investigation into transmission options for cross border power trading in asean power grid this work is a feasibility study of high voltage ac hvac and high voltage dc hvdc transmission option for the association of southeast asian nations asean power grid apg interconnections an optimal power flow a minimum cost power generation model is developed in the matpower simulation platform to perform this analysis electricity generation and consumption data are taken from the latest power development plans of individual asean countries for the evaluation of optimal cross border power flow through the interconnections results show that apg can enhance power generation from countries with abundant renewable resources to meet the growing demand at load centers in the asean member nations an annual cost is used as the output matrix for this study the analysis results reveal that in some interconnections implementing hvdc link instead of currently planned hvac could be economically beneficial for the apg the findings in this paper would serve as valuable references for the apg planners

credit constraints and labor supply evidence from bank branching deregulation this paper examines labor supply adjustment both at the intensive and extensive margins following financial market development specifically we exploit the staggered passage of bank branching deregulation in the united state to study the impact of relaxing credit constraints on labor supply decisions we find strong evidence that improvements in how credit markets function decrease weekly hours worked and that the effect is most significant for the lower middle marginal income group furthermore we observe heterogeneous responses across demo graphic groups race and income in contrast we find little to no evidence that deregulation has a significant impact on the extensive margin of participation

financing investment in the european electricity transmission network consequences on long term sustainability of the tsos financial structure this article focuses on the ability of european tsos to meet the demand for substantial investments in the electricity transmission grid over the next two decades we employ quantitative analysis to assess the impact of the required capital expenditures under a set of alternative financing strategies we consider a best case scenario of full cooperation between the european tsos it appears that under current trends in the evolution of transmission tariffs only half the volumes of investment currently planned could be funded a highly significant increase in transmission tariffs will be required to ensure the whole scale investments can be delivered finally alternative strategies can dampen the impact on tariffs but they can only partially substitute for this increase in charges paid by network users

the short term impact of unconditional cash transfers to the poor experimental evidence from kenya we use a randomized controlled trial to study the response of poor households in rural kenya to unconditional cash transfers from the ngo givedirectly the transfers differ from other programs in that they are explicitly unconditional large and concentrated in time we randomized at both the village and household levels furthermore within the treatment group we randomized recipient gender wife versus husband transfer timing lump sum transfer versus monthly installments and transfer magnitude us 404 ppp versus us 1 525 ppp we find a strong consumption response to transfers with an increase in household monthly consumption from 158 ppp to 193 ppp nine months after the transfer began transfer recipients experience large increases in psychological well being we find no overall effect on levels of the stress hormone cortisol although there are differences across some subgroups monthly transfers are more likely than lump sum transfers to improve food security whereas lump sum transfers are more likely to be spent on durables suggesting that households face savings and credit constraints together these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological well being

conditional cash transfers civil conflict and insurgent influence experimental evidence from the philippines abstract conditional cash transfer cct programs are an increasingly popular tool for reducing poverty in conflict affected areas despite their growing popularity there is limited evidence on how cct programs affect conflict and theoretical predictions are ambiguous we estimate the effect of conditional cash transfers on civil conflict in the philippines by exploiting an experiment that randomly assigned eligibility for a cct program at the village level we find that cash transfers caused a substantial decrease in conflict related incidents in treatment villages relative to control villages in the first 9 months of the program using unique data on local insurgent influence we also find that the program reduced insurgent influence in treated villages an analysis of possible spillovers yields inconclusive results while we find no statistical evidence of spillovers we also cannot rule out that the village level effect was due to displacement of insurgent activity from treatment to control villages

an empirical test of credit rationing in the mortgage market abstract recent theoretical models of credit rationing suggest that mortgages are rationed with nonprice terms on the basis of default risk despite the development of secondary mortgage markets and the deregulation of deposit rates we test this hypothesis using aggregate time series data on fha and conventional mortgage originations fha loans are more expensive for borrowers but provide federal guarantees which protect lenders against default losses for this reason fha loans should be subject to easier credit constraints than conventional mortgages and the fha share of mortgage originations should increase with aggregate default risk default risk is proxied by a bond rate quality spread consistent with previous studies our results imply that default risk induced mortgage rationing persists in the post disintermediation era but that fha programs help offset the overall impact of rationing on housing markets

