Identifying Latent Structures in Panel Data

This paper provides a novel mechanism for identifying and estimating latent group structures in panel data using penalized techniques. We consider both linear and nonlinear models where the regression coefficients are heterogeneous across groups but homogeneous within a group and the group membership is unknown. Two approaches are considered—penalized profile likelihood (PPL) estimation for the general nonlinear models without endogenous regressors, and penalized GMM (PGMM) estimation for linear models with endogeneity. In both cases, we develop a new variant of Lasso called classifier‐Lasso (C‐Lasso) that serves to shrink individual coefficients to the unknown group‐specific coefficients. C‐Lasso achieves simultaneous classification and consistent estimation in a single step and the classification exhibits the desirable property of uniform consistency. For PPL estimation, C‐Lasso also achieves the oracle property so that group‐specific parameter estimators are asymptotically equivalent to infeasible estimators that use individual group identity information. For PGMM estimation, the oracle property of C‐Lasso is preserved in some special cases. Simulations demonstrate good finite‐sample performance of the approach in both classification and estimation. Empirical applications to both linear and nonlinear models are presented.     

Poverty and Self‐Control

We argue that poverty can perpetuate itself by undermining the capacity for self‐control. In line with a distinguished psychological literature, we consider modes of self‐control that involve the self‐imposed use of contingent punishments and rewards. We study settings in which consumers with quasi‐hyperbolic preferences confront an otherwise standard intertemporal allocation problem with credit constraints. Our main result demonstrates that low initial assets can limit self‐control, trapping people in poverty, while individuals with high initial assets can accumulate indefinitely. Thus, even temporary policies that initiate accumulation among the poor may be effective. We examine implications concerning the effect of access to credit on saving, the demand for commitment devices, the design of financial accounts to promote accumulation, and the variation of the marginal propensity to consume across income from different sources. We also explore the nature of optimal self‐control, demonstrating that it has a simple and behaviorally plausible structure that is immune to self‐renegotiation.     

Advisers and the Fiduciary Duty Debate

This work concerns itself with the debate taking place in the United States about the duty of care financial advisers owe investors. On one side it is argued that advisers need only concern themselves with recommendations which meet certain suitability standards. On the other side, there are those who argue the suitability standard is not strong enough to adequately protect investor interests. Instead of ensuring investment recommendations are merely suitable, financial advisers owe their investors a fiduciary duty to “act in the best interest of the customer without regard to the financial or other interests … of the investment adviser providing the advice.” (SEC, 2011). In applying a properly understood conception of what fiduciary means I argue that regulations should not be harmonized but that fiduciary duty should apply to all who provide personalized investment advice to retail customers. I will further argue that even if the regulations are harmonized as proposed, because of exemptions for broker‐dealers as envisioned in the proposal, and which currently apply to Registered Investment Advisers, the efficacy of fiduciary duty is diluted to the point of rendering its current application, much less its potential uniform imposition, irrelevant.     

Health Risk,Inequality Indexes,and Environmental Justice

Inequality indexes have long been used to analyze distributions of income. Studies have recently begun to use these tools to evaluate the equity of distributions of environmental harm. In response, issues have been raised regarding the appropriateness of using income-based measures in the context of undesirable outcomes. We begin from first principles, identifying a theoretical preference structure under which income-based tools can be appropriate for ranking distributions of “bads.” While some critiques of existing applications are valid, they are not a justification for rejecting the approach altogether. Instead, we show how standard income-based measures can be adjusted to accommodate bad outcomes. Rather than inequality indexes, we argue that equally distributed equivalents (EDEs) are well-suited for this purpose since they account for levels and dispersion of outcome distributions. The Kolm–Pollak EDE is particularly useful, having the advantage of consistently evaluating both bads and their complementary goods (e.g., mortality risk and survival probability). As an illustration, we show how these tools can inform an environmental justice analysis of a proposed Environmental Protection Agency (EPA) rule addressing indoor air pollution.     

Temporal Disaggregation: Methods,Information Loss,and Diagnostics

This research provides a generalized framework to disaggregate lower-frequency time series and evaluate the disaggregation performance. The proposed framework combines two models in separate stages: a linear regression model to exploit related independent variables in the first stage and a state–space model to disaggregate the residual from the regression in the second stage. For the purpose of providing a set of practical criteria for assessing the disaggregation performance, we measure the information loss that occurs during temporal aggregation while examining what effects take place when aggregating data. To validate the proposed framework, we implement Monte Carlo simulations and provide two empirical studies. Supplementary materials for this article are available online.     

Trustworthiness in evaluation practice: an emphasis on the relational

As canons for trustworthiness developed explicitly in the discourse of qualitative inquiry, the emphasis was on procedural matters rather than fundamentally relational ones. A nod was made to the relational in such strategies as “member checks” but the issues of how the evaluator actually relates to participants and to the larger communities of practice and discourse—matters subsumed under moral principles and ethical standards—were often marginalized. This chapter posits that the first consideration in designing and conducting rigorous evaluation inquiry, and in critiquing the results of any research, should be the study's trustworthiness. Judging a study's trustworthiness, however, should focus on much more than procedural matters; it should also rely on moral principles and ethical standards which specifically address how we relate to an evaluation's participants. Central to these considerations are cross-cultural sensibilities about the nuanced meanings associated with any principles and standards. The chapter provides a theoretical framework for this position and offers two illustrative examples in the form of dialogues.     

Examining the correlates of engagement and disengagement coping among help-seeking battered women

This study examined several potential correlates of engagement and disengagement coping, including abuse-related factors, socioeconomic and social coping resources, and childhood trauma variables among a sample of battered women (N = 388). Relationship abuse frequency, particularly psychological aggression, and peritraumatic dissociation were the strongest positive predictors of the use of disengagement coping. Social coping resources, including tangible support and appraisals of social support and belonging, were associated with higher engagement coping and lower disengagement coping. A positive association was also found between interparental domestic violence and disengagement coping, and negative associations were found between both childhood physical and sexual abuse and engagement coping. Results suggest that coping strategies used by battered women are multidetermined and deserve further exploration.     

Relationship of interpersonal behaviors and health-related control appraisals to patient satisfaction and compliance in a university health center

OBJECTIVE: The authors' aim was to evaluate patient-provider relationships in a college health center. PARTICIPANTS: Eighty student patients and their health-care providers. METHODS: Patients completed a measure of perceived health competence before a consultation and measures of provider participatory behavior and interpersonal behavior before and after the consultation. They evaluated their satisfaction with care and compliance after the consultation and again 2 weeks later. Providers completed measures of their participatory behavior and patients' interpersonal behavior after the consultation. RESULTS: Patients preferred to be well informed and to have their preferences taken into account, and generally felt competent at managing their own health affairs. They indicated they obtained the high level of participation they desired. Patients desired and actually experienced friendly and submissive providers. Degree of match between patients' desired and actual level of involvement in their care was associated with greater satisfaction. A greater match between the extent to which they desired the provider to be affiliative and the provider's actual affiliative behavior was associated with more satisfaction. No variables were predictive of patient compliance. CONCLUSION: The authors discuss results in terms of the influence of situational factors characteristic of a college health center.