Papers by William Horrace
Estimating market Prices for Child Care : Sample Design Estimation and Accuracy
ABSTRACT
Federal regulations recommend that states reimburse the child care costs of recipients of cash as... more Federal regulations recommend that states reimburse the child care costs of recipients of cash assistance and other low-income families, up to the 75th percentile of the market price of care in the relevant local market. The regulations recommend that states carry out surveys to estimate these 75th percentiles. This estimation problem raises two major statistical issues: (1) picking a sample design that will allow one to estimate the 75th percentiles cheaply, efficiently and equitably; and (2) assessing the sampling variability of the estimates obtained.
We consider fixed-effect estimation of a production function where inputs and outputs vary over t... more We consider fixed-effect estimation of a production function where inputs and outputs vary over time, space, and cross-sectional unit. We exploit variability in the spatial dimension to identify time-varying individual effects, without parametric assumptions on the effects. While estimation is unbiased, asymptotics along the spatial dimension allow estimation of robust standard errors and asymptotic normality of the marginal products. Also,
Federal regulations recommend that states reimburse the child care costs of recipients of cash as... more Federal regulations recommend that states reimburse the child care costs of recipients of cash assistance and other low-income families, up to the 75th percentile of the market price of care in the relevant local market. The regulations recommend that states carry out surveys to estimate these 75th percentiles. This estimation problem raises two major statistical issues: (1) picking a sample design that will allow one to estimate the 75th percentiles cheaply, efficiently and equitably; and (2) assessing the sampling variability of the estimates obtained.
... Page 2. Do Federal Programs Affect Internal Migration? The Impact of New Deal Expenditures on... more ... Page 2. Do Federal Programs Affect Internal Migration? The Impact of New Deal Expenditures on Mobility During the Great Depression Price V. Fishback, William C. Horrace and Shawn Kantor NBER Working Paper No. 8283 May 2001 JEL No. H53, I38, J68, N32, O15, R23 ...
SSRN Electronic Journal, 2000
Parametric stochastic frontier models yield firm-level conditional distributions of inefficiency ... more Parametric stochastic frontier models yield firm-level conditional distributions of inefficiency that are truncated normal. Given these distributions, how should one assess and rank firm-level efficiency? This study compares the techniques of estimating a) the conditional mean of inefficiency and b) probabilities that firms are most or least efficient.
Expected efficiency ranks from parametric stochastic frontier models
Empirical Economics, 2014
ABSTRACT In the stochastic frontier model, we extend the multivariate probability statements of H... more ABSTRACT In the stochastic frontier model, we extend the multivariate probability statements of Horrace (J Econom, 126:335–354, 2005) to calculate the conditional probability that a firm is any particular efficiency rank in the sample. From this, we construct the conditional expected efficiency rank for each firm. Compared to the traditional ranked efficiency point estimates, firm-level conditional expected ranks are more informative about the degree of uncertainty of the ranking. The conditional expected ranks may be useful for empiricists. A Monte Carlo study and an empirical example are provided.
Closure to “State-Space Versus Multiple Regression for Forecasting Urban Water Demand” by R. Bruce Billings, William C. Horrace, and Donald E. Agthe
Journal of Water Resources Planning and Management-asce, 1999
SSRN Electronic Journal, 2000
Observed tradeoffs between monetary returns and fatality risk identify estimates of the value of ... more Observed tradeoffs between monetary returns and fatality risk identify estimates of the value of a statistical life (VSL), which inform public policy and quantify preferences for environmental quality, health and safety. To date, few investigations have estimated the VSL associated with tradeoffs between returns from natural resource extraction activities and the fatality risks they involve. Furthermore researchers have been unable to determine whether or not one's VSL is stable across multiple decision environments using revealed preference methods. Understanding these tradeoffs (and the VSL that they imply) may be used to inform resource management policy and safety regulations, as well as our general understanding of the value of life. By modeling a commercial fishing captain's choice to fish or not, conditional on the observed risk, this research investigates these topics using data from the Alaskan red king crab and snow crab fisheries. Using weather conditions and policy variables as instruments, our estimates of the mean VSL range from $4.00M to $4.76M (depending on the modeling assumption and fishery analyzed) and are robust to the incorporation of heterogeneous preferences. Furthermore, given the unique nature of the data we are able to conduct an intra-vessel comparison of the VSL and conclude that for roughly 92% of the fishermen observed in the data set their VSL estimates are stable across both fisheries. The authors would like to thank Jennifer Lincoln (NIOSH Alaska Field Station) and Charlie Medlicott (USCG-Dutch Harbor, AK) for their extensive help in providing information on the risks present within the Alaskan crab fishery.
