WHAT HAVE WE LEARNED FROM THREE DECADES OF RESEARCH ON THE PRODUCTIVITY OF PUBLIC CAPITAL?

The last three decades have witnessed a great deal of research effort devoted to measuring the private output elasticity of public capital. The wide range of available estimates have precluded any consensus so far, however. This paper reconciles the empirical findings of the literature by quantitatively analyzing a sample of 578 estimates collected from 68 studies for the 1983–2008 period. Using meta‐regression analysis, we show how study design characteristics and publication bias can explain a large fraction of the variation across estimates. We find a short‐run output elasticity of public capital supplied at the central government level of 0.083, which increases to 0.122 in the long run. If, in addition, only core infrastructure at a regional/local level of government is considered, these estimates are almost doubled. The average output elasticity of public capital amounts to 0.106. Our results suggest that public capital is undersupplied in OECD economies.     

A Meta‐Analysis of the Effect of Common Currencies on International Trade*

Abstract. Thirty‐four recent studies have investigated the effect of currency union on trade, resulting in 754 point estimates of this effect. This paper uses meta‐analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects. The hypothesis that there is no effect of currency union on trade is easily and robustly rejected at standard significance levels. Combining these estimates implies that a currency union increases bilateral trade by between 30 and 90%. Although there is evidence of publication selection, there is also evidence of a genuine positive trade effect beyond publication bias.     

BANK COMPETITION AND FINANCIAL STABILITY: MUCH ADO ABOUT NOTHING?

The theoretical literature gives conflicting predictions on how bank competition should affect financial stability, and dozens of researchers have attempted to evaluate the relationship empirically. We collect 598 estimates of the competition‐stability nexus reported in 31 studies and analyse the literature using meta‐analysis methods. We control for 35 aspects of study design and employ Bayesian model averaging to tackle the resulting model uncertainty. Our findings suggest that the definition of financial stability and bank competition used by researchers influences their results in a systematic way. The choice of data, estimation methodology, and control variables also affects the reported coefficient. We find evidence for moderate publication bias. Taken together, the estimates reported in the literature suggest little interplay between competition and stability, even when corrected for publication bias and potential misspecifications.     

DOES EDUCATION REALLY IMPROVE HEALTH? A META‐ANALYSIS

While numerous studies assess the relationship between education and health, no consensus has been reached on whether education really improves health. We perform a meta‐analysis of 4866 estimates gleaned from 99 published studies that examine the health effects of education. We find that the current literature suffers from moderate publication bias towards the positive effects of education on health. After correcting for publication bias with an array of sophisticated methods, we find that the overall effect size is practically zero, indicating that education generates no discernible benefits to health. The heterogeneity analysis by Bayesian Model Averaging (BMA) and Frequentist Model Averaging (FMA) reveals that the reported estimates can be largely explained by whether the econometric models control for endogeneity of education, the types of data and the differences in health measurements. Our results also suggest that education may not be an effective policy option for promoting population health.     

ARE ALL ECONOMIC FACTS GREATLY EXAGGERATED? THEORY COMPETITION AND SELECTIVITY

Abstract ..There is growing concern and mounting evidence of selectivity in empirical economics. Most empirical economic literatures have a truncated distribution of results. The aim of this paper is to explore the link between publication selectivity and theory contests. This link is confirmed through the analysis of 87 distinct empirical economics literatures, involving more than three and a half thousand separate empirical studies, using objective measures of both selectivity and contests. Our meta–meta‐analysis shows that publication selection is widespread, but not universal. It distorts scientific inference with potentially adverse effects on policy making, but competition and debate between rival theories reduces this selectivity and thereby improves economic inference.     

META‐ANALYSIS OF ECONOMICS RESEARCH REPORTING GUIDELINES

Meta‐regression analysis (MRA) can provide objective and comprehensive summaries of economics research. Their use has grown rapidly over the last few decades. To improve transparency and to raise the quality of MRA, the meta‐analysis of economics research‐network (MAER‐Net) has created the below reporting guidelines. Future meta‐analyses in economics will be expected to follow these guidelines or give valid reasons why a meta‐analysis must deviate from them.     

