teacher quality in educational production tracking decay and student achievement growing concerns over the inadequate achievement of u s students have led to proposals to reward good teachers and penalize or fire bad ones the leading method for assessing teacher quality is value added modeling vam which decomposes students test scores into components attributed to student heterogeneity and to teacher quality implicit in the vam approach are strong assumptions about the nature of the educational production function and the assignment of students to classrooms in this paper i develop falsification tests for three widely used vam specifications based on the idea that future teachers cannot influence students past achievement in da ta from north carolina each of the vams exclusion restrictions are dramatically viola ted in particular these models indicate large effects of 5th grade teachers on 4th grade t est score gains i also find that conventional measures of individual teachers value added fade out very quickly and are at best weakly related to long run effects i discuss implic ations for the use of vams as personnel tools

agricultural dis incentives and food security is there a link using the world bank database distortions to agricultural incentives this paper analyzes the impact that agricultural dis incentives have on food security for a wide sample of countries over the 1990 2010 period we adopt a continuous treatment approach applying generalized propensity score matching to reduce potential biases stemming from differences in observed country characteristics the results provide strong evidence of self selection and heterogeneous food security impacts at different levels of policy intensity estimates of the dose response functions show that both discrimination against agriculture and large support for it lead to poor performance in the availability access and utilization dimensions of food security

can fao s measure of chronic undernourishment be strengthened abstract in its sixth world food survey released at the 1996 world food summit the food and agriculture organization of the united nations fao reported that 841 million people in developing countries are chronically undernourished this number and its country and regional level disaggregations have proved tremendously useful to countless development aid agencies and researchers in the context of a recent wave of new nationally representative household food consumption and expenditure surveys this paper examines the estimation methodology underlying the food insecurity measure which relies on national aggregate measures of food availability and distribution the paper finds that the measure largely reflects national food availabilities and does not adequately capture people s ability to gain access to food the ultimate key to food security the implications for the indicator s use by policy makers in geographical targeting and tracking changes in food insecurity over time are drawn out the paper concludes by arguing that the time has come to review the potential for employing the new household survey data along with new methods to strengthen the empirical foundations of fao s measure

information to guide policy responses to higher global food prices the data and analyses required abstract national decision makers must understand the degree to which their country and population groups within it are exposed to the negative effects of higher global food prices or could exploit new economic opportunities offered by higher prices this paper provides a conceptual overview of the range of data and analyses that will permit leaders and analysts serving them to assess the broad implications of higher global food prices for a country and its population groups what we find is that there are a relatively small number of types of policy responses that governments might take in the face of a food price rise consequently relatively well defined sets of data need to be compiled and types of analyses used by government to generate the information needed to broadly guide efforts to prevent food price increases from becoming crises and to derive any possible benefits international joint action can be employed profitably both to collect this data and to build national capacity to conduct the analyses needed to guide policy formulation and general program design in the face of the risks and the opportunities of higher food prices and to evaluate the effectiveness of those policy responses

the impact of state government subsidies and tax credits in an emerging industry ethanol production 1980 2007 this article examines the effects of state economic development incentives in the emerging ethanol industry we compiled data on ethanol production capacity and subsidies tax credits for all states for the years 1980 2007 a period that covers the complete emergence of the biofuel industry in the united states importantly this time period was characterized by the passage of several state level subsidies and tax breaks aimed at increasing ethanol production hence this panel documents a substantial amount of within state variation in policies from which to identify an effect we find that some incentives directed at ethanol production have a significant effect on a state s production capacity

political economy of public policies insights from distortions to agricultural and food markets the agricultural and food sector is an ideal case for investigating the political economy of public policies many of the policy developments in this sector since the 1950s have been sudden and transformational while others have been gradual but persistent this paper reviews and synthesizes the literature on trends and fluctuations in market distortions and the political economy explanations that have been advanced based on a rich global data set covering a half century of evidence on commodities countries and policy instruments the paper identifies hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible

do state borders matter for u s intranational trade the role of history and internal migration empirical evidence of the impact of borders on international trade flows using the gravity equation approach abounds this paper examines the empirical relevance of state borders in u s interstate trade for various specifications of the gravity equation we find a large and economically significant subnational border effect for some specifications however two model specifications drastically reduce if not eliminate the border effect i dynamic panel specifications controlling for past levels of trade and ii models conditioning on internal migration les resultats empiriques de l analyse des impacts des frontieres sur les flux de commerce international en utilisant les modeles de gravite sont devenus monnaie courante ce texte examine l impact des frontieres entre etats a l aide de cette technique il s avere que les effets de frontieres infranationales sont grands et significatifs pour certaines specifications du modele cependant deux specifications du modele reduisent dramatiquement s ils n eliminent pas l effet de frontiere i des specifications qui prennent en compte les niveaux anterieurs de commerce et ii des specifications qui dependent de la migration interne

