Tag: SMU Department of Economics

Russia awards SMU’s Weber $3 million for research lab to study diversity, social interactions

Post author By Margaret Allen
Post date June 10, 2013

Grant will establish first-of-its-kind research laboratory at Moscow’s New Economic School to focus on many types of societal diversity

A $3 million grant to SMU economics professor Shlomo Weber will fund the establishment of a first-of-its-kind research laboratory to study diversity and social interactions.

The new center at Moscow’s New Economic School will focus on research into the many different types of societal diversity, including economic, historical, geographical, linguistic and ethnic. Researchers at the center will assess the impact of societal diversity on economic, political and social development, said Weber, who is the Robert H. and Nancy Dedman Trustee Professor of Economics in the SMU Department of Economics.

Weber is a PINE Foundation Visiting Professor of Economics at the New Economic School, where President Obama delivered the 2009 commencement address and declared a reset on Russian-American relations.

“This kind of support is quite unique in the world,” he said. “Our team of Russian and foreign scholars will do their best to contribute to the study of Russia’s social and economic development in the past, present and future.”

Grant supports theoretical and empirical aspects of research into diversity
Ranked the best economics institution in the former communist countries, NES is a private graduate school in economics. Its mission is to benefit Russia’s private and public sectors through excellence in economics education and research. Faculty-in-residence include economists with doctoral degrees in economics and finance from the world’s leading universities.

Members of the SMU economics faculty will have a chance to participate in research at the laboratory, especially in studies of social and trade networks and development, Weber said. SMU economics doctoral students will have opportunities for internships.

Every year, 15 to 20 graduates of the NES Master’s program join the top doctoral economics programs in the United States. Many leading economics and finance departments have NES alumni on their faculty. SMU Assistant Professor Anna Kormlitzina, in SMU’s Department of Economics, is a graduate of NES.

“The award of this grant is remarkable evidence of NES’s progress over the 20 years of its existence,” Weber said. “I’m grateful to the government of the Russian Federation for the decision to support theoretical and empirical aspects of diversity and social interactions, focused but not limited to Russian economy and society.”

Research will examine how diversity impacts social interactions, trust, emergence of social networks
The grant is part of an annual program by the Russian Federation that supports research supervised by the world’s leading scholars. Weber was one of 700 applicants, 42 of whom were awarded funding.

The research will be conducted on theoretical, empirical and experimental grounds and will examine how diversity impacts social interactions, trust and emergence of various types of social networks and on the quality and functioning of public and private institutions.

Weber’s grant was the only one awarded within the discipline of “Economics and Business.” Grants were awarded on the basis of the scientist’s scientific achievements, research experience and research prospects of the project; sponsoring organization; and leadership potential of the research laboratory being established.

The grant carries a possible two-year extension. Winners of the competition personally lead the laboratory for a minimum of four months each calendar year.

Grant will bring together the world’s leading scholars on diversity
“This grant will help to bring together the world’s leading scholars, including Nobel winners Robet Aumann, from Hebrew University, and Eric Maskin, from Harvard, and leading authorities in their respective fields — Stephen Durlauf, Wisconsin, and Matt Jackson, Stanford — as well as young scholars and students,” Weber said. “The decision to award this grant recognizes the success of NES in implementing its mission to benefit Russia’s private and public sectors through excellence in economics education and research. It also provides support for further development of the school’s research capacity.”

Weber’s expertise includes consulting in Eastern and Western Europe and in Central and Southeast Asia. He currently coordinates an Open Society Institute development project at the National University of Mongolia.

Weber’s recent book, with economist Victor Ginsburgh, “How Many Languages Do We Need? Economics of Linguistic Diversity” (2011, Princeton University Press), will be followed later this year by a volume edited with economist Michael Alexeev, “The Oxford Handbook of Russian Economy.”

Weber earned his doctoral degree in mathematical economics from Hebrew University, Jerusalem, and his bachelor’s and master’s degrees in mathematics from Moscow State University.

