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Federal Reserve Board

Washington, DC, United States
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PubMed | Brandeis University, UNDP Inc, Federal Reserve Board and Indigenous
Type: | Journal: Economics and human biology | Year: 2016

Mounting evidence suggests that income inequality is associated with worse individual health. But does the visibility of inequality matter? Using data from a horticultural-foraging society of native Amazonians in Bolivia (Tsimane), we examined whether village inequality in resources and behaviors with greater cultural visibility is more likely to bear a negative association with health than village inequality in less conspicuous resources. We draw on a nine-year annual panel (2002-2010) from 13 Tsimane villages for our main analysis, and an additional survey to gauge the cultural visibility of resources. We measured inequality using the Gini coefficient. We tested the robustness of our results using a shorter two-year annual panel (2008-2009) in another 40 Tsimane villages and an additional measure of inequality (coefficient of variation, CV). Behaviors with low cultural visibility (e.g., household farm area planted with staples) were less likely to be associated with individual health, compared to more conspicuous behaviors (e.g., expenditures in durable goods, consumption of domesticated animals). We find some evidence that property rights and access to resources matter, with inequality of privately-owned resources showing a larger effect on health. More inequality was associated with improved perceived health - maybe due to improved health prospects from increasing wealth - and worse anthropometric indicators. For example, a unit increase in the Gini coefficient of expenditures in durable goods was associated with 0.24 fewer episodes of stress and a six percentage-point lower probability of reporting illness. A one-point increase in the CV of village inequality in meat consumption was associated with a 4 and 3 percentage-point lower probability of reporting illness and being in bed due to illness, and a 0.05 SD decrease in age-sex standardized arm-muscle area. In small-scale, rural societies at the periphery of market economies, nominal economic inequality in resources bore an association with individual health, but did not necessarily harm perceived health. Economic inequalities in small-scale societies apparently matter, but a thick cultural tapestry of reciprocity norms and kinship ties makes their effects less predictable than in industrial societies.

Wolcott E.L.,Federal Reserve Board | Conrad J.M.,Cornell University
Land Economics | Year: 2011

Ecologists and anthropologists have had a long-standing interest in the settlement and evolution of isolated islands, particularly Easter Island. The open access model is often used to describe the evolution of a human population and its resource base. Unfortunately, an open access model, with spiral convergence to a steady state, is inappropriate for island dynamics where the human population peaks and then goes into permanent decline. We develop more appropriate two-state and three-state models. The nonautonomous version of the three-state model, which collapses to the stable two-state model, produces dynamics that are more consistent with the history of Easter Island. © 2011 by the Board of Regents of the University of Wisconsin System.

Ghamami S.,Federal Reserve Board | Ghamami S.,University of California at Berkeley | Zhang B.,IBM
Proceedings - Winter Simulation Conference | Year: 2015

This paper presents an overview of the efficient Monte Carlo counterparty credit risk (CCR) estimation framework recently developed by Ghamami and Zhang (2014). We focus on the estimation of credit value adjustment (CVA), one of the most widely used and regulatory-driven counterparty credit risk measures. Our proposed efficient CVA estimators are developed based on novel applications of well-known mean square error (MSE) reduction techniques in the simulation literature. Our numerical examples illustrate that the efficient estimators outperform the existing crude estimators of CVA substantially in terms of MSE. © 2014 IEEE.

Mankad S.,University of Maryland College Park | Michailidis G.,University of Michigan | Brunetti C.,Federal Reserve Board
Proceedings of the ACM SIGMOD International Conference on Management of Data | Year: 2014

Time series of graphs are increasingly prevalent in modern economic and financial data and pose unique challenges to visual exploration and pattern extraction. This paper describes the application of matrix factorizations that enhance existing visualization techniques for exploration and pattern detection in graph time-series. The combination of matrix factorization and visualizations allows the user to home in on and display interesting, underlying structure and its evolution over time. The methods are scalable to data sets with a large number of time points or nodes, and can accommodate sudden changes to graph topology. The tools are used to summarize how dynamics in the interbank and equity markets changed during the sub-prime crisis for banks in the Eurozone area. Copyright 2014 ACM.