credit rationing and the demand for owner occupied housing abstract this study applies cross sectional data to test whether default risk induced credit constraints affect the demand for owner occupied housing credit constrained households are argued to exhibit different elasticities of demand for housing than less constrained households housing demand elasticities are then estimated separately for households obtaining va insured and non va loans the government guarantee on va loans insures lenders against default enabling lenders to apply easier nonprice terms of credit results indicate that observed demand elasticities differ significantly across va and conventional mortgage holders that marginal changes in credit constraints affect housing demand and that fha financing mitigates the effect of mortgage constraints

costly monitoring financial intermediation and equilibrium credit rationing abstract this paper establishes a link between equilibrium credit rationing and financial intermediation in a model with asymmetrically informed lenders and borrowers costly monitoring and investment project indivisibilities intermediation is shown to dominate borrowing and lending between individuals and these financial intermediaries exhibit several of the important features of intermediaries as we know them equilibrium interest rates and the aggregate quantity of loans respond quite differently to changes in taste and technology parameters depending on whether or not there is rationing in equilibrium

transmission expansion planning in electricity markets this paper presents a mixed integer linear programming lp formulation for the long term transmission expansion planning problem in a competitive pool based electricity market to achieve optimal expansion planning while modeling market functioning we define a number of scenarios based on the future demand in the system and we simulate the maximization of the aggregate social welfare investment and operating costs transmission losses and generator offers and demand bids are considered we propose to use a set of metrics to rate the effect of the expansion on the generators demands and the system as a whole the proposed model is applied to the garver six bus system and to the ieee 24 bus reliability test system simulation results can be interpreted in economic terms based on the values of the metrics obtained for different scenarios parameters and topologies

consumer demand for fair trade evidence from a multistore field experiment abstract we provide new evidence on consumer demand for ethical products from experiments conducted in a u s grocery store chain we find that sales of the two most popular coffees rose by almost 10 when they carried a fair trade label as compared to a generic placebo label demand for the higher priced coffee remained steady when its price was raised by 8 but demand for the lower priced coffee was elastic a 9 price increase led to a 30 decline in sales while consumers attach value to ethical sourcing there is significant heterogeneity in willingness to pay for it

immigration and the diffusion of technology the huguenot diaspora in prussia abstract this paper analyzes long term effects of skilled worker immigration on productivity for the huguenot migration to prussia in 1685 religiously persecuted french huguenots settled in brandenburg prussia and compensated for population losses due to plagues during the thirty years war we combine huguenot immigration lists from 1700 with prussian firm level data on the value of inputs and outputs in 1802 in a unique database to analyze the effects of skilled immigration to places with underused economic potential exploiting this settlement pattern in an instrumental variable approach we find substantial long term effects of huguenot settlement on the productivity of textile manufactories jel j24 j61 l67 n33 n63 o33 o47

credit rationing deregulation and race in mortgage lending in the united states 1960 90 this paper examines discrimination in mortgage lending in teh united states over three decades in 1960 to 1990 we focus on whether deregulation increased federal oversight and enhanced competition reduce discrimination as becker s theory suggests becker 1971 we find that discrimination is evident over the three decades taken together is prevalent from 1960 to 1980 but is absent in the data from 1980 to 1990 this finding strongly supports becker hypothesis preferences for discrimination appear to be offset by the higher costs fo engaging in them after 1980

export markets and labor allocation in a low income country we study the effects of a positive export shock on labor allocation between the informal microenterprise sector and the formal firm sector in a low income country the united states vietnam bilateral trade agreement led to large reductions in us tariffs on vietnamese exports we find that the share of manufacturing workers in vietnam in the formal sector increased by 5 percentage points in response to the us tariff reductions the reallocation was greater for workers in more internationally integrated provinces and for younger cohorts we estimate the gap in labor productivity within manufacturing across the informal and formal sectors this gap and the aggregate labor productivity gain from the export induced reallocation of workers across the two sectors are reduced when we account for worker heterogeneity measurement error and differences in labor intensity of production

