Empirical Economics

Costa-Font, Joan; Györi, Mario

doi: 10.1007/s00181-022-02312-7pmid: N/A

We examine the impact of an income windfall (from a lottery win) on an individual's overweight and Body Mass Index (BMI). We use longitudinal data from the United Kingdom, where a large proportion of the population plays the lottery, and retrieve income effect estimates using time and individual specific fixed effects alongside a set of relevant controls. Although our findings suggest any income windfall may lead to a contemporaneous increase in overweight, we document evidence that a £1,000 win reduces the probability of overweight in the range by up to 3 percentual points 12 months after the lottery win. Estimates are heterogeneous across working hours and educational attainment. A £1000 lottery win reduces the risk of overweight among low educated individuals by 4.5–5 percentual points (pp)12 months after the lottery win.

Awaworyi Churchill, Sefa; Inekwe, John; Ivanovski, Kris

doi: 10.1007/s00181-022-02319-0pmid: 36311971

The outbreak of COVID-19 has induced economic and financial disruptions to global economies, consistent with those experienced during previous episodes of economic or financial crises. This study offers a critical perspective into the spread of the virus by investigating the convergence patterns of COVID-19 across 155 countries from March 2020 to August 2021. The club clustering algorithm is used to verify the convergence patterns of infection and death rates in these countries. The findings show that full panel convergence cannot be achieved indicating the presence of sub-convergent clusters. Cluster formation for death rates includes the Americas, Africa, the Middle East, and Asia, among others. To understand the factors driving these results, we analyse the determinants of the convergence process of COVID-19. The probability of belonging to a cluster with higher death intensity increases with being above the age of 65, poverty, and for female smokers while handwashing shows beneficial effect on case intensity.

Honoré, Bo E.; Hu, Luojia

doi: 10.1007/s00181-022-02306-5pmid: 36337349

Recent studies have documented the disparate impact of the COVID-19 pandemic on labor market outcomes for different racial groups. This paper adds to this literature by documenting that the employment of Asian Americans—in particular those with no college education—has been especially hard hit by the economic crisis associated with the onset of the pandemic. This can only partly be explained by differences in demographics, local market conditions, and job characteristics, and it also cannot be entirely explained by possible different selection into education levels across ethnic groups. The burden on Asian Americans is primarily borne by those who are not US-born.

Yan, Karen X.

doi: 10.1007/s00181-022-02318-1pmid: 36320925

This paper examines whether the SAH orders, implemented in the USA from mid-March to late May 2020, improved air quality in the northeastern states. The estimates are based on panel data from the Environmental Protection Agency and an identification strategy that exploits the exogenous variation in the timing of the SAH orders. We find that the SAH orders reduced the concentrations of the air pollutants nitrogen dioxide (NO2\documentclass[12pt]{minimal}\usepackage{amsmath}\usepackage{wasysym}\usepackage{amsfonts}\usepackage{amssymb}\usepackage{amsbsy}\usepackage{mathrsfs}\usepackage{upgreek}\setlength{\oddsidemargin}{-69pt}\begin{document}$${\textrm{NO}}_2$$\end{document}) and carbon monoxide (CO), whose dominant source is motor vehicle emissions, by approximately 24% and 13%, respectively. The effects were larger for areas of high population density and areas near major roads. We also find that the reductions got smaller, and air pollution gradually approached normal levels, after the orders were lifted. This suggests that the air quality improvements were temporary.

Chow, Hwee Kwan; Choy, Keen Meng

doi: 10.1007/s00181-022-02311-8pmid: 36311973

This paper aims to investigate whether the predictive performance and behaviour of professional forecasters are different during the COVID-19 pandemic as compared with the global financial crisis of 2008 and normal times. To this end, we use a survey of professional forecasters in Singapore collated by the central bank to analyse the forecasting records for GDP growth and CPI inflation for the period 2000Q1–2021Q4. We first examine the point forecasts to document the extent of forecast failure during the two crises and explore various explanations for it, such as leader-following and herding behaviour. Then, using percentile-based summary measures of probability distribution forecasts, we study how the degree of consensus and extent of subjective uncertainty among forecasters were affected by crisis conditions. A trend break is observed in the subjective uncertainty associated with growth projections after the onset of the COVID-19 crisis. In contrast, both subjective uncertainty and the degree of consensus in inflation projections were essentially unchanged in crises, suggesting that the short-term inflation expectations of forecasters were strongly anchored.