migration and trade theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels this paper assesses the functional form of the impact of migration on trade flows in a quasi experimental setting we provide evidence that the relationship is not log linear in particular at small levels of immigration stocks the elasticity of trade to migration is quite high and it declines to zero at about 4 000 immigrants if immigration stocks exceed such a level the evidence suggests that trade will not increase anymore this suggests that for cross country network and other effects flowing from immigration to materialise at a significant level for trade a high enough level of immigrant stocks is necessary but there appears to be satiation as immigrant numbers increase

empirical analysis of macroeconomic time series var and structural models abstract var and structural econometric models have complementary roles in the modelling of macroeconomic time series a constant parameter var provided it is statistically well specified constitutes a valid basis for testing hypotheses of dynamic specification exogeneity and a priori structure thus facilitating model evaluation as well as suggesting a potentially efficient model development strategy deterministic e g trends and regime shifts and stochastic e g integrated variables non stationarities are analysable within this framework and the johansen maximum likelihood procedure for cointegrated systems is used in an analysis of the determination of earnings prices productivity and unemployment in the u k

segmented trends and non stationary time series since the influential work of charles r nelson and charles plosser 1982 many empirical studies have concluded that macroeconomic time series are difference stationary this paper proposes the segmented trend model as an alternative in which the series is the sum of a nonstationary trend and a stationary cycle and where the trend shows infrequent shifts the paper proposes tests between the difference stationary and segmented trends models and applies these to the data of nelson and plosser in general the results indicate that prices are difference stationary but quantities follow segmented trend processes copyright 1989 by royal economic society

some consequences of temporal aggregation in empirical analysis i derive the generating mechanism of a temporally aggregated process when the disaggregated one belongs to the vector autoregressive integrated moving average class i then study the effects of temporal aggregation on a set of characteristics of usual interest such as exogeneity causality cointegration and common features an empirical example with canadian interest rates illustrates the main issues

inference in cointegrating models uk m1 revisited the paper addresses the practical determination of cointegration rank this is difficult for many reasons deterministic terms play a crucial role in limiting distributions and systems may not be formulated to ensure similarity to nuisance parameters finite sample critical values may differ from asymptotic equivalents dummy variables alter critical values often greatly multiple cointegration vectors must be identified to allow inference the data may be 1 2 rather than 1 1 altering distributions and conditioning must be done with care these issues are illustrated by an empirical application of multivariate cointegration analysis to a small model of narrow money prices output and interest rates in the uk copyright 1998 by blackwell publishers ltd

bridging trade theory and labour econometrics the effects of international migration this paper surveys current theoretical and empirical research on international migration with a particular emphasis on the links between trade theory and labour empirics

measuring protection mission impossible abstract there seems to be some confusion between openness and protection measures in the international trade literature the aim of this paper is to bring together the state of the art in quantifying trade policy measures and for this reason we focus on the extent of the protection granted by policies rather than on the degree of openness of the economy given the considerable amount of literature that deals with these issues we will limit our review as follows on the one hand we focus on trade policies implemented at the border and therefore do not consider all the other possible public interventions influencing trade flows on the other hand we only take into account indexes that explicitly adopt a metric expressed in a scalar aggregate tariff and quota equivalent measures or an index in a closed interval we distinguish between indexes that aggregate across products same barrier for more products and indexes that aggregate across instruments more barriers for the same product finally in order to classify the large number of indexes covered in our review we propose a typology based on three categories incidence outcome and equivalence

the effects of foreign acquisition on domestic and export markets dynamics in china using recent data from the chinese manufacturing industry and the generalised propensity score this paper establishes economically significant causal effects of foreign acquisition on domestic and export markets dynamics

small system modelling of real wages inflation unemployment and output per capita in italy 1970 1994 the relationships between real wages output per capita inflation and unemployment in italy between 1970 and 1994 are modelled using a cointegrated vector autoregression there is evidence of a change in the underlying equilibria and in the dynamic evolution of the variables probably associated with the substantial changes in many sectors of the italian economy after 1979 alternative ways to model structural change in the italian labour market are considered in adopting a split sample approach the results favour an hysteresis interpretation of unemployment

immigrant links to the home country empirical implications for u s bilateral trade flows immigrants ties to their home countries can play a key role in fostering bilateral trade linkages immigrant ties include knowledge of home country markets language preferences and business contacts that have the potential to decrease trading transaction costs empirical results for the united states suggest that immigrant links have historically been important in increasing bilateral trade flows with immigrants home countries copyright 1994 by mit press

trade liberalization and food security in nepal among south asian countries nepal liberalized most extensively during the 1980s and 1990s on both domestic and external fronts in south asia nepal has the lowest per capita income highest dependence of population on agriculture and second highest poverty rate at the same time nepal has the lowest average tariffs in south asia and has taken several steps to downsize its public food distribution system and remove a host of agricultural subsidies the outcomes from these policy reforms in nepal are mixed aggregate indicators of food sufficiency and security per capita food availability extent of malnourishment show improvement in nepal since liberalization relative to other south asian countries nepal is doing better on some indicators like extent of undernourished population while on other indicators like stunting of children nepal is actually doing the worst more importantly the gains from liberalization across regions in nepal have been uneven the reason for such an uneven outcome is lack of complementary policies from the government that would lead to spatial integration of markets e g the creation of physical and marketing infrastructure liberalization has in effect reinforced the ex ante hierarchy across regions in nepal the paper then reviews the role and reform of the nepal food corporation nfc within this broader context

