Faculté des arts et des sciences – Département de sciences économiques - Travaux et publications

URI permanent de cette collectionhttps://hdl.handle.net/1866/19239

Cette collection accueille les publications savantes et d’autres types de travaux d’auteur.e.s associé.e.s à cette unité. Voir aussi les collections Thèses et mémoires et Production étudiante de l'unité.

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Accès libre
Bootstrap inference for group factor models
Gonçalves, Sílvia; Koh, Julia; Perron, Benoit; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Oxford University Press, 2024)
Andreou et al. (2019) have proposed a test for common factors based on canonical correlations between factors estimated separately from each group. We propose a simple bootstrap test that avoids the need to estimate the bias and variance of the canonical correlations explicitly and provide high-level conditions for its validity. We verify these conditions for a wild bootstrap scheme similar to the one proposed in Gonçalves and Perron (2014). Simulation experiments show that this bootstrap approach leads to null rejection rates closer to the nominal level in all of our designs compared to the asymptotic framework.
Accès libre
Accident-Induced absence from work and wage growth
Bíró, Anikó; Bisztray, Márta; Galindo da Fonseca, Joao; Molnár, Tímea Laura; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques, 2024-01-14)
How do short absences from work affect workers’ labor trajectory? We use linked employer-employee administrative data from Hungary, with rich administrative health records, and use unexpected and mild accidents with no permanent labor productivity losses as exogenous drivers of short absences. Our Differencein-Differences results show that, relative to the counterfactual of no accident, even short (3–6-months long) periods of absence due to accidents decrease wages for up to two years by 1.5 percent, and workers end up with lower-paying firms. Missed opportunities to move to higher-paying firms account for 7–37 percent of the wage loss over a two-year period.
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Nonparametric estimation of the density of a change-point
Carrasco, Marine; Peltier, Hugo; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques, 2024-01)
The paper considers a panel model where the regression coe¢ cients undergo changes at an unknown time point, di§erentfor each series. The timings of changes are assumed to be independent, identically distributed, and drawn from some com-mon distribution, the density of which we aim to estimate nonparametrically. The estimation procedure involves two steps. First, changepoints are estimated indi-vidually for each series using the least-squares method. While these estimators are not consistent, they can be regarded as noisy signals of the true change-points. To address the inherent estimation error, a deconvolution kernel estimator is applied to estimate the density of the change-point. The paper establishes the consistency of this estimator and demonstrates that the rate of convergence of the Mean Inte-grated Squared error (MISE) is faster than that obtained with normal or Laplacian errors. Finally, using a Bayesian approach, we propose an estimator of the poste-rior means of the breakpoints, utilizing nonparametric estimates of the required densities. An application of the proposed methodology to portfolio returns reveals how quickly the markets responded to the Covid shock.
Accès libre
How are wages determined? : a quasi-experimental test of wage determination theories
Carvalho, Marcelo; Galindo da Fonseca, Joao; Santarrosa, Rogerio; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques, 2023-01-02)
We use novel quasi-experimental variation to (i) test whether firm-specific demand shocks impact wages, and (ii) to disentangle predictions coming from wage bargaining and firm upward sloping labor supply curve (wage posting). We use a unique institutional feature of public procurement auctions in Brazil: the moment in which the auction ends is random. Under this setting, for close auctions in which firms are constantly outbidding each other by incremental amounts, winner and runner-up are as good as randomly assigned. Using this first variation, we find that winning a government contract increases wages. In addition, contract value is higher for auctions that (randomly) end earlier. We use these two sources of exogenous variation to disentangle the effect on wages that comes from changes in firm size (wage posting) and the part that comes from changes in contract value holding size constant (bargaining). We find direct evidence of bargaining.
Accès libre
Fiscal rules with discretion for an economic union
Sublet, Guillaume; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques, 2022-03-11)
The design of a fiscal rule involves a trade-off between committing governments to a fiscally responsible budget and giving governments the discretion to respond to shocks. What is the optimal degree of discretion for deficit-biased governments that are facing shocks to their fiscal needs? The tail of the distribution of shocks determines the optimal degree of discretion. If the tail is thin, an optimal rule features a cap on public spending enforced by off-equilibrium sanctions. If the tail is thick, an optimal rule grants more discretion than a cap could achieve at the cost of on-equilibrium sanctions. An optimal rule featuring on-equilibrium sanctions also features a threshold below which public spending is exempt from sanctions. The optimal exemption balances a loss of discipline on low levels of spending with an economy of sanctions on high levels of spending. These findings suggest avenues to reform the Stability and Growth Pact.
