validity of interpreting observed racial differences as discrimination depends heavily on whether the analysis is based on a sample that is representative of a population of individuals or households or based on a sample of market transactions, as well as the analyst?s ability to control for heterogeneity within that sample. Heterogeneous firm behavior and differentiated products, such as those found in labor and housing markets, also can confound empirical analyses of discrimination by confusing the allocation of individuals across firms or products with disparate treatment or by ignoring disparate impacts that might arise based on that allocation.

Comparing the effectiveness of equivalence partitioning, branch testing and code reading by stepwise abstraction applied by subjects

Some verification and validation techniques have been evaluated both theoretically and empirically. Most empirical studies have been conducted without subjects, passing over any effect testers have when they apply the techniques. We have run an experiment with students to evaluate the effectiveness of three verification and validation techniques (equivalence partitioning, branch testing and code reading by stepwise abstraction). We have studied how well able the techniques are to reveal defects in three programs. We have replicated the experiment eight times at different sites. Our results show that equivalence partitioning and branch testing are equally effective and better than code reading by stepwise abstraction. The effectiveness of code reading by stepwise abstraction varies significantly from program to program. Finally, we have identified project contextual variables that should be considered when applying any verification and validation technique or to choose one particular technique.