long range growth economic development in the global network of air links we study the impact of international long distance flights on the global spatial allocation of economic activity to identify causal effects we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles we show that these air links have a positive effect on local economic activity as captured by satellite measured night lights to shed light on how air links shape economic outcomes we first present evidence of positive externalities in the global network of air links connections induce further connections we then find that air links increase business links showing that the movement of people fosters the movement of capital in particular this is driven mostly by capital flowing from high income to middle income but not low income countries taken together our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses but also gives rise to increased spatial inequality locally and potentially globally

immigrants and the making of america we study the effects of european immigration to the u s during the age of mass migration 1850 1920 on economic prosperity exploiting cross county variation in immigration that arises from the interaction of fluctuations in aggregate immigrant flows and of the gradual expansion of the railway network we find that counties with more historical immigration have higher income less poverty less unemployment higher rates of urbanization and greater educational attainment today the long run effects seem to capture the persistence of short run benefits including greater industrialization increased agricultural productivity and more innovation

housing demand and community choice an empirical analysis abstract housing demand reflects the household s simultaneous choice of the neighborhood whether to own or rent the dwelling and the quantity of housing services demanded existing literature emphasizes the final two factors but overlooks the choice of community this paper develops an econometric model that incorporates all three components and then estimates this model using a sample of tampa florida households incorporating community choice increases the price elasticity of demand and reduces the differential between white and comparable nonwhite households the results are robust to the inclusion of permanent income and taxes

credit rationing race and the mortgage market abstract this study applies microdata from the 1983 survey of consumer finances to evaluate the effects of borrower race and default risk in mortgage lending the empirical analysis is based on a probit model of whether borrowers obtain fha or conventional mortgages the former are fully insured and are characterized by easier downpayment constraints but are typically more expensive hence households borrowing through the fha will tend to be credit constrained in the conventional market results of the analysis indicate that variables which proxy lender concerns about default risk and cost have an important effect on the type of loan borrowers obtain empirical estimates also suggest that minority households are significantly less likely to obtain conventional financing than whites even after controlling for various proxies of default risk these results suggest that race effects in mortgage lending may persist for reasons unrelated to borrower default risk

directly unproductive profit seeking dup activities this paper propses directly unproductive profit seeking dup activities as a general concept that embraces a wide range of recently analyzed economic activities including the subset of rent seeking activities considered by krueger it then proceeds to provide a synthesis and generalization of the welfare theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the dup activity thus a unification and overview of the subject are achieved

on the robustness of racial discrimination findings in mortgage lending studies that mortgage lenders have complex underwriting standards often differing legitimately from one lender to another implies that any statistical model estimated to approximate these standards for use in fair lending determinations must be misspecified exploration of the sensitivity of disparate treatment findings from such statistical models is thus imperative we contribute to this goal this article examines whether the conclusions from several bank specific studies undertaken by the office of the comptroller of the currency are robust to changes in the link function adopted to model the probability of loan approval and to the approach used to approximate the finite sample null distribution for the disparate treatment hypothesis test our evidence of discrimination findings that are reasonably robust to the range of examined link functions suggests that regulators and researchers can be reasonably comfortable with their current use of the logit link based on several features of our results we

multinationals and anti sweatshop activism during the 1990s anti sweatshop activists campaigned to improve conditions for workers in developing countries this paper analyzes the impact of antisweatshop campaigns in indonesia on wages and employment identification is based on comparing the wage growth of workers in foreign owned and exporting firms in targeted regions or sectors before and after the initiation of antisweatshop campaigns we find the campaigns led to large real wage increases for targeted enterprises there were some costs in terms of reduced investment falling profits and increased probability of closure for smaller plants but we fail to find significant effects on employment jel f23 j31 j81 l67 o14 o15

