Further results on bias in dynamic unbalanced panel data models with an application to firm R&D investment

This paper extends the LSDV bias-corrected estimator in [Bun, M., Carree, M.A. 2005. Bias-corrected estimation in dynamic panel data models, Journal of Business and Economic Statistics, 23(2): 200-10] to unbalanced panels and discusses the analytic method of obtaining the solution. Using a Monte Carlo approach the paper compares the performance of this estimator with three other available techniques for dynamic panel data models. Simulation reveals that LSDV-bc estimator is a good choice except for samples with small T, where it may be unpractical. The methodology is applied to examine the impact of internal and external R&D on labor productivity in an unbalanced panel of innovating firms.Bias Correction, Unbalanced Panel Data, GMM, Dynamic Models

Rich and powerful? Subjective power and welfare in Russia

Does"empowerment"come hand-in-hand with higher economic welfare? In theory, higher income is likely to raise both power and welfare, but heterogeneity in other characteristics and household formation can either strengthen or weaken the relationship. Survey data on Russian adults indicate that higher individual and household incomes raise both self-rated power and welfare. The individual income effect is primarily direct, rather than through higher household income. There are diminishing returns to income, though income inequality emerges as only a minor factor reducing either aggregate power or welfare. At given income, the identified covariates have strikingly similar effects on power and welfare. There are some notable differences between men and women in perceived power.Public Health Promotion,Anthropology,Gender and Social Development,Economic Theory&Research,Windpower,Economic Theory&Research,Anthropology,Gender and Social Development,Inequality,Windpower

Measuring the Effectiveness of R&D tax credits in the Netherlands

This paper examines the impact of the Dutch R&D fiscal incentive program, known as WBSO, on R&D capital formation. Taking a factor-demand approach we measure the elasticity of firm R&D capital accumulation to its user cost. An econometric model is estimated using a rich unbalanced panel covering the period 1996-2004 with firm-specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we examine the impact of the R&D incentive program. We find evidence that the program of R&D incentives in the Netherlands has been effective in reducing the user cost of R&D and in stimulating firms’ investment in R&D. Cette étude analyse l’effet du programme d’incitations fiscales à la recherche aux Pays-Bas, connu sous le nom de WBSO, sur la formation du capital de recherche. À partir d’une approche de demande de facteurs de production, nous mesurons l’élasticité du stock de capital de recherche au coût d’usage de la recherche. L’estimation économétrique se base sur un panel d’entreprises non-cylindré, couvrant la période 1996-2004, avec des coûts d’usage de la recherche variables. Nous trouvons que les incitations fiscales à la recherche ont effectivement baissé le coût d’usage de la recherche et ainsi stimulé les investissements en recherche et développement aux Pays-Bas.R&D tax credits; panel data; crowding out; user-cost elasticity., crédit d’impôt à la recherche, données panel, coût d’usage à la recherche, crowding-out.

Identifying welfare effects from subjective questions

The authors argue that the welfare inferences drawn from subjective answers to questions on qualitative surveys are clouded by concerns about the structure of measurement errors and how latent psychological factors influence observed respondent characteristics. They propose a panel data model to high-quality panel data for Russia for 1994-96, they find that some results widely reported in past studies of subjective well-being appear to be robust but others do not. Household income, for example, is a highly significant predictor of self-rated economic welfare; per capita income is a weaker predictor. Ill health and loss of a job reduce self-reported economic welfare; per capita income is a weaker predictor. Ill health and loss of a job reduce self-reported economic welfare, but demographic effects are weak at a given current income. And the effects of unemployment is not robust. Returning to work does not restore a sense of welfare unless there is an income gain. The results imply that even transient unemployment brings the feeling of a permanent welfare loss, suggesting that high unemployment benefits do not attract people out of work but do discourage a return to work.Economic Theory&Research,Services&Transfers to Poor,Public Health Promotion,Environmental Economics&Policies,Labor Policies,Safety Nets and Transfers,Economic Theory&Research,Environmental Economics&Policies,Inequality,Governance Indicators

Who bears the cost of Russia's military draft?

