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Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics University of California, Berkeley
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Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

May 31, 2020

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Page 1: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Econ

omic

s 17

2Is

sues

in A

frica

n E

cono

mic

Dev

elop

men

t

Pro

fess

or T

ed M

igue

lD

epar

tmen

t of E

cono

mic

sU

nive

rsity

of C

alifo

rnia

, Ber

kele

y

Page 2: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Econ

omic

s 17

2Is

sues

in A

frica

n E

cono

mic

Dev

elop

men

t

Lect

ure

6 �

Febr

uary

1, 2

007

Page 3: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

63

Page 4: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

64

Hea

lth a

nd w

ealth

: cau

se o

r effe

ct?

�H

ow c

an w

e de

term

ine

whe

ther

poo

r hea

lth is

the

caus

e of

pov

erty

(as

Blo

om a

nd S

achs

ass

ert)

or v

ice

vers

a?�

This

is a

diff

icul

t pro

blem

�M

ore

gene

rally

how

to in

terp

ret C

orr(

A, B

) > 0

?1.

�A c

ause

s B

�: A

!B

2. �B

cau

ses

A�:

B !

A3.

A !

Ban

d B

!A

sim

ulta

neou

sly

4. S

ome

othe

r fac

tor C

cau

ses

both

: C !

Aan

d C

!B

5. T

he a

ssoc

iatio

n is

pur

ely

coin

cide

ntal

(but

regr

essi

on

conf

iden

ce in

terv

als

help

add

ress

this

)

Page 5: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

65

Ano

ther

app

roac

h: a

naly

sis

with

�mic

ro-d

ata�

�B

oth

Blo

om a

nd S

achs

(199

8) a

nd A

JR (2

001)

focu

s on

br

oad

coun

try-le

vel h

isto

rical

tren

ds�

But

est

ablis

hing

cau

salit

y an

d th

eore

tical

cha

nnel

s is

ex

ceed

ingl

y di

fficu

lt in

that

set

ting

�A

noth

er a

ppro

ach

uses

dat

a at

the

leve

l of i

ndiv

idua

ls,

com

mun

ities

, or f

irms

to te

st th

eorie

s ab

out t

he li

nk

betw

een

heal

th a

nd w

ealth

�P

robl

em S

et #

1 fe

atur

es s

ome

anal

ysis

of t

his

kind

Page 6: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

66

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

Page 7: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

67

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�E

duca

tion

is a

pos

sibl

e ch

anne

l lin

king

hea

lth, i

ncom

e

Poo

r hea

lthLo

wer

inco

me

Page 8: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

68

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�E

duca

tion

is a

pos

sibl

e ch

anne

l lin

king

hea

lth, i

ncom

e

Edu

catio

n

Poo

r hea

lthLo

wer

inco

me

Page 9: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

69

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�W

orm

s ar

e am

ong

the

wor

ld�s

mos

t pre

vale

nt d

isea

ses:

Par

asite

# in

fect

ions

glo

bally

Hoo

kwor

m1.

3 bi

llion

Rou

ndw

orm

1.3

billi

onW

hipw

orm

900

mill

ion

Sch

isto

som

iasi

s20

0 m

illio

n

Page 10: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

610

Page 11: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

611

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�W

orm

s ar

e am

ong

the

wor

ld�s

mos

t pre

vale

nt d

isea

ses:

Par

asite

# in

fect

ions

glo

bally

Hoo

kwor

m1.

3 bi

llion

Rou

ndw

orm

1.3

billi

onW

hipw

orm

900

mill

ion

Sch

isto

som

iasi

s20

0 m

illio

n

�H

ealth

and

nut

ritio

nal c

onse

quen

ces

�an

emia

, w

eakn

ess,

list

less

ness

, stu

ntin

g, w

astin

g, s

tom

ach

pain

espe

cial

ly fo

r hea

vy in

fect

ions

Page 12: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

612

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�Tr

ansm

issi

on o

f wor

m in

fect

ions

thro

ugh

poor

hyg

iene

, sa

nita

tion.

Elim

inat

ing

one

pers

on�s

infe

ctio

n m

ay re

duce

tra

nsm

issi

on to

oth

ers:

�ext

erna

litie

s� /

spill

over

s

Page 13: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

613

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�Tr

ansm

issi

on o

f wor

m in

fect

ions

thro

ugh

poor

hyg

iene

, sa

nita

tion.

