Summer 2017

IFPRI’s Applied Microeconomics & Development Seminar Series provides a forum for researchers to present top-quality applied microeconomics and development work. Seminars are held on the first and third Thursdays of each month at IFPRI’s Washington DC office, located at 2033 K St. NW.

June 8
Speaker: Melanie Morten, Assistant Professor at Stanford University
12:00-1:15 pm
Conference Room 7AB
Migration and Consumption Insurance in Bangladesh
We investigate the relationship between seasonal migration and informal risk sharing in rural Bangladesh. We use data from a randomized controlled trial which provided incentives for households to migrate (Bryan et al., 2014). Using this experimental variation, we first provide evidence that these incentives substantially increased insurance against income shocks. We then investigate the mechanisms behind this effect by characterizing a dynamic model of migration and endogenous risk sharing. We estimate the model using data from control villages, and use treatment data to validate the model. We find that extending migration opportunities reduced the persistence of income shocks, which in turn relaxed constraints to risk-sharing and allowed for more insurance between households.

July 6
Speaker: Quy-Toan Do, Senior Economist at The World Bank
12:00-1:15 pm
Conference Room 7AB
The speculative poaching of African elephants
The paper uses newly assembled data on ivory prices combined with information on the illegal killing of African elephants to estimate the price elasticity of elephant poaching. We find that supply is rather inelastic and that the price pass-through from consumer to producer markets is also small. The property that ivory is a storable commodity allows the construction of an instrumental variable, which addresses the issue of joint determination of prices and quantities. Finally, we discuss what the results mean in terms of elephant conservation policies.

July 20
Speaker: Kyle Meng, Assistant Professor at University of California at Santa Barbara
12:00-1:15 pm
Conference Room 7AB
The Spatial Structure of Endowments, Trade, and Inequality: Evidence from the Global Climate
We show that simply reshuffling the spatial arrangement of endowments among trading partners can affect global welfare inequality. In standard trade models, an increase in the spatial correlation of productivities amplifies dispersion in economic outcomes. We explore this result empirically in the context of global agricultural trade over 1961-2013 by exploiting an exogenous global spatial reorganization of productivities induced by the El Nin ̃o-Southern Oscillation. As predicted, we find that higher spatial correlation in cereal yields increases welfare inequality. We apply these estimated relationships to examine how additional spatial correlation in productivity induced by future climate change would increase the global inequality of welfare.

August 3
Speaker: Daniel LaFave, Assistant Professor at Colby College
12:00-1:15 pm
Conference Room 7AB
Who Behaves as if Markets are Complete?
The farm household model, in which decisions about production and consumption are made simultaneously, lies at the heart of many models of development. Empirically modelling these simultaneous choices is not straightforward. The vast majority of empirical studies assume that farm households behave as if markets are complete in which case decision-making simplifies to a recursive system where consumption choices can be treated as if they are made after all production decisions. Previous empirical tests of the complete markets assumption have relied on restrictions on production decisions. We develop a new approach to testing based on household consumption choices and implement the procedure using data from rural Indonesia. Relative to production-side tests, the consumption-based test is well-suited to identifying those farm households in any setting who behave as if markets are complete and those that do not. The complete markets assumption is not rejected for farm households with relatively more land but is rejected for farmers with relatively less land. The tests are straightforward to implement and provide important information for interpretation of results from studies of development in rural settings.