Search

Slack – the underutilization of factors of production – varies systematically with economic development. Using novel and detailed measures of the utilization of labor and capital from a large representative sample of firms in rural and urban Kenya, we show that utilization is increasing in firm size, market access, and economic activity. We present a model of firm capacity choice where indivisibility in at least one input is a key driver of slack. We embed the model in spatial general equilibrium, with features characteristic of low-income settings – including many small firms and high transport costs – and show that it rationalizes both the endogenous emergence of slack in steady-state and elastic aggregate supply curves. We empirically validate model predictions using reduced-form estimates of the general equilibrium effects of cash transfers from a large-scale RCT in Kenya. The parsimonious model replicates much of the experimental evidence, predicting a large real multiplier of 1.5, driven by expansion in low-utilization sectors and firms, and limited average price inflation. Counterfactual analyses indicate that multipliers are likely to be meaningfully smaller in lower slack settings, such as urban areas. We use the model to revisit the estimation of spatial spillovers in clustered RCTs and uncover non-trivial ’missing intercept’ effects on income and inflation. Additionally, we innovate methodologically by pre registering key elements of model estimation and validation. The findings suggest that input indivisibilities and slack are key features of developing country settings, and are quantitatively important for macroeconomic dynamics and policies.

Background and aimsMany agricultural areas are expected to face hotter, drier conditions from climate change. Understanding the mechanisms that crops use to mitigate these stresses can guide breeding for more tolerant plant material. We tested relationships between traits, physiological function in hot conditions and historical climate associations to evaluate these mechanisms for winegrapes. We expected a more negative leaf osmotic potential at full hydration (πo), which reduces leaf turgor loss during drought, and either a metabolically cheaper or more osmoprotectant leaf chemical composition, to allow cultivars associated with hot, dry regions to maintain greater gas exchange in hot growing conditions.MethodsWe measured πo, gas exchange and leaf chemistry for seven commercially important winegrape cultivars that vary widely in historical climate associations. Vines were grown in common-garden field conditions in a hot wine-growing region (Davis, CA, USA) and measured over the hottest period of the growing season (July-September).Key resultsThe value of πo varied significantly between cultivars, and all cultivars significantly reduced πo (osmotically adjusted) over the study period, although osmotic adjustment did not vary across cultivars. The value of πo was correlated with gas exchange and climate associations, but in the direction opposite to expected. Photosynthesis and πo were higher in the cultivars associated with hotter, less humid regions. Leaf chemical composition varied between cultivars but was not related to climate associations.ConclusionsThese findings suggest that maintenance of leaf turgor is not a primary limitation on grapevine adaptation to hot or atmospherically dry growing conditions. Thus, selecting for a more negative πo or greater osmotic adjustment is not a promising strategy to develop more climate-resilient grape varieties, contrary to findings for other crops. Future work is needed to identify the mechanisms increasing photosynthesis in the cultivars associated with hot, dry regions.

The over-60 population in Sub-Saharan Africa is expected to grow rapidly in the coming decades, tripling between 2020 and 2050. Despite this explosive projected growth, few countries in the region have implemented policies designed to support older populations. Further, little research in economics has specifically examined aging in Sub-Saharan Africa, though many opportunities exist for economists to generate research evidence to inform the design of effective policies in this area. This paper combines insights from a cross-disciplinary review with original data analysis to characterize the challenges and opportunities facing older Sub-Saharan Africans in domains such as health and financial security. Informed by these findings, the paper identifies directions for future economic research and discusses policy recommendations, including the need to reform health care systems and expand pension and other public support programs to prepare for an aging Africa.

Equating the scores from different forms of a test requires collecting data that link the forms. Problems arise when the test forms to be linked are given to groups that are not equivalent and the forms share no common items by which to measure or adjust for this group nonequivalence. We compared three approaches to adjusting for group nonequivalence in a situation where not only is randomization questionable, but the number of common items is small. Group adjustment through either subgroup weighting, a weak anchor, or a mix of both was evaluated in terms of linking accuracy using a resampling approach. We used data from a single test form to create two research forms for which the equating relationship was known. The results showed that both subgroup weighting and weak anchor approaches produced nearly equivalent linking results when group equivalence was not met. Direct (random groups) linking methods produced the least accurate result due to nontrivial bias. Use of subgroup weighting and linking using the anchor test only marginally improved linking accuracy compared to using the weak anchor alone when the degree of group nonequivalence was small.

In this investigation, we used real data to assess potential differential effects associated with taking a test in a test center (TC) versus testing at home using remote proctoring (RP). We used a pseudo-equivalent groups (PEG) approach to examine group equivalence at the item level and the total score level. If our assumption holds that the PEG approach removes between-group ability differences (as measured by the test) reasonably well, then a plausible explanation for any systematic differences in performance between TC and RP groups that remain after applying the PEG approach would be the operation of test mode effects. At the item level, we compared item difficulties estimated using the PEG approach (i.e., adjusting only for ability differences between groups) to those estimated via delta equating (i.e., adjusting for any systematic differences between groups). All tests used in this investigation showed small, nonsystematic differences, providing evidence of trivial effects associated with at-home testing. At the total score level, we linked the RP group scores to the TC group scores after adjusting for group differences using demographic covariates. We then compared the resulting RP group conversion to the original TC group conversion (the criterion in this study). The magnitude of differences between the RP conversion and the TC conversion was small, leading to the same pass/fail decision for most RP examinees. The present analyses seem to suggest little to no mode effects for the tests used in this investigation.

We assess the impacts of a randomized school-based deworming intervention in Kenya on the mortality of recipients’ children using a 23-year longitudinal data set of over 6,500 original participants and their offspring. The under-5 mortality rate fell by 22% (17 deaths per 1000 live births) for children of treatment group individuals. We find that a combination of improved health, education, and living standards, increased urban residence, delayed fertility, and greater use of health care in the parent generation contributed to the reduction. The results provide evidence for meaningful intergenerational benefits of child health investments