We investigate peer correlations in income using a novel panel of data from a village in China. We construct a complete and heterogeneous social connections (guanxi) network that includes all ...households, and use spatial-network econometric models to estimate peer correlations. The results provide unique empirical evidence for the existence of a peer correlation in income, even after netting out influences of family characteristics, contextual effects, and various unobservable factors. We identify peer effects in land and labor allocations as the drivers of peer correlations in income.
•We investigate peer correlations in income in a rural Chinese village.•Our data is a complete, heterogeneous network of household interactions.•A network interactions model identifies peer correlations and effects.•Peer effects in land and labor allocation drives peer correlations in income.
Recent trends in the frequency and intensity of extreme weather events have raised the concern that climate change could increase flooding risks and property damage. However, a major challenge in ...attributing and projecting changes in disaster risk is that damage is influenced not only by the physical climate hazard, but also by non-climatic factors that shape exposure and vulnerability. Recent assessments of integrated disaster risk have been hampered by the paucity of literature analyzing local-scale interactions between hazard, exposure and vulnerability in the historical record. Here we develop an integrated empirical analysis of historical flood damage that emphasizes spatial and temporal heterogeneity in flood hazard, economic exposure and social vulnerability. Using the Midwestern United States as a testbed, we show that annual property damage from flooding is projected to increase by 13 to 17.4 % over the next two decades. At the state level, over half of the increase is driven by projected growth in housing units. However, at the county level, the dominant factor causing future damage varies, emphasizing the value of a fully integrated, spatially and temporally resolved approach to assessing flooding risk and control strategies.
We analyze whether third‐party certification has been successful in improving the performance of voluntary pollution abatement in the Responsible Care (RC) program which made certification mandatory ...from 2005 onward. We use facility‐level panel data from 821 plants between 1996 and 2010, and exploit the change in the program requirements to estimate the causal impact of third‐party certification on participating facility emissions compared to non‐RC plants in the U.S. chemical industry. We address endogenous selection into RC via instrumental variables, and explore heterogeneity in the treatment effect. We find that, on average, there is no statistically discernible effect of third‐party certification on facility emissions, and that this result is robust to a variety of models that correspond to different assumptions related to identification. (JEL Q53, Q58, L60)
The flow of foreign direct investment (FDI) has increased the challenges governments face in carrying out their fiscal responsibilities. A country's system of law and order enables or constrains the ...implementation of government policies, and consequently influences whether the size of government responds to changes in FDI inflows and outflows. We test this hypothesis by fitting a semiparametric model of government consumption to a panel of developed and developing countries with within-country variation. Over a short data frequency, the average compensating response of governments in developing countries to an increase in FDI inflows is larger by a factor of five than that of developed countries. These significant level effects of FDI inflows are driven by law and order and are adjusted for differences in per capita income across countries. The larger the compensating response of a government, the bigger is the constraining effect of a stronger system of law and order. The efficiency hypothesis seems empirically valid for developing countries with a moderate system of law and order. Over a long data frequency, we find a strong (negative) link between FDI inflows and government consumption, and increases in law and order weaken this link. For both data frequencies, FDI outflows have no level effect on government consumption, whereas the empirical regularity of strong and robust inertia in government consumption exists in all countries.
In a recent article, Santeramo and Searle (2019: Henceforth San-Sea) argued that the linkages between the soy oil and palm oil markets and their land use consequences could negatively affect the ...climate performance of the US Renewable Fuel Standard (RFS) and California's Low Fuel Standard. To support their arguments, San-Sea estimated the own and cross-price elasticities for supplies of soy and palm oils in the US. These authors refer to a valid point that induced land use changes may negatively impact emissions savings due to biofuels. However, their estimated elasticities provide no new insight on this issue. In addition, their approach, findings, analysis, and conclusion are subject to several deficiencies and limitations. These authors provide no new evidence for the link between biofuel production and land use change due to substitution among vegetable oils. In what follows, we reflect on some important facts and concerns.
Although public interest in sustainable and safer products have steadily risen worldwide, research has shown a difference between consumer’s willingness to purchase, and actual purchasing behavior, ...for which two main explanations exist, including a lack of accessibility and a poor knowledge of related attributes. Fortunately, the emergence of online food markets may improve this situation through convenient accessibility to sustainable food and detailed description about sustainability labels. This research uses a hedonic price analysis to compare the price premiums for the sustainability attribute in Chinese online and offline markets, using edible oil as a case. The specific objective is to test the different values of a sustainable attribute, a green food label, in two types of markets. Results show that the green food attribute could gain a price premium in the online market but not in the offline market, indicating the importance of the online channel for sustainable food sale in China. A big price mechanism difference between online and offline markets is also found, with regard to attributes of production method, variety, place of origin, packaging, and discount. These results provide a guide for firms’ pricing strategies in online and offline markets.
...when I applied the checklist for Meta-analysis of Observational Studies in Epidemiology,3 I found that 13 of the list's 33 elements were not reported adequately in this article (checklist ...available on request).
We develop a class of difference-in-differences regression models for the case of multiple transportation interventions that may occur sequentially over time and may generate causal spillover effects ...within a spatial system. We show how these models can be estimated using tools from spatial econometrics, and further extend the models to a system of seemingly unrelated outcomes such that there may be spatial correlation in the error terms. These models facilitate estimation of direct, indirect, and total average causal effects, as well as individual and cumulative effects of transportation interventions that partially overlap in space. Such estimates can assist policymakers in assessing potentially reinforcing effects originating from multiple transportation interventions located in close proximity. We develop an empirical example of our models to evaluate spatiotemporal socioeconomic impacts of the original and expanded light rail system in Denver, CO.
We investigate the circumstances under which socially responsible investing (SRI) enhances firm long-term financial performance, and therefore provides incentives for firms to self-regulate their ...environmental performance. Aggregating portfolios across SRI mutual funds, we estimate the effect of SRI investment with environmental screening criteria on firm cost of equity capital. We find that accounting for interactions between firm and non-shareholder stakeholders, and potential agency costs associated with certain environmental activities of the firm, SRI can facilitate the alignment of firms' environmental and financial goals. We also find that an industry group's environmental performance and diversity influence the extent to which a firm in that group can benefit from SRI investment.
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