rafmacalaba/datause-encoder-data huggingface dataset:
Hamilton (2001). Using nationwide consumption surveys between 1888 and 1994 in the United States, Costa (2001) finds that the CPI underestimated increases in the true cost of living until 1919, but consistently overestimated them thereafter. Hamilton (2001), using a different set of data, the Panel Study of Income Dynamics between 1974 and 1991 in the United States, finds a similar trend. In particular, he estimates the annual CPI upward bias at approximately three percentage points between 1974 and 1981 and slightly less than one percentage points between 1981 and 1991. The results of Costa (2001) and Hamilton (2001) are also broadly consistent with the findings of Boskin et al (1996, 1998), who calculate the contribution of each source of CPI bias and conclude that between 1979 and 1995 the United States CPI exhibited an upward bias of 1.1 percentage points per year.

Since then the Engel curve method has been applied to various other countries. In two papers referring to Canada, Beatty and Larsen (2005) and Brzozowski (2006) find that the Canadian CPI overstated changes in the cost of living among specific demographic groups. Similarly, Barrett and Brzozowski (2010), in a study on the Australian CPI, show there was cumulative upward bias of 34 percent between 1975 and 2003, although the magnitude of the bias varies by household type and time period considered. In New Zealand, Gibson and Scobie (2010) argue that the country’s CPI overestimated inflation by an amount similar to the bias in the United States. In contrast, Larsen (2007), following the same method but using data on Norway in the 1990s, concludes that the CPI understated the increase in the cost of living.

More recently, the application of the Engel curve method has been extended to developing and transitional economies in Asia and Latin America. De Carvalho Filho and Chamon (2012) argue that post-reform growth in real household incomes in Brazil and Mexico was underestimated because the CPI overstated the increase in the cost of living. Gibson, Stillman, and Le (2008) obtain similar results using data from Russia during the transition period between 1992 and 2001. In Indonesia, <mark>Olivia and Gibson (2013) find that t</mark> he CPI bias was negative during the 1997–98 financial crisis, but consistently positive since 2000. In China, Nakamura, Steinsson and Liu (2016) find that official inflation rates show less variability over time than actual inflation rates.

While Engel curve estimates have become a widely used methodology to cross-triangulate official inflation trends, the method is not without limitations. Its major weakness is that any drift in the Engel curve that cannot be explained by the covariates in the regression model is attributed entirely 7
22 Table 2: Voluntary Debt Reduction, Secondary Market Prices and Stock

# Markets in Chile and Mexico

(million **US$)** <!-- Start of picture text --> 1985 1986 1987 1988<br>DES CDC BB DES CDC BB DES CDC BB DES CDC BB<br>Chile I/ 126 115 297 411 832 696 993 1208<br>Mexico 2/ 983 1966 655 3665<br>1985 1986 1987 1988<br>SMP SMI SMP SMI SMP SMI SMP SMI<br>Chile 39.2 66.5 62.9 64.1 95.5 58.1 102.5<br>Mexico 58.0 100.0 53.7 155.0 47.4 75.0<br><!-- End of picture text --> Notation: BB debt buybacks

- SMP average secondary market prices of sovereign debt SMI average deflated level of stock market price index

- Notes: 1/ BB in the case of Chile refers to Chapter 18 operations whereby the private sector officially repurchased its foreign debt. Only US$ 298 million correspond to Central Bank BB.

- 2/ Total DES under the program suspended in April 1988 was US$ 3.6 billion. Lack of data regarding the DES timing led us to prorate between June 1986 and April 1988 the actual volume.
4 How did these growth rates impact on employment? The most important developments were a marked slow-down in employment in agriculture from around 1990 and an acceleration in the rate of growth in job creation in manufacturing, construction and transport and communications. Employment in all non-agricultural sectors grew strongly in the 1990s except government, community and personal services.

Higher rates of employment growth in non-agricultural sectors are consistent with more rapid rates of output expansion in individual sectors after 1987. They are also consistent with the changing structure of manufacturing in favour of labour-intensive sectors such as garments and footwear.

The apparent sharp decline in agricultural employment growth from around 1990 was unexpected, however. The expansion of job opportunities in agriculture was relatively robust at around two per cent per annum in the 1980s, although rates of growth began to decline in the second half of the decade (Table 2).6 The National Labour Force Surveys suggest that growth rates were negative - close to two per cent per annum - from 1989-90. Nearly **half** of all new jobs taken up in non-agricultural sectors in the early 1990s represented a shift in employment away from agriculture.

