rafmacalaba/datause-encoder-data huggingface dataset:
and Tanzania. In studying the scale-heterogeneity problem in relatively poor settings we can reasonably expect to obtain a more complete characterization of living standards than would be possible with a short vignette in a rich country. Related to our new measure of subjective poverty, we propose a measure of scale heterogeneity among the poor. We find considerable scale heterogeneity and substantially higher poverty rates with our new measure, but the empirical determinants of subjective poverty turn out to be very similar to past methods ignoring scale heterogeneity.

Second, the paper tests the robustness of the conclusions of BHR with regard to the extent of biases in standard regression models for subjective welfare. Here we follow what appears to be the most common approach in the literature, whereby the survey responses are interpreted as ordinal indicators of a latent continuous welfare metric. With the additional assumptions of constant thresholds (the levels of welfare at which ordinal responses switch along the scale) and a normally distributed error term in the latent welfare variable, an OP is then widely used to model the data to retrieve the parameters of the underlying welfare function. In common with past work, the scales identified in the survey question are not treated as having any welfare significance—they are merely the survey instrument used to help identify the underlying welfare metric. The difference with past work is that we use the vignette scores to relax the assumption that the thresholds in the welfare space are constant across respondents. BHR also addressed this issue but only had the vignette data for Tajikistan, for which they found that respondents with different socioeconomic backgrounds tended to use systematically different scales in responding to subjective welfare questions. This prompted us to investigate the issue elsewhere. We decided to pick two very different poor areas of the world, in Guatemala and Tanzania. In both cases the study areas are clearly poor, but they are not unusually isolated or equal, so it can be expected that people will have some knowledge of the range of living standards in their societies. Using the vignettes developed for this study in these quite different settings, we confirm the finding of BHR that subjective welfare regressions are reasonably robust to scale heterogeneity. These findings put applications using subjective poverty and economic welfare data as dependent variables on a firmer foundation.

We begin with a description of our data. Section 3 presents our approach to measuring subjective poverty using vignettes. That section also tests whether different covariates emerge, 5
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**TABLE 4:** SUBSECTORAL **EFFECTS** OF FREER TRADE **(1 Change)**

||Expenditure|<br>Adjustment|**Tax**Ad|iustment|
|---|---|---|---|---|
||Gross<br>**Output**|Rate of<br>Return<br>La|Gross<br>Output|Rate of<br>Return<br>la|
|AGRICULTURE|0.8|0.8|**0.0**|**0.0**|
|ENERGY|0.7|0.7|-2.8|-2.8|
|MANUFACTURING|-2.6|-1.9|-4.8|-4.1|
|Food, Beverages and Tobacco|-0.8|0.0|-2.6|-1.8|
|Leather and Textiles|7.1|7.1|2.1|2.2|
|Petroleum and Coal Products|1.6|0.8|-0.4|-1.6|
|Chemicals|-6.7|-5.0|-8.9|-7.2|
|Non-Metallic Mineral Products|<br>6.9|6.9|6.6|6.7|
|Metals|-15.3|-13.9|-15.7|-14.2|
|Metal Products|0.3|0.4|-1.3|-1.2|
|Machinery|-16.6|-14.9|-16.4|-14.5|
|Electrical Appliances|-4.4|-4.5|-7.4|-7.5|
|and Electronics|||||
|Transport Equipment|-1.8|-1.0|-2.9|-2.2|
|Other Manufacturing|-5.4|-3.8|-6.5|-4.9|
|CONSTRUCTION|-1.1|-1.1|0.9|0.9|
|SERVICES|2.0|1.7|0.7|0.4|
|TOTAL|-1.0|0.0|**-2.2**|-1.3|

Source: Mitra and GO (1991).

/a Gross profit margin on output.

