Solving endogeneity problems in multilevel estimation: an example using education production functions

This paper explores endogeneity problems in multilevel estimation of education production functions. The focus is on level 2 endogeneity which arises from correlations between student characteristics and omitted school variables. Theses correlations are mainly the result of student stratification between schools. From an econometric point of view, the correlations between student and school characteristics imply that the omission of some variables may generate endogeneity bias. Therefore, an estimation approach based on the Mundlak [20 Mundlak, Y. 1978. On the pooling of time series and cross-sectional data. Econometrica, 46: 69–86. [Crossref], [Web of Science ®] , [Google Scholar]] technique is developed in order to tackle bias and to generate consistent estimates. Note that our analysis can be extended to any multilevel-structured data (students nested within schools, employees within firms, firms within regions, etc). The entire analysis is undertaken in a comparative context between three countries: Germany, Finland and the UK. Each one of them represents a particular system. For instance, Finland is known for its extreme comprehensiveness, Germany for early selection and the UK for its liberalism. These countries are used to illustrate the theory and to prove that the level of bias arising from omitted variables varies according to the characteristics of education systems.     

A Game–Theoretic View of the Fiscal Theory of the Price Level

The goal of this paper is to probe the validity of the fiscal theory of the price level by modelling explicitly the market structure in which households and the government make their decisions. I describe the economy as a game, and I am thus able to state precisely the consequences of actions that are out of the equilibrium path. I show that there exist government strategies that lead to a version of the fiscal theory, in which the price level is determined by fiscal variables alone. These strategies are however more complex than the simple budgetary rules usually associated with the fiscal theory, and the government budget constraint cannot be merely viewed as an equilibrium condition.     

A Robust Test for Weak Instruments

This article deals with the estimation of continuous-time stochastic volatility models of option pricing. We argue that option prices are much more informative about the parameters than are asset prices. This is confirmed in a Monte Carlo experiment that compares two very simple strategies based on the different information sets. Both approaches are based on indirect inference and avoid any discretization bias by simulating the continuous-time model. We assume an Ornstein-Uhlenbeck process for the log of the volatility, a zero-volatility risk premium, and no leverage effect. We do not pursue asymptotic efficiency or specification issues; rather, we stick to a framework with no overidentifying restrictions and show that, given our option-pricing model, estimation based on option prices is much more precise in samples of typical size, without increasing the computational burden.     

Strategic Inventory and Supply Chain Behavior

Based on a serial supply chain model with two periods and price‐sensitive demand, we present the first experimental test of the effect of strategic inventories on supply chain performance. In theory, if holding costs are sufficiently low, the buyer builds up a strategic inventory (even if no operational reasons for stock‐holding exist) to limit the supplier's market power, and to increase the own profit share. As it turns out, this enhances the overall supply chain performance. The supplier anticipates the effect of the strategic inventory and differentiates prices to capture a part of the increased supply chain profits. Our results show that the positive effects of strategic inventories are even more pronounced than theoretically predicted, because strategic inventories empower buyers by shifting the perception of the fair split. Overall, strategic inventories have a double positive effect, a strategic and a behavioral, both reducing the average wholesale prices and dampening the double marginalization effect. The latter effect leads to more equitable payoffs.     

A Study of the Dynamic Mechanisms and Effects of Allocating Emissions Permits under Endogenous Growth

The allocation of carbon emissions permits is a major component of the design of carbon trading schemes. The choice of allocation mechanisms can influence the long-term growth path, which in turn affects the effectiveness of the emissions reduction policy. The findings of this article indicate that while a static allocation mechanism can maximize current yields, it leads to a slowdown in output growth under endogenous economic growth. To optimize intertemporal economic output, the allocation of carbon emissions will need to be dynamically adjusted. In the absence of complete information, an output-oriented adjustment to the allocation of emissions rights in different periods can guide market trading so that it approaches a long-term optimal growth path.     

The effect of community organisations’ participation and existence on self-rated health in China: evidence from China Health and Retirement Longitudinal Study

Using the China Health and Retirement Longitudinal Study cross-sectional survey in 2011 with an 80.51% response rate, an endogenous logit model is adopted to account for the relationship between social capital and self-rated health and the heterogeneity from gender, age and marital status on individual self-rated health status. Consequently, social capital at both individual and community levels is found to be positively correlated with better subjective self-rated health status. Furthermore, the social capital’s marginal effect of the male, high-income groups, the married are larger than that of the female, rural residents, low-income groups and the divorced. In addition, interclass correlation value from the partition of the fixed and random effect of social capital is significantly, ranging from 3.0 to 5.49%, indicating a significant proportion of the total variance in self-rated health that can be explained by community-level differences.     

不可再生资源跨期优化配置中的环境保护理论与机制

自然环境,是不可再生资源跨期配置中不可或缺的生产要素。环境保护机制缺位,是引发环境要素供给不足,不可再生资源跨期配置与生态环境处置恶性互动与循环,以及经济滞涨危机的根源。揭示了不可再生资源跨期优化配置与环境保护良性互动机理,提出了不可再生资源跨期优化配置环境保护适度内化理论,借鉴国际经验,设计了不可再生资源跨期生产、跨期消费、废弃物处理三环节的环境保护机制,以便缓解环境危机,促进不可再生资源与环境可持续利用。     

东亚金融合作的研究范式及其架构

东亚金融合作包括金融监管合作与金融市场合作两个有机组成部分,是国际金融领域的一个重要的前瞻性理论课题.文章对现有研究范式进行了归纳与评价,从微观基础的跨期均衡角度,提出了研究范式的创新问题,并指出东亚金融合作的基本思路和主要研究架构.     

信贷市场对农地流转市场发育的影响

我国农地流转市场逐步呈现出适度规模化、有偿化和契约化的趋势,导致农户参与农地流转市场的资本门槛提高。基于3省706户农户调查数据,在控制信贷获得与农地流转决策可能存在的内生性的基础上,从微观层面实证检验农村正规和非正规信贷市场对农户农地流转决策的可能影响。结果表明,正规信贷和非正规信贷对农户转入农地行为和转入规模产生显著正向影响,但是由于农村正规信贷市场不完善以及现行法律禁止农地抵押,非正规信贷对农户农地转入规模的影响更大。未来加快推进农地抵押制度改革和完善农村正规信贷市场有利于促进农地流转和发展适度规模经营,实现农村信贷和农村土地两个要素市场的良性互动和均衡。     

Efficient Estimation of Models with Conditional Moment Restrictions Containing Unknown Functions

We propose an estimation method for models of conditional moment restrictions, which contain finite dimensional unknown parameters (θ) and infinite dimensional unknown functions (h). Our proposal is to approximate h with a sieve and to estimate θ and the sieve parameters jointly by applying the method of minimum distance. We show that: (i) the sieve estimator of h is consistent with a rate faster than n^‐1/4 under certain metric; (ii) the estimator of θ is √n consistent and asymptotically normally distributed; (iii) the estimator for the asymptotic covariance of the θ estimator is consistent and easy to compute; and (iv) the optimally weighted minimum distance estimator of θ attains the semiparametric efficiency bound. We illustrate our results with two examples: a partially linear regression with an endogenous nonparametric part, and a partially additive IV regression with a link function.