Publications by Year: 2010

Pande, Rohini, Lori Beaman, Esther Duflo, and Petia Topalova. 2010. “Political Reservation and Substantive Representation: Evidence from Indian Village Councils.” Washington D.C. and New Delhi: Brookings Institution Press and The National Council of Applied Econ, 7, 2010 edition.Abstract

Female presence in India’s state and national legislatures hovers at ten percent. Concerns that this limits the political voice available to women has led to the introduction and subsequent passage of a Reservation Bill in the Upper house of the Indian Parliament. The bill seeks to reserve 33% of India’s state and national legislature positions for women. If implemented 181 out of the 543 National legislators and 1,370 out of the 4,109 State legislators will be women.

Singhal, Monica, Mihir Desai, and Dhammika Dharmapala. 2010. “Tax Incentives for Affordable Housing: The Low Income Housing Tax Credit”. Publisher's Version
Khwaja, Asim, Tahir R. Andrabi, and Jishnu Das. 2010. “Education Policy in Pakistan: A Framework for Reform.” IGC International Growth Centre – Pakistan, Policy Brief, December 2010. Publisher's VersionAbstract

This policy brief draws on research papers and reports from a large-scale longitudinal study through a grant from the World Bank’s South Asia Regions and Knowledge for Change Trust Funds. The study, titled “Learning and Educational Achievements in Punjab Schools” (LEAPS) analyses the education sector in Pakistan, its major challenges and policy options for moving forward. The data from the study is public and is available at

Hanna, Rema. 2010. “U.S. Environmental Regulation and FDI: Evidence from a Panel of US-Based Multinational Firms.” American Economic Journal: Applied Economics 2 (3): 158-189. Publisher's VersionAbstract

This paper measures the response of US-based multinationals to the Clean Air Act Amendments (CAAA). Using a panel of firm-level data over the period 1966 – 1999, I estimate the effect of regulation on a multinational’s foreign production decisions. The CAAA induced substantial variation in the degree of regulation faced by firms, allowing for the estimation of econometric models that control for firm-specific characteristics and industrial trends. I find that the CAAA caused regulated multinational firms to increase their foreign assets by 5.3 percent and their foreign output by 9 percent. Heavily regulated firms did not disproportionately increase foreign investment in developing countries.

Levy, Dan, and Jim Ohls. 2010. “Evaluation of Jamaica's PATH conditional cash transfer programme.” Journal of Development Effectiveness 2 (4): 421-441. Publisher's VersionAbstract

This paper summarises the findings of an evaluation of the Programme of Advancement through Health and Education (PATH), a conditional cash transfer programme implemented by the Government of Jamaica. The authors find that PATH was generally implemented as intended; exhibited better targeting to the poor than other similar social assistance programmes in Jamaica; and had positive and statistically significant impacts on school attendance and number of preventive healthcare visits for children. They find no evidence, however, that PATH was able to affect longer-term outcomes such as marks, grade progression, or healthcare status.

Chandra, Amitabh, Jonathan Gruber, and Robin McKnight. 2010. “Patient Cost Sharing in Low Income Populations.” American Economic Review 100 (2): 303-308. Publisher's VersionAbstract

Economic theory suggests that a natural tool to control medical costs is increased consumer cost sharing for medical care. While such cost sharing reduces “full insurance” (wherein patients are indifferent between falling sick or remaining healthy), a greater reliance on coinsurance and copayments can, in theory, stem patient and provider incentives to engage in moral hazard. These issues are particularly salient for low income populations who are at the center of current efforts to expand coverage (among the uninsured in 2008, 38 percent had incomes below the federal poverty line (FPL), and 52 percent had incomes between 100 and 299 percent of the FPL (Kaiser Commission on Medicaid and the Uninsured 2009)). As insurance is expanded to these groups, it is important to understand how they respond to greater levels of patient cost sharing. On the one hand, smarter plan design could help reduce the fiscal pressures associated with insurance expansion. But on the other, it is also possible that low income recipients are unable to cut back on utilization wisely and, consequently, experience hospitalization “offsets” as a result of greater levels of patient cost sharing. In particular, there remains a concern among many that higher cost sharing on primary care will lead to less effective use of primary care, worse health, and, consequently, higher downstream costs at hospitals (the so-called “offset effects”).