immigration restrictions as active labor market policy evidence from the mexican bracero exclusion an important class of active labor market policy has received little rigorous impact evaluation immigration barriers intended to improve the terms of employment for domestic workers by deliberately shrinking the workforce recent advances in the theory of endogenous technical change suggest that such policies could have limited or even perverse labor market effects but empirical tests are scarce we study a natural experiment that excluded almost half a million mexican bracero seasonal agricultural workers from the united states with the stated goal of raising wages and employment for domestic farm workers we build a simple model to clarify how the labor market effects of bracero exclusion depend on assumptions about production technology and test it by collecting novel archival data on the bracero program that allow us to measure state level exposure to exclusion for the first time we cannot reject the hypothesis that bracero exclusion had no effect on u s agricultural wages or employment and find that important mechanisms for this result include both adoption of less labor intensive technologies and shifts in crop mix

household location and race estimates of a multinomial logit model a multinomial logit model of household location choice in which families choose from a number of mutually exclusive residential location is estimated regression results indicate that the locational choices of white and black households are importantly but differently affected by their socioeconomic characteristics in that regard black suburbanization patterns are little influenced by large simulated changes in household characteristics findings suggest that policies which focus on the educational and earnings opportunities of blacks would likely be largely ineffectual in fostering the integration of predominantly white suburban communities copyright 1989 by mit press

credit rationing in the u s mortgage market evidence from variation in fha market shares abstract this paper examines the nature of mortgage credit rationing across geographic markets and time particular attention is paid to the response of conventional mortgage supply to higher risk conditions associated with regional recessions we develop a series of four indirect tests based on the spatial variation of the fha share of mortgages both endorsements and applications as well as fha and conventional rejection rates results of these four tests indicate that conventional mortgage underwriting criteria do not become more flexible and may even become more demanding when local economic conditions deteriorate this result indicates the use of non price credit rationing in the mortgage market and suggests a special role for fha insured mortgages as a mechanism for maintaining mortgage credit supply in declining housing markets

an evaluation of lender redlining in the allocation of unsecured consumer credit in the us credit discrimination in the us has been a topic of considerable interest over the past few decades this paper examines the lending behaviour of a commercial depository institution with respect to unsecured consumer loans in minority versus non minority us census tracts in contrast to previous studies the data include information about applicants credit scores and marginal exceptions to loan policy in a logit model of the probability of denial no evidence of discrimination is found for overall loans or when an application is turned down even when a minimum credit score is reached the evidence of non discrimination is not as clear for applications that were approved despite falling short of minimum credit scores or applications that barely met the minimum score but were turned down the results suggest that future research on lending discrimination should focus on these marginal exceptions to loan policy

the evolution of culture and institutions evidence from the kuba kingdom we use variation in historical state centralization to examine the long term impact of institutions on cultural norms the kuba kingdom established in central africa in the early 17th century by king shyaam had more developed state institutions than the other independent villages and chieftaincies in the region it had an unwritten constitution separation of political powers a judicial system with courts and juries a police force a military taxation and significant public goods provision comparing individuals from the kuba kingdom to those from just outside the kingdom we find that centralized formal institutions are associated with weaker norms of rule following and a greater propensity to cheat for material gain this finding is consistent with recent models where endogenous investments to inculcate values in children decline when there is an increase in the effectiveness of formal institutions that enforce socially desirable behavior consistent with such a mechanism we find that kuba parents believe it is less important to teach children values related to rule following behaviors