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Tags Dedman College, Shlomo Weber, SMU Department of Economics

Culture, Society & Family Economics & Statistics Researcher news

SMU-North Texas Food Bank study will analyze causes of hunger in Dallas and rural North Texas

Post author By Margaret Allen
Post date November 6, 2012

SMU with The Hunger Center of North Texas will look at the impact of social networks and social capital

Economics researchers at SMU will analyze the roles social networks and isolation play in fighting hunger in North Texas.

Recent studies have found that household economic resources are not the only factor contributing to food insecurity, according to SMU economist Thomas B. Fomby.

About 1 in 6 U.S. households are affected by food insecurity, meaning there’s not enough food at all times to sustain active, healthy lives for all family members, according to the U.S. Department of Agriculture.

Reidus hilli, John Graf, SMU, coelacanth, Dipluridae,

“This study will analyze the role of other factors causing food insecurity, such as urban or rural settings, access to nutrition assistance programs, access to inexpensive groceries, family support and social stigma,” Fomby said.

Fomby, professor of economics and director of the Richard B. Johnson Center for Economic Studies, and Daniel Millimet, SMU professor of economics, are conducting the study. A $120,000 grant from the North Texas Food Bank is funding the research. The study will be complete in March 2014.

Household income a powerful predictor, but social networks play role
Although household income is the single most powerful predictor of food security, poverty and hunger are not synonymous. According to Feeding America, 28 percent of food insecure residents in Dallas County are ineligible for most nutrition assistance programs because they have incomes above 185 percent of the federal poverty level; and the U. S. Department of Agriculture reports that 58.9 percent of U.S. households with incomes below the poverty level are food secure. The reasons for this are not well understood.

“With this research, we expect to better understand the causes of food insecurity in North Texas and improve the assessment of at-risk households,” Fomby said.

The SMU study is one of two major research projects launching The Hunger Center of North Texas, a new collaborative research initiative created by the North Texas Food Bank. The University of North Texas is also collaborating on a study.

The studies will focus on the impact that “social networks” and “social capital” have on household food security. The central questions are:

How do social relationships and community conditions make it easier (or harder) for low-income households to keep healthy food on the table?
How do these social and community influences differ in the City of Dallas and rural areas of North Texas?

Groundbreaking research may help leverage social forces to reduce food assistance
“We believe that this research will be groundbreaking,” said Richard Amory, director of research for the North Texas Food Bank. “Nutrition assistance programs tend to approach individuals and households in isolation. Understanding the role that communities play in food security may help us leverage social forces to develop more effective programs and, ultimately, reduce the need for food assistance.”

The studies will start to shed some light on issues related to hunger in the community, said Kimberly Aaron, vice president of Policy, Programs and Research for the North Texas Food Bank.

“In performing our due diligence on existing research, while forming The Hunger Center, it became clear that many factors related to food insecurity are not well understood,” Aaron said.

SMU and the North Texas Food Bank recently formed a partnership, “Stampede Against Hunger,” to build on SMU’s strong support for NTFB, connecting campus groups already working with the food bank, as well as encouraging new types of participation for the campus and alumni community.

SMU support for the food bank has ranged from traditional food drives and volunteer work in the NTFB distribution center, to research for the food bank conducted by students in the Cox School of Business and the Bobby B. Lyle School of Engineering. Faculty and students from the Annette Caldwell Simmons School of Education and Human Development volunteer regularly in NTFB nutrition courses and Fondren Library staff organize a “Food for Fines” drive each year, waiving library fines in exchange for donations of non-perishable food items.

Fomby and Millimet are in the SMU Department of Economics in Dedman College. — Nancy George, and the NTFB

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SMU is a nationally ranked private university in Dallas founded 100 years ago. Today, SMU enrolls nearly 11,000 students who benefit from the academic opportunities and international reach of seven degree-granting schools. For more information, www.smu.edu.