Hanna, Rema, and Paulina Olivia. 2010. “The Impact of Inspections on Plant-Level Air Emissions.” The B.E. Journal of Economic Analysis & Policy 10 (1): 1-33. Publisher's VersionAbstract

Each year, the United States conducts approximately 20,000 inspections of manufacturing plants under the Clean Air Act. This paper compiles a panel dataset on plant-level inspections, fines, and emissions to understand whether these inspections actually reduce air emissions. We find plants reduce air emissions by fifteen percent, on average, following an inspection under the Clean Air Act. Plants that belong to industries that typically have low abatement costs respond more strongly to an inspection than those who belong to industries with high abatement costs.

Mian, Atif, Asim Ijaz Khwaja, and Bilal Zia. 2010. “Dollars Dollars Everywhere, Nor Any Dime to Lend: Credit Limit Constraints on Financial Sector Absorptive Capacity.” The Review of Financial Studies 23 (12): 4281-4323. Publisher's VersionAbstract

We exploit an unexpected inflow of liquidity in an emerging market to study how capital is intermediated to firms. We find that backward-looking credit limit constraints imposed by banks make it difficult for firms to borrow, despite readily available bank liquidity, healthy aggregate demand, and a sharply falling cost of capital. The resulting aggregate failure to extend and retain capital in the economy suggests that agency costs that force banks to rely on sticky balance-sheet-based credit limits prevent emerging economies from effectively intermediating capital.

Hanna, Rema, Marianne Bertrand, and Sendhil Mullainathan. 2010. “Affirmative action in education: Evidence from engineering college admissions in India.” Journal of Public Economics 94 (1-2): 16-29. Publisher's VersionAbstract

This paper examines an affirmative action program for “lower-caste” groups in engineering colleges in India. We study both the targeting properties of the program, and its implications for labor market outcomes. We find that affirmative action successfully targets the financially disadvantaged: the upper-caste applicants that are displaced by affirmative action come from a richer economic background than the lower-caste applicants that are displacing them. Targeting by caste, however, may lead to the exclusion of other disadvantaged groups. For example, caste-based targeting reduces the overall number of females entering engineering colleges. We find that despite poor entrance exam scores, lower-caste entrants obtain a positive return to admission. Our estimates, however, also suggest that these gains may come at an absolute cost because the income losses experienced by displaced upper-caste applicants are larger than the income gains experienced by displacing lower-caste students. Limited sample sizes in our preferred econometric specifications, however, prevent us from drawing strong conclusions from these labor market findings.

Field, Erica, Seema Jayachandran, and Rohini Pande. 2010. “Do Traditional Institutions Constrain Female Entrepreneurship? A Field Experiment on Business Training in India.” American Economic Review 100 (2): 125-129. Publisher's Version
Cutler, David, Winnie Fung, Michael Kremer, Monica Singhal, and Tom Vogl. 2010. “Early-life Malaria Exposure and Adult Outcomes: Evidence from Malaria Eradication in India.” American Economic Journal: Applied Economics 2 (2): 72-94. Publisher's VersionAbstract

We examine the effects of exposure to malaria in early childhood on educational attainment and economic status in adulthood by exploiting geographic variation in malaria prevalence in India prior to a nationwide eradication program in the 1950s. We find that the program led to modest increases in household per capita consumption for prime age men, and the effects for men are larger than those for women in most specifications. We find no evidence of increased educational attainment for men and mixed evidence for women.

Pande, Rohini, Esther Duflo, Michael Greenstone, and Nicholas Ryan. 2010. “Towards an Emissions Trading Scheme for Air Pollutants in India.” Ministry of Environment and Forest, Government of India, 24.Abstract

Emissions trading schemes have great potential to lower pollution while minimizing compliance costs for firms in many areas now subject to traditional command-and-control regulation. This paper connects experience with emissions trading, from programs like the U.S. Acid Rain program, to lessons for implementation of a Trading Pilot Scheme in India. This experience suggests that four areas are especially important for successful implementation of an emissions trading scheme: setting the cap, allocating permits, monitoring and compliance. The introduction of emissions trading would position India as a clear leader in environmental regulation amongst emerging economies.