infonet-economy

Contrary to expectations, evidence of a death of distance has eluded numerous estimations in the popular gravity model of trade: estimates of the coefficient of distance are markedly higher in studies with recent data. This column shows that this is only so for the poorer countries who are trading with geographically closer partners. This regionalization of trade for low-income…

The “distance effect” measuring the elasticity of trade flows to distance has been to be rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the “distance puzzle”. We review the evidence and explanations. Using an extensive data set of 124 countries over the period 1970-2005, we confirm the existence of this puzzle and identify…

This paper proposes to use dynamic treatment models to analyze the effects of fertility on labor market interactions. It argues that when large data sets are available the dynamic potential outcome model is an interesting modeling framework because it allows the careful consideration of the selection issues coming from the interaction of fertility and labor market decisions at…

"Winner-take-all" markets (i.e., markets in which the relative and not the absolute performance is decisive) have gained in importance. Such markets have a tendency to provoke inefficiently many entries. We investigate such markets in an experiment and show that there are even more inefficient entries than predicted by the Nash equilibrium. Moreover, this effect increases…

AIDS continues to have a devastating effect on developing countries, particularly in Sub-Saharan Africa. The lack of a proven effective vaccine to stop HIV transmission has lead to much of public policy putting an emphasis on information campaigns in order to reduce HIV-prevalence. In this paper we examine the impact of HIV/AIDS-knowledge from two sides. First, we examine to what…

We document the widespread existence of antisocial punishment, that is, the sanctioning of people who behave prosocially. Our evidence comes from public goods experiments that we conducted in 16 comparable participant pools around the world. However, there is a huge cross-societal variation. Some participant pools punished the high contributors as much as they punished the low…

The issue of potentially endogenous control variables in causal studies based on the assumption of no selection bias conditional on observables (conditional independence assumption, CIA) is discussed. The paper shows that the standard formulation of the CIA obscures the endogeneity problem. It suggests a CIA based on potential variables together with explicit exogeneity conditions,…