Estimation in the bivariate poisson distribution and hypothesis testing concerning independence

Estimation procedures in the bivariate Poisson distribution are briefly reviewed and some errors in the literature are corrected. Asymptotic efficiencies are reexamined for both symmetric and asymmetric cases. Six hypothesis testing procedures, including three studied by Kocherlakota and Kocherlakota (1985), for independence are evaluated by using Monte Carlo simulations.     

Financial-Firm Production of Monetary Services: A Generalized Symmetric Baroett Variable-Profit-Function Approach

An alternative monetary-production model of financial firms is employed to investigate supply-side monetary aggregation. Financial firms are conceived to produce monetary services as outputs through financial intermediation. A new method for testing the existence of consistent monetary-output aggregates in financial firms' production technology is developed in terms of a multiproduct firm's variable profit function, and the method does not require homotheticity of the aggregator function. We use a generalized symmetric Barnett flexible functional form. That specification satisfies global curvature conditions and retains its flexibility under the null hypothesis of weak separability. Neither of those properties is possessed by other flexible functional forms.     

The Effect of Pseudo-Exogenous Instrumental Variables on Hausman Test

Hausman test is popularly used to examine the endogeneity of explanatory variables in a regression model. To derive a well-defined asymptotic distribution of Hausman test, the correlation between the instrumental variables and the error term needs to converge to zero. However, it is possible that there remains considerable correlation in finite samples between the instruments and the error, even though their correlation eventually converges to zero. This article investigates the potential problem that such “pseudo-exogenous” instruments may create. We show that the performance of Hausman test is deteriorated when the instruments are asymptotically exogenous but endogenous in finite samples, through Monte Carlo simulations.     

ENERGY USE AND TEMPERATURE HABITUATION: EVIDENCE FROM HIGH FREQUENCY THERMOSTAT USAGE DATA

Using micro‐level thermostat data from 27,000 U.S. households, we analyze how home heating/cooling decisions respond to weather. Responses are greater for extreme heat than for extreme cold and persist for at least 30 days after exposure, due in part to transaction costs but also to changes in intrinsic preferences. Failure to understand habit can lead us to overestimate the impact of short‐term policy nudges but underestimate the long‐run impact of small changes. Higher frequency estimates of how behavior responds to weather improve our understanding of climate adaptation as climate change affects not only mean temperatures but also variances. (JEL C55, D03, Q4)     

Discreteness Causes Bias in Percentage-Based Comparisons: A Case Study From Educational Testing

Discretizing continuous distributions can lead to bias in parameter estimates. We present a case study from educational testing that illustrates dramatic consequences of discreteness when discretizing partitions differ across distributions. The percentage of test takers who score above a certain cutoff score (percent above cutoff, or “PAC”) often describes overall performance on a test. Year-over-year changes in PAC, or ΔPAC, have gained prominence under recent U.S. education policies, with public schools facing sanctions if they fail to meet PAC targets. In this article, we describe how test score distributions act as continuous distributions that are discretized inconsistently over time. We show that this can propagate considerable bias to PAC trends, where positive ΔPACs appear negative, and vice versa, for a substantial number of actual tests. A simple model shows that this bias applies to any comparison of PAC statistics in which values for one distribution are discretized differently from values for the other.     

Penalties and payoffs: The short-term economic consequences of human capital acquisition for resettled refugees in the United States

The relationship between refugee investments in human capital and short-run economic outcomes may influence the extent to which refugees invest in human capital that is associated with positive future economic mobility. Using data from the Annual Survey of Refugees from 2016 and 2017 we assess the relationship between recent investments in human capital and hourly wages for employed refugees in the United States. Results suggest that recent job training has a positive effect on hourly wages. In contrast, enrollment in English classes and educational programmes have no short-term positive effects on hourly wages. When combined with the pressure resettled refugees experience to find employment quickly, these results suggest that the lack of short-term wage benefits from English language or educational courses may dissuade refugees from sufficiently investing in the amount of English language or education necessary to promote positive long-term economic mobility.     

Conditional correlation in asset return and GARCH intensity model

In an asset return series, there is a conditional asymmetric dependence between current return and past volatility depending on the current return’s sign. To take into account the conditional asymmetry, we introduce new models for asset return dynamics in which frequencies of the up and down movements of asset price have conditionally independent Poisson distributions with stochastic intensities. The intensities are assumed to be stochastic recurrence equations of the GARCH type to capture the volatility clustering and the leverage effect. We provide an important linkage between our model and existing GARCH, explain how to apply maximum likelihood estimation to determine the parameters in the intensity model and show empirical results with the S&P 500 index return series.     

A Time-Lag Analysis of the Relationships Among PISA Scores,Scientific Research Publication,and Economic Performance

Due to the poor performance of US students in international math and science tests, many authors worry that the US lead in science is in jeopardy. A recent study by Chen and Luoh (Soc Indic Res 96: 133–143, 2010) challenged this pessimistic view by delinking test performance and labor force quality. It was found that measures such as researchers per capita or scientific journal articles per capita can better account for economic performance. Because it takes time for education and R&;D to yield returns, this project replicated the preceding study using a time-lag structure. Although the results partly concur with previous findings, it is important to point out that GDP might depend on multiple variables acting together. Instead of solely focusing on reforming STEM education as partly measured by international test scores, improving the R&;D infrastructure and openness in trade could also be crucial to the future of the economy.     

Prediction of accrual closure date in multi-center clinical trials with discrete-time Poisson process models

In a phase III multi‐center cancer clinical trial or a large public health study, sample size is predetermined to achieve desired power, and study participants are enrolled from tens or hundreds of participating institutions. As the accrual is closing to the target size, the coordinating data center needs to project the accrual closure date on the basis of the observed accrual pattern and notify the participating sites several weeks in advance. In the past, projections were simply based on some crude assessment, and conservative measures were incorporated in order to achieve the target accrual size. This approach often resulted in excessive accrual size and subsequently unnecessary financial burden on the study sponsors. Here we proposed a discrete‐time Poisson process‐based method to estimate the accrual rate at time of projection and subsequently the trial closure date. To ensure that target size would be reached with high confidence, we also proposed a conservative method for the closure date projection. The proposed method was illustrated through the analysis of the accrual data of the National Surgical Adjuvant Breast and Bowel Project trial B‐38. The results showed that application of the proposed method could help to save considerable amount of expenditure in patient management without compromising the accrual goal in multi‐center clinical trials. Copyright © 2012 John Wiley & Sons, Ltd.     

Examining the Quality of Adolescent–Parent Relationships Among Chilean Families

The purpose of this study was to examine if adolescents’ reports of warm and harsh parenting practices by their mothers and fathers varied as a function of demographic, youth and their mothers or mother figures’ individual and family characteristics. Data are from 707 community-dwelling adolescents (mean age = 14, SD = 1.4) and their mothers or mother figures in Santiago, Chile. Having a warmer relationship with both parents was inversely associated with the adolescents’ age and positively associated with adolescents’ family involvement and parental monitoring. Both mothers’ and fathers’ harsh parenting were positively associated with adolescent externalizing behaviors and being male and inversely associated with youth autonomy and family involvement. These findings suggest that net of adolescent developmental emancipation and adolescent behavioral problems, positive relationships with parents, especially fathers, may be nurtured through parental monitoring and creation of an interactive family environment, and can help to foster positive developmental outcomes.