22. The results sugges **t** hat the manufacturing sector as a whole contracts. Part of this contraction is due to the fact that the manufacturing sector is highly protected and this protection is removed. An equally important part is that most of the indirect taxes are levied on the manufacturing sector. In agriculture, for example, lower protection is coupled by high subsidies that are not eliminated in these simulations.3/ Despite the limitations of the simulations, the results presented in Table 4 on manufacturing subsectors are quite consistent with the conclusions of the firm-level EPRs. The three 3/ In India, the manufacturing sector is both protected and taxed, while agriculture is disprotected and subsidized. In this experiment, protection is removed but taxes and subsidies are left intact.
that have a strong impact on the results: the elasticity of substitution between value-added and business services (esubs), the elasticity of multinational firm supply (etaf) and the vector of initial multinational shares in the services sectors theta_fdi(i). A liberalization of the barriers to FDI will result in a reduction in the cost of business services, both from the direct effect of lowering the costs of doing business for multinational service providers and from the indirect effect that additional varieties of business services allow users to purchase a quality adjusted unit of services at less cost. When esubs (the elasticity of substitution between value-added and business services) is high, users have the greater potential to substitute the cheaper business services and this increases productivity. The elasticity of multinational and Russian firm supply (etaf, etad) is primarily dependent on the sector specific factor for each firm type (foreign or domestic). The mathematical relationship between the elasticity of firm supply and sector specific factors is elaborated in an appendix to Balistreri and Tarr (2011). When etaf is high, a reduction in the barriers to foreign direct investment results in a larger expansion in the number of multinational firms supplying the Russian market, and hence more gains from additional varieties of business services. Finally, theta_fdi(i) (the share of the services market captured by multinationals) has a strong effect, since a liberalization results in a larger number of new varieties introduced when multinationals have a large initial share.

# **Share of expatriate labor employed by multinational service providers** . The impact

of liberalization of barriers to foreign direct investment in business services on the demand for labor in the business services sectors will depend on the share of expatriate labor used by multinational firms. If multinationals use mostly Russian labor, their expansion is likely to increase the demand for Russian labor in these sectors. We employed the estimates of the share of expatriate labor or specialized technology not available to Russian firms that is used by multinational service providers in Russia provided by the various Russian research institutes mentioned above. Here we estimate the impact of employing the upper or lower bound estimates of this share in all business services sectors.

57
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Policy ReseaRch WoRking PaPeR 4502

# **Abstract**

China has a large deficit of females, and public policies have sought to reduce the son preference that is widely believed to cause this. Recently a study has suggested that up to 75 percent of this deficit is attributable to hepatitis B infection, indicating that immunization programs should form the first plank of policy interventions. However, a large medical dataset from Taiwan (China) shows that hepatitis B infection raises women’s probability of having a son by only 0.25 percent. And demographic data from China show that the only group of women who have elevated probabilities of bearing a son are those who have already borne daughters. This pattern makes it difficult to see how any biological factor can explain a large part of the imbalance in China’s sex ratios at birth—unless it can be shown that it somehow selectively affects those who have borne girls, or causes them to first bear girls and then boys. The Taiwanese data suggest that this is not the case with hepatitis B, since its impact is unaffected by the sex composition of previous births. The data support the cultural, rather than the biological, explanation for the “missing women.” This paper—a product of the Human Development and Public Services Team, Development Research Group—is part of a larger effort in the department to study social institutions and development outcomes. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at mdasgupta@worldbank.org.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
ARGENTINA: SAVING AND INVEZ-MENT, - 1980 **PJ** 1990

**IL**

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De Nicoló and Kwast (2001) assess the direct and indirect interdependencies of large and complex U.S. banking organizations (LCBO) arising from inter-bank on- and off-balance sheet exposures, including linkages through the payment and settlement systems) by considering the correlation of their stock returns. They find that these correlations increased between 1988 and 1999, as did the market share for these LCBOs, interpreting this as evidence for an increase in systemic risk in the U.S. banking system, partly as consequence of consolidation.

A few descriptive studies have compared banking market structures and stability across pairs of countries. Bordo, Redish and Rockoff (1996) observe a greater stability of Canadian banks than of U.S. banks and relate this to the oligopolistic market structure in Canadian banking, compared to the higher degree of competition in U.S. banking. On the other hand, in spite of higher profitability, there are no indications of less competition in the Canadian market. Comparing the UK and German banking systems, Hoggarth, Milne and Wood (1998) find more competition and less stability in the UK; Staikouras and Wood (2000) find more competition and more stability in the Spanish than in the Greek banking system.

Summarizing, there is no clear conclusion from these different empirical studies on the validity of either the competition-stability or the competition-fragility hypotheses. Two conclusions, however, can be drawn. First, a higher degree of market concentration does not necessarily imply less competition. Specifically, testing for the relationship between market structure and stability and for the relationship between competitiveness and stability does not necessarily yield the same results. Second, as predicted by several theoretical studies, there is an important interaction effect between the regulatory and supervisory framework, on the one hand, and market structure and competitiveness, on the other hand, in their effect on banking system stability.