Even more unexpected, agricultural employment fell absolutely in the Outer Islands as well as on Java from around 1990 (Figure 1). The decline in absolute numbers was slight outside Java - compared with a reported three and a half per cent rate of decline annually on Java from 1989/90.7 But this was a marked turnabout in agricultural labour absorption Outside Java compared with the previous decade.<sup>8</sup> The pattems and possible causes of agricultural employment decline outside Java will be discussed further in the analysis of regional labour market change below.

What were the main features of non-agricultural employment growth on a national scale?. Viewed in historical perspective, a major shift had already occurred the

> 6 It is not appropriate to compare agricultural employment growth rates in the early 1980s with the second half of the decade owing to different procedures adopted for enumerating female unpaid family workers in the agricultural in the 1985 intercensal population survey. Among males, however, there was a noticeable decline in jobs taken up in agriculture in the second half of the decade.

7 The extent of these trends need to be confirmed from further survey since a significant part of the decline occurred in 1994 when one annual National Labour Force Survey was undertaken, in contrast to quarterly surveys conducted in previous years. The quarterly surveys had shown little seasonal variation in agricultural employment for several years. It therefore seems unlikely that seasonal effects alone can account for the sharp decline in 1994.

8 According to the Population Census data, agricultural employment grew by over three per cent per annum in the Outer Islands during the 1980s.
Figure 4: Value of Agriculture in the Sudanese Economy

- (a) Agricultural Exports since 1990

<!-- Start of picture text --> 6<br>Cotton Sesame seed and oil Groundnuts and oil<br>5 Sugar Sorghum Meats<br>Other Agricultural products<br>4<br>3<br>2<br>1<br>0<br>1990 1995 2000 2005 2010 2015<br>(100 millions)<br>constant international US$<br><!-- End of picture text -->

- (b) Agricultural Exports and Oil Production since 1990

<!-- Start of picture text --> Oil production index (2010 = 100)<br>Agriculture export index (2010 = 100) Succession of South Sudan<br>250<br>200<br>150<br>100<br>50<br>0<br>2000 2005 2010 2015<br>Index (2010 = 100)<br><!-- End of picture text --> _Source:_ FAOSTAT 2019<sup>5</sup> and IMF 2018.<sup>6</sup> Agriculture, particularly crop farming, is an important source of livelihood for Sudanese households, particularly in rural areas (Figure 5). In 2014, 40 percent of rural households identified crop farming as their main livelihood. Despite the decrease from 50 percent in 2009, crop farming still represents the most common source of livelihood in rural Sudan. In urban areas, only around 5 percent of households engage in crop farming (which is likely to be peri-urban farming). Around 5 percent of rural households identified animal husbandry as their main source of livelihood. Agriculture’s importance to households in rural Sudan links the study of the rural economy with understanding the agricultural decisions and outcomes of these agrarian households.

> 5 <u>http://www.fao.org/faostat/en/#data.</u>

> 6 <u>https://www.imf.org/en/Data.</u>

5
# **Plc,Planning, and Research**

# **Education and Employment**

Early studies of educational achievement in developing countries emphasized the effects of material inputs (such as textbooks) over teaching practices and classroom organization. Lockheed, Fonacier, and Bianchi examined how five teaching practices affected the achievements of fifth-grade students in the Philippines - and what affected teachers' decisions to use effcctive teaching practices.

With school, teacher, and classroom characteristics held constant, achievement was higher for students whose teachers used three teaching practices that show promise for applications in developing countries because they are effective, low-cost, or cost-effective: a Frequent tests and quizzes.

* Small group instruction, including peer tutoring.

* Teaching through laboratory work, particularly for science.

Group work and testing were twice as effective as laboratory work. Students whose teachers used group work in science scored 40 percent of a standard deviation higher than students whose teachers did not. Frequent testing raised achievement 25 percent of a standard deviation. And laboratory use raised it 15 percent.

Teacher's decisions about whether to test students frequently were unrelated to their prior education or experience. Group work was used more often by younger teachers, suggesting that recent teacher training may have emphasized group work to offset the difficult' of larger classrooms. Teachers who used laboratories also read more about teaching and reported more frequent participation in in-service training. But in general teachers' decisions about teaching practices were unrelated to their prior education - or experience suggesting that school-level management may be more important in encouraging effective teaching than preservice education and training.

[Using two-stage least squares regression techniques, the authors analyzed data from 419 classrooms that participated in the IEA Intemational Science Study.] This paper is a product of the Education and Employment Division, Population and Human Resources Department. Copies are available free from the World Bank, 1818 H Street NW, Washington DC 20433. Please contact Cynthia Cristobal, room S6001, extension 33640.

The PPR Working Paper Series disseminates the findings of work under way in the Bank's Policy, Planning, and Research Complex. An objective of the series is to get these'findings out C" zkly, even if presentations are less than fully polished. The findings, interpretations, and conclusions in these papers do not necessarily represent official policy of the Bank.

