mouhcine guettabi, phd assistant professor of economics, institute of social and economic research...
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Mouhcine Guettabi, PhD
Assistant Professor of Economics, Institute of Social and Economic Research
January 28, 2015 Anchorage
What motivates people to act the way they do?
“Economics surely does not provide a romantic vision of life. But the widespread poverty, misery, and crises in many parts of the world, much of it unnecessary, are strong reminders that understanding economic and social laws can make an enormous contribution to the welfare of people. "Gary Becker in his 1992 Nobel banquet speech.
Programs might appear potentially promising before implementation yet fail to generate expected impacts or benefits. The obvious need for impact evaluation is to help policy makers decide whether programs are generating intended effects; to promote accountability in the allocation of resources across public programs; and to fill gaps in understanding what works, what does not, and how measured changes in well-being are attributable to a particular project or policy intervention.
Broadly, the question of causality makes impact evaluation different from monitoring and evaluation and other evaluation approaches.
In the absence of data on counterfactual outcomes (that is, outcomes for participants had they not been exposed to the program), impact evaluations can be rigorous in identifying program effects by applying different models to survey data to construct comparison groups for participants.
The main question of impact evaluation is one of attribution—isolating the effect of the program from other factors and potential selection bias.
Some silliness
Facebook caused the Greek Debt Crisis
An extensive body of economic research has examined the relationships between addictive substance use (e.g. tobacco, alcohol, marijuana, cocaine) and its potential consequences (e.g. criminal activity, lower earnings, increased health services utilization, lower educational attainment).
The methods and results employed in these studies, however, are far from consistent. Lack of research consensus on the relationships between substance use and its various outcomes can be attributed to a number of factors, including sample heterogeneity, analysis method used, dissimilar measures for substance use, and low statistical power
Endogeneity in Health policy Substance Abuse for ex:
One important factor in explaining study variability could stem from the treatment of endogeneity of the key regressor (substance use), which is often the main statistical challenge encountered in this type of analysis. Endogeneity can arise when substance use is correlated with important unobserved regressors.
For example, finding a positive correlation between illicit drug use and unemployment does not necessarily mean that drug use causes a higher likelihood of being unemployed. Losing a job could lead to illicit drug consumption. Alternatively, the consumption of drugs and the probability of unemployment may be jointly determined by a common attitude toward risk that is unobserved and therefore omitted from the model.
Failing to address endogeneity in either of these examples will lead to biased coefficient estimates (Angrist and Pischke, 2009)
County Obesity rates in 2011County Obesity rates in 2004
Endogeneity in obesity and the environment
A growing and influential literature studies this connection between the built environment and obesity. Loosely, its main finding is that individuals living in sprawling neighborhoods are more likely to be obese than those who live in less sprawling neighborhoods.
If changes to the built environment were indeed effective in affecting those habits, urban planning could thus be an important tool with which to curb the rise in obesity.
Problem?
Many of the idiosyncratic characteristics that affect obesity may also affect neighborhood choices. For instance, someone with an idiosyncratic distaste for walking is both more likely to be obese and to prefer living where one can easily get around by car. For such individuals obesity is correlated with, but not caused by, the choice to live in a sprawling neighborhood.
That is, we may observe more obesity in sprawling neighborhoods because individuals who have a propensity to be obese choose to live in these neighborhoods. If such self-selection is important we can observe higher rates of obesity in sprawling neighborhoods even if there is no causal relationship between sprawl and obesity.
Summary of my research in this area
Density and Obesity:
In a paper focusing on children, We found density to be inversely related with children’s weight even after accounting for endogeneity issues.
Obesity and Financial Consequences:
Not only is obesity linked to chronic diseases and negative health outcomes, we show that it also causes bankruptcy.
proportion of individuals within the obese group who file for bankruptcy is no less than 22 percent higher than those with a 18<BMI<25
Health Insurance in Alaska
Overall, among those employees eligible for insurance, nearly 64% of eligible full-time employees, 39% of eligible part-time employees are enrolled in their employers’ plans.
Most Employers think Wellness Programs matter but few offer them
About 19% of the Alaska firms offering health benefits also have wellness programs, but that figure is considerably larger among the largest companies; 38% of the firms with more than 100 employees offer wellness programs
ACA implementation
We are currently assessing the changes in coverage by source in MA.
What behavioral questions should we be asking in the wake of this change in Alaska?
The ex ante design determines the possible benefits or pitfalls of an intervention through simulation or economic models. This approach attempts to predict the outcomes of intended policy changes, given assumptions on individual behavior and markets.
Ex ante approaches often build structural models to determine how different policies and markets interlink with behavior at the beneficiary level to better understand the mechanisms by which programs have an impact. Ex ante analysis can help in refining programs before they are implemented, as well as in forecasting the potential effects of programs in different economic environments.
Ex post impact evaluation, in contrast, is based on actual data gathered either after program intervention or before and after program implementation. Ex post evaluations measure actual impacts accrued by the beneficiaries because of the program.
Natural experiments
All natural experimental studies require a comparison of exposed and unexposed groups (or groups with varying levels of exposure) to identify the effect of the intervention.
For example, we recently evaluated the effect of SYGL using synthetic control methods and found that the change in the law increased gun deaths in FL, MI, and AL but had no effect in the other states.
More Experiments?
Public programs are designed to reach certain goals and beneficiaries.
In belt tightening times, it is hard to think about spending money to conduct field experiments before applying social policies. But this is the wrong way to think about it: only by conducting field experiments do we know what works, so that we can save money in the long run.
Some examples of behavioral nudges
Changing recess times
subsidies in promoting healthy food
Changing the location of the unhealthy food relative to its healthy counterpart.
Providing water during meals
Takeaway
We have research tools at our disposal that can greatly improve decision making.
A Difficult economic climate makes it all the more necessary to allocate the scarce dollars carefully.
Understanding why people behave the way do and what we can do to improve outcomes will rest on our willingness and desire to bridge the gap between research and policy.
