Juliet U. Elu

Does regional currency integration ameliorate global macroeconomic shocks in sub-Saharan Africa? The case of the 2008-2009 global financial crisis

Purpose - – The purpose of this paper is to consider whether regional currency integration in sub-Saharan Africa ameliorates global macroeconomic shocks by considering the impact of the 2008-2009 global financial crisis on economic growth. This suggests that Central Africa Franc Zone (CFAZ) eurocurrency union membership amplifies the effects of global business cycles in sub-Saharan Africa. Design/methodology/approach - – The authors estimate the parameters of a quantity theory model of economic growth within a Generalized Estimating Equation (GEE) Framework. Findings - – Parameter estimates from GEE specifications reveal that the contraction in credit during the financial crisis of 2008-2009 had larger adverse growth effects on sub-Saharan African countries who were members of the CFAZ eurocurrency union. The authors also find that sub-Saharan African countries who were members of the CFAZ eurocurrency union were more likely to experience a contraction in credit. Originality/value - – As far as the authors can discern, no existing empirical growth models use a GEE framework to estimate parameters of interest. The GEE parameter estimates are distribution-free, robust with respect to unknown forms of heteroskedasticity, and control for a wide variety of error structures that can induce bias in panel data parameter estimates.

Terrorism in Africa and South Asia: Economic or Existential Good?

This paper considers the extent to which terrorism in Africa and South Asia is an economic good that can be explained within a standard rational choice model of optimizing agent, or an existential good explained by individuals who are present-aim oriented. Such a consideration is important for enabling security measures that are likely to be effective against terrorism in Africa and South Asia. If for example, terrorism is motivated largely by existential other-worldly goals, standard security measures that change the cost and benefits of terrorism are not likely to be effective in thwarting organized terror. On the other hand, if terrorism reflects a solution to a problem with identifiable costs and benefits that accord with the behavior assumed in economic theory, then it may be possible to contain terrorism by altering those costs and benefits. Our analysis of terrorism in Africa and South Asia utilizes data from the University of Maryland National Consortium for The Study of Terrorism and Response to Terrorism Center from 1980-2005. Our results suggest that at least in Africa and South Asia, terrorism is a standard economic good, and appears to be income elastic. As such anti-terrorist interventions need to be targeted towards not reducing poverty and underdevelopment per se, but at the complements of terror—those normal good/services that terrorists use as inputs.

Does Ethnicity Matter for Access to Childhoodand Adolescent Health Capital in China? Evidence from the Wage-Height Relationship in the 2006 China Health and Nutrition Survey

This paper considers whether ethnicity conditions the return and access to health capital in China. Given that the wage-height relationship reflects the labor market earnings returns to childhood and adolescent health capital, differences in the labor market returns to height by ethnicity reflect ethnic differences in access to health capital during childhood and adolescence. We theoretically motivate the role of height in earnings by providing a Bioeconomic rationale for stature and height determining individual wages, and estimate height-augmented Mincerian earnings functions with data from the 2006 China Health and Nutrition Survey. Our results show that when the effects of unobserved genetic influences on adult height are accounted for, the labor market return on height is higher for Chinese ethnics. This suggests that in China there are ethnic disparities in access to the inputs that produce childhood and adolescent health capital.

Terrorism and Regional Integration in Sub-Saharan Africa: The Case of the CFA Franc Zone

To the extent that regional currency integration changes the cost of imported inputs used in the production of terror, it can change the supply of terror produced by rational terrorists. In this paper, we appeal to a theory of rational terrorism where a country’s membership in a regional currency union conditions the cost of imported inputs that produce terror, and estimate the parameters of static and dynamic terrorism supply functions with Generalized Estimating Equation count data estimators for Sub-Saharan Africa between 1974 and 2006. Our parameter estimates reveal that regional currency integration has counter-terrorism benefits as countries with membership in the newly constituted CFA Franc Zone had fewer terrorism incidents relative to other Sub-Saharan African countries. Our parameter estimates also suggest that the CFA Franc Zone caused a decrease in terrorism. As terrorism constrains important drivers of economic growth, our results suggest that another potential channel by which regional currency integration improves living standards in Sub-Saharan Africa is through reducing terrorism.

