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Book part

R. Kelley Pace and James P. LeSage

We show how to quickly estimate spatial probit models for large data sets using maximum likelihood. Like Beron and Vijverberg (2004), we use the GHK…

Abstract

We show how to quickly estimate spatial probit models for large data sets using maximum likelihood. Like Beron and Vijverberg (2004), we use the GHK (Geweke-Hajivassiliou-Keane) algorithm to perform maximum simulated likelihood estimation. However, using the GHK for large sample sizes has been viewed as extremely difficult (Wang, Iglesias, & Wooldridge, 2013). Nonetheless, for sparse covariance and precision matrices often encountered in spatial settings, the GHK can be applied to very large sample sizes as its operation counts and memory requirements increase almost linearly with n when using sparse matrix techniques.

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Spatial Econometrics: Qualitative and Limited Dependent Variables
Type: Book
ISBN: 978-1-78560-986-2

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Article

Ariel Atzil and Eli Feinerman

– Enabling decision-makers in Israel to better assess the prospects of government policies aimed at changing inter-generation income distribution for the benefit of the retirees.

Abstract

Purpose

Enabling decision-makers in Israel to better assess the prospects of government policies aimed at changing inter-generation income distribution for the benefit of the retirees.

Design/methodology/approach

Based on a comprehensive data set, the paper utilizes multivariate ordered-probit regression for empirical investigation of the motivations for support between parents and children in Israel.

Findings

The main finding is that child-parent support in Israel is usually driven by a combination of exchange and altruistic motives, rather than altruism alone.

Practical implications

Child-parent support will not reduce the impact of governmental policies aimed at redistributing income among different generations. If the Government of Israel raises the income level of its citizens aged 65 and over, the improvement in this population's condition will most probably be bigger than that caused directly by the amount the government has added to their income.

Originality/value

Empirical evaluation of the motivations for support given by children to their retired parents in Israel. Israel is a multicultural, immigrant country, home to people originating from all over the world, which provides an interesting cross-cultural perspective. In addition, the underlying database used in this study includes much more information than most databases utilized by earlier studies.

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International Journal of Social Economics, vol. 41 no. 2
Type: Research Article
ISSN: 0306-8293

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Book part

Badi H. Baltagi, Peter H. Egger and Michaela Kesina

This paper formulates and analyzes Bayesian model variants for the analysis of systems of spatial panel data with binary-dependent variables. The paper focuses on cases…

Abstract

This paper formulates and analyzes Bayesian model variants for the analysis of systems of spatial panel data with binary-dependent variables. The paper focuses on cases where latent variables of cross-sectional units in an equation of the system contemporaneously depend on the values of the same and, eventually, other latent variables of other cross-sectional units. Moreover, the paper discusses cases where time-invariant effects are exogenous versus endogenous. Such models may have numerous applications in industrial economics, public economics, or international economics. The paper illustrates that the performance of Bayesian estimation methods for such models is supportive of their use with even relatively small panel data sets.

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Spatial Econometrics: Qualitative and Limited Dependent Variables
Type: Book
ISBN: 978-1-78560-986-2

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Article

Michael K. Ndegwa, Apurba Shee, Calum G. Turvey and Liangzhi You

Drought-related climate risk and access to credit are among the major risks to agricultural productivity for smallholder farmers in Kenya. Farmers are usually…

Abstract

Purpose

Drought-related climate risk and access to credit are among the major risks to agricultural productivity for smallholder farmers in Kenya. Farmers are usually credit-constrained due to either involuntary quantity rationing or voluntary risk rationing. By exploiting randomized distribution of weather risk-contingent credit (RCC) and traditional credit, the authors estimate the causal effect of bundling weather index insurance to credit on uptake of agricultural credits among rural smallholders in Eastern Kenya. Further, the authors assess farmers' credit rationing, its determinants and effects on credit uptake.

Design/methodology/approach

The study design was a randomized controlled trial (RCT) conducted in Machakos County, Kenya. 1,170 sample households were randomly assigned to one of three research groups, namely control, RCC and traditional credit. This paper is based on baseline household survey data and the first phase of loan implementation data.