a market based transmission planning for hvdc grid case study of the north sea there is significant interest in building hvdc transmission to carry out transnational power exchange and deliver cheaper electricity from renewable energy sources which are located far from the load centers this paper presents a market based approach to solve a long term tep for meshed vsc hvdc grids that connect regional markets this is in general a nonlinear non convex large scale optimization problem with high computational burden partly due to the many combinations of wind and load that become possible we developed a two step iterative algorithm that first selects a subset of operating hours using a clustering technique and then seeks to maximize the social welfare of all regions and minimize the investment capital of transmission infrastructure subject to technical and economic constraints the outcome of the optimization is an optimal grid design with a topology and transmission capacities that results in congestion revenue paying off investment by the end the project s economic lifetime approximations are made to allow an analytical solution to the problem and demonstrate that an hvdc pricing mechanism can be consistent with an ac counterpart the model is used to investigate development of the offshore grid in the north sea simulation results are interpreted in economic terms and show the effectiveness of our proposed two step approach

international migration remittances and household investment evidence from philippine migrants exchange rate shocks how do households respond to overseas members economic shocks overseas filipinos in dozens of countries experienced sudden heterogeneous changes in exchange rates during the 1997 asian financial crisis appreciation of a migrant s currency against the philippine peso leads to increases in household remittances from overseas the estimated elasticity of philippine peso remittances with respect to the exchange rate is 0 60 positive migrant shocks lead to enhanced human capital accumulation and entrepreneurship in origin households child schooling and educational expenditure rise while child labour falls households also work more hours in self employment and become more likely to start relatively capital intensive household enterprises

homeownership in the 1980s and 1990s aggregate trends and racial gaps abstract housing policy under the clinton and bush administrations has sought to boost homeownership while also narrowing racial gaps in owner occupancy rates against that backdrop homeownership rose sharply in the 1990s but white minority gaps remain in excess of 25 percentage points we analyze these patterns using data from the 1983 to 2001 survey of consumer finances results indicate that household characteristics explain most of the increase in homeownership and roughly two thirds of the white minority homeownership gap credit barriers account for no more than 5 percentage points of the remaining gap this suggests that policy makers will need to look beyond innovations in mortgage finance if their goal is to further expand homeownership

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

aid under fire development projects and civil conflict we estimate the causal effect of a large development program on conflict in the philippines through a regression discontinuity design that exploits an arbitrary poverty threshold used to assign eligibility for the program we find that barely eligible municipalities experienced a large increase in conflict casualties compared to barely ineligible ones this increase is mostly due to insurgent initiated incidents in the early stages of program preparation our results are consistent with the hypothesis that insurgents try to sabotage the program because its success would weaken their support in the population

costly monitoring loan contracts and equilibrium credit rationing this paper develops a model with asymmetrically informed agents and costly monitoring of loan contracts where an equilibrium can exhibit credit rationing borrowers are identical ex ante but some receive loans and others do not in contrast to existing credit rationing theories rationing does not occur here due to inflexible prices adverse selection or moral hazard optimizing behaviour produces a standard debt contract in equilibrium the aggregate quantity of loans and equilibrium interest rates respond differently depending on whether there is rationing in equilibrium

worms at work long run impacts of a child health investment this study estimates long run impacts of a child health investment exploiting community wide experimental variation in school based deworming the program increased labor supply among men and education among women with accompanying shifts in labor market specialization ten years after deworming treatment men who were eligible as boys stay enrolled for more years of primary school work 17 more hours each week spend more time in nonagricultural self employment are more likely to hold manufacturing jobs and miss one fewer meal per week women who were in treatment schools as girls are approximately one quarter more likely to have attended secondary school halving the gender gap they reallocate time from traditional agriculture into cash crops and nonagricultural self employment we estimate a conservative annualized financial internal rate of return to deworming of 32 and show that mass deworming may generate more in future government revenue than it costs in subsidies

redlining in boston do mortgage lenders discriminate against neighborhoods historically lenders have been accused of redlining minority neighborhoods as well as refusing to lend to minority applicants considerable bank regulation is designed to prevent both actions however the strong correlation between race and neighborhood makes it difficult to distinguish the impact of geographic discrimination from the effects of racial discrimination previous studies have failed to untangle these two influences in part because of severe omitted variable bias the data set in this paper allows the distinct effects of race and geography to be identified and it shows that the evidence for redlining is weak