Elim

inat

ing

one

pers

on�s

infe

ctio

n m

ay re

duce

tra

nsm

issi

on to

oth

ers:

�ext

erna

litie

s� /

spill

over

s

�Tr

eatm

ent i

s ch

eap

(<U

S$1

per

yea

r)�

Dru

gs: a

lben

dazo

le, p

razi

quan

tel

Page 14: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

614

Hea

lth a

nd e

duca

tion:

cau

se o

r effe

ct?

�W

hat i

s th

e im

pact

of w

orm

infe

ctio

ns o

n ed

ucat

ion?

Page 15: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

615

Hea

lth a

nd e

duca

tion:

cau

se o

r effe

ct?

�W

hat i

s th

e im

pact

of w

orm

infe

ctio

ns o

n ed

ucat

ion?

�In

dat

a, c

hild

ren

with

wor

se w

orm

infe

ctio

ns te

nd to

hav

e w

orse

edu

catio

nal p

erfo

rman

ce th

an o

ther

chi

ldre

n

�H

ow to

inte

rpre

t Cor

r(H

ealth

, Edu

catio

n) >

0 ?

1. �A

cau

ses

B�:

Hea

lth!

Edu

catio

n2.

�B c

ause

s A

�: E

duca

tion !

Hea

lth3.

A !

Ban

d B

!A

sim

ulta

neou

sly

4. S

ome

othe

r fac

tor C

cau

ses

both

: C !

Aan

d C

!B

5. T

he a

ssoc

iatio

n is

pur

ely

coin

cide

ntal

(but

regr

essi

on

conf

iden

ce in

terv

als

help

add

ress

this

)

Page 16: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

616

Hea

lth a

nd e

duca

tion:

cau

se o

r effe

ct?

�W

hat i

s th

e im

pact

of w

orm

infe

ctio

ns o

n ed

ucat

ion?

�In

dat

a, c

hild

ren

with

wor

se w

orm

infe

ctio

ns te

nd to

hav

e w

orse

edu

catio

nal p

erfo

rman

ce th

an o

ther

chi

ldre

n

�H

ow to

inte

rpre

t Cor

r(H

ealth

, Edu

catio

n) >

0 ?

1. �A

cau

ses

B�:

Hea

lth!

Edu

catio

n2.

�B c

ause

s A

�: E

duca

tion !

Hea

lth3.

A !

Ban

d B

!A

sim

ulta

neou

sly

4. S

ome

othe

r fac

tor C

cau

ses

both

: C !

Aan

d C

!B

5. T

he a

ssoc

iatio

n is

pur

ely

coin

cide

ntal

(but

regr

essi

on

conf

iden

ce in

terv

als

help

add

ress

this

)

Page 17: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

617

Om

itted

var

iabl

e bi

as in

OLS

Page 18: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

618

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Page 19: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

619

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Y: e

duca

tiona

l out

com

e (e

.g.,

scho

ol a

ttend

ance

)W

: ind

icat

or v

aria

ble

(=0

or 1

) for

hav

ing

wor

ms

X: c

hild

cha

ract

eris

tic (e

.g.,

hom

e so

cioe

cono

mic

sta

tus)

Page 20: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

620

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Y: e

duca

tiona

l out

com

e (e

.g.,

scho

ol a

ttend

ance

)W

: ind

icat

or v

aria

ble

(=0

or 1

) for

hav

ing

wor

ms

X: c

hild

cha

ract

eris

tic (e

.g.,

hom

e so

cioe

cono

mic

sta

tus)

a, b

, c: p

aram

eter

s / �

coef

ficie

nts�

to b

e es

timat

ed

Page 21: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

621

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Y: e

duca

tiona

l out

com

e (e

.g.,

scho

ol a

ttend

ance

)W

: ind

icat

or v

aria

ble

(=0

or 1

) for

hav

ing

wor

ms

X: c

hild

cha

ract

eris

tic (e

.g.,

hom

e so

cioe

cono

mic

sta

tus)

a, b

, c: p

aram

eter

s / �

coef

ficie

nts�

to b

e es

timat

ed

e: w

hite

noi

se �e

rror

/dis

turb

ance

� ter

m, E

(e) =

0i:

deno

tes

pers

on �i

� in

the

popu

latio

n, i

from

1, �

, N

Page 22: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

622

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Exp

ecta

tions

(�av

erag

e�) o

f the

out

com

e fo

r diff

eren

t cas

es:

1.E

(Yi|

Wi=

1, X

i=1)

= ?

