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This paper evaluates the impact of three different performance incentives schemes using data from a social experiment that randomized 88 Mexican high schools with over 40,000 students into three treatment groups and a control group. Treatment one provides individual incentives for performance on curriculum-based mathematics tests to students only, treatment two to teachers only and treatment three gives both individual and group incentives to students, teachers and school administrators. Program impact estimates reveal the largest average effects for treatment three, smaller impacts for treatment one and no impact for treatment two. Download Paper
This paper examines how beliefs about own HIV status aect decisions to engage in risky sexual behavior, as measured by having extramarital sex and/or multiple sex partners. The empirical analysis is based on a panel survey of males from the 2006 and 2008 rounds of the Malawi Diusion and Ideational Change Project (MDICP). The paper first develops a behavioral model of the belief-risky behavior relationship. It then estimates the causal effect of beliefs on risky behavior in a way that takes into account the belief updating mechanisms implied by the model. In particular, the Arellano and Carrasco (2003) semiparametric panel data estimator that is used accommodates both unobserved heterogeneity and belief endogeneity, arising from dependence of current beliefs on past risky behavior. Results show that downward revisions in the belief assigned to being HIV positive increase risky behavior and upward revisions decrease it. We estimate for example that a change in the perceived probability of being HIV positive from 0 to 100% reduces risky behavior between 13.7 and 36.4 percentage points depending on the risky behavior definition and year. Implementation of a modied estimator that allows for misreporting of risky behavior finds the estimates to be downward biased but relatively robust to a wide range of plausible misreporting levels. Download Paper
Conditional cash transfer (CCT) programs have spread worldwide as a new form of social assistance for the poor. Previous evaluations of CCT programs focus mainly on rural settings, and little is known about their effects in urban areas. This paper studies the short-term (one and two-year) effects of the Mexican Oportunidades CCT program on urban children/youth. The program provides financial incentives for children/youth to attend school and for family members to visit health clinics. To participate, families had to sign up for the program and be deemed eligible. Difference-in-difference propensity score matching estimates indicate that the program is successful in increasing school enrollment, schooling attainment and time devoted to homework and in decreasing working rates of boys. Download Paper
This paper examines how beliefs about own HIV status affect decisions to engage in risky sexual behavior (as measured by extramarital affairs) and analyzes the potential for interventions that influence beliefs, such as HIV testing and informational campaigns, to reduce transmission rates. The empirical analysis is based on a panel survey of married males for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP). In the data, beliefs about HIV status vary significantly geographically and over time, in part because of newly available testing opportunities and because of cultural differences. We estimate the effect of beliefs on risky behavior using Arellano and Carrasco’s (2003) semiparametric panel data estimator, which accommodates unobserved heterogeneity and belief endogeneity. Results show that changes in the belief of being HIV positive induce changes in risky behavior.Downward revisions in beliefs increase risky behavior and upward revisions decrease it. We modify Arellano and Carrasco’s (2003) estimator to allow for underreporting of extramarital affairs and find the estimates to be robust. Using the estimates and a prototypical epidemiological model of disease transmission, we show that better informing people about their HIV status on net reduces the population HIV transmission rate. Download Paper
This paper examines how beliefs about own HIV status affect decisions to engage in risky sexual behavior using data on married males living in Malawi. Risky behavior is measured as the propensity to engage in extramarital affairs. The empirical analysis is based on panel surveys for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP). Beliefs vary significantly over time in the data, in part because of HIV testing and informational campaigns. We estimate the effect of beliefs about own HIV status on risky behavior using a panel data estimator developed by Arellano and Carrasco (2003), which accommodates unobserved heterogeneity as well as belief endogeneity arising from the dependence of current beliefs on lagged behaviors. We find that beliefs are an important determinant of risky behavior, with downward revisions in the belief of being HIV positive increasing risky behavior and upward revisions decreasing it. We modify Arellano and Carrasco’s (2003) estimator to allow for underreporting of affairs and find the estimates to be relatively robust to underreporting. Using our estimates and a prototypical epidemiological model of disease transmission, we show that making individuals better informed about their HIV status, either by increasing the credibility of test results and/or increasing access to testing, would on net reduce the HIV transmission rate. Download Paper
