Unconditional Quantile Regression Research Articles

Accounting for growing urban-rural welfare gaps in India

• The urban-rural welfare gap in India in 1983, 1993, 2004, and 2011 is examined across the consumption distribution. • Unconditional quantile regression decomposition suggests that urban advantage in endowments accounts for majority of the gap in all four years. • The urban-rural gap widened gradually over 1983–2011. • Increased gap in share of tertiary educated population accounts for a significant part of the observed increase in the welfare gap over 1983–2011. Using data from the large-scale consumption expenditure surveys collected by Indian National Sample Survey Organization, we examine the urban-rural welfare gap in India in 1983, 1993, 2004, and 2011 across the entire consumption distribution. Our main measure of welfare is spatially adjusted per capita consumption expenditure. Using the unconditional quantile regression decomposition, we find that the majority of the observed gap in each year is explained by the urban advantage in endowments. Difference in educational distributions across urban and rural areas explains a significant part of the gap observed in each year. Over time, there has been a gradual widening of the urban-rural gap. A decomposition of the change in the gap over 1983–2011 suggests that increasing gap between urban and rural areas in the share of tertiary educated population accounts for a significant part of the observed increase in the gap.

The distributive fairness of out-of-pocket healthcare expenditure in the Russian Federation

This article examines the effects of socioeconomic position and urban–rural settlement on the distribution of out-of-pocket expenditure (OPE) for health in the Russian Federation. Data comes from 2005 to 2016 waves of the Russian Longitudinal Monitoring Survey. Concentration index reflects changes in the distribution of OPE between the worse-off and the better-off Russians over a 12-year period. Finally, unconditional quantile regression—a recentred influence function approach estimates differential impacts of covariates along the distribution of OPE. OPE is concentrated amongst the better-off Russians in 2016. Urban settlements contribute to top end OPE distribution for the richest and town settlements, at the median for the richest and the poorest. Our model for the analysis is unique in the context of study population, as it marginalises the effect over the distributions of other covariates used in the model.

The Determinants of Gender Income Inequality in Vietnam: A Longitudinal Data Analysis

ABSTRACT Despite a great effort from the Vietnamese government, women in Vietnam have generally been at the disadvantaged position to access education and development opportunities. As a result, the wage gaps between men and women exist. This study is conducted to investigate the gender income inequality in Vietnam in the 2004–2016 period using data from Vietnam Household Living Standards Surveys (VHLSS). The results indicate that the gender pay gap in Vietnam has decreased during the research period. Empirical findings also indicate that education, ethnicity, economic sectors, and geographic areas are main determinants causing wage differentials in Vietnam. Additionally, the gender pay gap, with the focus on the so-called “Within inequality”, is heterogeneous across the wage distribution using unconditional quantile regression approach. In particular, the gender pay gap is shown to be higher at the top and the bottom quantiles of the wage distribution, indicating that inequality is more severe among low-paid and high-paid wage earners. These findings suggest that the government‘s policies should focus on encouraging education and improving the national economy creating more jobs for women to reduce gender wage gap in Vietnam.

The narrowing gender wage gap in South Korea

This paper investigates the Korean gender wage gap in 2003 and 2016 as well as its changes over time. Using data from the Economically Active Population Survey and unconditional quantile regressions, the wage gap is decomposed at selected quantiles across the wage distribution. The log wage gap forms an inverted-U shape across the distribution. Between 2003 and 2016, the log wage gap falls by 32%, 45%, 35% and 25% at the mean, 10th,50th and 90th quantiles. Reductions in structural and composition effects drive the fall at the bottom and middle of the distribution, while smaller reductions in structural effects result in the smaller fall at the top. Reductions in gender differences in tenure, regular worker status, education and occupations are associated with the fall in the wage gap over time. However, these variables continue to play important roles in the wage gap in 2016.

Financing tertiary education in Indonesia: assessing the feasibility of an income-contingent loan system

This paper examines the feasibility of an income-contingent loan system to finance tertiary education in Indonesia. Using graduates’ income data from the 2015 National Labor Force Survey, we modeled the life-cycle income distribution of university graduates using unconditional quantile regression. We used these estimates to simulate different income-contingent loan (ICL) schemes to observe the effect on the amount of repayment, length of repayment, government subsidy, and repayment burden of males and females in different quantiles of income. We simulated three loan schemes: without real interest, with a 25% surcharge on the total loan, and with 2% real interest. Implicit government subsidy was lowest with the 25% surcharge scheme. Results showed that ICL with a lower repayment burden is feasible in Indonesia and can increase access to tertiary education. We also discussed the administrative capacity among tax authorities.

