ELECTORAL SYSTEMS, POVERTY AND INCOME INEQUALITY

In this article we use the high-quality data coming from the Luxembourg Income Study Project, in a panel framework, to test for the effects of electoral systems on both poverty and income Inequality. We find that when de degree of proportionality of an electoral system increases, inequality and poverty decrease. We also find than in presidential regimes, the levels of poverty and inequality are higher than in parliamentary regimes.Income Inequality, Poverty, Electoral Systems, Transfer Expenditure.

Robust regression in Stata.

In regression analysis, the presence of outliers in the data set can strongly distort the classical least squares estimator and lead to unreliable results. To deal with this, several robust-to-outliers methods have been proposed in the statistical literature. In Stata, some of these methods are available through the commands rreg and qreg. Unfortunately, these methods only resist to some specific types of outliers and turn out to be ineffective under alternative scenarios. In this paper we present more effective robust estimators that we implemented in Stata. We also present a graphical tool that allows recognizing the type of existing outliers.S-estimators; MM-estimators; Outliers; Robustness;

Robinson's Squareroot-of-n-consistent Semiparametric Regression Estimator in Stata

This paper describes Robinson's (1988) double residual semiparametric regression estimator and Hardle and Mammen's (1993) specification test implementation in Stata. Some simple simulations illustrate how this newly coded estimator outperforms the already available semiparametric plreg command.Semipar; Semiparametric estimation

Estimating Nonlinearities in Spatial Autoregressive Models

In spatial autoregressive models, the functional form of autocorrelation is assumed to be linear. In this paper, we propose a simple semiparametric procedure, based on Yatchew's (1998) partial linear least squares, that relaxes this restriction. Simple simulations show that this model outperforms traditional SAR estimation when nonlinearities are present. We then apply the methodology on real data to test for the spatial pattern of voting for independent candidates in US presidential elections. We find that in some counties, votes for “third candidates” are non-linearly related to votes for “third candidates” in neighboring counties, which pleads for strategic behavior.Spatial econometrics; semiparametric estimations

Does Aid Induce Brain Drain? The Effect of Foreign Aid on Migration Selection

Recent evidence suggests that aid induces migration. However, total migration is quite general from a policy perspective since what explains the welfare consequences of migration is the extent of emigration selection. In this paper we ask whether skilled or unskilled migration is more sensitive to aid and to the different mechanisms through which aid may affect self-selection among international emigrants. We show that aid induces positive selection. And that the effect on skilled migration is larger than the effect on unskilled migration. As possible mechanisms to explain the relation, we find that aid induces skilled migration by reducing transaction and information costs, by improving the distribution of schooling, and by helping to overcome liquidity constraints.Foreign aid, International migration, Self-selection, Brain drain.

Supposedly Strong Instruments and Good Leverage Points

In this paper, we warn on the overoptimistic conclusions led by weak instruments testing when good leverage points are present in the first stage of an IV estimation. Some simulations and an empirical application are provided to illustrate the point raised.Instrumental variables, Weak instruments, Outliers, Robust statistics

Robustness or Efficiency, A Test to Solve the Dilemma

When dealing with the presence of outliers in a dataset, the problem of choosing between the classical ordinary least squares and robust regression methods is sometimes addressed inadequately. In this article, we propose using a Hausman-type test to determine whether a robust S- estimator is more appropriate than an ordinary least squares one in a multiple linear regression framework, on the basis of the trade-off betewen robustness and efficiency. An economic example is provided to illustrate the usefulness of the test.Efficiency, Hausman Test, Linear Regression, Robustness, S- estimator

Human Development and Electoral Systems

The aim of this paper is to test if electoral systems and human development are linked. Using high quality data and very simple panel data econometric techniques, we show that electoral systems play a critical role in explaining the difference in the levels of human development between countries. We find that countries which have proportional systems enjoy higher levels of human development than those with majoritarian ones, thanks to more redistributive fiscal policies. We also find that when the degree of proportionality, based on electoral district size, increases, so does human development.

Untalented but Successful

When studying the problem of the emergence of superstars, scholars face great difficulties in measuring talent, obtaining confidential data on earnings, and finding econometric techniques that lead to results that are robust to the presence of outliers (superstars). In this paper we use an original dataset from the Pokemon trading card game in which (i) there is no unidentifiable heterogeneity and (ii) all characteristics of individuals are public domain. To prevent the results to be distored by the presence of outliers, we estimate the «fair» price of each individual, using the robust «Least Trimmed of Squares» regression technique in a hedonic prices framework, and check the effective price at which they are sold. This allows to identify superstars, i.e. individuals that are sold at a price which represents several times their intrinsec value. We find that the two main theories of superstars developed by Rosen (1981), who awards a central importance to talent, and by Adler (1985), who awards more importance to the need of consumers to share a common culture are complementary and not mutually exclusive as is often claimed.Superstars, robust estimation, hedonic prices, leisure games.