Tags Annette Caldwell Simmons School of Education and Human Development, Bobby B. Lyle School of Engineering, Cox School of Business, Daniel L. Millimet, Dedman College, Fondren Library, Richard B. Johnson Center for Economic Studies, SMU Department of Economics, Thomas B. Fomby

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Despite belief WIC improves infant health, new study finds no positive or negative impact

Post author By Margaret Allen
Post date April 17, 2012

New study is the first to account for two factors: women misreporting their WIC nutritional benefits and participation of the very poor in the program

Existing scientific literature suggests the U.S. government nutritional program known as WIC improves birth outcomes of children, but new research is unable to find either a positive or negative impact on infant health.

WIC, which serves 53 percent of all U.S. infants, is for low-income pregnant women and their young children under five who are at or below 185 percent of the federal poverty level. The program provides grocery store food vouchers or electronic benefit transfer cards for healthy and nutritious food, and free prenatal care and health and nutritional counseling.

But economist and study author Manan Roy, Southern Methodist University, Dallas, says women severely underreport having received WIC food vouchers, either because they fear the stigma or fail to recall participating; and also the “poorest of the poor” sign up for the programs. Ignoring either of those two factors could skew an analysis of WIC’s impact on infant health. This is the first study to simultaneously account for both.

Since the poorest of the poor have the most unfavorable attributes to begin with, the “true” effect of the program will be biased downwards. Measurement error in the reports also bias the “true” effect of WIC participation, Roy said.

“To my knowledge, this is the first study of WIC to account for both factors,” said Roy. “The results are striking and ought to serve as a note of caution and guide to future evaluations of the program. I am unable to conclude there exists a causal effect — positive or negative — of prenatal WIC receipt on birth outcomes, even if as few as 1 percent of eligible women misreport their participation.”

Based on these findings and the existing literature on program evaluation, Roy said, it would be ideal to have experimental data or at least some form of verification of program participation in nationally representative household surveys to accurately evaluate WIC’s impact. In the absence of such data, researchers should be aware of and accordingly account for both these problems using varied statistical methods. Roy’s study focused on birth outcomes of infants, and didn’t look at WIC’s effect on older eligible children or breastfeeding practices.

Existing literature notes underreporting without accounting for it, but suggests WIC improves birth outcomes
The evidence has strong implications, Roy said, since WIC caters to a special sub-population that is in maximum need of nutritious food, regular health check-ups and nutritional counseling.

Formally known as the Special Supplemental Nutrition Program for Women, Infants and Children, WIC is a $7.1 billion program of the U.S. Department of Agriculture. As of March 2012, WIC provides nearly 9 million women and young children an average of $46 a month each, according to the government. Recipients can buy milk, cheese, cereal, juice, fruits, vegetables, bread, beans and rice.

Driving research interest in WIC is the growing perception that early life conditions have a long-term impact on adult-life outcomes as well as the evidence that early life interventions yield higher returns than do later life remedial or compensatory interventions.

Prior studies evaluating the effectiveness of WIC are mostly based on household surveys. Researchers are aware, however, that the poorest of the poor enroll into programs like WIC and that an overwhelming number of women deny receiving the benefits when polled on household surveys. Existing scientific literature has consistently recognized the underreporting problem without accounting for it, but nevertheless suggests WIC improves birth outcomes of children, such as birth weight and gestation age.

New study accounts for poorest of the poor and underreporting receipt of benefits
“My contribution is that I account for both these problems simultaneously and conclude that it is difficult to be sure whether there is a positive or a negative effect of the program,” Roy said.

Roy used data on more than 4,000 9-month-old infants available from the Early Childhood Longitudinal Study-Birth Cohort, released by the National Center for Education Statistics, U.S. Department of Education.

In that study, women are interviewed when the child is 9 months old. They are asked whether they received WIC benefits while they were pregnant with the child. So, it is difficult to rule out an element of recall error in addition to the social stigma of “being on welfare,” Roy said.

“In this first step toward quantifying the consequence of misreporting, I find that even 1 percent of misreporting is sufficient to render inconclusive the evidence concerning WIC’s causal effect. Any greater degrees of misreporting will only worsen the situation,” she said.

