Papers by Michael Gechter
Archive of all replication files and readme for "Labor Regulations and the Cost of Corruptio... more Archive of all replication files and readme for "Labor Regulations and the Cost of Corruption: Evidence from the Indian Firm Size Distribution."
Journal of Business & Economic Statistics
We derive a formal, decision-based method for comparing the performance of counterfactual treatme... more We derive a formal, decision-based method for comparing the performance of counterfactual treatment regime predictions using the results of experiments that give relevant information on the distribution of treated outcomes. Our approach allows us to quantify and assess the statistical significance of differential performance for optimal treatment regimes estimated from structural models, extrapolated treatment effects, expert opinion, and other methods. We apply our method to evaluate optimal treatment regimes for conditional cash transfer programs across countries where predictions are generated using data from experimental evaluations in other countries and pre-program data in the country of interest.
This dissertation is a collection of three independent essays on the theory and application of me... more This dissertation is a collection of three independent essays on the theory and application of methods of policy analysis in development economics. The first chapter tackles the methodological problem of external validity: the extent to which a study’s findings apply to settings outside of the study’s original context. There has recently been much debate within development economics over the practical usefulness of randomized policy evaluations outside of the places and times they were originally implemented. The chapter offers a practical solution to the problem of assessing generalizability: I derive bounds on the average causal effect in a context of interest using data from a previous experimental study. The second chapter, coauthored with Amrit Amirapu, investigates the costs that labor regulations impose on Indian firms. Regulatory burden has been viewed as the cause of many economic problems in India, including misallocation of resources across firms and slow growth. Many Ind...
Review of Economics and Statistics: Forthcoming.
We propose a method for aggregating evidence from observational studies, which may be subject to ... more We propose a method for aggregating evidence from observational studies, which may be subject to internal selection bias, and randomized controlled trials (RCTs) which may be subject to site selection bias. We show that it is possible to nonparametrically debias both types of studies using an Instrumental Variables (IV) strategy, uncovering the true distribution of treatment effects for complier studies. As we often have a small number of studies, imperfect instruments, and observe study results with error, parametric hierarchical Bayesian models work well in practice. Our specific implementation uses the presence of a facilitating organisation such as the Jameel Poverty Action Lab (JPAL) or Innovations for Poverty Action (IPA) as a novel Differences in Differences “Plausibly Exogenous” IV. This model point-identifies the internal selection bias for studies switching to the experimental design due to JPAL-IPA entry which is the negative local average treatment effect (LATE) in our s...
Land policy in developing country cities places significant restrictions on formal sector develop... more Land policy in developing country cities places significant restrictions on formal sector developers but often fails to reign in informal development. To what extent does this pattern reduce city efficiency, and how are the effects shared between the rich and poor? We address these questions in three steps. First, we exploit a unique natural experiment in Mumbai that led 15% of central city land occupied by the city’s defunct textile mills to come onto the market for redevelopment in the 2000s. Second, we use a “deep learning” approach to measure slums from satellite images, and combine this with administrative sources to construct a uniquely spatially disaggregated dataset spanning the period. Third, we develop a quantitative general equilibrium model of a city featuring formal and informal housing supply to guide our empirical analysis. We document a large increase in the supply of formal construction on mill sites, and find substantial spillovers on nearby locations that led slum...
arXiv: Methodology, 2018
We derive a formal, decision-based method for comparing the performance of counterfactual treatme... more We derive a formal, decision-based method for comparing the performance of counterfactual treatment regime predictions using the results of experiments that give relevant information on the distribution of treated outcomes. Our approach allows us to quantify and assess the statistical significance of differential performance for optimal treatment regimes estimated from structural models, extrapolated treatment effects, expert opinion, and other methods. We apply our method to evaluate optimal treatment regimes for conditional cash transfer programs across countries where predictions are generated using data from experimental evaluations in other countries and pre-program data in the country of interest.
Developing country cities are characterized by informal housing—slums—but growing urban populatio... more Developing country cities are characterized by informal housing—slums—but growing urban populations and incomes will lead governments to pursue a host of policies that promote the construction of modern, formal sector housing. This has the potential to affect entire neighborhoods since the effects are likely to spillover beyond directly targeted locations. In this paper, we ask how large are the spillovers from formal development, and what do these imply for the welfare consequences of pro-formalization policies in developing country cities? We address this question in three steps. First, we exploit a unique natural experiment in Mumbai that led 15% of central city land occupied by the city’s defunct textile mills to come onto the market for redevelopment in the 2000s. Second, we use a “deep learning” approach to measure slums from satellite images, and combine this with administrative sources to construct a uniquely spatially disaggregated dataset spanning the period. Third, we dev...
This paper investigates the eects of an important but little-researched set of Indian labor and i... more This paper investigates the eects of an important but little-researched set of Indian labor and industrial regulations. We use a novel methodology to provide a) the first objective cost estimates of any Indian labor regulations and b) evidence of their impact on misallocation of resources across firms. Our methodology takes advantage of the fact that some regulations only apply to establishments which hire 10 or more employees. Using data from India’s 2005 Economic Census, we observe that the distribution of establishments by size closely follows a power law, but with a significant drop in the distribution for establishments with 10 or more workers. Guided by a model based on Garicano, LeLarge and Van Reenen (2013) - but augmented to allow for the possibility of misreporting - we use this drop to estimate the implied costs of the regulation. We find that there is substantial variation in our estimated costs across states, industries and ownership types, and that our costs are more r...
The Review of Economics and Statistics
In this paper we estimate the costs associated with an important suite of labor regulations in In... more In this paper we estimate the costs associated with an important suite of labor regulations in India by taking advantage of the fact that these regulations only apply to firms above a size threshold. Using distortions in the firm size distribution together with a structural model of firm size choice, we estimate that the regulations increase firms' unit labor costs by 35%. This estimate is robust to potential misreporting on the part of firms and enumerators. We also document a robust positive association between regulatory costs and exposure to corruption, which may explain why regulations appear to be so costly in developing countries.
The use of the ratio of a country s female population to its male population (the sex ratio) as a... more The use of the ratio of a country s female population to its male population (the sex ratio) as a measure of its level of sex-based discrimination really began when Amartya Sen first investigated the sex ratio in Kynch and Sen (1983). Interest in the sex ratio picked up ...
The Review of Economics and Statistics, Mar 1, 2020
How informative are treatment effects estimated in one region or time period for another region o... more How informative are treatment effects estimated in one region or time period for another region or time? In this paper, I derive bounds on the average treatment effect in a context of interest using experimental evidence from another context. The bounds provide robustness against the possibility of unobserved treatment effect moderators whose distribution differs across contexts. Empirically, I use results from an experiment on returns to cash transfers given to microentrepreneurs in Leon, Mexico to predict average returns among microentrepreneurs in other Mexican cities. I show that the benchmark extrapolation method from the literature yields implausibly precise predictions for other cities considering the very small experimental sample. Using data from a pair of remedial education experiments carried out in India, I show the bounds are able to recover average treatment effects in one location using results from the other while the benchmark method cannot.
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Papers by Michael Gechter