Gigi Foster

Estimating spillovers using panel data, with an application to the classroom

Obtaining consistent estimates of spillovers in an educational context is hampered by at least two issues: selection into peer groups and peer effects emanating from unobservable characteristics. We develop an algorithm for estimating spillovers using panel data that addresses both of these problems. The key innovation is to allow the spillover to operate through the fixed effects of a student’s peers. The only data requirements are multiple outcomes per student and heterogeneity in the peer group over time. We first show that the non-linear least squares estimate of the spillover parameter is consistent and asymptotically normal for a fixed T. We then provide an iterative estimation algorithm that is easy to implement and converges to the non-linear least squares solution. Using University of Maryland transcript data, we find statistically significant peer effects on course grades, particularly in courses of a collaborative nature. We compare our method with traditional approaches to the estimation of peer effects, and quantify separately the biases associated with selection and spillovers through peer unobservables.

Tobit or OLS? An Empirical Evaluation Under Different Diary Window Lengths

Time use researchers frequently debate whether it is more appropriate to fit censored regression (Tobit) models using maximum likelihood estimation or linear models using ordinary least squares (OLS) to explain individuals’ allocations of time to different activities as recorded in time-diary data. One side argues that estimation of Tobit models addresses the significant censoring (i.e., large numbers of zeros) typically found in time-diary data and that OLS estimation leads to biased and inconsistent estimates. The opposing side argues that optimization occurs over a longer period than that covered by the typical time diary, and thus that reported zeros represent measurement error rather than true non-participation in the activity, in which case OLS is preferred. We use the Australian Time Use Surveys, which record information for two consecutive diary days, to estimate censored and linear versions of a parental child care model for both 24-hour and 48-hour windows of observation in order to determine the empirical consequences of estimation technique and diary length. We find a moderate amount of measurement error when we use the 24-hour window compared to the 48-hour window, but a large number of zeros in the shorter window remain zeroes when we double the window length. Most of the qualitative conclusions we draw are similar for the two windows of observation and the two estimation methods, although there are some slight differences in the magnitudes and statistical significance of the estimates. Importantly, Tobit estimates appear to be more sensitive to window length than OLS estimates.

Making friends: A nonexperimental analysis of social pair formation

Economists and psychologists often assume that people sort into groups based on similarities. In this article, the validity of this assumption is examined using pairwise data and a new application of a proven analytical technique. I use a unique administrative data set that follows undergraduate students as they move from quasi-randomly assigned housing into self-selected residence groups; social pair formation is measured using behavior, not survey responses. Sorting is observed from the baseline ‘clean slate’ of random groupings, creating a quasi-experimental environment and circumventing problems inherent in examining selection processes when starting groups are not randomly formed. A wide array of covariates, including original campus location, race, and academic ability is exploited to determine the most important factors driving students’ choices about with whom to live. Results support a role for ability in friendship formation, both conditionally and unconditionally, but also a significant and more potent influence of social factors and luck. The article demonstrates a novel approach to the analysis of normally unobserved human sorting processes in a real-world context.

Measuring the relative productivity of multitasking to sole-tasking in household production: experimental evidence

The standard household production model does not incorporate multitasking, although time-diary data reveal that individuals regularly multitask. We incorporate multitasking into a household production model in which time spent in childcare can be sole-tasked or multitasked with another household production activity and we present the results of an experiment designed to measure the productivity parameters of this model. Because utility and productivity are intertwined and difficult to disentangle in any household production model, we vary the utility pay-offs our experimental participants receive in order to determine how our estimated productivity parameters are affected by a change in the utility parameters. Our estimates of the relative multitasking productivities indicate that, while a minute of sole-tasked time produces more of a single commodity than a minute of multitasked time, total household output increases when two outputs are produced simultaneously, hence confirming the economic motivation for multitasking.

The economics of multitasking

1. Introduction: The Economics of Multitasking Charlene M. Kalenkoski and Gigi Foster 2. Economic Theories about the Allocation of Time: Review and an Extension for Multitasking Raul G. Sanchis 3. Are Women Better than Men at Multitasking Household Production Activities? Charlene M. Kalenkoski and Gigi Foster 4. The Multitasking Parent: Time Penalties, Dimensions and Gender Differences Lyn Craig and Judith Brown 5. The Effect of Multitasking on Childrens Non-cognitive Skills Agne Suziedelyte 6. Childrens Media Use and Homework Time Sabrina Wulff Pabilonia 7. Do Americans Eat Meals Anymore or Do They Just Snack? Karen S. Hamrick 8. Secondary Child Care in the ATUS: What Does It Measure? Jay Stewart and Mary Dorinda Allard 9. Multitasking and the Returns to Experience Parama Chaudhury 10. Discussion: The Economics of Multitasking Charlene M. Kalenkoski and Gigi Foster

Rising inequality: A benign outgrowth of markets or a symptom of cancerous political favours?

Is the rise in inequality in Australia due to global changes in the distribution of marginal productivity or changes in the allocation of political favours? This article lays out the arguments for both views. Looking at the tax and subsidy changes that favour the rich, and considering that almost all the 200 richest Australians look like the beneficiaries of political favours rather than innovators or superstars, the article concludes that inequality is probably increasing due to changes in the political realm. The discussion outlines a research agenda and possible counter-moves, such as more direct democracy and having open markets for political favours.

The Multitasking of Household Production

The standard household production model does not incorporate multitasking, although time-diary data reveal that individuals regularly multi-task. We formulate a model where time spent in child care can be sole-tasked or multitasked with other household production activities. This model implies associations between household productivity factors and both child outcomes and parental time use. We then use data from the Longitudinal Study of Australian Children and the Australian Time Use Surveys to examine the empirical validity of these implications. Consistent with our models predictions, household productivity factors are associated both with child outcomes and parental time use.

Are Women Better than Men at Multitasking Household Production Activities

Time-use data show that people frequently multitask when performing household production activities, especially child care, and that this is especially true for women (see, e.g., Floro and Miles 2003; Kalenkoski and Foster 2008; Offer and Schneider 2011; and Zaiceva and Zimmerman 2011). It has been conjectured that this is because women have greater multitasking ability than men. Evidence from neuroscience (Weise et al. 2006) suggests the possibility of innate gender differences in cognitive functioning that may affect task performance. Preferences, social roles, and cultural constraints may also play a role in explaining differences (Booth 2009; Croson and Gneezy 2009; de Mel, McKenzie, and Woodruff 2009; and Gneezy, Leonard, and List 2009).

A Tale of Cyclones, Exports and Surplus Forgone in Australia's Protected Banana Industry

This paper examines the welfare loss caused by import restrictions on bananas in Australia, which we argue to be a classic rent‐seeking policy. We propose a new micro‐model of agricultural production under uncertainty and production delays and ask whether, due to cyclones and the timing of planting decisions, Australian banana import restrictions have turned into a form of export promotion. We exploit two cyclones as exogenous supply shocks, and use new data to estimate the price elasticity of demand for bananas in Australia to be around −0.5. We estimate the total welfare loss of Australias banana import restrictions to be over A

Education Policy Reforms to Boost Productivity in Australia: Education Policy Reforms to Boost Productivity in Australia

150 million per year, implying a yearly subsidy of more than a quarter of a million dollars per banana grower.