Earlier research found low-income infants better off under public insurance
Roy presented her study, “Identifying the Effect of WIC on Infant Health When Participation is Endogenous and Misreported,” at the Southern Economic Association Annual Meeting, Washington, D.C., and in her dissertation, “Three Essays on the Effect of Public Policies on Infant and Adolescent Health.” The paper is available from IDEAS, a service of the Economic Research Division of the Federal Reserve Bank of St. Louis. Roy is a Ph.D. candidate in SMU’s Department of Economics.

The study follows earlier infant health research in which Roy analyzed data from the Early Childhood Longitudinal Study-Birth Cohort to compare private vs. public insurance and its impact on infant health. In that study, Roy found that among insured infants, those in low-income families are better off under government-provided Medicaid and CHIP than infants covered by private insurance, because public plans provide cheaper but comprehensive coverage.

Manan presented that study — “How well does the U.S. government provide health insurance?” — at the 2011 Western Economic Association International Conference, San Diego. — Margaret Allen

Tags Dedman College, Manan Roy, SMU Department of Economics

Culture, Society & Family Economics & Statistics

Imposing trade restrictions on parallel imports can motivate a firm to export, study finds

Post author By Margaret Allen
Post date April 10, 2012
1 Comment on Imposing trade restrictions on parallel imports can motivate a firm to export, study finds

Game theoretic analysis indicates that strategic policies to allow or ban parallel imports are often based on motivating domestic firms to succeed in competitive foreign markets.

Imposing trade restrictions on parallel imports has the surprising effect of motivating a firm to export, according to a new study using game theory economic analysis.

That’s the finding of economists Santanu Roy, Southern Methodist University, Dallas, and Kamal Saggi, Vanderbilt University, Nashville.

The economists found that diverse parallel importing policies among countries today make it possible to analyze for the first time how competition between firms and allowing or banning parallel imports can influence competition in foreign and domestic markets.

“Our research is the first to look at the consequence of strategic policy setting by governments in the context of competition in domestic and foreign markets,” Roy said.

Most surprising among the findings, he said, is that imposing trade restrictions on parallel imports can actually motivate a firm to export.

That can be the case when the market to which the firm is exporting is smaller than its own.

“So even though you are formally prohibiting the import of a product, you are actually promoting trade,” Roy said. “And that’s a new way of looking at this.”

Click this link to hear Santanu Roy discuss how parallel import policies impact global free trade.

Parallel importing: When a firm competes with itself
Parallel importing occurs when a manufacturer exports its trademarked or patented products to a foreign market where demand, policies or price pressures require the goods be sold at a lower price. A third-party buyer purchases the low-priced goods and imports them back to the manufacturer’s home country, undercutting domestic prices.

The controversial practice has spawned gray market retail, where consumers buy high-value, brand-named goods at cut prices, such as electronics, video games, alcohol, books and pharmaceuticals.

Parallel importing and gray market retail are growing worldwide
Some advocates of free trade decry parallel importing, saying it infringes on manufacturers’ intellectual property rights accorded by copyright, patent and trademark laws. That, in turn, can discourage investment in new technology and products.

As a result, some countries allow parallel importing; others ban it. For example, parallel importing is allowed among the member countries of the European Union. It’s not permitted by the United States, although exceptions exist for many different products. Generally speaking, developed nations restrict parallel importing, while developing nations allow it.

The study by Roy and Saggi found there is no one-size-fits-all solution — neither a global ban nor a blanket endorsement.

Only need for intervention could be countries with major asymmetries
In fact, the study’s authors found that policy diversity is working well because it takes into account important variables such as similarity or dissimilarity of markets, as well as competing products and government regulations.

“The only area where there may be need for intervention is where there may be major asymmetries between countries — where one country is very large and the other is very small,” Roy said.

Roy and Saggi found that there’s strategic interdependence in the policymaking across governments, as well as a lot of strategic dependence in the decisions of firms. For that reason, the degree of asymmetry of demand across countries is going to be a very important part of the picture, Roy said.

Impact of parallel importing varies, depending on the markets
By modeling the impact of parallel importing under various scenarios, Roy and Saggi discovered that parallel importing typically works in favor of a domestic manufacturer whose export market is similar in size to its domestic market, and where intellectual property rights and parallel trade policies are similar to its own. In that case, a competitor is unlikely to cut prices, and prices remain stable and profitable both at home and abroad.

