Aparna Dutta

Job Market Paper:

Testing for a Structural Break in Spatial Panel Model (PDF link)

Abstract:

This paper considers the problem of testing for a structural break in the spatial lag parameter in a panel model. The paper proposes a likelihood ratio test of the null hypothesis of no break against the alternative hypothesis of a single break. The limiting distribution of the test is derived under the null and when both the number of individual units N and the number of time periods T is large or N is fixed and T is large. It is shown that the asymptotic critical values can be obtained analytically. The paper also proposes a break date estimator that can be employed to determine the location of the break point following the evidence against the null hypothesis. I present Monte Carlo evidence to show that the proposed procedure performs well in finite samples. Finally the paper considers an empirical application of the test on budget spillovers and interdependence in fiscal policy within US states.

Working Papers:

Economic Incentives and Social Frictions: Dynamics of Cross-Country Migration  (with Anindya S. Chakrabarti) (PDF Link)

Abstract:

In this paper we devise a theory of cross-country migration in the form of labor mobility based on regional and sectoral productivity shocks in a multi-country, multi-sector setting. Country-specific sociological and institutional factors induce a friction on such labor reallocation process driven by economic incentives. We use country level data to show how country to country migration can be determined by industrial composition in the countries, shocks in factor productivity in the regionally concentrated sectors and spatial dispersion of these shocks. The model explains both the nominal and relative flow of workers across U.S. well, which is taken as the frictionless benchmark case. On the other hand, when applied to Europe the model explains the relative flow network well, but predicts a higher nominal flow than is seen in the data. This missing mass of migrants is explained by socio-cultural-political barriers. We use dyadic regression to analyze the effects of institutional and cultural `distance’ between countries to explain the frictions. Taken together, the economic mechanism along with the institutional factors explains the ‘European immobility puzzle’.

Falling Behind or Catching Up – Structural Break Story of Africa’s Convergence (with Fan Zhuo) (PDF Link)

Abstract:

In this empirical paper we show that the “iron-law” of convergence (2%) stills holds for the world. We detect a break in Africa’s convergence rate and argue that Africa was not really converging before 2000. The world convergence rate before 2000 was mostly driven by Asian and Latin American countries. We show that the recent institutional and infrastructural development has led the African countries on the path of “catching up”. We use LASSO to select the variables and use the double selection method to estimate the treatment effect in the partially linear model. We also compare LASSO variable selections with GBM and Random Forest variable selections.

Work in Progress:

Spatial Panel Modeling of Origin – Destination Flows