spillover effects of human service facilities in a racially segmented housing market abstract previous studies of human service facility spillovers on residential property values have been inconclusive and have failed to take into account the effects of racial segmentation of housing markets likewise studies of racial discrimination in urban housing markets and price differentials between white and nonwhite areas of the city have failed to consider the impacts of service facilities on prices this study develops an hedonic price model of housing services in a racially segmented housing market which considers a variety of human service facilities and their spillover effects model results for oakland california in 1976 indicate that facilities significantly affect housing prices both positively and negatively and that these effects vary by racial submarket implications of these findings for the interpretation of past discrimination studies facility impact studies and social policy are considered

necessity is the mother of invention input supplies and directed technical change this study provides causal evidence that a shock to the relative supply of inputs to production can 1 affect the direction of technological progress and 2 lead to a rebound in the relative price of the input that became relatively more abundant the strong induced bias hypothesis i exploit the impact of the u s civil war on the british cotton textile industry which reduced supplies of cotton from the southern united states forcing british producers to shift to lower quality indian cotton using detailed new data i show that this shift induced the development of new technologies that augmented indian cotton as these new technologies became available i show that the relative price of indian u s cotton rebounded to its pre war level despite the increased relative supply of indian cotton this is the first paper to establish both of these patterns empirically lending support to the two key predictions of leading directed technical change theories

the determinants of default on insured conventional residential mortgage loans this paper presents empirical evidence on the determinants of default for insured residential mortgages a multinomial logit model is specified and estimated for regional aggregates constructed from cross sectional and time series data the results document the independent statistical significance of contemporaneous payment income and loan value ratios and unemployment rates as well as more commonly studied determinants of default such as age and the original loan value ratio

the place premium bounding the price equivalent of migration barriers large international differences in the price of labor can be sustained by differences between workers or by natural and policy barriers to worker mobility we use migrant selection theory and evide

property tax capitalization in a model with tax deferred assets standard deductions and the taxation of nominal interest previous property tax capitalization studies assume that families itemize that they save in taxable assets and that real interest income is taxed however many families do not itemize many families invest in tax deferred assets and nominal interest income is taxed as a consequence prior studies likely misspecify the property tax capitalization equation for roughly ninety percent of their samples taking federal tax provisions into account increases the precision of our estimated capitalization rate in addition our results suggest that biases in prior studies likely contribute to the variety of capitalization estimates in the literature

risk based pricing and the enhancement of mortgage credit availability among underserved and higher credit risk populations this paper estimates an option based hazard model of the competing risks of fha mortgage termination results indicate that the elevated default risks of loans originated among lower credit quality and minority borrowers are more than offset by the damped prepayment speeds of those loans so as to result in markedly lower loan termination probabilities among underserved borrower groups those damped termination risks translate into sizable reductions in risk premia to investors in simulated lower creditquality mortgage pools empirical findings suggest that such pooling and risk based pricing of fha insured mortgages could serve to substantially reduce housing finance costs among underserved borrowers so as to advance both their homeownership opportunities and related federal housing policy objectives