Produced at the PPR Dissemination Center
In 2004, each PFA was allowed to offer two different funds. The old fund _(Siefore_ 1) was then allowed to invest up to 20 percent of its assets in foreign fixed-income instruments. The new fund ( _Siefore_ 2) was allowed to invest up to 15 percent of its assets in variable-income instruments, using diversified instruments linked to indexes and with capital protection.<sup>47</sup> Yet, as of December 2006, the asset allocation of the two funds did not differ significantly (Table 14). In 2007, the Mexican pension system was reformed. In order to improve the investment regime of

**Table 14:** Mexico: Portfolio composition of pension funds, by fund and instrument, December 2006

|(percent)|||
|---|---|---|
|**Instrument**|**_Sief_**|**_ore_**|
||**1**|**2**|
|**Fixed-income**|100.0|92.2|
|Public sector|76.3|73.6|
|Financial sector|6.4|4.9|
|Corporate sector<sup>a</sup>|11.2|9.5|
|Foreign sector|6.1|4.2|
|**Variable-income**|--|7.8|
|Domestic||2.0|
|Foreign||5.8|
|**Total assets(LCU million)**|54,106|471,617|

Note:<sup>a</sup> _Afores_ can only invest in private bonds rated A or higher.

Source: Consar.

PFAs, taking into account the lifecycle and risk-profile of affiliates, each _Afore_ has the option of starting up to three new pension funds.<sup>48</sup> These funds are allowed to invest larger shares of their portfolios in variable-income instruments. As of August 2007, nine _Afores_ were offering an additional third fund, which can invest up to 20 percent of its assets in variable-income instruments. Since 2002, the gradual relaxation of quantitative investment limits has been combined with a value at risk measure.

# <u>The Case of Peru</u>

The reform of the Peruvian pension system took place in 1992 and it has also been moving slowly towards a multi-fund regime, initially implemented in 2005. The portfolio of Peruvian pension funds has been more diversified in comparison to other reformed LAC countries, while being consistent with the objectives of a multi-fund scheme. The risk-return decreases from Fund 1 (Capital Preservation Fund) to Fund 2 (Mixed Fund, the old fund) to Fund 3 (Capital Appreciation Fund). Data for 2006 show that the most conservative fund invests more than half of its assets in fixed-income instruments, while the assets of the most aggressive fund are mostly invested in equities (Table 15). But it is important to acknowledge that portfolio composition is related, to some degree, the country’s regulatory framework. In the multi-fund scheme, affiliates younger than 60 years-old can a fund according to their risk-return preferences.<sup>49</sup> Whenever a worker joins the private pension system, his or her employer must name the administrator that will manage the worker’s contributions – as long as the worker, in a 10-day period, informs that he or she wants to remain in or join the public system.

> 47 Capital protection means that pension funds must be invested in zero coupon bonds with no restrictions on maturity together with variable-income instruments in a 1:1 rate. 48 See Table A4 in Appendix 1.

> 49 Workers older than 59 years-old are automatically assigned to Fund 1.

29
**Assessing Economic and Political Impacts of Hydrological Variability on Treaties:** Case Studies on the Zambezi and Mekong Basins 

Brian Blankespoor<sup>1</sup> , Alan Basist<sup>2</sup> , Ariel Dinar<sup>3</sup> , Shlomi Dinar<sup>4</sup>

**Key words** : runoff; remote sensing; surface wetness, hydrological variability; international relations; international river basins; Mekong; Zambezi

**JEL classification:** C53, F51, F53, Q54 **World Bank Sector:** ENV

 We acknowledge the Global Runoff Data Center for providing us with runoff data. This paper was funded in its initial stages by the World Bank Knowledge for Change Project (KCP). We also thank our respective institutions for their support: Weather Predict, the Water Science and Policy Center at University of California Riverside, Florida International University, and World Bank Research Group. Shlomi Dinar would also like to acknowledge a grant from the Smith Richardson Foundation that aided with research that is used in this report. The views expressed in this paper are those of the authors and should not be attributed to their respective institutions.