This paper examines whether and to what extent changes in beliefs about own HIV status induce changes in risky sexual behavior using data from married males living in three regions of Malawi. Risky behavior is measured as the propensity to engage in extramarital affairs. The empirical analysis is based on panel surveys for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP), which contain detailed information on beliefs about HIV status and on sexual behaviors. Many individuals change their beliefs over time, because of opportunities to get tested for HIV and informational campaigns. We estimate the effect of belief revisions on the propensity to engage in extra-marital affairs using a panel data estimator developed by Arellano and Carrasco (2003), which accommodates unobserved heterogeneity as well as belief endogeneity arising from the dependence of current beliefs on lagged behaviors. We find that downward revisions in the belief of being HIV positive lead to an increased propensity to engage in extra-marital affairs and upward revisions to a decreased propensity. The estimates are shown to be robust to underreporting of affairs. Using our estimates and a standard epidemeological model of disease transmission, we find that increasing the responsiveness of beliefs to test results would reduce the HIV transmission rate as infected individuals reduce sexual behavior and decrease the likelihood that uninfected persons have contact with an HV-positive person. Download Paper
This paper examines whether and to what extent changes in beliefs about own HIV status induce changes in risky sexual behavior using data from married males living in three regions of Malawi. Risky behavior is measured as the propensity to engage in extramarital affairs. The empirical analysis is based on panel surveys for years 2006 and 2008 from the Malawi Diffusion and Ideational Change Project (MDICP), which contain detailed information on beliefs about HIV status and on sexual behaviors. Many individuals change their beliefs over time, in part because of opportunities to get tested for HIV and informational campaigns. We estimate the effect of belief revisions on the propensity to engage in extra-marital affairs using a panel data estimator developed by Arellano and Carrasco (2003). The estimator accommodates unobserved heterogeneity as well as belief endogeneity arising from the dependence of current beliefs on lagged behaviors. We find that downward revisions in the belief of being HIV positive lead to an increased propensity to engage in extra-marital affairs and upward revisions to a decreased propensity. The estimates are shown to be robust to underreporting of affairs. Download Paper
This paper discusses the use of discrete choice dynamic programming (DCDP) methods for evaluating policies of particular relevance to developing countries, such as policies to reduce child labor and increase school attendance, to improve school quality, to affect immigration flows, to expand old age pension benefits, or to foster small business investment through microfinance. We describe the DCDP framework and how it relates to static models, illustrate its application with an example related to conditional cash transfer programs, consider numerous empirical applications from the literature of how the DCDP methodology has been used to address substantively important policy issues, and discuss methods for model validation. Download Paper
This paper examines how beliefs about own HIV status affect sexual behavior. Risky behavior is measured as the propensity to engage in extramarital affairs or not use condoms. The empirical analysis is based on 2004 and 2006 data from the Malawi Diffusion and Ideational Change Project. Controlling for endogeneity between beliefs and risk-taking, we find that downward revisions in the belief of being HIV positive lead to a lower propensity to engage in extramarital affairs but have no effect on condom use. We show that the estimates provide a lower bound when there is measurement error in reported extra-marital affairs. Download Paper
Many HIV testing programs in Africa and elsewhere aim to reduce risk-taking behaviors by providing individuals with information about their own HIV status. This paper examines how beliefs about own HIV status affect risky sexual behavior using data from married couples living in three regions of Malawi. Risky behavior is measured as the propensity to engage in extramarital affairs or to not use condoms. The empirical analysis is based on two panel surveys for years 2004 and 2006 from the Malawi Diffusion and Ideational Change Project (MDICP) and from an experimental HIV testing intervention carried out in 2004 that provided randomized incentives for picking up test results. Most individuals participating in the MDICP testing learned that they were HIV negative and a small fraction that they were positive. Controlling for potential endogeneity between beliefs and risk-taking, we find that downward revisions in the subjective belief of being HIV positive lead to decreases in the propensity to engage in extra-marital affairs but have no effect on condom use. These results are generally supported by survey questions that directly elicited from respondents how participating in testing altered their behavior. We show that the estimates provide a lower bound in the presence of measurement error in extra-marital affairs. Download Paper