loan performance and race r carter hill recent studies find evidence of racial discrimination in mortgage markets although these studies explore loan approval rates for whites versus minorities they do not specifically consider loan performance either in the form of default rates or loan administration costs this study considers discrimination in the used car credit market where the collateral is not subject to location externalities collateral value and quality do not vary as much as in real estate and the loan terms are shorter we find administration costs and default rates are higher for minorities than for whites controlling for age income home ownership wealth occupation loan terms and geographic location jel k2 i introduction credit discrimination occurs whenever minorities are denied credit on the basis of race or are offered loans at terms different than the terms offered similarly situated whites 1 economists identify two types of discrimination preference taste based discrimination and information statistical based discrimination 2 the legal definition of discrimination makes no such distinction in their statistical studies munnell brown mceneaney and tootell 1996 carr and megbolugbe 1994 and gabriel and rosenthal 1991 find evidence of discrimination whereas most economic theorists such as becker 1993 and commentators such as brimelow 1993 and brimelow and spencer 1993 argue competition will greatly reduce if not eliminate discrimination in section iii we demonstrate why under regulation statistical discrimination may increase with increasing competition this anomalous result occurs because the legal definition does not distinguish between the two types of discrimination some economists implicitly assume credit markets are unregulated when considering the effect of competition on discrimination antidiscrimination regulation changes the effect of competition in unregulated markets taste based discrimination is unprofitable and increasing competition will reduce this form of discrimination if the industry s employees or white borrowers have a taste for discrimination competition will not necessarily eliminate taste based discrimination when regulation is binding and the economic foundation for statistical discrimination exists discrimination is profitable and increasing competition may increase discrimination the effect of regulation and competition on discrimination depends critically on the information basis for discrimination the relationship between loan performance and race therefore the appropriate empirical question is does a statistical basis for discrimination exist this question cannot be answered by loan approval studies rather it must be addressed by evaluating how loans perform after they are approved further the appropriate public policy issue is should society regulate statistical discrimination this article is an empirical inquiry into the relationship between race and loan performance we measure loan performance by estimating the same marginal default rates that lenders use to score credit applications and by the variables that have the most impact on loan administration costs we find that race matters regrettably in the fashion suggested by stereotypes in general minorities have higher default rates and contribute to higher administration costs in other words the foundation for statistical discrimination appears to exist section ii contains a review of the extant literature a theoretical model of credit scoring with both taste and statistical discrimination is contained in section iii the data are discussed in section iv and the empirical models are presented in section v ii literature as in arrow 1973 and becker 1957 an individual is said to have a preference or taste for discrimination if he is willing to pay a price or forgo income in order to practice discrimination

a new strategy for transmission expansion in competitive electricity markets it will be important to develop a transmission network capable of handling future generation and load patterns in a deregulated unbundled and competitive electricity market a new strategy for transmission expansion under a competitive market environment is therefore presented in this paper in the proposed strategy a new transmission planning model is developed to consider a variety of market driven power flow patterns while a decision analysis scheme is incorporated to minimize the risk of the selected plan numerical examples are given to illustrate the potential of the proposed strategy to make a significant contribution to transmission planning in competitive markets

us food aid and civil conflict we study the effect of us food aid on conflict in recipient countries our analysis exploits time variation in food aid shipments due to changes in us wheat production and cross sectional variation in a country s tendency to receive any us food aid according to our estimates an increase in us food aid increases the incidence and duration of civil conflicts but has no robust effect on interstate conflicts or the onset of civil conflicts we also provide suggestive evidence that the effects are most pronounced in countries with a recent history of civil conflict jel d74 f35 o17 o19 q11 q18 we are unable to determine whether our aid helps or hinders one or more parties to the conflict it is clear that the losses particularly looted assets constitutes a serious barrier to the efficient and effective provision of assistance and can contribute to the war economy this raises a serious challenge for the humanitarian community can humanitarians be accused of fueling or prolonging the conflict in these two countries medecins sans frontieres amsterdam 1

schooling and labor market consequences of school construction in indonesia evidence from an unusual policy experiment between 1973 and 1978 the indonesian government engaged in one of the largest school construction programs on record combining differences across regions in the number of schools constructed with differences across cohorts induced by the timing of the program suggests that each primary school constructed per 1 000 children led to an average increase of 0 12 to 0 19 years of education as well as a 1 5 to 2 7 percent increase in wages this implies estimates of economic returns to education ranging from 6 8 to 10 6 percent

infant industry protection in the steel rail industry abstract this paper examines a particular instance of infant industry protection the case of the u s steel rail industry it analyzes the joint roles of learning by doing changing resource endowments and tariff protection in the emergence of this industry making use of estimated demand and cost parameters the paper simulates what would have happened to prices production and welfare under free trade i calculate that despite strong learning effects the steel rail tariff hurt rail users in both the short and long runs the tariff s overall effect on welfare was positive but fairly small