SSRN Electronic Journal, 2000
Stochastic production frontier models are used extensively in the agricultural and resource econo... more Stochastic production frontier models are used extensively in the agricultural and resource economics literature to estimate production functions and technical efficiency, as well as to guide policy. Traditionally these models assume that each agent's production can be specified as a representative, homogeneous function. This paper proposes the synthesis of a latent class regression and an agricultural production frontier model to estimate technical efficiency while allowing for the possibility of production heterogeneity. We use this model to estimate a latent class production function and efficiency measures for vessels in the Northeast Atlantic herring fishery. Our results suggest that traditional measures of technical efficiency may be incorrect, if heterogeneity of agricultural production exists.
A balanced panel of data is used to estimate technical efficiency, employing a fixed-effects stoc... more A balanced panel of data is used to estimate technical efficiency, employing a fixed-effects stochastic frontier specification for wool producers in Australia. Both point estimates and confidence intervals for technical efficiency are reported. The confidence intervals are constructed using the Multiple Comparisons with the Best (MCB) procedure of Schmidt (1996, 2000). The confidence intervals make explicit the precision of the technical efficiency estimates and underscore the dangers of drawing inferences based solely on point estimates. Additionally, they allow identification of wool producers that are statistically efficient and those that are statistically inefficient. The data reveal at the 95% level that twenty-one of the twenty-six wool farms analyzed may be efficient.
Southern Economic Journal, 2005
This study considers an aggregate life expectancy production function for a sample of developed c... more This study considers an aggregate life expectancy production function for a sample of developed countries. We find that pharmaceutical consumption has a positive effect on life expectancy at middle and advanced ages but is sensitive to the age distribution of a given country. Thus, ignoring age distribution in a regression of life expectancy on pharmaceutical consumption creates an omittedvariable bias in the pharmaceutical coefficient. We find that doubling annual pharmaceutical expenditures adds about one year of life expectancy for males at age 40 and slightly less than a year of life expectancy for females at age 65. We also present results for lifestyle inputs into the production of life expectancy. For example, decreasing tobacco consumption by about two cigarettes per day or increasing fruit and vegetable consumption by 30% (one-third pound per day) increases life expectancy approximately one year for 40-year-old females.
PMA13: RELATIONSHIP BETWEEN NONPARAMETRIC RECEIVER OPERATING CHARACTERISTIC ANALYSIS AND A LIKELIHOOD-RATIO TEST FOR MODEL SELECTION: II. A MONTE CARLO SIMULATION USING DISCRETE DATA
Value in Health, 2001
ABSTRACT
The Journal of Economic Inequality, 2008
Inequality measures are often presented in the form of a rank ordering to highlight their relativ... more Inequality measures are often presented in the form of a rank ordering to highlight their relative magnitudes. However, a rank ordering may produce misleading inference, because the inequality measures themselves are statistical estimators with different standard errors, and because a rank ordering necessarily implies multiple comparisons across all measures. Within this setting, if differences between several inequality measures are simultaneously and statistically insignificant, the interpretation of the ranking is changed. This study uses a multivariate subset selection procedure to make simultaneous distinctions across inequality measures at a pre-specified confidence level. Three applications of this procedure are explored using country-level data from the Luxembourg Income Study. The findings show that simultaneous precision plays an important role in relative inequality comparisons and should not be ignored.
The Journal of Economic History, 2005
The value of life: Real risks and safety-related productivity in the Himalaya
Labour Economics, 2012
This paper estimates the value of a statistical life from commercial Himalayan expeditions. Becau... more This paper estimates the value of a statistical life from commercial Himalayan expeditions. Because deaths occur with a fair amount of regularity, fatality rates are calculated for each mountain trail and are, hence, disaggregated measures of risk. Also, since the marginal ...
Journal of Productivity Analysis, 2011
Deconvolution is a useful statistical technique for recovering an unknown density in the presence... more Deconvolution is a useful statistical technique for recovering an unknown density in the presence of measurement error. Typically, the method hinges on stringent assumptions about the nature of the measurement error, more specifically, that the distribution is entirely known. We relax this assumption in the context of a regression error component model and develop an estimator for the unknown density. We show semi-uniform consistency of the estimator and provide Monte Carlo evidence that demonstrates the merits of the method.
Journal of Productivity Analysis, 2009
We use a stochastic production frontier model to investigate the presence of heterogeneous produc... more We use a stochastic production frontier model to investigate the presence of heterogeneous production and its impact on fleet capacity and capacity utilization in a multi-species fishery. Furthermore, we propose a new fleet capacity estimate that incorporates complete information on the stochastic differences between each vessel-specific technical efficiency distribution.
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Papers by William Horrace