Accès libre
Respecting improvement in markets with indivisible goods
Ehlers, Lars; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques, 2023-09-17)
We study markets with indivisible goods where monetary compensations are fixed (or are not possible). Each individual is endowed with an object and a preference relation over all objects. Respect for improvement means that when the ranking of an agent’s endowment improves in some other agent’s preference (while keeping other preferences unchanged), then this agent weakly benefits from it. As a main result we show that on the strict domain individual rationality, strategy-proofness, and non-bossiness imply respecting improvement. As a consequence we obtain that top trading with fixed-tie breaking and random tie-breaking, respectively, satisfy respecting improvement on the weak domain. We further show that trading cycles rules with fixed tie-breaking satisfy respecting improvement. Finally, we put our results in the contexts of generalized matching problems, roommate problems and school choice.
Accès libre
On the constrained efficiency of strategy-proof random assignment
Basteck, Christian; Ehlers, Lars; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2023-04-25)
We study random assignment of indivisible objects among a set of agents with strict preferences. Random Serial Dictatorship is known to be only ex-post efficient and there exist mechanisms which Pareto-dominate it ex-ante. However, we show that there is no mechanism that is likewise (i) strategy-proof and (ii) boundedly invariant, and that Pareto-dominates Random Serial Dictatorship. Moreover, the same holds for all mechanisms that are ex post efficient, strategy-proof and boundedly invariant: no such mechanism is dominated by any other mechanism that is likewise strategy-proof and boundedly invariant.
Accès libre
Student-optimal interdistrict school choice : district-based versus school-based admissions
Ehlers, Lars; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques, 2022)
Hafalir, Kojima and Yenmez (2022) introduce a model of interdistrict school choice: each district consists of a set of schools and the district’s admission rule places applicants to the schools in the district. We show that any district’s admission rule satisfying their assumptions is uniquely rationalized by a collection of schools’ choice functions satisfying substitutability and acceptance. We then establish that all students weakly prefer the outcome of the cumulative offer process (COP) under the school-based admissions to the outcome under the district-based admissions. This has the implication that if students prefer the interdistrict outcome for the district-based admissions to the intradistrict outcome, then all students are weakly better off under the school-based admissions compared to either of these outcomes. Therefore, for student-optimal interdistrict school choice the introduction of district admission rules hurts students and it suffices to endow schools with usual choice priorities (if students’ welfare is more important than districts’ policy goals) and to (de)centralize district admissions by letting schools choose.
Accès libre
Normative properties for object allocation problems : characterizations and trade-offs
Ehlers, Lars; Klaus, Bettina; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Lausanne. École des hautes études commerciales. Département d'économie, 2021-03)
We consider the allocation of indivisible objects among agents when monetary transfers are not allowed. Agents have strict preferences over the objects (possibly about not getting any object) and are assigned at most one object. How should one allocate offices to faculty members at a university when a department moves into a new building or when the current office allocation is not considered optimal anymore? Ideally, an allocation rule would be (1) fair / equitable, (2) efficient, and (3) incentive robust. Of course, our three objectives might find different formulations depending on the exact allocation situation. Unfortunately, often the most natural properties to reflect (1) - (3) are not compatible and thus, an ideal allocation method usually does not exist.We explore trade-offs between and characterizations by various normative properties for various object allocation problems, including Shapley-Scarf exchange problems and problems where the set of objects is commonly owned by the agents.
Accès libre
Three public goods and lexicographic preferences : replacement principle
Ehlers, Lars; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Centre interuniversitaire de recherche en économie quantitative, 2021-03)
We study the problem of locating multiple public goods for a group of agents with single-peaked preferences over an interval. An alternative specifies for each public good a location. In Miyagawa (1998) each agent consumes only his most preferred public good without rivalry. We extend preferences lexicographically and characterize the class of rules satisfying Pareto-optimality and replacementdomination. We show that for three public goods, this results in a very similar characterization to Miyagawa (2001a): only the two rules which either always chooses the left-most Pareto-optimal alternative or always chooses the rightmost Pareto-optimal alternative satisfy these properties. This is in contrast to Ehlers (2002) who showed that for two goods the corresponding characterization is substantially different to Miyagawa (2001a).
Accès libre
Strategy-proof and envyfree random assignment
Basteck, Christian; Ehlers, Lars; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Centre interuniversitaire de recherche en économie quantitative, 2020-12-22)
We study the random assignment of indivisible objects among a set of agents with strict preferences. We show that there exists no mechanism which is strategy-proof, envyfree and unanimous. Then we weaken the latter requirement to q-unanimity: when each agent ranks a different object at the top, then any agent shall receive his most preferred object with probability of at least q. We show that if a mechanism satisfies strategyproofness, envyfreeness, ex-post weak non-wastefulness, ex-post weak efficiency and q-unanimity, then q must be smaller than or equal to 2 |N| (where |N| is the number of agents). We introduce a new mechanism called random careless dictator (RCD) and show that RCD achieves this maximal bound. In addition, for three agents, RCD is characterized by the first four properties. JEL Classification: D63, D70.