The authors use data from a large nationally representative survey in Russia to analyze the distributional and welfare implications of draft avoidance as a common response to Russia's highly unpopular conscription system. They develop a simple theoretical model that describes household compliance decisions with respect to enlistment. The authors use several econometric techniques to estimate the effect of various household characteristics on the probability of serving in the army and the implications for household income. Their results indicate that the burden of conscription falls disproportionately on the poor. Poor, rural households, with a low level of education, are more likely to have sons who are enlisted than urban, wealthy, and better-educated families. The losses incurred by the poor are disproportionately large and exceed the statutory rates of personal income taxes.Poverty Lines,Peace&Peacekeeping,Housing&Human Habitats,Economic Theory&Research,Environmental Economics&Policies

Who wants to redistribute? Russia's tunnel effect in the 1990's

It seems natural to expect the rich to oppose policies to redistribute income from the rich to the poor, and the poor to favor such policies. But this may be too simple a model, say the Authors. Expectations of future welfare may come into play. Well-off people on a downward trajectory may well favor such policies and poor people on a rising trajectory may not. This resistance of upwardly mobile poor people to lasting redistribution is analogous to Hirshman's"tunnel effect", as applied to traffic stuck on a congested two-lane road in a tunnel: People's spirits lift when traffic starts moving again; but when another lane starts moving and theirs doesn't, they might grow furious andwant to correct things by crossing the double line separating the two lanes. Using Russia in the 1990's as the setting, the authors analyze why some people favor governmental redistribution and others do not and whether there is a"tunnel effect". They find that: 1) Some 72 percent of the 7,000 adults surveyed in October 1996 favor government action to reduce incomes of the rich. But the other 28 percent were not only the currently"rich". 2) About 85 percent of those in the poorest consumption decile favor redistribution. But among those who expect their welfare to decline, support for redistribution is high, even among the currently"rich". There is little support for redistribution among the well-off who expect to become even better off. Resistance is greatest among those on a rising consumption path who expect it to continue. 3) Women tend to favor redistribution more than men. 4) Those who favor redistribution include people who voted communists and people who are vulnerable: the old, women, poorly educated adults, people who live in rural areas, people who expect to lose their jobs, and people who do not think the government cares about them.Public Health Promotion,Economic Theory&Research,Health Economics&Finance,Environmental Economics&Policies,Labor Policies,Health Economics&Finance,Poverty Diagnostics,Inequality,Environmental Economics&Policies,Economic Theory&Research

Lasting local impacts of an economywide crisis

The immediate welfare costs of an economywide crisis can be high, but are there also lasting impacts? And are they greater in some geographic areas than others? The authors study Indonesia’s severe financial crisis of 1998. They use 10 national surveys spanning 1993–2002, each covering 200,000 randomly sampled households, to estimate the impacts on mean consumption and the incidence of poverty across each of 260 districts. Counterfactual analyses indicate geographically diverse impacts years after the crisis. Proportionate impacts on the poverty rate were greater in initially better off and less unequal areas. In the aggregate, a large share - possibly the majority - of those Indonesians who were still poor in 2002 would not have been so without the 1998 crisis.Public Health Promotion,Poverty Monitoring&Analysis,Environmental Economics&Policies,Economic Theory&Research,Economic Conditions and Volatility,Inequality,Environmental Economics&Policies,Economic Theory&Research,Poverty Assessment,Economic Conditions and Volatility

Chaos motion in robot manipulators

It is shown that a simple two-link planar manipulator exhibits a phenomenon of global instability in a subspace of its configuration space. A numerical example, as well as results of a graphic simulation, is given

"Obstacles to School Progression in Rural Pakistan: An Analysis of Gender and Sibling Rivalry Using Field Survey Data"

This paper aims to identify the obstacles to school progression by integrating field surveys conducted in twenty-five Pakistani villages, using economic theory and econometric analysis. The full-information maximum likelihood (FIML) estimation of the sequential schooling decision model reveals important dynamics of the gender difference in educational attainment, intrahousehold resource-allocation patterns, and transitory income and wealth effects. We find a high educational retention rate and observe that school progression rates between male and female students after secondary school are comparable. In particular, we find gender-specific and schooling-stage-specific birth-order effects on education. Our overall findings are consistent with the theoretical implications of optimal schooling behavior under binding credit constraints and the self-selection in education-friendly households. Finally, we find serious supply-side constraints on primary education for females.

Wage effects of R&D tax incentives:Evidence from the Netherlands

This paper examines the impact of the Dutch R&D tax incentives program, known as WBSO, on the wages of R&D workers. In our model these wages are partly determined by the governments WBSO tax disbursements. We construct detailed firm- and time specific R&D tax credit rates as a function of the R&D tax incentives scheme to capture the wage effects of the government R&D support. An instrumentalvariables econometric model is estimated using an unbalanced firm-level panel data covering the period 1996-2004. After controlling for firm and industry effects and business cycle fluctuations, R&D tax incentives are found to increase R&D wages. The R&D wage effect of these incentives is smaller than their effect on real R&D investment, but it is still sizeable. The elasticity of the R&D wage with respect to the fraction of the wage supported by the WBSO scheme is estimated at 0.1.price effect of tax incentives, tax credits, panel data model, R&D workers, wages