Estimation and Inference in Two-Step Econometric Models

A commonly used procedure in a wide class of empirical applications is to impute unobserved regressors, such as expectations, from an auxiliary econometric model. This two-step (T-S) procedure fails to account for the fact that imputed regressors are measured with sampling error, so hypothesis tests based on the estimated covariance matrix of the second-step estimator are biased, even in large samples. We present a simple yet general method of calculating asymptotically correct standard errors in T-S models. The procedure may be applied even when joint estimation methods, such as full information maximum likelihood, are inappropriate or computationally infeasible. We present two examples from recent empirical literature in which these corrections have a major impact on hypothesis testing.     

An Opportunistic Field Experiment in Community Water Conservation

This quasi-experimental, seven-year study evaluated the effectiveness of an educative versus a price structuring approach to the strategic management of domestic water consumption. The Knowledge, Attitudes, and Behavior scales of the Water Survey Questionnaire (Watson, Moore, McLachlan, Bradley & Murphy, 1988) measured the effects of the two strategies on water conservation. Two thousand six hundred parents, teachers, high, and elementary students in cross-sectional and longitudinal samples were measured in three data gathering rounds at the first, fourth, and seventh years. In the educative phase between the first and second rounds, water conservation increased. Although there was no significant change in behavior, some decline in positive attitudes and intentions occurred during the price structuring phase between the second and third rounds. The implications of these findings are discussed in relation to other studies. Findings on the stability of inter-group and inter-variable relationships and on the consistency of the measuring instrument across time are also presented and discussed.     

Women from refugee backgrounds and their experiences of attending a specialist antenatal clinic. Narratives from an Australian setting

ProblemIn response to an identified need, a specialist antenatal clinic for women from refugee backgrounds was introduced in 2008, with an evaluation planned and completed in 2010.QuestionCan maternity care experiences for women from refugee backgrounds, attending a specialist antenatal clinic in a tertiary Australian public hospital, be improved?MethodsThe evaluation employed mixed methods, generating qualitative and quantitative data from two hospital databases, a chart audit, surveys and interviews with service users, providers and stakeholders. Contributions were received from 202 participants.FindingsThe clinic was highly regarded by all participants. Continuity of care throughout the antenatal period was particularly valued by newly arrived women as it afforded them security and support to negotiate an unfamiliar Western maternity system. Positive experiences decreased however; as women transitioned from the clinic to labour and postnatal wards where they reported that their traditional birthing and recuperative practices were often interrupted by the imposition of Western biomedical notions of appropriate care. The centrally located clinic was problematic, frequently requiring complex travel arrangements. Appointment schedules often impacted negatively on traditional spousal and family obligations.ConclusionsProviding comprehensive and culturally responsive maternity care for women from refugee backgrounds is achievable, however it is also resource intensive. The production of translated information which is high quality in terms of production and content, whilst also taking account of languages which are only rarely encountered, is problematic. Cultural competency programmes for staff, ideally online, require regular updating in light of new knowledge and changing political sensitivities.     

A unifying framework for duality and modeling in robust linear programs

In this paper, our major theme is a unifying framework for duality in robust linear programming. We show that there are two pair of dual programs allied with a robust linear program; one in which the primal is constructed to be “ultra-conservative” and one in which the primal is constructed to be “ultra-optimistic.” Furthermore, as one would expect, if the uncertainly in the primal is row-based, the corresponding uncertainty in the dual is column-based, and vice-versa. Several examples are provided that illustrate the properties of these primal and dual models.     

WHY AGNOSTIC SIGN RESTRICTIONS ARE NOT ENOUGH: UNDERSTANDING THE DYNAMICS OF OIL MARKET VAR MODELS

Sign restrictions on the responses generated by structural vector autoregressive models have been proposed as an alternative approach to the use of exclusion restrictions on the impact multiplier matrix. In recent years such models have been increasingly used to identify demand and supply shocks in the market for crude oil. We demonstrate that sign restrictions alone are insufficient to infer the responses of the real price of oil to such shocks. Moreover, the conventional assumption that all admissible models are equally likely is routinely violated in oil market models, calling into question the use of posterior median responses to characterize the responses to structural shocks. When combining sign restrictions with additional empirically plausible bounds on the magnitude of the short‐run oil supply elasticity and on the impact response of real activity, however, it is possible to reduce the set of admissible model solutions to a small number of qualitatively similar estimates. The resulting model estimates are broadly consistent with earlier results regarding the relative importance of demand and supply shocks for the real price of oil based on structural vector autoregressive (VAR) models identified by exclusion restrictions, but imply very different dynamics from the posterior median responses in VAR models based on sign restrictions only.     

Financial Literacy and Superannuation Awareness of Indigenous Australians: Pilot Study Results

Financial literacy in the general Australian population and how to improve it is now firmly on the national agenda, partly as a result of compulsory superannuation. This paper reports the results of a pilot study which explored the financial literacy levels and superannuation knowledge of Indigenous Australians living in an urban environment. Previous studies have indicated that social disadvantage has a strong correlation with poor financial literacy but previous surveys of financial literacy in Australia have not reported specifically on the Indigenous population. Findings suggest that in some areas financial literacy is significantly weaker than that in the general population. Several of the areas of comparative weakness relate to an over belief in the role of government and the extent to which financial matters are regulated. There is also a high level of desire for financial education and information but a lower level of usage of potential sources of financial information. The findings suggest that a closing of the financial literacy gap is required.     

Out‐of‐Home Placement of Children Exposed to Violence

There is growing concern about the increasing number of children in the USA who are exposed to community violence and the need to remove some of them from their families. This study examines risk factors for out‐of‐home placement among a large pool of children and adolescents who were referred for general clinical assessment following exposure to violence and/or psychological trauma in their communities or homes. Children with greater familial and environmental support and children exposed to incidents involving a non‐parental personal threat were associated with a significantly lower risk of out‐of‐home placement. A greater likelihood of being placed out of home was associated with older age (adolescents), history of mental health service use, involvement with law enforcement agencies, higher clinical ratings of depression or impaired thought processes, lower clinical functioning and greater exposure to traumatic events. Evidence of maltreatment and a threat to life was associated with 13.6 times greater likelihood of being placed out of the home. This study raises an important issue in respect to the children's past use of mental health service and current symptoms. It is not just the risk of violence but also evidence of psychiatric problem that trigger out‐of‐home placement. Further studies are needed to assess the quality and effectiveness of mental health services provided to children exposed to violence. © 2007 The Author(s). Journal compilation © 2007 National Children's Bureau.