Page 23: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

623

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Exp

ecta

tions

(�av

erag

e�) o

f the

out

com

e fo

r diff

eren

t cas

es:

1. E

(Yi|

Wi=

1, X

i=1)

= a

+ b

E(W

i| W

i=1,

Xi=

1)+

cE(X

i| W

i=1,

Xi=

1) +

E(e

i| W

i=1,

Xi=

1)

Page 24: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

624

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Exp

ecta

tions

(�av

erag

e�) o

f the

out

com

e fo

r diff

eren

t cas

es:

1.E

(Yi|

Wi=

1, X

i=1)

= a

+ b

+ c

+ E

(ei|

Wi=

1, X

i=1)

Page 25: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

625

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Exp

ecta

tions

(�av

erag

e�) o

f the

out

com

e fo

r diff

eren

t cas

es:

1.E

(Yi|

Wi=

1, X

i=1)

= a

+ b

+ c

+ E

(ei|

Wi=

1, X

i=1)

= a+

b+c

Page 26: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

626

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Exp

ecta

tions

(�av

erag

e�) o

f the

out

com

e fo

r diff

eren

t cas

es:

1.E

(Yi|

Wi=

1, X

i=1)

= a

+ b

+ c

+ E

(ei|

Wi=

1, X

i=1)

= a+

b+c

2.E

(Yi|

Wi=

1, X

i=0)

= a

+ b

+ E

(ei|

Wi=

1, X

i=1)

= a

+b

Page 27: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

627

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Exp

ecta

tions

(�av

erag

e�) o

f the

out

com

e fo

r diff

eren

t cas

es:

1.E

(Yi|

Wi=

1, X

i=1)

= a

+ b

+ c

+ E

(ei|

Wi=

1, X

i=1)

= a+

b+c

2.E

(Yi|

Wi=

1, X

i=0)

= a

+ b

+ E

(ei|

Wi=

1, X

i=1)

= a

+b3.

E(Y

i| W

i=0,

Xi=

1) =

a +

c +

E(e

i| W

i=1,

Xi=

1) =

a+c

Page 28: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

628

Om

itted

var

iabl

e bi

as in

OLS

(1)

Y

i= a

+ b

Wi+

cX

i+

e i

Exp

ecta

tions

(�av

erag

e�) o

f the

out

com

e fo

r diff

eren

t cas

es:

1.E

(Yi|

Wi=

1, X

i=1)

= a

+ b

+ c

+ E

(ei|

Wi=

1, X

i=1)

= a+

b+c

2.E

(Yi|

Wi=

1, X

i=0)

= a

+ b

+ E

(ei|

Wi=

1, X

i=1)

= a

+b3.

E(Y

i| W

i=0,

Xi=

1) =

a +

c +

E(e

i| W

i=1,

Xi=

1) =

a+c

4.E

(Yi|

Wi=

0, X

i=0)

= a

+ E

(ei|

Wi=

1, X

i=1)

= c

Page 29: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

629

Om

itted

var

iabl

e bi

as in

OLS

(1)

Yi=

a +

bW

i+ c

Xi

+ e i

(2)

E(Y

i| W

i=1)

�E

(Yi|

Wi=

0)

Page 30: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

630

Om

itted

var

iabl

e bi

as in

OLS

(1)

Yi=

a +

bW

i+ c

Xi

+ e i

(2)

E(Y

i| W

i=1)

�E

(Yi|

Wi=

0)

= [a

+ b

+ c

E(X

i| W

i=1)

+ E

(ei|

Wi=

1)]

�[a

+ 0

+ c

E(X

i| W

i=0)

+ E

(ei|

Wi=

0)]

Page 31: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

631

Om

itted

var

iabl

e bi

as in

OLS

(1)

Yi=

a +

bW

i+ c

Xi

+ e i

(2)

E(Y

i| W

i=1)

�E

(Yi|

Wi=

0)