NEA Presidential Address: Gender Inequality and Human Development in Sub- Saharan Africa

This Presidential Address considers the effects of gender inequality on human development in Sub-Saharan Africa. Parameter estimates from quantile and ordinal categorical latent variable specifications of the relationship between components of the Human Development Index and measures of gender inequality suggests that human development in Sub-Saharan Africa increases with respect to improvements in several measures of gender inequality. The results suggest that inegalitarian laws, norms, traditions and codes of conduct toward women constrain both human and economic development in Sub-Saharan Africa.

Is Regional Integration Beneficial for Agricultural Productivity in Sub-Saharan Africa? The Case of CEMAC and WAEMU

This paper examines the effects of regional euro-currency integration on agricultural productivity in Sub-Saharan Africa. We utilize a propensity score matching estimator to estimate the treatment effect of Sub-Saharan African countries joining regional euro-currency integration on agricultural value-added. Our parameter estimates reveal that regional euro-currency integration membership has positive effects on agricultural value-added. This suggests that as an institutional arrangement, regional currency union membership can improve agricultural productivity in Sub-Saharan Africa, which is an important component of achieving economic growth that is effective in reducing poverty.

Can Black Africa afford to be Green Africa

Purpose - – The purpose of this paper is to use a neoclassical factor pricing approach to carbon emissions, and consider whether the productivity of carbon emissions differs in Sub-Saharan Africa relative to the rest of the world. Design/methodology/approach - – Allowing for possible cross-country dependency and correlation in the effects of the factors of production on the level of gross domestic product per capita, the authors estimate the parameters of a cross-country net production function with carbon emissions as an input. Findings - – While there is a “Sub-Saharan Africa effect” whereby carbon emissions are less productive as an input relative to the rest of the world; practically it is equally productive relative to all other countries suggesting a unfavorable distributional impact if Sub-Saharan Africa were to implement carbon emissions reductions consistent with the Kyoto Protocol. Research limitations/implications - – If global warming is not anthropogenic or caused by carbon emissions, the parameter estimates do not inform an optimal and equitable carbon emissions policy based upon Sub-Saharan Africans reducing their short-run living standards. Practical implications - – Fair and equitable global carbon emissions policies should aim to treat Sub-Saharan African countries in proportion to their carbon emissions, and not unfairly impose emissions constraints on them equal to that of countries in the industrialized west. Social implications - – As Sub-Saharan Africa has a disproportionate number of individuals in the world living on less than one dollar a day, the results suggest “Black Africa” may not be able to afford being a “Green Africa.” Originality/value - – The results are the first to quantify the effects of carbon emissions restrictions on output and their distributional implications for Sub-Saharan Africa.

Consumer’s Surplus with a Racial Apology? Black Relative to Non-Black Inequality in the Welfare Gains of Fuel-Efficient Cars and Trucks

This paper considers whether race conditions the welfare gains associated with the purchase of cars and trucks that comply with National Highway Traffic Safety Administration Corporate Average Fuel Efficiency Standards . We utilize data from the General Social Survey on respondent stated preferences for the extent to which they value fuel-efficient cars and trucks to estimate the maximum market price they are willing to pay for fuel-efficient cars and trucks. Multinomial and Binary Logit parameter estimates from an inverse demand maximum price valuation specification reveal that relative to non-black Americans, black Americans place less value on fuel-efficient cars and trucks. Our results suggest that federal Corporate Average Fuel Efficiency Standards policy is a source of inegalitarian and racially stratified welfare outcomes as relative to non-black Americans, black Americans gain less consumer’s surplus from fuel-efficient cars and trucks.

Do Inequality-Based Entry Barriers Deter the Formation of Female-Owned Firms in Nigeria?

In this paper, we consider the role of inequality-based entry barriers on the formation of female-owned firms in Nigeria. With data from the 2010 World Enterprise Survey, we estimate the parameters of a simple model of female-owned firm entry to determine the role of inequality-based barriers on the number of female-owned firms across city-industry clusters in Nigeria. Parameter estimates from count data specifications of firm entry reveal that access to financing, land, and licenses/permits absolutely deter the entry of female-owned firms, as these entry barriers are proportional to the probability of observing no female-owned firms. In general, barriers to securing land constrain the entry of female-owned firms beyond the process determining absolute entry deterrence. This suggests that the market entry and underrepresentation of female-owned among firm-owners and entrepreneurs in Nigeria is, at least in part, caused by gender inequality in general. As private firm output dominates the gross domestic product of modern economies, our findings suggest that the reduction of gender inequality in Sub-Saharan Africa would result in more female-owned and entrepreneurs which would catalyze economic growth.