Extensive and Intensive Margin Effects in Sample Selection Models: Racial Effects on Wages

Import Response to Exchange Rate Fluctuations: A Micro-Level Investigation

Repeated treatment in a GOTV field experiment: Distinguishing between intensive and extensive margin effects

Can price dispersion be associated with higher levels of welfare? To answer we compare two economies that differ only in the way prices are formed. In the first, sellers post a unique price–quantity pair, with no price dispersion. In the second, sellers post a quantity only and let prices be determined ex post by realized demand, resulting in price dispersion. We show that while agents trade lower quantities when prices are dispersed (an intensive margin effect), they also trade more often (an extensive margin effect). At low inflation, the extensive margin dominates making agents better off with price dispersion.

This paper uses customs transaction data covering all Chinese exporters and the World Bank's antidumping database to investigate how they responded to Latin-American and Caribbean (LAC) antidumping measures during 2000-2012 period. The paper uses the difference-in-differences identification strategy, and finds a substantial trade-dampening effect of these measures at the product level which operates through the intensive margin (i.e., a decrease in export volume per exporter) rather than the extensive margin (i.e., a decrease in the number of exporters) on average. Although we do not find a significant extensive margin effect, we still observe a positive number of exporters exited the LAC market after antidumping measures, specifically, less productive firms and trade intermediaries are more likely to exit the market. The pattern of Chinese exporters exiting the protected market was the same in ARG, BRA, MEX and COL. The antidumping measures taken by different countries had different impacts on Chinese exporters. MEX and BRA antidumping measures not only had an intensive margin but also an extensive margin effect on Chinese exports. ARG antidumping measures only had an intensive margin effect. COL antidumping measures had no effect. The paper also finds that MEX antidumping measures caused a significant increase in the export prices of the affected Chinese products, but no significant increase in the export prices for the other three countries. The paper does not find any shift in the destinations of the affected Chinese exports.

We analyze the effectiveness of R&D subsidies on firms' R&D efforts in a developing country like Ecuador. We use the National Survey of Innovation Activities. Methodologically, we employ a structural framework that considers simultaneity and selection issues. Our results indicate that subsidies have an extensive margin effect, as they encourage firms to carry out R&D activities, and an intensive margin effect, as they increase firms' total innovation effort. However, this is compatible with partial crowding‐out of private efforts by public funds. One possible mechanism to explain this result is that, in developing countries with less developed capital markets, firms with financial constraints may divert part of the subsidy to invest in fixed capital. We find some support for this hypothesis, as the most financially constrained firms both explain the crowding‐out effect and increase their fixed capital investment when receiving a subsidy. For other firms, we observe crowding‐in, and their fixed capital investment remains insensitive to the subsidy.

Using China Compulsory Certification (CCC) as a case study, we investigate how compulsory certification schemes impact China's imports. A difference‐in‐difference approach is used with China customs data to measure the impact of CCC on imports. Our findings show that the CCC regulation increases China's market access for products requiring certification. The results show that the import‐promoting effects of CCC regulation are due to an increase in the intensive margin effect rather than to an increase in the extensive margin effect. We also find that product quality plays no significant mediation role in the effect of CCC regulation on China's imports.

In this article, we model long‐run responses to climate expectations that are predetermined before the growing season and short‐run responses to weather realizations during the growing season. The model is applied to a climatically diverse region, the U.S. Pacific Northwest, and the most comprehensive dataset on irrigation in the United States to estimate the impact of extreme weather on irrigation technology adoption and agricultural water use. Impacts on agricultural water use were driven more by adjustments to irrigated acreage (extensive margin effects) than by adjustments to the water application rate (intensive margin effects). The model captures the two mechanisms for irrigation to mitigate freeze damage to crops: wetting the soil (heat retention) and over‐head sprinkler irrigation (latent heat). Realized late spring freeze caused water use for orchard/vineyard to increase by 3%, but this represents less than a 1% increase in total agricultural water use. Expected spring freeze variability encouraged adoption of sprinkler irrigation technology for some crops.