Starr M.,American University of Washington | Dominiak L.,Federal Reserve Board | Aizcorbe A.,Virginia Polytechnic Institute and State University
Health Affairs | Year: 2014

Researchers have disagreed about factors driving up health care spending since the 1980s. One camp, led by Kenneth Thorpe, identifies rising numbers of people being treated for chronic diseases as a major factor. Charles Roehrig and David Rousseau reach the opposite conclusion: that three-quarters of growth in average spending reflects the rising costs of treating given diseases. We reexamined sources of spending growth using data from four nationally representative surveys. We found that rising costs of treatment accounted for 70 percent of growth in real average health care spending from 1980 to 2006. The contribution of shares of the population treated for given diseases increased in 1997-2006, but even then it accounted for only one-third of spending growth. We highlight the fact that Thorpe's inclusion of population growth as part of disease prevalence explains the appreciable difference in results. An important policy implication is that programs to better manage chronic diseases may only modestly reduce average spending growth. © 2014 Project HOPE.

Love D.A.,Williams College | Smith P.A.,Federal Reserve Board
Health Economics | Year: 2010

A number of recent studies find that poor health is empirically associated with a safer portfolio allocation. It is difficult to say, however, whether this relationship is truly causal. Both health status and portfolio choice are influenced by unobserved characteristics such as risk attitudes, impatience, information, and motivation, and these unobserved factors, if not adequately controlled for, can induce significant bias in the estimates of asset demand equations. Using the 1992-2006 waves of the Health and Retirement Study, we investigate how much of the connection between health and portfolio choice is causal and how much is due to the effects of unobserved heterogeneity. Accounting for unobserved heterogeneity with fixed effects and correlated random effects models, we find that health does not appear to significantly affect portfolio choice among single households. For married households, we find a small effect (about 2-3 percentage points) from being in the lowest of five self-reported health categories. Copyright © 2009 John Wiley & Sons, Ltd.

Fan M.,Ball State University | Firestone S.,Federal Reserve Board
International Journal of Industrial Organization | Year: 2010

This paper estimates the production technology of the U.S. computer industry using firm market value to control for the correlation between inputs and unobservable productivity shocks. We show that firm market value can serve as a proxy for unobservable productivity shocks. We also show that firm market value is robust as a proxy when firm faces uncertainties and capital market imperfections. Empirical results suggest that our firm market value proxy works well for the computer industry. © 2009 Elsevier B.V.

Matoso R.,Petrobras | Rezende M.,Federal Reserve Board
International Journal of Industrial Organization | Year: 2014

This paper analyzes bidding behavior in oil and gas tract auctions in Brazil, where the main winner has been Petrobras, a national company. We test predictions from the theory of common-value, first-price, sealed-bid auctions with asymmetric information. The tests indicate that Petrobras was better informed about tract values than other bidders. We show that Petrobras bid higher than its competitors for more profitable tracts, and that it bid more frequently than its competitors for tracts being re-offered after receiving no bids in previous auctions. We also find evidence that Petrobras could bid competitively in a limited number of auctions only, and we discuss how our results can help to improve oil and gas tract auction rules.

Datta D.D.,Federal Reserve Board | Londono J.M.,Federal Reserve Board | Ross L.J.,Washington University in St. Louis
Energy Economics | Year: 2016

We investigate the informational content of options-implied probability density functions (PDFs) for the future price of oil. Using a semiparametric variant of the methodology in Breeden and Litzenberger (1978), we investigate the fit and smoothness of distributions derived from alternative PDF estimation methods, and develop a set of robust summary statistics. Using PDFs estimated around episodes of high geopolitical tensions, oil supply disruptions, macroeconomic data releases, and shifts in OPEC production strategy, we explore the extent to which oil price movements are expected or unexpected, and whether agents believe these movements to be persistent or temporary. © 2016.

Arrow K.J.,Stanford University | Priebsch M.,Federal Reserve Board
Environmental and Resource Economics | Year: 2014

Lotteries with infinite expected utility are inconsistent with the axioms of expected utility theory. To rule them out, either the set of permissible lotteries must be restricted (to exclude, at a minimum, "fat-tailed" distributions such as that underlying the St. Petersburg Paradox and power laws that are popular in models of climate change), or the utility function must be bounded. This note explores the second approach and proposes a number of tractable specifications leading to utility functions that are bounded both from above and below. This property is intimately related to that of increasing relative risk aversion as first hypothesized by Arrow (1965). © 2014 Springer Science+Business Media Dordrecht.

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