7/8/08

May's American Economic Review.   Papers from the January 2008 meetings contain a lot of things relevant to AREC 365.

 

(1)  Institutions and economic development.  Easterly:  "After all this research and experience [showing formal land titling was frequently ineffective], the aid donors today remain stuck on some kind of idealized comprehensive (top down) government reform that would somehow make formal registration of land titles 'optimal.'"   Rodik:  "Yet this literature [suggesting that appropriate institutional arrangments in one country may be inappropriate in another country] appears to have had very little impact on operational practices. The type of institutional reform promoted by multilateral organizations such as the World Bank, the IMF or the ...WTO is heavily biased toward a best-practice model."

 

(2)  Height, Health and Economic Development.  Case and Paxson:  "[T]he advantages offered by a healthier early life environment—as measured by height—follow adults into old age. We use several waves of data from the Health and Retirement Study (HRS) to document the extent to which height is associated with more favorable outcomes for individuals above the age of 50. We find that taller men and women have greater cognitive function, measured on a wide variety of dimensions."    Deaton fails to find a consistent link between distribution of income and distribution of height   "Indeed, even the link between mean height and income is far from established (see particularly the analysis of global heights and income in Deaton 2007) where there is no relationship between mean height of women and GDP in the year of birth across poor countries in Asia, Africa, and Latin America."  Peracchi looks at the relationship between income and height in Italy.

 

(3)  Psychology and Development.  Duflo, Kremer, and Robinson :  "Many countries have withdrawn or scaled back fertilizer subsidies, in part because of fiscal constraints, corruption, and inefficiency in the administration of fertilizer subsidies, but also because of a belief among economists that farmers would choose to use inputs that actually raised profits in real-world conditions. ...  Behavioral economists have identified major departures from economists’ standard models ...However, it is still unclear whether these departures have any major impact on production. Fertilizer offers an attractive context to explore this question.  In this paper, we use a series of field trials on Kenyan farms to explore the most natural hypothesis: the possibility that, while fertilizer and hybrid seed increase yield on model farms, they are actually not profitable on many small farms, where conditions are less than optimal. Our mean estimates of yield increases due to fertilizer use are in the range of the estimates found on model farms. We find that the mean rate of return to using the most profitable quantity of fertilizer we examined was 36 percent over a season, or 69.5 percent on an annualized basis. However, other levels of fertilizer use, including the combination of fertilizer plus hybrid seed recommended by the Ministry of Agriculture, are not profitable for farmers in our sample."   Banerjee and Mullainathan "Economists have long been interested in the idea that there is a direct circular relation between poverty and low productivity, and not just one that is mediated by market failures, usually in asset markets. The nutrition-based efficiency wage model (Partha Dasgupta and Debraj Ray, 1987) is the canonical example of models where this happens: However it has been variously suggested (see for example T. N. Srinivasan 1994) that the link from nutrition to productivity, and especially the link from productivity to nutrition, is too weak to be any more than a small part of the story. Dasgupta himself acknowledges this when he writes that the “nutrition-productivity construct provides a metaphor … for … an economic environment harboring poverty traps” (Dasgupta 1997, 5)."

posted July 8, 2008 at 8:20 p.m.

 

A "Controlled Experiment" in Famine.  At the end of WWII, Nazi-occupied Netherlands experienced severe food shortages (the hongerwinter, or "hunger winter"), with average food intake estimated at 1000 calories per person per day, and some with diets as low as 400-800 calories per day.   The famine was short-lived, lasting only a few months in late 1944 and early 1945, and ending abruptly with the Allied victories in May 1945.   This situation, and the existence of precise birth records, created an unplanned "controlled experiment" by which children born, or in-utero during the famine could be compared to children born before and after the famine.    The study of the Dutch Famine Birth Cohort has generated a number of studies that identify the impacts of maternal undernutrition on unborn children.

posted July 8, 2008 at 9:00 a.m.