rethinking economic development i provide a summary reflection and assessment of the current state of economic development in both the policy and academic worlds in terms of development policy currently the primary focus is on policy interventions namely foreign aid aimed at fixing the deficiencies of developing countries academic research also has a similar focus except with an emphasis in rigorous evaluation of interventions to estimate causal effects a standard set of versatile quantitative tools is used e g experimental and quasi experimental methods which can be easily applied in a range of settings to estimate the causal effects of policies which are typically presumed to be similar across contexts in this article i take a step back and ask whether the current practices are the best that we can do are foreign aid and policy interventions the best options we have for poverty alleviation what else can be done is our current research strategy characterized by rigorous but a lack of context specific analysis the best method of analysis is there a role for other research methods for a deeper understanding of the local context and for more collaboration with local scholars repenser le developpement economiquee dans cet article je propose un apercu une reflexion et une evaluation de l etat actuel du developpement economique a la fois dans les spheres politiques et universitaires en matiere de developpement economique l attention est principalement portee sur l intervention politique c est a dire l aide exterieure visant a corriger les defaillances des pays en developpement les recherches universitaires y portent une attention similaire mais en mettant davantage l accent sur l evaluation rigoureuse de ces memes interventions pour en mesurer les effets de causalite a cette fin un ensemble d outils quantitatifs et modulables standard sont utilises notamment par l entremise de methodes experimentales et quasi experimentales pouvant facilement s appliquer a une vaste gamme de situations et ce aux fins d evaluations des liens de causalite engendres par ces politiques liens habituellement consideres comme similaires d un contexte a l autre dans cet article je prends un peu de recul pour m interroger sur la pertinence des pratiques actuelles les interventions politiques et l aide exterieure offrent elles les meilleures options pour reduire la pauvrete que pouvons nous faire d autre notre strategie de recherche actuelle caracterisee par des analyses rigoureuses mais peu adaptees a des contextes specifiques est elle la meilleure d autres methodes de recherche peuvent elles permettre de mieux comprendre les contextes regionaux et favoriser une meilleure collaboration avec les intellectuels locaux

temporary protection and technology adoption evidence from the napoleonic blockade this paper uses a natural experiment to assess whether temporary protection from trade with industrial leaders can foster development of infant industries in follower countries using a new dataset compiled from primary sources i find that in the short run regions departements in the french empire which became better protected from trade with the british for exogenous reasons during the napoleonic wars 1803 15 increased capacity in a new technology mechanised cotton spinning to a larger extent than regions which remained more exposed to trade temporary protection had long term effects in particular by exploiting the fact that the post war location of the cotton industry was determined to a large extent by the historical accident of the wars i first show that the location of cotton spinning within france was persistent and firms located in regions with higher post war spinning capacity were more productive 30 years later second i find that after the restoration of peace exports of cotton goods from france increased substantially consistent with evolving comparative advantage in cottons third i show that as late as 1850 france and belgium both part of the french empire prior to 1815 had larger cotton spinning industries than other continental european countries which were not protected from british trade during the wars this suggests that adoption of the new technology was far from inevitable

measuring racial discrimination with fair housing audits caught in the act a survey technique called a fair housing audit provides a direct measure of racial discrimination in housing this paper examines the econometric issues raised by audit data measures the discrimination uncovered by a 1981 boston study and tests hypotheses about the causes of discrimination the estimated level of discrimination is high black housing seekers are told about 30 percent fewer available housing units than are whites the hypothesis tests indicate that the primary cause of this discrimination is that housing agents illegally promote their economic interests by catering to the racial prejudice of their current or potential white customers

competition small business financing and discrimination evidence from a new survey we analyze credit applications loan denials and interest rates paid by small businesses across owner gender race and ethnicity in addition we examine data from owners who said they did not apply for credit because they believed that their applications would have been turned down after controlling for a rich set of explanatory variables including personal and business credit histories substantial differences in denial rates between firms owned by african americans and white males remain moreover consistent with becker s classic theories 1957 we find evidence that increases in competition in the firm s local banking market reduces these differences