Paik, Yongwook; Makridis, Christos A.

doi: 10.1007/s00181-022-02310-9pmid: N/A

Governments around the world have been facing the challenges of regulating the ever-increasing prevalence of ridesharing platforms, leading to a proliferation of academic and policy debates about the social value of such platforms. However, the overall social value is still unclear because when analyzing the net benefit provided by ridesharing platforms, prior studies have focused on either supply side (i.e., drivers) or demand side (i.e., passengers) users without considering nonusers. Conversely, some studies that have considered the spillover effect of a ridesharing platform on nonusers have not simultaneously considered the net benefit for users. In this study, we propose that a hedonic pricing model can be used as a reasonably straightforward approach to collectively quantify the social value of a ridesharing platform for both users and nonusers. Using this approach, we exploit plausibly exogenous variation in the staggered entry of Uber into different metropolitan areas between 2010 and 2016 and find that the entry of Uber leads to, on average, a 2.8% increase in median housing prices per square foot within a metropolitan area. We also find that there is substantial spatial heterogeneity, with benefits concentrated in areas with greater dependence on public transportation and higher levels of traffic delay. By quantitatively computing the social value of a ridesharing platform with a hedonic pricing model, our study helps government regulators generate policies that are more likely to promote public welfare and become less susceptible to political whims.

Sokhanvar, Amin; Lee, Chien-Chiang

doi: 10.1007/s00181-022-02320-7pmid: N/A

The Russia–Ukraine war and new sanctions against Russia have created economic losers and winners. Supply chain shocks are made by two factors: the market’s extraordinary swings and the breadth of commodities exported by Russia and Ukraine including energy and raw material. This paper adopts the cross-quantilogram approach to visualize the effects of energy price shocks on the exchange rate movements during this war. Our findings indicate that energy price hikes are associated with the appreciation of the Canadian dollar against the Euro and Japanese yen. Considering the ongoing war in Ukraine, the best feasible policy responses are discussed.

Alves, Weider Loureto; Ferreira, Roberto Tatiwa

doi: 10.1007/s00181-022-02317-2pmid: N/A

This work analyzes the exchange rate pass-through to inflation in Brazil through a methodology that simultaneously considers the time and the frequency domains applied to a New Keynesian Phillips Curve with exchange rate. For this purpose, we employ the continuous wavelet transform methodology that allows for disaggregating effects in different frequency bands over time. The results show that, in general, the relationship between inflation and the exchange rate is generally weak for the short and medium run (high frequencies), except in some periods marked by financial crises, political instability, and high inflation. On the other hand, we found strong evidence of the relationship between inflation and the exchange rate in the long run (low frequencies). A robustness analysis using different inflation and exchange rate measures, such as free prices, tradable and non-tradable prices, and the real effective exchange rate, confirms the results previously found in the baseline model.

Kiss, Tamás; Nguyen, Hoang; Österholm, Pär

doi: 10.1007/s00181-022-02309-2pmid: N/A

In this paper, we analyse Okun’s law—a relation between the change in the unemployment rate and GDP growth—using data from Australia, the euro area, the UK and the USA. More specifically, we assess the relevance of non-Gaussianity when modelling the relation. This is done in a Bayesian VAR framework with stochastic volatility where we allow the different models’ error distributions to have heavier-than-Gaussian tails and skewness. Our results indicate that accounting for heavy tails yields improvements over a Gaussian specification in some cases, whereas skewness appears less fruitful. In terms of dynamic effects, a shock to GDP growth has robustly negative effects on the change in the unemployment rate in all four economies.

Lekfuangfu, Warn N.; Lordan, Grace

doi: 10.1007/s00181-022-02314-5pmid: N/A

We consider the extent to which temporal shifts have been responsible for an increased tendency for females to sort into traditionally male roles over time, versus childhood factors. Drawing on three cohort studies, which follow individuals born in the UK in 1958, 1970 and 2000, we compare the shift in the tendency of females in these cohorts to sort into traditionally male roles compared to males, to the combined effect of a large set of childhood variables. For all three cohorts, we find strong evidence of sorting along gendered lines, which has decreased over time, yet there is no erosion of the gender gap in the tendency to sort into occupations with the highest share of males. Within the cohort, we find little evidence that childhood variables change the tendency for females of either the average or highest ability to sort substantively differently. Our work is highly suggestive that temporal shifts are what matter in determining the differential gendered sorting patterns we have seen over the last number of decades, and also those that remain today. These temporal changes include attitudinal changes, technology advances, policy changes and economic shifts.