This paper discusses methods for evaluating the impacts of social programs prior to their implementation. Ex ante evaluation is useful for designing programs that achieve some optimality criteria, such as maximizing impact for a given cost. This paper illustrates through several examples the use of behavioral models in predicting the impacts of hypothetical programs. Among the programs considered are wage subsidy programs, conditional cash transfer programs, and income support programs. In some cases, the behavioral model justifies a completely nonparametric estimation strategy, even when there is no direct variation in the policy instrument. In other cases, stronger modeling and/or functional form assumptions are required to evaluate a program ex ante. We illustrate the application of ex ante evaluation methods using data from the PROGRESA school subsidy experiment in Mexico. We assess the effectiveness of the method by comparing ex ante predictions of program impacts to the impacts measured under the randomized experiment. Download Paper
We present a theoretical model of airport searches. The model extends previous work in the area in that detection conditional on search is imperfect. The hit rates tests for racial bias developed in Knowles, Persico, and Todd (2001) is shown to apply even in the presence of imperfections in monitoring. We then study two channels for improving airport security: better targeting and better detection. We show that better targeting does not necessarily decrease the overall crime rate, although it will decrease crime in the group that is targeted. Improved detection rates unambiguously decrease crime. Group-specific improvements in detection do not necessarily increase the number of searches for those groups. The analysis is extended to allow for the possibility that criminal passengers disguise themselves as members of low-crime groups. Download Paper
This paper considers the use of outcomes-based tests for detecting racial bias in the context of police searches of motor vehicles. It shows that the test proposed in Knowles, Persico and Todd (2001) can also be applied in a more general environment where police officers are heterogenous in their tastes for discrimination and in their costs of search and motorists are heterogeneous in their benefits and costs from criminal behavior. We characterize the police and motorist decision problems in a game theoretic framework and establish properties of the equilibrium. We also extend of the model to the case where drivers' characteristics are mutable in the sense that drivers can adapt some of their characteristics to reduce the probability of being monitored. After developing the theory that justifies the application of outcomes- based tests, we apply the tests to data on police searches of motor vehicles gathered by the Wichita Police department. The empirical findings are consistent with the notion that police in Wichita choose their search strategies to maximize successful searches, and not out of racial bias. Download Paper
This paper studies the determinants of children's scores on tests of cognitive achievement in math and reading. Using rich longitudinal data on test scores, home environments, and schools, we implement alternative specifications for the production function for achievement and test their assumptions. We do not find support for commonly used restrictive models that assume test scores depend only on contemporaneous inputs or that assume conditioning in a lagged score captures the effects of all past inputs. Instead, the results show that both contemporaneous and lagged inputs matter in the production of current achievement and that it is important to allow for unobserved child-specific endowment effects and endogeneity of inputs. Using a specification that incorporates these features, we analyze sources of test score gaps between black, white and Hispanic children. The estimated model captures key patterns in the data, such as the widening of minority-white test score gaps with age, which is most pronounced for black children. The parameter estimates indicate that home inputs are significant determinants of achievement, while the effects of school inputs (as measured by pupil-teacher ratios and teacher salaries) are imprecisely measured in specifications that allow for unobserved child endowments. We find that equalizing home inputs at the average levels of white children would close the black-white test score gap by about 25% and close the Hispanic-white gap by about 30%. Download Paper
This paper studies the performance of a methodology that can be used to evaluate the impact of new policies that radically depart from existing ones. It uses data gathered from a randomized schooling subsidy experiment in Mexico (i) to estimate and validate a dynamic behavioral model of parental decisions about fertility and child schooling, (ii) to forecast long-term program impacts that extend beyond the life of the experiment, and (iii) to assess the impact of a variety of counterfactual policies. The behavioral model is estimated using data on families in the randomized-out control group and in the treatment group prior to the experiment, both of which did not receive any subsidy. Child wages provide a valuable source of variation in the data for identifying subsidy effects. Using the estimated model, we predict the effects of school subsidies according to the schedule that was implemented under the Mexican PROGRESA program. We compare the predicted impacts to the experimental benchmarks and find that the model's predictions track the experimental results closely. The model is also used to simulate the effects of counterfactual programs and to find an alternative subsidy schedule that provides greater impact on schooling achievement at similar cost to the existing program. Download Paper
