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Schmeiser M.D.,Board of Governors of the Federal Reserve System
Health Economics

Participation in the SUPPL.emental Nutrition Assistance Program (SNAP) reached an all-time high of 40.2 million persons in March 2010, which means the program affects a substantial fraction of Americans. A significant body of research has emerged suggesting that participation in SNAP increases the probability of being obese for adult women and has little effect on the probability for adult men. However, studies addressing the effects of participation on children have produced mixed results. This paper examines the effect of long-term SNAP participation on the Body Mass Index (BMI) percentile and probability of being overweight or obese for children ages 5-18 using data from the National Longitudinal Survey of Youth 1979 Children and Young Adults data set. An instrumental variables identification strategy that exploits exogenous variation in state-level program parameters, as well as state and federal expansions of the Earned Income Tax Credit (EITC), is used to address the endogeneity between SNAP participation and obesity. SNAP participation is found to significantly reduce BMI percentile and the probability of being overweight or obese for boys and girls ages 5-11 and boys ages 12-18. For girls ages 12-18, SNAP participation appears to have no significant effect on these outcomes. © 2011 John Wiley & Sons, Ltd. Source

Cai B.,University of Oregon | Cameron T.A.,University of Oregon | Gerdes G.R.,Board of Governors of the Federal Reserve System
Environmental and Resource Economics

We explore the relationship between willingness to pay (WTP) for climate change mitigation and distributional preferences, by which we mean individuals' opinions about who should be responsible for climate change prevention and whether the share of climate change impacts borne by the poor is a cause for concern. We use 1,770 responses to an online stated preference survey. The domestic costs in our survey's policy choice scenarios are expressed as a set of randomized shares across four different payment vehicles, and the international cost shares are randomized across four groups of countries. We also elicit respondents' perceptions of the likely regressivity of climate change impacts under a policy of business-as-usual. WTP is higher when larger cost shares are borne by parties deemed to bear a greater responsibility for mitigation, and when respondents believe (and care) that the impacts of climate change may be borne disproportionately by the world's poor. That WTP for an environmental policy depends on the distributional consequences of the policy is an unsettling result: efficiency assessments are typically assumed to be separate from equity considerations in most benefit-cost analyses. © 2010 Springer Science+Business Media B.V. Source

Berge T.J.,Board of Governors of the Federal Reserve System
Journal of Forecasting

Four methods of model selection - equally weighted forecasts, Bayesian model-averaged forecasts, and two models produced by the machine-learning algorithm boosting - are applied to the problem of predicting business cycle turning points with a set of common macroeconomic variables. The methods address a fundamental problem faced by forecasters: the most useful model is simple but makes use of all relevant indicators. The results indicate that successful models of recession condition on different economic indicators at different forecast horizons. Predictors that describe real economic activity provide the clearest signal of recession at very short horizons. In contrast, signals from housing and financial markets produce the best forecasts at longer forecast horizons. A real-time forecast experiment explores the predictability of the 2001 and 2007 recessions. © 2015 John Wiley & Sons, Ltd. Source

Manuszak M.D.,Board of Governors of the Federal Reserve System
International Journal of Industrial Organization

This paper presents an empirical model of oligopolistic supply and demand that reflects divisions between downstream retailers and upstream suppliers in order to evaluate the potential effects of upstream mergers. The demand model allows for downstream product differentiation, while the supply model allows upstream firms to inherit market power from their affiliated retailers. The supply and demand models are jointly estimated using data on the retail gasoline industry for the Hawaiian islands in the 1990s. A number of hypothetical upstream mergers in the Hawaiian retail gasoline industry are simulated to evaluate the effects of the mergers on market outcomes and welfare. Various scenarios with post-merger cost savings are also considered. Source

Brennan M.J.,University of California at Los Angeles | Brennan M.J.,University of Manchester | Wang A.W.,Board of Governors of the Federal Reserve System
Review of Environmental Economics and Policy

We show that, when stock prices are subject to stochastic mispricing errors, expected rates of return may depend not only on the fundamental risk that is captured by a standard asset pricing model, but also on the type and degree of asset mispricing, even when the mispricing is zero on average. Empirically, the mispricing induced return premium, either estimated using a Kalman filter or proxied by the volatility and variance ratio of residual returns, is shown to be significantly associated with realized risk-adjusted returns. © The Author 2010. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. Source

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