THE DEMAND FOR BEER,WINE AND SPIRITS: A SURVEY OF THE LITERATURE

Abstract The demand for alcohol literature is vast and much conflicting information about the nature of the demand for alcoholic beverages has been published. This paper presents a survey of the literature, and then uses the technique of meta‐regression analysis to establish insights into the nature of the demand for beer, wine and spirits. Unlike previous meta‐studies of the demand for alcoholic beverages this study adjusts for the precision of each elasticity estimate. The analysis presented suggests reported elasticity estimates will be influenced by such factors as estimation technique, data frequency and time period under consideration. With respect to time, the findings suggest that the demand for alcoholic beverages has become less inelastic since the mid‐1950s and that the income elasticity has been falling since the mid‐1960s. The analysis also found support for the idea that alcohol as a commodity group is a necessity, and that consumers respond to price discounting with inventory behaviour rather than true substitution behaviour. Little support is found for the idea that the demand for alcoholic beverages varies fundamentally across most countries, although wine may be an exception.     

ALCOHOL CONSUMPTION AND HUMAN CAPITAL: A RETROSPECTIVE STUDY OF THE LITERATURE

Abstract Grossman proposed an individual's health can be viewed as one aspect of their human capital. Following this line of thought a number of recent papers have reported a positive impact of alcohol consumption on earnings. The rationale for the existence of such a relationship is the positive impact of alcohol on physical and mental health. We conduct a meta‐analysis to determine whether such factors as: the estimation technique, the presence of ex‐drinkers in the sample, possible sample selection bias and publication bias may all contribute to these findings. An additional suggestion for the positive relationship between alcohol and wages is the presence of a common set of personality traits that determines drinking behaviour and also leads to higher earnings. We examine this relationship by reviewing the literature that investigates if the personality influencing aspects of alcohol consumption influences measures of human capital. We also survey the significant body of research that has examined how alcohol consumption has been found to influence educational outcomes and the work force participation of problem drinkers.     

The Income Elasticity of Money Demand: A Meta‐Analysis of Empirical Results*

Abstract. In this paper, we use meta‐analytic methods to investigate possible sources for the large variation in empirical findings about the income elasticity of money demand. Our results suggest that the broadness of the monetary aggregate, the inclusion of wealth and the consideration of financial innovation exert a significant influence on estimated income elasticities. Furthermore, we find substantial cross‐country differences, in particular between the US and other countries. These differences can, to some extent, be explained by the macrofeconomic environment and the dissemination of payment cards.     

FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH: A META‐ANALYSIS

We analyze 1334 estimates from 67 studies that examine the effect of financial development on economic growth. Taken together, the studies imply a positive and statistically significant effect, but the individual estimates vary widely. We find that both research design and heterogeneity in the underlying effect play a role in explaining the differences in results. Studies that do not address endogeneity tend to overstate the effect of finance on growth. While the effect seems to be weaker in less developed countries, the effect decreases worldwide after the 1980s. Our results also suggest that stock markets support faster economic growth than other financial intermediaries.     

INFLATION AND CENTRAL BANK INDEPENDENCE: A META‐REGRESSION ANALYSIS

Abstract Using 59 studies, we perform a meta‐regression analysis of studies examining the relationship between inflation and central bank independence (CBI). The studies considered are very different with respect to the CBI indicator used, the sample of countries and time periods covered, model specification, estimators used and publication outlet. We conclude that there is a significant publication bias. However, we also find a significant genuine effect of CBI on inflation. Differences between studies are not caused by differences in CBI indicators used.     

POLITICAL BUDGET CYCLES: MANIPULATION BY LEADERS VERSUS MANIPULATION BY RESEARCHERS? EVIDENCE FROM A META‐REGRESSION ANALYSIS

Despite a long history of research on political budget cycles, their existence and magnitude are still in question. By conducting a systematic analysis of the existing literature, we intend to clarify the debate. Based on data collected from 1037 regressions in 46 studies, our meta‐analysis suggests that little, if any, systematic evidence can be found in the research record that national leaders do manipulate fiscal tools in order to be reelected. However, it is much more clear that researchers selectively report that national leaders do manipulate fiscal tools in order to be reelected. The publication selection bias highlighted has nonetheless been reduced during the past 25 years of research. We also show that the incumbents' strategies differ depending on which tools they use. Finally, the nature and quality of political institutions appear to be the factors which most affect the political budget cycles.     

WHICH FISCAL MULTIPLIERS ARE REGIME‐DEPENDENT? A META‐REGRESSION ANALYSIS

We analyse whether estimated multiplier effects are systematically higher if the economy suffers a downturn. For that purpose, we conduct a meta‐regression analysis on a unique data set of 98 empirical studies with more than 1800 observations on multiplier effects and control for regime‐dependence of the multiplier. We find that spending multipliers are much higher (by about 0.7–0.9 units) during a downturn. Tax multipliers are not sensitive to the economic regime, and generally lower than spending multipliers. Finally, for all spending categories other than government consumption, the multiplier significantly exceeds one during downturns.