Improvements in education and educational quality are widely acknowledged to be major contributors to black economic progress in the Twentieth Century. This paper investigates the sources of improvement in black education in the South in the first half of the century and demonstrates the important roles of social activism, especially NAACP litigation and private philanthropy, in improving the quality and availability of public schooling. Many scholars view education as a rival to social activism in explaining black economic progress, but such a view misses the important role of philanthropic and legal interventions in promoting education. Download Paper
This paper applies recently developed cross sectional and longitudinal propensity score matching estimators to data from the National Supported Work Demonstration that have been previously analyzed by LaLonde (1986) and Dehejia and Wahba (1998,1999). We find little support for recent claims in the econometrics and statistics literatures that traditional, cross sectional matching estimators generally provide a reliable method of evaluating social experiments (e.g. Dehejia and Wahba, 1998, 1999). Our results show that program impact estimates generated through propensity score matching are highly sensitive to choice of variables used in estimating the propensity scores and sensitive to the choice of analysis sample. Among the estimators we study, the difference in differences matching estimator is the most robust. We attribute its better performance to the fact that it eliminates temporarily invariant sources of bias that may arise, for example, when program participants and nonparticipants are geographically mismatched or from differences in survey questionnaires, which are both common sources of biases in evaluation studies. Download Paper
This paper uses a large, nonexperimental data set to evaluate the effects of a preschool enrichment program in a developing country on cognitive, psycho social, and anthropometric outcomes. Outcomes are shown to be highly dependent on age and duration of exposure to the program. To minimize the impact of distributional assumptions, program impacts are estimated nonparametrically as a function of age and duration. A generalized version of the method of matching is developed and used to control for nonrandom selectivity into the program or into alternative program durations. The estimates obtained using this method reveal a different pattern of program impacts with respect to age and duration than does a parametric model under more restrictive functional form assumptions. The estimates based on matching show a greater dependence of test score impacts on duration of exposure to the program and show larger impacts for the anthropometric measures for a range of durations.  Impact estimates are based on three different comparison groups: children in the same communities in which the program was introduced who were not in the program, children in similar communities in which the program had not yet been introduced, and children who were in the program for a month or less. The average impact estimates for test score outcomes are robust to the three alternative comparison groups. The preschool program is found to increase cognitive and psycho social test scores, but only for children who participated in the program for at least seven months. The anthropometric results for weight differ substantially depending on which comparison group is used, suggesting that estimates based on the first two comparisons are contaminated by important unobserved characteristics related to program entry. The preferred estimates based on the third comparison group indicate that the program tends to improve the anthropometric outcomes, again with initially increasing effects as the duration of program participation increases. Cost benefit analysis based on these estimates and other assumptions indicate fairly high rates of return for this program. Download Paper
A new anti poverty program in Mexico, PROGRESA, provides monetary transfers to families that are contingent upon their children's regular attendance at school. The benefit levels are intended to offset the opportunity costs of not sending children to school and vary with the grade level and gender of the child. The initial phase of the program was implemented as a randomized social experiment. This paper uses a Markov schooling transition model applied to the experimental data to assess the impact of the educational subsidy program along several dimensions, including effects on initial ages of school entry, dropout rates, grade repetition rates, and school reentry rates. The findings show that the program effectively reduces drop out rates and facilitates progression through the grades, particularly during the transition from primary to secondary school. Results based on a simulation evaluating the effects of longer terms of exposure to the program indicate that if children were to participate in the program between ages 6 to 14, they would experience an increase of 0.6 years in average educational attainment levels years and an increase of 19% in the percentage of children attending junior secondary school. Download Paper