Live football and tourism expenditure: match attendance effects in the UK

ABSTRACT Research question: The inbound tourist expenditure generating role of football (soccer), particularly the English Premier League (EPL), is evaluated. An enhanced economic and management understanding of the role of regular sporting fixtures emerges, as well as quantification of their impact. Expenditure on football tickets is isolated to identify local economic spillovers outside the stadium walls. Research methods: Using the UK International Passenger Survey, unconditional quantile regressions (UQR) are used to evaluate the distributional impact of football attendance on tourist expenditures. Both total expenditure and a new measure which adjusts expenditures for football ticket prices are considered. UQR is a novel technique which is as yet underexploited within sport economics and management and confers important methodological advantages over both ordinary least squares and quantile regressions. Results and findings: Significant cross quantile variation is found. High spending football fans spend more, even after ticket prices are excluded. Surprisingly, spending effects owing to attendance are strongest for those who overall spend the least, confirming the role of sport as a generator of tourist expenditure. Though the attendance effect is smaller for higher aggregate spenders, there is nevertheless a significant impact across the distribution. Implications: Distributional expenditure impacts highlight clear differentials between attendance by high and low spenders. Similar analysis is applicable to other global brands such as the National Football League (NFL), in the United States (American football) and the Indian Premier (cricket) League. The EPL's global popularity can be leveraged for achieving enhanced tourist expenditure.

Effect of Income Heterogeneity on Valuation of Mortality Risk in Taiwan: An Application of Unconditional Quantile Regression Method.

According to theory and existing empirical results, heterogeneity in personal characteristics, with income variation being one of them, affects the marginal willingness to pay (WTP) for reducing fatal risk. In this study, the effect of income heterogeneity on the value of statistical life (VSL) in Taiwan through unconditional quantile regression analysis using the data collected by the “Manpower Utilization Survey” is investigated. The results of this empirical study show that the hedonic wage function that was constructed using empirical data from Taiwan was in line with the general form of non-linear function rather than the semi-log function that has been often used in previous studies, which should have great impact on the estimation of the VSL. The empirical results also show that the estimated VSL of Taiwanese labor varied with the difference in wages, which needs to be taken into account when discussing the public policies using VSL.

Modelling the heterogeneous effects of stocking rate on dairy production: an application of unconditional quantile regression with fixed effects

ABSTRACTThis article analyses the effects of stocking rate on dairy production, using New Zealand dairy farm business data for the period 2005–2014. Unlike previous studies that assume a homogenous relationship between stocking rate and dairy production, we contribute to the literature by investigating the heterogeneous effects of stocking rate on milksolids production and applying an unconditional quantile regression model with fixed effects to control for unobserved farm-specific traits that are time invariant. The empirical results show that stocking rate exerts significant heterogeneous effects on milksolids production at different quantiles. In particular, we find that an additional increase in stocking rate (i.e. one cow/ha increase) increases milksolids production per hectare by between 17% and 25% but decreases milksolids production per cow by between 5% and 12%. In addition, we find that milking interval, dairy breed, farm labour, access to irrigation and farm location are important factors that increase milksolids production.

Wage inequality in Bangladesh, 2000–2010: an unconditional quantile regression decomposition

ABSTRACT This paper reports on an investigation into changes in wage inequality in Bangladesh between 2000 and 2010, based on gender, marital status, education, job industry, job sector, location, etc. The 2000 and 2010 Labour Force Surveys conducted by the Bangladesh Bureau of Statistics (BBS) provided the data used. Oaxaca–Blinder’s (1973) decomposition and regression of the (recentered) influence function (RIF) model of Firpo–Fortin–Lemieux (FFL)’s (2007) decomposition were used to identify the important factors that caused wage inequality in Bangladesh. Both methods showed that the coefficient effect is the main contributor to the overall increase in wage inequality.