agricultural trade distortions during the global financial crisis the authors are grateful for financial support from the australian research council rural industries research and development corporation and world bank

spatiotemporal analysis of ethanol market penetration abstract consumption of ethanol in the united states has increased rapidly over the last few years fueled by both higher crude oil prices and generous public support measures for renewable fuels the contribution of ethanol to the transport energy mix varies markedly by state heterogeneity in ethanol adoption and market development is investigated using a hierarchical spatiotemporal model a bayesian markov chain monte carlo method is employed for estimation of the proposed flexible model structure besides spatial dependence among neighboring states differential inclusion rates of ethanol are found to be largely determined by national and state level biofuel incentive policies relative gasoline prices feedstock availability household median income mtbe bans and density of fuel retail infrastructure our findings imply that increasing renewable fuel support as well as investing in extending the transportation and fuel retail infrastructure can result in higher ethanol consumption

a public policy aid for bioenergy investment case study of failed plants abstract recent failures of renewable energy plants have raised concerns regarding government s role in providing credit subsidies and have harmed the long run development of renewable energy the major reason for these failures lies in government loan appraisers not having a model that addresses these root causes and instead relying on traditional net present value npv analysis what is required is a model representing entrepreneurs investment decision processes when faced with uncertainty irreversibility and flexibility that characterize renewable energy investments the aim is to develop such a model with a real options analysis roa criterion as the foundation a case study comparing npv with roa decisions for 50 and 100 million gallon ethanol plants is used as a basis for future development of a template government loan appraisers can use for evaluating the feasibility of renewable energy investments

natural disasters growth and institutions a tale of two earthquakes abstract we examine the impact of natural disasters on gdp per capita by applying the synthetic control approach and using a within country perspective our analysis encompasses two large scale earthquakes that occurred in two different italian regions in 1976 and 1980 we show that the short term effects are negligible in both regions though they become negative if we simulate the gdp that would have been observed in absence of financial aid in the long term our findings indicate a positive effect in one case and a negative effect in the other largely reflecting divergent patterns of the tfp consistent with these findings we offer further evidence suggesting that a quake and related financial aid might either increase technical efficiency via a disruptive creation mechanism or reduce it by stimulating corruption distorting the markets and deteriorating social capital finally we show that the bad outcome is more likely to occur in regions with lower pre quake institutional quality as a result our evidence suggests that unanticipated local shocks are likely to change long run growth rates exacerbating territorial disparities

crossing the river a comparative perspective on italian employment dynamics crossing the river a comparative perspective on italian employment dynamics this paper studies the unprecedented job destruction which occurred throughout europe during the recession of the early 1990s it raises the question whether changes in the institutional structure of various countries labour markets may have deepened the normal effects of the recession institutional legal and sociopolitical safety nets were used to protect many european employees from technological and demand shocks throughout the 1970s and early 1980s important steps have since been taken to deregulate industrial relations european labour markets may currently be in the middle of the river they already experience the negative employment aspects of an american labour market without yet enjoying its benefits based on a study of several countries the article concludes that the social costs of deregulation will be smallest if the intended destination of the transition is reached credibly and without hesitation policy makers must point decisively towards a well defined riverbank rather than leaving the labour market in the middle of the stream giuseppe bertola and andrea ichino

too much of a good thing on the growth effects of the eu s regional policy the european union eu provides grants to disadvantaged regions of member states from two pools the structural funds and the cohesion fund the main goal of the associated transfers is to facilitate convergence of poor regions in terms of per capita income to the eu average we use data at the nuts3 level from the last two eu budgetary periods 1994 1999 and 2000 2006 and generalized propensity score estimation to analyze to which extent the goal of fostering growth in the target regions was achieved with the funds provided and whether or not more transfers generated stronger growth effects we find that overall eu transfers enable faster growth in the recipient regions as intended but we estimate that in 36 of the recipient regions the transfer intensity exceeds the aggregate efficiency maximizing level and in 18 of the regions a reduction of transfers would not even reduce their growth we conclude that some reallocation of the funds across target regions would lead to higher aggregate growth in the eu and could generate even faster convergence than the current scheme does

determinants of food security in southern ethiopia at the household level in the early 1980s a paradigm shift occurred in the field of food security following amartya sens 1981 claims that food insecurity is more of a demand concern affecting the poor s access to food than a supply concern affecting availability of food at the national level despite the wide acceptance of sen s thinking many controversies including the relative importance of supply side versus demand side variables in causing and solving food insecurity have remained in academic and policy circles this study develops a recursive household food security model within the framework of consumer demand and production theories following singh et al 1986 and parses out the relative importance of supply side versus demand side variables in determining household food security in southern ethiopia based on results of a test of full reduced model and the magnitude of changes in conditional probabilities of food security we conclude that the supply side variables are more powerful determinants of food security than the demand side variables