= [a

+ b

+ c

E(X

i| W

i=1)

+ E

(ei|

Wi=

1)]

�[a

+ 0

+ c

E(X

i| W

i=0)

+ E

(ei|

Wi=

0)]

= b

+ c

[E(X

i| W

i=1)

�E

(Xi|

Wi=

0)]

Page 32: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

632

Om

itted

var

iabl

e bi

as in

OLS

(1)

Yi=

a +

bW

i+ c

Xi

+ e i

(2)

E(Y

i| W

i=1)

�E

(Yi|

Wi=

0)

= [a

+ b

+ c

E(X

i| W

i=1)

+ E

(ei|

Wi=

1)]

�[a

+ 0

+ c

E(X

i| W

i=0)

+ E

(ei|

Wi=

0)]

= b

+ c

[E(X

i| W

i=1)

�E

(Xi|

Wi=

0)]

True

effe

ct�O

mitt

ed v

aria

ble/

sele

ctio

n bi

as� t

erm

Page 33: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

633

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?

Page 34: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

634

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?1)

Col

lect

info

rmat

ion

on X

Page 35: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

635

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?1)

Col

lect

info

rmat

ion

on X

Bet

ter d

ata

colle

ctio

n re

duce

s O

VB

, few

er X

�s

Page 36: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

636

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?1)

Col

lect

info

rmat

ion

on X

Bet

ter d

ata

colle

ctio

n re

duce

s O

VB

, few

er X

�s2)

The

om

itted

var

iabl

e do

es n

ot a

ffect

the

outc

ome

Page 37: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

637

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?1)

Col

lect

info

rmat

ion

on X

Bet

ter d

ata

colle

ctio

n re

duce

s O

VB

, few

er X

�s2)

The

om

itted

var

iabl

e do

es n

ot a

ffect

the

outc

ome

c =

0

Page 38: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

638

Om

itted

var

iabl

e bi

as in

OLS

(1)

Yi=

a +

bW

i+ c

Xi

+ e i

(2)

E(Y

i| W

i=1)

�E

(Yi|

Wi=

0)

= [a

+ b

+ c

E(X

i| W

i=1)

+ E

(ei|

Wi=

1)]

�[a

+ 0

+ c

E(X

i| W

i=0)

+ E

(ei|

Wi=

0)]

= b

+ c

[E(X

i| W

i=1)

�E

(Xi|

Wi=

0)]

True

effe

ct�O

mitt

ed v

aria

ble/

sele

ctio

n bi

as� t

erm

Page 39: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

639

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?1)

Col

lect

info

rmat

ion

on X

Bet

ter d

ata

colle

ctio

n re

duce

s O

VB

, few

er X

�s2)

The

om

itted

var

iabl

e do

es n

ot a

ffect

the

outc

ome

c =

03)

The

om

itted

var

iabl

es a

re n

ot c

orre

late

d w

ith th

e ex

plan

ator

y va

riabl

e of

inte

rest

(her

e, W

)

Page 40: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

640

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?1)

Col

lect

info

rmat

ion

on X

Bet

ter d

ata

colle

ctio

n re

duce

s O

VB

, few

er X

�s2)

The

om

itted

var

iabl

e do

es n

ot a

ffect

the

outc

ome

c =

03)

The

om

itted

var

iabl

es a

re n

ot c

orre

late

d w

ith th

e ex

plan

ator

y va

riabl

e of

inte

rest

(her

e, W

)�E

xper

imen

tal�

varia

tion

in v

aria

bles

of i

nter

est

Page 41: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

641

Dea

ling

with

om

itted

var

iabl

e bi

as�

Whe

n is

om

itted

var

iabl

e bi

as n

ot a

pro

blem

?1)

Col

lect

info

rmat

ion

on X

Bet

ter d

ata

colle

ctio

n re

duce

s O

VB

, few

er X

�s2)

The

om

itted

var

iabl

e do

es n

ot a

ffect

the

outc

ome

c =

03)