무조건부 분위회귀를 이용한 아파트 가격결정요인 분석 - 양재천 인근 아파트를 중심으로 -

무조건부 분위회귀를 이용한 아파트 가격결정요인 분석 - 양재천 인근 아파트를 중심으로 -

Short-term contracts and their effect on wages in Indian regular wage employment

The increase in regular wage employment in the Indian economy between 2004–2005 and 2011–2012 was accompanied by a significant deterioration in job security; more workers found themselves on short-term and insecure contracts – a continuing trend. Insecurity of tenure results in a significant wage penalty for short-term workers, compared with those with longer term contracts. This article estimates the negative effect of short-term contracts on the wages of Indian regular wage workers all along the income distribution – unlike earlier studies – using the method of unconditional quantile regressions on data from the 68th round and the 61st round of the National Sample Survey Organisation on Employment covering the period 2004–2005 and 2011–2012. It finds that the wage penalty due to short-term contracts is higher for high-wage workers than for low-wage workers, with the maximum impact felt by median wage workers, and has increased for higher paid workers from 2004–2005 to 2011–2012. The spread of informal employment arrangements within India’s formal labour markets has resulted in an increasingly unequal distribution of workers’ access to the benefits of growth, reflecting a shift in power in favour of capital. These findings, specific to a developing economy like India, stand in contrast with studies in European countries, where high-wage workers do not face as much of a penalty for short-term contract work as low-wage workers. JEL Codes: J31, J41

The Exporter Wage Premium Hypothesis: An Unconditional Quantile Regression and Decomposition Approach

ABSTRACTRelying on the World Bank Enterprise Survey dataset in 2012/13, this paper applies the unconditional quantile regression and decomposition estimation techniques to examine the hypothesis that workers in exporting firms receive higher wages than those in non-exporting firms. The results show that the relationship between export and firm’s wage bill is indirect and is transmitted through technology and firm size. Remarkably, these indirect relationships are much more pronounced at the more upper quantiles of the wage bill distribution. However, the net relationships of the interaction between export and technology are relatively larger and positive as compared to that of the interaction between export and firm size which are marginal and mixed. The decomposition analysis indicates that much of the present exporter wage premiums are largely due to the differences in the returns to the characteristics between exporting and non-exporting firms. The findings from this paper suggest directions for future work that can be directly useful for policy.

Does hospital competition improve efficiency? The effect of the patient choice reform in England.

We use the 2006 relaxation of constraints on patient choice of hospital in the English NHS to investigate the effect of hospital competition on dimensions of efficiency including indicators of resource management (admissions per bed, bed occupancy rate, proportion of day cases, and cancelled elective operations) and costs (reference cost index for overall and elective activity, cleaning services costs, laundry and linen costs). We employ a quasi differences-in-differences approach and estimate seemingly unrelated regressions and unconditional quantile regressions with data on hospital trusts from 2002/2003 to 2010/2011. Our findings suggest that increased competition had mixed effects on efficiency. An additional equivalent rival increased admissions per bed by 1.1%, admissions per doctor by 0.9% and the proportion of day cases by 0.38 percentage points, but it also increased the number of cancelled elective operations by 2.5%.

The changing face of environmental amenities: Heterogeneity across housing submarkets and time

The value of environmental amenities has been studied for decades in the hedonic housing prices literature. Numerous studies have found that amenities such as marine, river and woodland habitats, national and regional reserves, urban parks, or wetlands contribute positively on the formation of housing prices. Work is scarce when considering heterogeneity across submarkets and time. Auckland, New Zealand’s largest city, has a unique landscape with open spaces, waterways, coastal areas and volcanic features. Local housing market is highly segmented and the city has gone through a bust, recovery and boom cycle in the last decade. This paper incorporates heterogeneity across submarkets and time, and examines how they affect the capitalisation of amenities into housing prices. We construct a dataset of about 280 thousand sale transactions between 2000 and 2016 in Auckland and estimate hedonic models based on unconditional quantile regressions. We find diverse capitalisation patterns across housing submarkets. Beaches may add price premiums of 5.1% in houses in the upper-end of the distribution, but also price discounts of 2.1% in houses in the lower-end of the distribution. We use a detailed categorisation of parks and find that volcanic parks may add premiums for houses in the 70% percentile and above of the price distribution, but also imply price discounts values for houses around the median price and below. We argue that the differing effects occur because of trade-offs between regulations to protect amenities and the ecosystem services they provide, conditional to specifics of the location of houses.

The Structure of the Wage Gap for Temporary Workers: Evidence from Australian Panel Data

AbstractThis study uses panel data for Australia to estimate the wage differential between workers in temporary jobs and workers in permanent jobs. It is the first study to use unconditional quantile regression methods in combination with fixed effects to examine how this gap varies over the entire wage distribution. While the wages of fixed‐term contract workers are found to be similar to those of permanent workers, low‐paid casual workers experience a wage penalty and high‐paid casual workers a wage premium compared to their permanent counterparts. Temporary agency workers also usually receive a wage premium, which is particularly large for the most well paid.