However, where markets are dissimilar, they found that parallel importing led to price slashing both at home and abroad, which in turn drove manufacturers to abandon exporting to prevent prices being slashed at home.

“One of the consequences of parallel import policy is that when it’s allowed, firms will actually take steps to alter their pricing in such a way that parallel imports don’t occur,” Roy said. “So the fact we don’t actually observe parallel imports in data doesn’t mean that parallel import policy does not have a very important impact on the way firms price their goods across the markets.”

Parallel importing policies should be set on a case-by-case basis
Because the impact of parallel importing varies on a case-by-case basis, policies governing parallel imports should be determined country by country and product by product. Roy and Saggi warn against uniform global standards to restrict or allow parallel imports, such as could be imposed by the international trade governing body, the World Trade Organization, or through its agreements, such as the TRIPS agreement on trade-related intellectual property rights.

Roy and Saggi report their findings in two articles: “Equilibrium Parallel Import Policies and International Market Structure,” a scenario in which there are quality differences in the products across countries, forthcoming in the Journal of International Economics; and “Strategic Competition and Optimal Parallel Import Policy,” a scenario in which there’s asymmetrical protection of intellectual property, forthcoming in the Canadian Journal of Economics. Roy and Saggi were members of a development research group at the World Bank that researched parallel importing.

Roy is professor and director of graduate studies in the SMU Department of Economics. Saggi is professor and director of the graduate program in economic development in the Vanderbilt Department of Economics. — Margaret Allen

Tags Dedman College, Santanu Roy, SMU Department of Economics

Culture, Society & Family Economics & Statistics Researcher news SMU In The News

UPI: Study looks at how language excludes many in EU

Post author By Margaret Allen
Post date February 14, 2012

UPI and other media outlets have covered the research of SMU economist Shlomo Weber.

In the new book “How Many Languages Do We Need? The Economics of Linguistic Diversity” (Princeton University Press), Weber and his co-author, Victor Ginsburgh, explain their research to understand the costs and benefits of the many languages across the globe.

Weber is the Robert H. and Nancy Dedman Trustee Professor of Economics at SMU and director of the Richard Johnson Center for Economic Studies at SMU. He is also a PINE Foundation professor of economics at the New Economic School, Moscow.

Weber’s main area of research is game theory and its applications to public finance, political economy and international trade. Weber has consulted on numerous projects for private businesses, international organizations and governments in Asia, North America, Western and Eastern Europe.

Read the full story.

EXCERPT:

DALLAS, UPI — A majority of European Union citizens are marginalized because they do not speak English, the language most EU official business is conducted in, a study says.

Shlomo Weber of Southern Methodist University in Dallas and Victor Ginsburgh of the Free University of Brussels say that for the EU’s non-English speakers, their native languages are of limited use in the union’s political, legal, communal and business spheres.

That means they have limited access to EU laws, rules, regulations and debates in the governing body, they said.

“Language is the proxy for engagement. People identify strongly with their language, which is integral to culture and traditions,” Weber said in an SMU release Tuesday. “Language is so explosive; language is so close to how you feel.”

Previous studies have found 90 percent of the EU’s official documents are drafted in English and later translated to other languages, mostly French and sometimes German.

Read the full story.

Other coverage:

From Germany: Die EU hat zu viele Amtssprachen
From Italy: Due terzi dei cittadini europei sono emarginati linguistici
From Turkey: Are foreign languages useless?
International Monetary Fund: A review of “How Many Languages Do We Need?”

Tags Dedman College, Shlomo Weber, SMU Department of Economics

Grant will establish first-of-its-kind research laboratory at Moscow’s New Economic School to focus on many types of societal diversity

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SMU with The Hunger Center of North Texas will look at the impact of social networks and social capital

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New study is the first to account for two factors: women misreporting their WIC nutritional benefits and participation of the very poor in the program

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Game theoretic analysis indicates that strategic policies to allow or ban parallel imports are often based on motivating domestic firms to succeed in competitive foreign markets.

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