This paper explores the role of emotions driven by sports as political drivers. To do so, I study whether the nationality compositions, player performance, and geographic distribution of the fan base of Premier League teams on the eve of the Brexit referendum. I find that increases in the relative performance of foreign players in the 2015-16 season produce economic and statistically significant increases in the Remain vote share by approximately 1 percentage point at the district level. I do not find evidence that the relative number of foreign players explains cross-district differences in voting. I also find that expectations are important and that the effects on voter preferences seem to display persistence over time. I confirm that these results are causal by implementing a series of falsification and robustness checks. This set of results implies that voter’s priors about immigrants change not by considering exposure to foreign players (an extensive margin effect) but rather by considering their relative performance (an intensive margin effect).

Monopolistic competition: CES redux?

The usual decomposition of effects in corner solution models into extensive and intensive margins is generally incompatible with a causal interpretation. This paper proposes a decomposition based on the joint distribution of potential outcomes which is meaningful in a causal sense. The difference between decompositions can be substantial and yield diametrically opposed results, as shown in a standard Tobit model example. In a generalized Tobit application exploring the effect of reducing firm entry regulation on bilateral trade flows between countries, estimates suggest that using the usual decomposition would overstate the contribution of the extensive margin by around 15%.

The Effect of Investing Abroad on Investment at Home: On the Role of Technology, Tax Savings, and Internal Capital Markets

The effect of investing abroad on investment at home: On the role of technology, tax savings, and internal capital markets

Marginal analysis evaluates changes in an objective function associated with a unit change in a relevant variable. The primary statistic of marginal analysis is the marginal effect (ME). The ME facilitates the examination of outcomes for defined patient profiles while measuring the change in original units (e.g., costs, probabilities). The ME has a long history in economics; however, it is not widely used in health services research despite its flexibility and ability to provide unique insights. This paper, the first in a two-part series, introduces and illustrates the calculation of the ME for a variety of regression models often used in health services research. Part One includes a review of prior studies discussing MEs, followed by derivation of ME formulas for various regression models including linear, logistic, multinomial logit model (MLM), generalized linear model (GLM) for continuous data, GLM for count data, two-part model, sample selection (two-stage) model, and parametric survival model. Prior theoretical papers in health services research reported the derivation and interpretation of ME primarily for the linear and logistic models, with less emphasis on count models, survival models, MLM, two-part models, and sample selection models. These additional models are relevant for health services research studies examining costs and utilization. Part Two of the series will focus on the methods for estimating and interpreting the ME in applied research. The illustration, discussion, and application of ME in this two-part series support the conduct of future studies applying the marginal concept.

ABSTRACTThis study examines the effect of terrorism on height-for-age z-scores, weight-for-age z-scores, weight-for-height z-scores, stunting, and wasting. Using the Boko Haram Insurgency, it compares outcomes in Boko Haram high-active and low-active areas. A difference-in-difference and regression model identifies the extensive and intensive margin effects respectively. The study uses data from the Nigeria Demographic and Health Survey and the Global Terrorism Database. The results suggest that the Boko Haram Insurgency reduces weight-for-age and weight-for-height z-scores and increases the probability of wasting. The evidence suggests that policies targeting healthcare services may mitigate the long-term impacts of the Boko Haram Insurgency on human capital production.

In the presence of both convex and nonconvex capital adjustment costs in a dynamic general equilibrium model, corporate tax policy generates both intensive and extensive margin effects via the channel of marginal Q. Its impact is determined largely by the strength of the extensive margin effect, which, in turn, depends on the cross‐sectional distribution of firms. Depending on the initial distribution of firms, the economy displays asymmetric responses to tax changes. Moreover, an anticipated increase in the future investment tax credit reduces investment and adjustment rate initially.