The

om

itted

var

iabl

es a

re n

ot c

orre

late

d w

ith th

e ex

plan

ator

y va

riabl

e of

inte

rest

(her

e, W

)�E

xper

imen

tal�

varia

tion

in v

aria

bles

of i

nter

est

�If

treat

men

t with

dew

orm

ing

drug

s is

ass

igne

d �r

ando

mly

�, an

d re

duce

s w

orm

infe

ctio

n, th

en th

e re

duct

ion

in w

orm

s sh

ould

be

unco

rrel

ated

with

X

Page 42: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

642

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�P

rimar

y S

choo

l Dew

orm

ing

Pro

ject

(PS

DP

) in

Ken

ya

Page 43: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

643

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�P

rimar

y S

choo

l Dew

orm

ing

Pro

ject

(PS

DP

) in

Ken

ya

�R

ando

miz

ed e

valu

atio

n de

sign

: Thr

ee s

teps

(i) S

choo

ls d

ivid

ed b

y ge

ogra

phic

zon

e, (i

i) al

phab

etiz

ed,

(iii)

divi

ded

into

thre

e gr

oups

(1-2

-3, 1

-2-3

, etc

.)

Page 44: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

644

Mig

uel (

2005

) / M

igue

l and

Kre

mer

(200

4)

�P

rimar

y S

choo

l Dew

orm

ing

Pro

ject

(PS

DP

) in

Ken

ya

�R

ando

miz

ed e

valu

atio

n de

sign

: Thr

ee s

teps

(i) S

choo

ls d

ivid

ed b

y ge

ogra

phic

zon

e, (i

i) al

phab

etiz

ed,

(iii)

divi

ded

into

thre

e gr

oups

(1-2

-3, 1

-2-3

, etc

.)

1998

1999

Gro

up 1

(25

scho

ols)

Trea

tmen

tTr

eatm

ent

Gro

up 2

(25

scho

ols)

Com

paris

onTr

eatm

ent

Gro

up 3

(25

scho

ols)

Com

paris

on C

ompa

rison

Page 45: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

645

Page 46: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

646

Page 47: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

647

PS

DP

Bas

elin

e di

ffere

nces

(199

8)A

vera

geA

vera

geA

vera

geG

roup

1G

roup

2G

roup

3(N

=25)

(N=2

5)(N

=25)

Page 48: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

648

PS

DP

Bas

elin

e di

ffere

nces

(199

8)A

vera

geA

vera

geA

vera

geG

roup

1G

roup

2G

roup

3(N

=25)

(N=2

5)(N

=25)

Latri

ne a

t hom

e0.

820.

810.

82Li

vest

ock

at h

ome

0.66

0.67

0.66

Chi

ld s

ick

ofte

n0.

100.

100.

08(s

elf-r

epor

ted)

1996

exa

m s

core

-0.1

00.

090.

01(n

orm

aliz

ed m

ean

0, s

.d. 1

)

Page 49: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

649

Pro

gram

impa

cts

�Th

ree

type

s of

ana

lysi

s:(1

) Dire

ct tr

eatm

ent e

ffect

s: s

impl

e di

ffere

nce

betw

een

treat

men

t and

com

paris

on s

choo

ls(2

) With

in-s

choo

l ext

erna

lity

impa

cts

(3) C

ross

-sch

ool e

xter

nalit

y im

pact

s

Page 50: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

650

Hea

lth, n

utrit

ion

impa

cts

(199

9)

Gro

up 1

Gro

up 2

G1�

G2

Rat

e of

mod

erat

e-he

avy

infe

ctio

n0.

270.

52-0

.25*

Sic

k in

pas

t wee

k 0.

410.

45-0

.04*

Hei

ght f

or a

ge-1

.13

-1.2

20.

09*

(Z-s

core

)

Hem

oglo

bin

(Hb)

124.

812

3.2

1.6

Page 51: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

651

With

in-s

choo

l inf

ectio

n ex

tern

aliti

es (1

999)

Gro

up 1

Gro

up 1

Gro

up 2

(Tre

ated

)(U

ntre

ated

)

Rat

e of

mod

erat

e-he

avy

Infe

ctio

n, 1

999

0.24

0.34

0.52

Page 52: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

652

With

in-s

choo

l inf

ectio

n ex

tern

aliti

es (1

999)

Gro

up 1

Gro

up 1

Gro

up 2

(Tre

ated

)(U

ntre

ated

)

