‘Metrics Monday: One IV for Two Endogenous Variable, and Testing for Mechanisms

A few months ago, a post in this series discussed a recently published article in the American Political Science Review by Acharya et al. (2016, ungated version here) in which the authors developed a method to test whether a mediator variable is a mechanism whereby treatment variable causes outcome variable .

At the time, I suggested to one of my PhD students that she should use that method to test for a presumed mechanism in her job-market paper, but since her identification strategy was based on an IV, it really wasn’t clear that Acharya et al.’s method could be applied to her research question.

A few weeks ago, a new working paper by Dippel et al. (2017) was released titled “Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters.” Although Dippel et al.’s application is really timely–Do trade shocks cause people to vote for populist parties by turning them into disgruntled workers?–I’ll focus in this post on their methodological innovation. Continue reading

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Agriculture in Africa–Telling Myths from Facts

Food Policy, the journal I have the privilege and the pleasure of co-editing with my Bologna colleague Mario Mazzocchi, has a new special issue which should be of interest to readers of this blog.

The topic is “Agriculture in Africa–Telling Myths from Facts,” the special issue was guest edited by the World Bank’s Luc Christiaensen, and there is a lot of good stuff in there if you are working on agricultural development. And the best part is that it is all open access thanks to the Bill & Melinda Gates Foundation.

Here is the table of contents: Continue reading

What Are the Spillovers from Participation in Agricultural Value Chains?

A few months ago, I came across a reference to a review of the literature on contract farming by Otsuka et al. (2016) in a paper I was handling at Food Policy. Given how much work I have done on contract farming so far, I made sure to make time to read Otsuka et al.’s review.

One of the things that grabbed me in their review was the part where Otsuka and his coauthors write:

[i]t is less clear … how far [contract farming] improves farmers’ welfare. Although many empirical studies found positive effects of [contract farming] on the income from contracted crops, such evidence is not conclusive, because crops and products under [contract farming] are usually labor-intensive so that income from other crop production or nonfarm activities might be sacrificed … [I]ncome from other sources should be analyzed along with income from contracted production to identify the net income gain and the degree to which [contract farming] sacrifices other income … To our knowledge, such a study is lacking … (p.369)

When I read that, I realized that I could actually answer that question using the data I used in my 2012 World Development article and in my 2017 American Journal of Agricultural Economics article with Lindsey Novak, and that I could do so rather quickly. Continue reading