- 1 Development Research Group, World Bank

- 2 Weather Predict Consulting, North Carolina

- 3 University of California, Riverside, California

- 4 Florida International University, Miami, Florida
Policy Research Working Paper 5254

# **Abstract**

Many highly-disaggregated cross-country indicators of institutional quality and the business environment have been developed in recent years. The promise of these indicators is that they can be used to identify specific reform priorities that policymakers and aid donors can target in their efforts to improve institutional and regulatory quality outcomes. Doing so however requires evidence on the partial effects of these many very detailed variables on outcomes of interest, for example, investor perceptions of corruption or the quality of the regulatory environment. The analysis in this paper uses Bayesian Model Averaging (BMA) to systematically document the partial correlations between disaggregated indicators and several closely-related outcome variables of interest using two leading datasets: the Global Integrity Index and the Doing Business indicators. The authors find major instability across outcomes and across levels of disaggregation in the set of indicators identified by BMA as important determinants of outcomes. Disaggregated indicators that are important determinants of one outcome are on average not important determinants of other very similar outcomes. And for a given outcome variable, indicators that are important at one level of disaggregation are on average not important at other levels of disaggregation. These findings illustrate the difficulties in using highly-disaggregated indicators to identify reform priorities.

This paper—a product of the Macroeconomics and Growth Team, Development Research Group—is part of a larger effort in the department to study the causes and consequences of governance. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at akraay@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
rate will actually *Uoori-t **the** real **exchnge rate,** rather than achieving the desired deproeciatLon. Equivalenco with exchange rate changes is broken **as** long * prices are flexible, since a depreciation of the comercial rate does not alter the wedge _(if_ any) between international and dometic prices of traded goods and thus **does** not **increase** incentivex for illegal trade. Soction 4 deals with custoos fraud, which does not **use real** resources but affects the real ezchange rate through its effect on the relative price of tradod goods. We show that a rise in **the** UTCS rate **_raises_ the** tax/subsidyinclusive terms of trade, leading to a reallocation of resources towarLs exportables and a rise in the price of nontradeables relative to iuportables. Section 5 givoe a briof discussion of the role that devaluations and UTCS schemes can play in alleviating transitional unemployment after a contractionary economic shock. Section 6 concludes the paper.

1. A Two-Period Model As in Adams and Greenwood (1985), the reprosentative consumr maximizes

# - (1) U(.) U(c 1 ) + U(C2)

where ct is consumption of an imported good, ubject to the intertemporal budget constraint. Financial welth can bo hold in the form of domestic monty or interest-bearing foreign nominal bonds. Domestic noney is held to economize on transactions costs; if **real** income and money balances In terms of imports are Yt and at then transactions costs are v(mt/yt)yt, **where** v<sup>1</sup> s 0, v " > 0, and v e [0,11. A proportion v(.) of output is therefore lost due to 3
- 12 -

projects—particularly large-scale national projects—are different and unique. To compromise this problem, three main infrastructure sectors are selected in this paper: roads, electricity, and water and sanitation. Our sample data partly overlap with my previous work, which cover large ODA projects assisted by the Japanese Government. But the more detailed contract-specific information has been added. The current paper also uses a new dataset on broadly similar infrastructure projects financed by the World Bank.

As expected, our sample reveals that the degree of procurement competition appears to differ among sectors (Figure 7). In road procurements, one can expect a number of competitors per auction—averaging 6.1 firms. The probability of attracting more than six firms to competitive bidding is considerable. By contrast, competition seems much limited in the other two sectors. It is consistent with the above PPP contract cases. In the water and sewage sector, the average number of bidders per auction is 6.2, but the distribution highly concentrates on _N_ = 3 ; the median is 4. In the electricity sector, most auctions have attracted two or three firms. Formally, the extent to which competition takes effect is lowest in this area. The skewness is estimated at 2.02, which is higher than 0.63 in the water sector.

The above is naturally followed by the question of how many bidders are required to enhance auction efficiency in each of the infrastructure sectors. It seems that in electricity projects one cannot expect the same level of competition as road procurements. In addition, it is also debatable whether the current level of competition in the electricity sector is really sufficient to maximize the competition effect. If not, what can we do? The following sections address these questions by estimating an equilibrium bid function.
Policy Research Working Paper 5170

# **Abstract**

This paper uses municipality level data to estimate the general relationship between climate, income, and life expectancy in Chile. The analysis finds that incomes are negatively related to temperature, while life expectancy is not significantly related to average temperatures. Both incomes and life expectancy are greater in areas with either very little rain or a lot of rain. The authors use the estimated relationships to simulate the effects of both past (1958–08) and future (2008–58) climate change. The findings indicate that past climate change has been favorable for the central, and most populous, part of Chile, and it has contributed to reduced poverty and reduced inequality of health outcomes.

Whereas temperatures in the past have shown a downward trend for most of the Chilean population, climate models suggest that they will increase in the future, and that there will be a reduction in precipitation in the central part of Chile. The analysis simulates the likely effects of these projected climate changes over the next 50 years. The findings suggest that expected future climate will tend to reduce incomes across the whole country, with an average reduction of about 7 percent, all other things equal.

This paper—a product of the Social Development Division, Sustainable Development Department—is part of a larger effort in the department to reduce poverty and vulnerability to climate change. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at dverner@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