Level of Criminal Justice Contact and Early Adult Wage Inequality

This study explores heterogeneity in the relationship between criminal justice contact and early adult wages using unconditional quantile regression models with sibling fixed effects, estimated separately by race-ethnicity. The findings support the contention that the relationship between criminal justice contact and wages is heterogeneous in three respects: level of contact, race, and location in the wage distribution. First, entry-level contacts in the form of arrest are largely uncorrelated with wages, whereas wage gaps are evident following late-stage contacts in the form of jail or prison incarceration. Second, the wage gap from incarceration is observable among black respondents, but not whites or Latinos. Third, the size of the wage gap from incarceration is approximately U-shaped with respect to the black wage distribution.

Spatially filtered unconditional quantile regression: Application to a hedonic analysis

AbstractUnconditional quantile regression (UQR) attracts attention in various fields to investigate the impacts of explanatory variables on quantiles of the marginal distribution of an explained variable. This study attempts to introduce spatial dependence into the UQR within the framework of random effects eigenvector spatial filtering, resulting in the model that we term the spatially filtered UQR (SF‐UQR). We then develop a computationally efficient approach for SF‐UQR estimation. Finally, the performance of the SF‐UQR is tested with a hedonic land price model for the Tokyo metropolitan area. SF‐UQR is implemented in an R package, “spmoran.”

Cohort and education as predictors of temporary employment, and their relation to low wages and socioeconomic classification for young people in Sweden

ABSTRACTThe purpose of my paper is to describe and explain the probability of staying in temporary work for young people (age 16–27) in Sweden between 1992 and 2011 and its relation to socioeconomic outcomes (low socioeconomic classification and wage). I used panel data from the Swedish Labour Force Survey (LFS) and the longitudinal integration database for health insurance and labour market studies (LISA). To analyse the data, I used a dynamic probit model, unconditional quantile regression, and a pooled bivariate probit model. My results suggest that young people who have a low education have lower probabilities of receiving temporary employment in younger cohorts. However, younger cohorts with a lower education have a substantive wage disadvantage, specifically in younger cohorts compared to older cohorts. Low-educated cohorts also have a higher probability of obtaining low socioeconomic classification (SEC) employment, which is conditional on holding temporary employment in older cohorts compared to other educational groupings.

Recentered Influence Functions in Stata: Methods for Analyzing the Determinants of Poverty and Inequality

Recentered influence functions (RIFs) are statistical tools popularized by Firpo, Fortin, and Lemieux (2009) for analyzing unconditional partial effects on quantiles in a regression analysis framework (unconditional quantile regressions). The flexibility and simplicity of these tools has opened the possibility of extending the analysis to other distributional statistics using linear regressions or decomposition approaches. In this paper, I introduce three Stata commands to facilitate the use of RIFs in the analysis of outcome distributions: rifvar() is an egen extension used to create RIFs for a large set of distributional statistics; rifhdreg facilitates the estimation of RIF regressions, enabling the use of high-dimensional fixed effects; and oaxaca_rif to implement Oaxaca-Blinder type decomposition analysis (RIF decompositions).

The Immigrant-Native Wage Gap in Germany Revisited

This study provides new evidence on the levels of economic integration experienced by foreigners and naturalised immigrants relative to native Germans from 1994 to 2015. We decompose the wage gap using the method for unconditional quantile regression models by employing a regression of the (recentered) influence function (RIF) of the gross hourly wage on a rich set of explanatory variables. This approach enables us to estimate contributions made across the whole wage distribution. To allow for a detailed characterization of labour market conditions, we consider a comprehensive set of socio-economic and labour-related aspects capturing influences of, e.g., human capital quality, cultural background, and the personalities of immigrants. The decomposition results clearly indicate a significant growing gap with higher wages for both foreigners (13.6 to 17.6 %) and naturalised immigrants (10.0 to 16.4 %). The findings further display a low explanation for the wage gap in low wage deciles that is even more pronounced within immigrant subgroups. Cultural and economic distances each have a significant influence on wages. A different appreciation of foreign educational qualifications, however, widens the wage gap substantially by 4.5 ppts on average. Moreover, we observe an indication of deterioration of immigrants’ human capital endowments over time relative to those of native Germans.