Rat

e of

mod

erat

e-he

avy

Infe

ctio

n, 1

999

0.24

0.34

0.52

Rat

e of

mod

erat

e-he

avy

Infe

ctio

n, 1

998

0.39

0.41

-

Page 53: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

653

Cro

ss-s

choo

l inf

ectio

n ex

tern

aliti

es (1

999)

�La

rge

redu

ctio

ns in

mod

erat

e-he

avy

infe

ctio

n le

vels

w

ithin

6 k

m o

f tre

atm

ent s

choo

ls in

199

9

Page 54: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

654

Page 55: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

655

Page 56: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

656

Cro

ss-s

choo

l inf

ectio

n ex

tern

aliti

es (1

999)

�La

rge

redu

ctio

ns in

mod

erat

e-he

avy

infe

ctio

n le

vels

w

ithin

6 k

m o

f tre

atm

ent s

choo

ls in

199

9

�A

n av

erag

e re

duct

ion

in m

oder

ate-

heav

y in

fect

ions

of 2

3 pe

rcen

tage

poi

nts

in th

e st

udy

area

can

be

attri

bute

d to

cr

oss-

scho

ol e

xter

nalit

ies

Page 57: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

657

Edu

catio

nal i

mpa

cts

�sc

hool

par

ticip

atio

n

��S

choo

l par

ticip

atio

n� d

ata

colle

cted

by

enum

erat

ors

durin

g un

anno

unce

d pr

imar

y sc

hool

vis

its

Page 58: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

658

Edu

catio

nal i

mpa

cts

�sc

hool

par

ticip

atio

n

��S

choo

l par

ticip

atio

n� d

ata

colle

cted

by

enum

erat

ors

durin

g un

anno

unce

d pr

imar

y sc

hool

vis

itsG

roup

1 (T

)G

roup

2 (C

)G

roup

3 (C

)Y

oung

er g

irls,

and

all

boys

0.84

0.73

0.77

Old

er g

irls

(≥13

yea

rs)

0.86

0.80

0.81

Pre

-sch

ool,

Gra

des

1-2

0.80

0.69

0.70

Gra

des

6-8

0.93

0.86

0.89

Page 59: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

659

Edu

catio

nal i

mpa

cts

�ac

adem

ic te

sts

�S

tand

ardi

zed

acad

emic

exa

ms

adm

inis

tere

d in

gra

des

3-8

in 1

998

and

1999

�W

hy m

ight

dew

orm

ing

affe

ct te

st s

core

s?

Page 60: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

660

Edu

catio

nal i

mpa

cts

�ac

adem

ic te

sts

�S

tand

ardi

zed

acad

emic

exa

ms

adm

inis

tere

d in

gra

des

3-8

in 1

998

and

1999

�W

hy m

ight

dew

orm

ing

affe

ct te

st s

core

s?1)

Incr

ease

d tim

e in

sch

ool (

+)2)

Gre

ater

effi

cien

cy o

f lea

rnin

g (+

)

Page 61: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

Eco

nom

ics

172:

Lec

ture

661

Edu

catio

nal i

mpa

cts

�ac

adem

ic te

sts

�S

tand

ardi

zed

acad

emic

exa

ms

adm

inis

tere

d in

gra

des

3-8

in 1

998

and

1999

�W

hy m

ight

dew

orm

ing

affe

ct te

st s

core

s?1)

Incr

ease

d tim

e in

sch

ool (

+)2)

Gre

ater

effi

cien

cy o

f lea

rnin

g (+

)

�B

ut th

e av

erag

e te

st g

ain

from

dew

orm

ing

is z

ero.

Why

?

Page 62: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 63: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 64: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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664

Cos

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calc

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Page 65: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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ly U

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her a

dult

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es

Page 66: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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666

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Page 67: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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ics

172:

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667

Cos

t-ben

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�D

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Page 68: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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668

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?

Page 69: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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669

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arne

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at th

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ot e

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ive�

Page 70: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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670

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take

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(2) S

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m a

nthr

opol

ogy)

Page 71: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 72: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 73: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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673

Page 74: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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674

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r nex

t tim

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Mig

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2005

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Page 75: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 76: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 77: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 78: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 79: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 80: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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Page 81: Economics 172 - University of California, Berkeleywebfac/emiguel/e172_s07/lecture6.pdf · Economics 172 Issues in African Economic Development Professor Ted Miguel Department of Economics

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172:

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681

Map

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