Estimation of Discrete Choice Dynamic Programming Models

This study reviews estimation methods for the infinite horizon discrete choice dynamic programming models and conducts Monte Carlo experiments. We consider: the maximum likelihood estimator (MLE), the two‐step conditional choice probabilities estimator, sequential estimators based on policy iterations mapping under finite dependence, and sequential estimators based on value iteration mappings. Our simulation result shows that the estimation performance of the sequential estimators based on policy iterations and value iteration mappings is largely comparable to the MLE, while they achieve substantial computation gains over the MLE by a factor of 100 for a model with a moderately large state space.     

Consumption,housing collateral and the Canadian business cycle

How important are collateral constraints for reproducing salient features of the data? To address this question, we estimate two nested versions of a New Keynesian model: one with collateralized household debt and the frictionless version of the same model. Both versions of the model are fit to Canadian data using Bayesian methods. We argue that the presence of collateral constraints improves the performance of the model in terms of overall goodness of fit. Housing collateral helps to generate a positive correlation between consumption and house prices. Moreover, housing collateral induced spillovers boosted consumption growth during the housing market boom‐bust cycles of the late 1980s and early 2000s.     

A Taxi Zoning Analysis Using Large-Scale Probe Data: A Case Study for Metropolitan Bangkok

Taxis are considered one of the most convenient means of transportation, especially when people have to travel off-route, where public transportation is not a feasible option, and also when they need to reach a destination according to what is most convenient for them. However, many issues exist about taxi services, such as the problems of passengers who are unable to get taxi service at the location of their choice, or problems concerning when they need the taxi service to arrive. These problems may be due to the unavailability of the taxi at that particular location or due to the taxi driver not wanting to provide service. A taxi driver may not want to provide service to a potential passenger, because they may have preferences on the direction and areas they want to go or because of the different types of service zoning. Understanding the behaviors of taxi drivers and the characteristics of the trip/travel might be helpful to solving such issues. In this study, we conducted an analysis from a questionnaire survey and large-scale taxi probe data to understand taxi service behavior, travel characteristics, and to discover taxi service zoning characteristics. As a result, four types of taxi service zones including isolated zones, interactive zones, special service zones, and target zones were encountered. Travel characteristics were calculated and analyzed at different criteria, such as weekdays, weekends, and various time windows in a single day. The result of these characteristics was explained according to their similarities and dissimilarities in each type of zone. The discovery of the different zones and their respective definitions might be a good initiative for further development of a policy for taxi drivers to provide better service for passengers.     

Do TV-aided model lessons in class improve student performance? Evidence from public primary schools in Papua New Guinea

Lack of access to high-quality education remains a serious concern in many developing countries. This is especially the case for rural areas, including islands suffering from a shortage of skilled teachers and sufficient educational equipment. We examine the impact of introducing TV-aided model lessons in class to enhance the quality of teaching (the EQUITV project) on the national examination test scores of Mathematics and “Combined Subject” (a comprehensive subject comprising 30% science and 70% social studies and other topics) as well as English in the final year of primary education in Papua New Guinea. We employ a panel event study to capture the different timings of the intervention across schools over multiple time periods. We find that the project significantly and robustly improved test scores for girls only in English 3 years after the introduction of the project, but no improvement was seen for boys.     

On the inclusiveness of rural road improvement: Evidence from Morocco

This paper explores the heterogeneous impact of a rural road improvement project on the economic activities and living standards of households in Morocco. Road pavement improvements are expected to promote better market access, encourage the transformation of traditional agricultural activities, and create opportunities for new economic activities. However, benefits may not extend evenly across different groups, and the distributional consequences call for careful empirical investigation. We employ a difference-in-differences (DID) estimation using a household-level panel dataset collected under a quasi-experimental setting in the 2010s. We classify households into three groups based on asset holdings (rich, middle, and poor). We provide several new findings. First, there was no significant transformation of agricultural production or sales for all groups. Second, rich households increased hired agricultural labor and began paid employment while middle households started new family businesses. Poor households, however, did not enjoy these new employment opportunities except for a marginal increase in family businesses. Third, due to shifts in employment, the rural road renewal project improved household consumption 3%–4% annually for rich and middle households, an impact not clearly seen among poor households. Thus, our findings show that the economic benefits of rural road improvement might not be well-inclusive.     

Solar-powered cold-storage and agrifood market modernization in Nigeria

Modern cooling technologies that utilize renewable energy sources have been increasingly recognized as promising tools to address various challenges emerging in progressively complex agrifood systems in developing countries. Knowledge gaps about the actual impacts of these technologies in developing countries remain, especially in Africa south of the Sahara (SSA). This study fills this knowledge gap by providing evidence from the evaluation of recent interventions in northeast Nigeria in which seven small solar-powered cold storages were installed across seven horticulture markets. Combinations of difference-in-difference (DID) and variants of propensity-score-based methods suggest that cold storage significantly increased horticulture sales volumes and revenues of market agents. Back-of-the-envelope calculations indicate that increased net revenues for market agents may be sufficiently large to recoup cold storage investments and operating costs within a reasonable time frame. Using cold storage also reduced the share of food loss. It lengthened the products' shelf-life while raising prices received by market agents and farmers, which were associated with improved product quality, expanded value-adding activities by market agents, and increased use of advance payments.     

Inheriting the DNA of emergingness: Strategies of advanced market firms under emerging market ownership

Despite growing concerns about emerging market firms (EMFs)' acquisitions in advanced markets, the influences of emerging market ownership on advanced market firms (AMFs) as targets remain largely underexplored. This study aims to conceptually advance our understanding of the environmental adaptation strategies of AMFs under emerging market ownership, focusing on the strategic implications of the “emergingness” encapsulated in the resource transfer from EMF acquirers to AMF targets. Drawing on the institution-based view and resource-based view, this conceptual piece develops an Institution-Resource-Strategy framework and proposes two types of strategies for AMFs under emerging market ownership, namely arbitrage and avoidance, each comprising three varying tactics. We illustrate our propositions using three cases of Japanese firms under Chinese ownership. This study adds to the literature on internationalizing EMFs, the institution-based view of global strategies, and cross-border mergers and acquisitions and offers managerial implications for emerging and advanced market stakeholders.     

Effects of COVID-19 restrictions on mechanization service providers and mechanization equipment retailers: Insights from phone surveys in Myanmar

Agrifood sector mechanization service providers (MSP) and mechanization equipment retailers (MER) have increasingly become the providers of mechanical technologies for smallholders in developing countries, including Myanmar. Evidence remains scarce on the effects of COVID-19 on these MSPs and MERs. This study provides insights into the effects of COVID-19 restrictions on MSPs and MERs in Myanmar, using unbalanced panel data from five rounds of phone surveys. Direct responses to COVID-19 involving movement restrictions, market disruptions, and growing financial challenges had significant negative effects on revenue prospects, service delivery, and sales of machines and equipment. Negative revenue prospects during a particular period can further hurt revenue prospects in subsequent periods. This is consistent with the hypotheses that MSPs who had incurred high sunk costs in machines can engage in more desperate and, thus, potentially suboptimal business practices to recover the sunk cost. Overall, policies to minimize movement restrictions and various financial struggles and mitigate any pessimism at the beginning of the production season are all important to make sure MSPs and MERs continue to function effectively under COVID-19.