Findings

The authors find that 48% of the households were price-rationed, 41% were risk-rationed and 11% were quantity-rationed. The average credit uptake rate was 33% with the uptake of bundled credit being significantly higher than that of traditional credit. Risk rationing seems to influence the credit uptake negatively, whereas premium subsidies do not have any significant association with credit uptake. Among the socio-economic variables, training attendance, crop production being the main household head occupation, expenditure on food, maize labour requirement, hired labour, livestock revenue and access to credit are found to influence the credit uptake positively, whereas the expenditure on non-food items is negatively related with credit uptake.

Research limitations/implications

The study findings provide important insights on the factors of credit demand. Empirical results suggest that risk rationing is pervasive and discourages farmers to take up credit. The study results also imply that credit demand is inelastic although relatively small sample size for RCC premium subsidy groups may be a limiting factor to the authors’ estimation.

Originality/value

By implementing a multi-arm RCT, the authors estimate the factors affecting the uptake of insurance bundled agricultural credits along with eliciting credit rationing among rural smallholders in Eastern Kenya. This paper provides key empirical findings on the uptake of RCC and the effect of credit rationing on uptake of agricultural credits, a field which has been majorly theoretical.

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Agricultural Finance Review, vol. 80 no. 5
Type: Research Article
ISSN: 0002-1466

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Article

Yan Li

The purpose of this paper is to examine whether people who engage in religious activities are more generous in terms of both religious and secular giving.

Abstract

Purpose

The purpose of this paper is to examine whether people who engage in religious activities are more generous in terms of both religious and secular giving.

Design/methodology/approach

Bivariate probit (BVP) and bivariate tobit (BVT) analyses show that religious people have a greater propensity to give and higher levels of giving to both religious and secular charitable organizations. The bivariate systems permit a test of the correlation across the different giving decisions, and the correlation between religious and secular giving is found to be highly significant.

Findings

Religiosity positively influences both religious and secular donations. After controlling for this correlation, the impacts of religiosity on religious and secular giving are more efficient estimates but smaller than expected.

Originality/value

As a result of these methodological shortcomings, the causal relationship between religiosity and charitable giving is far from clear. To overcome those problems, this study uses BVP and BVT models to control for the potential correlation between religious giving and secular giving by the same individual and then draws appropriate interpretations. This study adds a firmer theoretical foundation to the existing literature.

Details

International Journal of Social Economics, vol. 44 no. 9
Type: Research Article
ISSN: 0306-8293

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Book part

Bertrand Candelon, Elena-Ivona Dumitrescu, Christophe Hurlin and Franz C. Palm

In this article we propose a multivariate dynamic probit model. Our model can be viewed as a nonlinear VAR model for the latent variables associated with correlated binary…

Abstract

In this article we propose a multivariate dynamic probit model. Our model can be viewed as a nonlinear VAR model for the latent variables associated with correlated binary time-series data. To estimate it, we implement an exact maximum likelihood approach, hence providing a solution to the problem generally encountered in the formulation of multivariate probit models. Our framework allows us to study the predictive relationships among the binary processes under analysis. Finally, an empirical study of three financial crises is conducted.

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VAR Models in Macroeconomics – New Developments and Applications: Essays in Honor of Christopher A. Sims
Type: Book
ISBN: 978-1-78190-752-8

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Article

Alhassan Abdul-Wakeel Karakara and Evans Osabuohien

This study aims to investigate how ICT adoption enhances the innovativeness of informal firms in West Africa, using the cases of Ghana and Nigeria.

Abstract

Purpose

This study aims to investigate how ICT adoption enhances the innovativeness of informal firms in West Africa, using the cases of Ghana and Nigeria.

Design/methodology/approach

The study used the World Bank Enterprise Survey data 2014 for Ghana and Nigeria with binary logistic regression analysis to achieve this. Four different innovations are modelled. They include: first, whether a firm has innovated based on producing a new product or significantly improved product; second, whether a firm has innovated in its methods of production or services; third, whether a firm has innovated in terms of its organisational structure; and fourth, whether a firm has introduced a new and improved marketing method.

Findings

The results show that the use of email, cellphone and website has a positive impact on the four types of innovations modelled. However, these effects varied markedly between Ghana and Nigeria. Firms’ spending on research and development (R&D), firm giving its employees the chance to develop their ideas and when firm competes with others; all positively impact the four types of innovations. Thus, the study recommends that policies should be geared towards making firms have more access to ICTs to enable them to be more innovative to serve clients and the economy.