# **4.2 Cross-country studies**

The recent availability of large cross-country time-series datasets has initiated a new wave of literature assessing the validity of the different theoretical models. Beck, Demirguc-Kunt and Levine (2006 a,b) build on the crisis prediction work by DemirgucKunt and Detragiache (1998, 2002) to assess the competition-stability and competition-
thereafter may have included quality differences. In general, spatial variation in the cost of living is unlikely to be accurately measured with data collected for a temporal index, and in this regard the situation in Vietnam was similar to other large developing countries.<sup>10</sup> In light of these concerns, the Prices Department of the General Statistics Office (GSO) introduced a new spatial cost of living index (SCOLI) in 2010, based on a price survey fielded in 1,588 communes (almost one-fifth of the total).<sup>11</sup> Surveying overlapped with the VHLSS, which another GSO department was running in the same communes (and others) at the same time, ensuring that the budget shares needed for the SCOLI relate to the same period as the prices. To maintain consistency over space, the price surveyors were given detailed photographs of each of the sixty-four goods and services that were the specifications to be priced. The surveyors were required to find examples in the market of similar size and quality to what was pictured, weigh them, and record prices per metric unit (unless they were in standard packaging of known weight or were a service). The sampled prices were to be obtained from three different vendors in each locality; this quota was met in almost 90% of the item-market combinations and the price index calculations described below dealt with the remaining cases of missing data.

The price surveying for the SCOLI was repeated in 2012, again in conjunction with the VHLSS but with an expanded scope. Specifically, the number of goods and services to be priced increased to 101, with seven food items and thirty nonfood goods and services added to the basket, and the number of communes surveyed increased to 1,644. The prices in approximately one-half of the communes were surveyed in March and for the other half in September, with the subsamples

> 10. For example, the main spatial deflator used in China, due to Brandt and Holz (2006), was developed from prices collected for the CPI.

> 11. Vietnam’s communes are the lowest level administrative unit, averaging about 10,000 people or 2,500 households.

10
Therefore, the circumstance _J_ -specific share of inequality of opportunity can be given as follows:

# **b) Data, Variable Construction, Identification, and Summary Statistics**

# **Data, Variable Construction, and Identification**

Two data sources are used for the analysis. First, the paper relies on the 2012/13 wave of the nationally representative 1-2-3 Household Survey, which covered all 11 of the provinces into which the Democratic Republic of Congo was divided until 2015. It provides information on individual characteristics (gender, education, occupation, sector of activity, earnings, and so on) and the family background of individuals, such as father’s occupation, sector of activity, and education.

The sample is restricted to working men and women in the 20–64 age-group in urban and rural areas with known sector of employment and positive total monthly labor earnings.<sup>16</sup> In addition, the sample is further restricted to those individuals whose fathers were working when they were 15 years old and who had never migrated outside the country. The latter restriction is added to ensure that the results are not driven by migration effects. This resulted in a final sample of 11,609 individuals of whom 6,561 (5,048) were men (women), and 6,219 (5,390) were living in urban (rural) areas.

Following Cogneau and Mesplé-Somps (2008), information on the occupation and educational attainment of fathers is combined to define four social origins of the individual, as follows: (i) farmers with no education or with primary education, (ii) farmers with secondary or tertiary education, (iii) nonfarmers with no education or with primary education, and (iv) nonfarmers with secondary or tertiary education. The positions of individuals (the sons and daughters) are also defined in the same way as those of the fathers. However, contrary to Cogneau and Mesplé-Somps (2008), the unemployed, students, and retirees are not included because the outcome variable here is the labor earnings of individuals, that is, the sample captures only individuals who, at the time of the survey, reported they were employed.

The second data source is the Polity IV data set measuring the MEPVs in the country. The MEPV variable of interest is the magnitude of all societal MEPVs. This includes episodes of civil and ethnic violence as well warfare involving the country during a year. The scale of the magnitude

> 16 Total labor earnings is defined here as the sum of all income derived from primary and secondary employment and self-employment for individuals. In the construction of the labor earnings aggregates, the bottom 1 percent and top 1 percent were trimmed to correct for outliers.

