An Eclectic Approach to Estimating the Determinants of Achievement in Jamaican Primary Education

This article estimates the determinants of cognitive skillsin Jamaican primary education. We take an eclectic approach,integrating the production function framework favored by economistswith the concerns of educators about pedagogical processes andthose of sociologists regarding school organization and management.At the same time, we correct for selectivity biases inducedby school choice. We use an unusually rich data set, the 1990Jamaican Survey of Living Conditions, which includes not onlyscores on cognitive achievement tests but also detailed informationon each child's household and the primary school he or she attends.We find that all three components—physical and pedagogicalinputs, pedagogical practices, and school organization and climate—influence student achievement. Our policy simulations suggestthat a focus on inputs alone may be misplaced in school systemswith input levels as high as those found in Jamaica; schoolreforms that concentrate on just a few pedagogical practicescould lead to substantial improvements in student achievement.     

On measuring the benefits of lower transport costs

Despite large amounts invested in rural roads in developing countries, little is known about their benefits. This paper derives an expression for the willingness-to-pay for a reduction in transport costs from the canonical agricultural household model and uses it to estimate the benefits of a hypothetical road project. Estimation is based on novel cross-sectional data collected in a small region of Madagascar with enormous, yet plausibly exogenous, variation in transport cost. A road that essentially eliminated transport costs in the study area would boost the incomes of the remotest households – those facing transport costs of about $75/ton – by nearly half, mostly by raising non-farm earnings. This benefit estimate is contrasted to one based on a hedonic approach.     

A Generalized Earnings‐Based Stock Valuation Model with Learning

We present a stock valuation model in an incomplete‐information environment in which the unobservable mean of earnings growth rate (MEGR) is learned and price is updated continuously. We calibrate our model to a market portfolio to empirically evaluate its performance. Of the 8.84% total risk premium we estimate, the earnings growth premium is 4.57%, the short‐rate risk contributes 3.38%, and the learning‐induced risk premium on the unknown MEGR is 0.89% (a nontrivial 10% of the total risk premium). This result highlights the significant learning effect on valuation, implying an additional risk premium in an incomplete‐information environment.     

Incentives,supervision, and sharecropper productivity

Though sharecropping remains widespread, its determinants are still poorly understood and the debate over the extent of moral hazard is far from settled. We address both issues by analyzing the role of landlord supervision. When landlords vary in their cost of supervision, otherwise identical share-tenants can have different productivity. Unique data on monitoring frequency collected from share-tenants in rural Pakistan confirms that, controlling for selection, ‘supervised’ tenants are significantly more productive than ‘unsupervised’ ones. Also, landlords' decisions regarding monitoring and incentives offered to tenants depend importantly on the cost of supervision.