Originality/value

This study differs by concentrating on how the adoption of ICTs could help firms to introduce innovations into their companies in two West African countries, namely, Ghana and Nigeria. Thus, it complements literature on informal firms’ innovation efforts in West Africa.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 14 no. 3
Type: Research Article
ISSN: 1750-6204

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Article

Krishna P. Paudel, Nirmala Devkota and Ying Tan

The purpose of this paper is to address the issues of correlated events and individual heterogeneity in multiple best management practices (BMPs) adoption.

Abstract

Purpose

The purpose of this paper is to address the issues of correlated events and individual heterogeneity in multiple best management practices (BMPs) adoption.

Design/methodology/approach

The authors used survey data collected from broiler producers in Louisiana, USA. The authors estimated several duration models that either considered event dependence or heterogeneity or both.

Findings

Results from the conditional frailty model indicated that large farms adopt BMPs earlier, farmers who have been in broiler farming profession for a long time are late to adopt BMPs and more informed farmers, through contact with extension agents and education, are early adopters of BMPs.

Research limitations/implications

The limitation of this study is that the authors did not validate the robustness of the conditional frailty model using a more rigorous approach, such as empirical simulation method.

Practical implications

Many farmers do not adopt a new technology immediately after it becomes available. Duration models help to understand why farmers wait and how long they wait before adopting a new technology. In case of correlated events, where farmers adopt more than one technology, it is important to know the driving factors behind multiple technologies adoption. The findings from this study should help to properly target farmers to increase the adoption rate of a desired BMP.

Originality/value

This is the first study in agriculture technology adoption literature that uses a conditional frailty model to understand why farmers wait to adopt a new technology. This study also addresses both dependence in BMP adoption and heterogeneity in farmers’ quality that impact technology adoption.

Details

China Agricultural Economic Review, vol. 8 no. 4
Type: Research Article
ISSN: 1756-137X

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Book part

Ivan Jeliazkov, Jennifer Graves and Mark Kutzbach

In this paper, we consider the analysis of models for univariate and multivariate ordinal outcomes in the context of the latent variable inferential framework of Albert…

Abstract

In this paper, we consider the analysis of models for univariate and multivariate ordinal outcomes in the context of the latent variable inferential framework of Albert and Chib (1993). We review several alternative modeling and identification schemes and evaluate how each aids or hampers estimation by Markov chain Monte Carlo simulation methods. For each identification scheme we also discuss the question of model comparison by marginal likelihoods and Bayes factors. In addition, we develop a simulation-based framework for analyzing covariate effects that can provide interpretability of the results despite the nonlinearities in the model and the different identification restrictions that can be implemented. The methods are employed to analyze problems in labor economics (educational attainment), political economy (voter opinions), and health economics (consumers’ reliance on alternative sources of medical information).

Details

Bayesian Econometrics
Type: Book
ISBN: 978-1-84855-308-8

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Article

Uwe Jirjahn

A growing number of econometric examinations show that works councils substantially shape the personnel policy of firms in Germany. Firms with works councils make greater…

Abstract

Purpose

A growing number of econometric examinations show that works councils substantially shape the personnel policy of firms in Germany. Firms with works councils make greater use of various human resource management (HRM) practices. This gives rise to the question of whether employers view the shaping of personnel policy positively or negatively. Against this background, the purpose of this paper is to examine the influence of works councils on employer attitudes toward HRM practices.

Design/methodology/approach

Using data from manufacturing establishments, multivariate and recursive multivariate models are applied to estimate the determinants of employer attitudes toward HRM practices.

Findings

The incidence of a works council increases the probability of positive employer attitudes toward the incentive effects of performance pay, profit sharing, promotions, further training and worker involvement in decision making. However, it decreases the probability of positive employer attitudes toward high wages. The results suggest that works councils play a redistribution role in wages and a collective voice role in the other HRM practices.

Originality/value

The study complements examinations focusing on the influence of works councils on the formal presence of HRM practices. There are two potential limitations of focusing solely on formal HRM practices. First, the formal presence of a practice does not necessarily mean that the practice is effectively used. Second, a firm may informally use HRM practices even though the practices have not been formally adopted. The study provides insights into the question of whether or not works councils influence employers’ support for the various practices. This support can be important for the effective use of the practices, regardless of whether they are of formal or informal nature.

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