13
location, and sectoral competition, as mediating factors, which we examine in section 2.2. These factors determine the local firm’s absorptive capacity. Factors at the host-country and institutional level can influence foreign and domestic firm characteristics as well as the transmission channels through which knowledge diffuses from multinational to local firms. Such factors include a country’s income per capita, learning and innovation infrastructure, trade policy, business and investment climate, access to finance, labor market regulations, among others. Their role is discussed in section 2.3.

# **2.1 Factors Influencing a Foreign Firm’s Spillover Potential**

The degree of _foreign ownership_ impacts on local firms’ potential to absorb FDI spillovers. A higher share of foreign ownership, and, thus, larger control over management and lower potential for knowledge leakages, correlates positively with the parent firm’s incentive to transfer knowledge, e.g., in the form of technology which has been confirmed by empirical studies for Greece (Dimelis and Louri 2002) and Indonesia (Taaki 2005). On the other hand, a larger domestic ownership share could also be beneficial for local firms, since the foreign investor’s interests are less-well protected making technology leakages more likely (demonstration effect). A larger domestic participation might further increase the likelihood to rely on domestic suppliers (Crespo and Fontoura 2007). Toth and Semjen (1999) confirm that a larger domestic ownership share led to more inter-sectoral linkages (reported in Crespo and Fontoura 2007).

Empirical studies controlling for different _structures of foreign ownership_ tend to support the the more positive spillover effects of joint ventures. Explanations include the possibility of more vertical linkages as well as stronger technology leakages for partially-owned foreign firms (Javorcik and Spatareanu 2008). For example, Havranek and Irsova (2011) find evidence for lower spillovers in fully-owned foreign affiliates, and Javorcik (2004) and Javorcik and Spatareanu (2008) find a positive vertical spillover effect on domestic firms in supplying industries from multinationals with partial foreign ownership, but not from multinationals with full foreign ownership. Abraham et al. (2010) find for a sample of Chinese manufacturing firms that foreign ownership in a domestic firm’s sector only results in positive horizontal spillovers when foreign ownership is organized as a joint-venture. By contrast, the presence of fully-owned foreign firm is found to have a negative impact on local firms, due to technology intensity of multinationals crowding-out local producers within the same sectors (Abraham et al. 2010).

5
can be re-allocated, and this may well matter as much for men as for women. The adult male in any society requires a certain amount of leisure time. Without electricity, a significant share of that time will no doubt be in daylight hours, in which case it competes with labor supply. With electric light, there can be a substitution of male leisure from daylight hours to night time; for example, instead of sitting with friends at the tea shop or playing a sport during daylight hours, men can sit at home and watch TV in the evening once electricity is available.

There may well be other ways through which household electrification can increase welfare. Health effects may also result as electric lighting reduces the pollution from using candles or kerosene (IEG 2008). Traditional biomass fuels for cooking and kerosene lamps generate indoor air pollution that is a recognized health hazard, with health costs that are disproportionately borne by women and children.<sup>8</sup> While we do not directly examine impacts on health in this paper, this is a further channel whereby electrification can increase schooling, labor supply and consumption.

The implications for household expenditure on energy have also been prominent in the literature, often with claims about benefits from lower energy expenditures due to electrification (see, for example, Mathur and Mathur, 2005, in the context of rural India). However, while a lower price (per unit of energy consumed) can be expected to generate a welfare gain, there can be no presumption that total expenditure on energy provides an inverse welfare indicator. Spending on energy may increase due to electrification, and this can be a good thing.

Substitution amongst energy sources can also be expected. In India there is evidence that the highly subsidized kerosene ration that most households receive is substituted for cooking once electricity is used for lighting (Heltzberg 2004), although kerosene lamps and candles remain a common back-up given erratic electricity supply (Rehman et al., 2005). Such substitution can still entail welfare gains, of course; for example, even kerosene is considered a cleaner fuel for cooking stoves than traditional biomass.

The role of television is not well understood, but may well be more important than past economic analyses have allowed for. Television viewing may improve women’s domestic productivity and welfare through greater knowledge (see, for example, Kohlin et al. 2011; ADB 2010). Research has documented significant effects on fertility from information about modern

> 8 See Dasgupta et al (2006), using data for Bangladesh. Also see Duflo et al. (2008) for a review of the evidence on the health effects of indoor air pollution.

6