Bonggeun Kim

Measurement Error in Recall Surveys and the Relationship between Household Size and Food Demand

Variation in household survey design and implementation is used to obtain evidence of nonrandom measurement error in recall surveys of household expenditure. These surveys, which are used especially in developing countries, appear to have measurement errors in food expenditures and in food budget shares that are correlated with household size. These correlated errors may be part of the explanation for a puzzling pattern of falling food demand with rising household size in poorer countries.

Modeling China's energy consumption behavior and changes in energy intensity

Chinas demand for energy has grown to fuel its rapidly expanding industrial, commercial and consumer sectors. At the same time, China has become the second largest consumer of petroleum products having surpassed Japan for the first time in 2003. The environmental consequences of a continuation of these trends will have global implications. Government policies and consumers have become more environmentally aware, but the ability of governments to formulate policies has been hindered by the lack of data on inter-factor and inter-fuel substitution possibilities. In this paper Allen partial elasticities of factor and energy substitution, and price elasticities of energy demand are calculated for Chinas industrial economy using a two-stage translog cost function approach for the period 1995-2004. The results suggest that energy is substitutable with both capital and labor. Coal is significantly substitutable with electricity and slightly complementary with oil, while oil and electricity are slightly substitutable. Chinas energy intensity is increasing during the study period and the major driver appears to be due to the increased use of energy-intensive technology.

Testing the Infrequent Purchases Model Using Direct Measurement of Hidden Consumption from Food Stocks

Survey reports of zero expenditure result from either genuine non-consumption, or purchases undertaken too infrequently to observe during a survey, with hidden consumption from stocks. Infrequent purchase models rely on untested hypotheses to distinguish these types of zeros. We test such models with data from an unusual survey where food stocks are measured at the start and end of the survey reference period. Parameter estimates using these direct measures of hidden consumption out of stocks are compared with estimates from infrequent purchase models that attempt to recover this hidden consumption. The results suggest considerable bias when using the infrequent purchase models. Copyright 2012, Oxford University Press.

Non‐Classical Measurement Error in Long‐Term Retrospective Recall Surveys*

Applied microeconomic researchers are beginning to use long-term retrospective survey data in settings where conventional longitudinal survey data are unavailable. However, inaccurate long-term recall could induce non-classical measurement error, for which conventional statistical corrections are less effective. In this article, we use the unique Panel Study of Income Dynamics Validation Study to assess the accuracy of long-term retrospective recall data. We find underreporting of transitory variation which creates a non-classical measurement error problem.

CPI Mismeasurements and Their Impacts on Economic Management in Korea

We estimate the consumer price index (CPI) bias in Korea by employing the approach of Engels Law as suggested by Hamilton (2001). Using Korean panel data (Korean Labor and Income Panel Study) and following Hamiltons model with a non-linear specification correction, our estimation result shows that the CPI bias over the sample period (200005) averaged at least 0.7 percent annually, which implies that about 21 percent of the inflation rate during the sample period can be attributed to the bias. This CPI bias has caused a substantial understatement of the growth in real GDP and contributes to excessive transfers from younger taxpayers to the elderly through indexed pension payments. We discuss the implications of the CPI bias for economic management and policies in Korea.

The Effect of Neighborhood Diversity on Volunteering: Evidence From New Zealand

Abstract A growing empirical literature has found that neighborhood heterogeneity lowers people’s likelihood of contributing to public goods. However, this literature has been mostly cross-sectional, and so struggled to address the effects of unobserved influences on contributions that may be correlated with heterogeneity. It has also paid little attention to how heterogeneity’s estimated effects are influenced by neighborhood size or the concavity of heterogeneity measures. With access to a panel of three waves of census data on volunteering rates in New Zealand, released at two fine levels of aggregation, we can control for stable unobserved neighborhood characteristics that may affect volunteering rates. We use pooled cross-section, between and fixed effects regressions to test whether volunteering rates are lowered by heterogeneity in race/ethnicity, language, birthplace, or income. We find that estimates are affected by neighborhood definition, and that ethnic and language heterogeneity are robustly associated with lower volunteering rates in New Zealand.

Using Panel Data to Estimate Income Under-Reporting by the Self-Employed

Self‐employment income is believed to be understated in economic statistics but there is debate about the extent of under‐reporting. This paper refines the widely used method of Pissarides and Weber (Journal of Public Economics, Vol. 39, No. 1 (1989), pp. 17–32) that relies on discrepancies between food shares and reported incomes. Our panel data approach disentangles under‐reporting from fluctuations in transitory income and gives a point estimate of the under‐reporting rate. Previous studies just give an interval estimate and also make the unlikely assumption that under‐reporting is independent of transitory income fluctuations. Panel data from Korea and Russia are used to illustrate the method, and suggest that in both countries almost one‐quarter of the income of self‐employed households is not reported.

Using Panel Data to Exactly Estimate Income Under-Reporting by the Self Employed

The income of the self-employed is often assumed to be understated in economic statistics. Controversy exists about the best method for estimating the extent of under-reporting and about the resulting measures of the size of the underground economy. This paper refines a method developed by Pissarides and Weber (1989) and uses discrepancies between food shares and reported incomes of the self-employed and other households to estimate under-reporting by the self-employed. In contrast to previous studies our panel data methodology distinguishes income under-reporting from transitory income fluctuations of the self employed, and provides an exact estimate of the degree of under reporting rather than just an interval estimate. Using panel data from Korea and Russia we estimate that 38 percent of the income of self employed households in Korea and 47 percent of the income of Russian self-employed households is not reported.