· Scott Cunningham discusses how detailed qualitative and contextual work can be used to understand the assignment mechanism and justify difference-in-differences assumptions “choosing comparison groups in DiD requires a deep understanding of the treatment assignment mechanism, which often involves qualitative methods and not just data-driven approaches to matching on pre-trends” – something I emphasize in this post
· On VoxDev, Sandra Aguilar-Gomez summarizes her work in Mexico that shows how extreme heat leads to more loan delinquencies from SMEs. ”We estimate the impact of unexpected days above the 95th percentile of the temperature distribution on firms’ financial distress, with our primary focus on the delinquency rate, measured as the ratio of non-performing loans to total outstanding credit in a county….Extreme heat in a municipality raises its credit delinquency rate, an effect driven entirely by small firms defaulting on their loans. In terms of magnitudes, ten unusual days of extreme heat during the previous three months increase the delinquency rate of SMEs by 0.17 percentage points, equivalent to 4.4% of the observed sample mean….we find that the negative effect of extreme heat is stronger in agriculture…effects in the non-agricultural sector are concentrated in services and retail, that is, non-tradable sectors that rely heavily on local demand. The findings suggest that adverse conditions in agriculture lead to reduced local spending, causing spillover effects into non-agricultural industries.”
· On the backstory podcast, Ted Miguel and Paul Niehaus are interviewed about their work on the general equilibrium effects of cash transfers. Ted discusses how important measurement of a wide range of different outcomes was to putting the project together – and Paul notes that often “measure everything” is the wrong approach and means a lack of focus or understanding, but for this work on trying to look at economy-wide impacts it was key. Ted also talks about how it is really hard to ex ante predict mechanisms, and so both the PAP and measurement often don’t cover everything you would want on this – but this then spurs new research. Paul notes that there needs to be space in papers for a speculative section which can give guidance to future work, even if it is not so well supported as the rest of the paper. There is also some discussion at the end about how to chose which things to work on. Ted also talks about how he has tended to go through around cycles on which topics/themes excite him and this has led to a set of new things to learn each time around that keeps research interesting. In another episode Duncan Thomas is interviewed about his work on the long-term effects of exposure to the 2004 tsunami. He talks about how risky it was to start the study, and it wasn’t clear it would work out, despite having worked in other parts of Indonesia for some time beforehand. He talks about the difficulty in initial tracking, and how success could build over time since finding some people in one round then was used to help in finding others in future rounds. Duncan also talks about how we don’t encourage risk-taking enough in economics – but that we also don’t have the right incentive systems in place in economics to fund and encourage this – and working in teams is a key way to deal with this.
· Alice Evans summarizes a recent working paper on how men come to value women’s talent and contributions – working alongside more female co-workers leads men to be more likely to marry women who work outside the home, and to have daughters who work – based on work in the U.S. and the shock to female labor force participation during WW1. “The authors (roughly) estimate that each additional female wartime civil servant led to 2.2 additional women entering the workforce”. She then draws some more recent parallels in Zambia and Cambodia.
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