Accès libre
Non-manipulable house exchangeunder (minimum) equilibrium prices
Andersson, Tommy; Ehlers, Lars; Svensson, Lars-Gunnar; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Lund University. Department of economics, 2020)
We consider a market with indivisible objects, called houses, and money. On this market, each house is initially owned (or rented) by some agent and each agent demands precisely one house. The problem is to identify the complete set of direct allocation mechanisms that can be used to reallocate the houses among the agents. The focus is on price mechanisms, i.e., mappings of preference profiles to price equilibria, that are strategy-proof and satisfy an individual rationality condition. We prove that the only mechanism that satisfies these conditions is a price mechanism with a minimal equilibrium price vector. The result is not true in full preference domain. Instead, we identify a smaller domain, that contains almost all profiles, where the result holds.
Accès libre
The growth impact of language standardization : Metcalfe’s Law and the industrial revolution
Dudley, Léonard; Rauh, Christopher; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (2020-01-13)
During the Industrial Revolution, did population growth stimulate innovation, or did causality run primarily from innovation to growth? Previous research fails to explain why between 1700 and 1850: (i) most innovation originated in three clusters of cities in Britain, northern France, and the USA; (ii) the rate of urbanization in these innovating regions was greater than it was elsewhere; (iii) the most important innovations involved cooperation between co-inventors with different areas of specialization. The key, we suggest, was the existence, for the first time in history, of rapidly expanding networks of people able to write and speak standardized languages. Metcalfe’s (2013) Law states that the value of a network grows as the square of the number of its users. We find that the presence in 1700 of a monolingual dictionary describing a language which considerable numbers of people were able to read and speak was significant in determining a city’s subsequent innovation. In turn, innovation – especially cooperative innovation – was significant in explaining a city’s population growth.
Accès libre
Strategy-proof choice under monotonic additive preferences
Bahel, Eric; Sprumont, Yves; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2020-05)
We describe the class of strategy-proof mechanisms for choosing sets of objects when preferences are additive and monotonic.
Accès libre
Two-stage majoritarian choice
Horan, Sean; Sprumont, Yves; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2020-05)
We propose a class of decisive collective choice rules that rely on an exogenous linear ordering to partition the majority relation into two acyclic relations. The first relation is used to obtain a shortlist of the feasible alternatives while the second is used to make a final choice. In combination with faithfulness to the underlying majority relation, rules in this class are characterized by two desirable rationality properties: Sen’s expansion consistency and a version of Manzini and Mariotti’s weak WARP. The rules also satisfy natural adaptations of Arrow’s independence of irrelevant alternatives and May’s positive responsiveness.
Accès libre
Estimating COVID-19 prevalence in the United States: A sample selection model approach
Benatia, David; Godefroy, Raphaël; Lewis, Joshua; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2020-04)
Accès libre
Spouses, children and entrepreneurship
Galindo da Fonseca, Joao; Berubé, Charles; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2020-04)
We develop a model of endogenous entrepreneurship and marriage. Spouses influence entrepreneurship via three channels: they reduce benefits by working less the more profitable the business is, they reduce costs by working more in case of business failure, and children, associated with a spouse, increase the cost of failure. We use administrative matched owner-employer-employee spouse data to estimate the specifications derived from our model. The model is informative on the sources of endogeneity and the IV strategy. We show that higher marriage rates induce less entry but larger firms on average. Through the lens of our model, marriage increases firm productivity.
Accès libre
Blocking pairs versus blocking students: Stability comparisons in school choice
Dogan, Battal; Ehlers, Lars; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2020-04)
It is known that there are school choice problems without an efficient and stable assignment. We consider comparing assignments in terms of their stability by comparing their sets of blocking (student-school) pairs or comparing their sets of blocking students who are involved in at least one blocking pair. Although there always exists a Pareto improvement over the student-optimal stable (DA) assignment which is minimally unstable among efficient assignments when the stability comparison is based on comparing the sets of blocking pairs in the set-inclusion sense, we show that this is not necessarily true when the stability comparison is based on comparing the sets of blocking pairs in the cardinal sense, or when it is based on comparing sets of blocking students (in the set-inclusion or cardinal sense). Given the latter impossibilities, we characterize the priority profiles where there exists a Pareto improvement over the DA mechanism which is cardinally minimally stable among efficient assignments when counting blocking pairs or counting blocking students. The resulting domain restrictions suggest to take with caution school choice analysis which relies on a particular stability comparison method.
Accès libre
Robust minimal instability of the top trading cycles mechanism
Doğan, Battal; Ehlers, Lars; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2020-03)
In the context of priority-based resource allocation, we formulate methods to compare assignments in terms of their stability as binary relations (on the set of possible assignments) that depend on the preference and the priority proﬁle. We introduce three basic properties, stability preferred, separability, and consistency, that a reasonable stability comparison should satisfy. We show that, for any stability comparison satisfying the three properties, the top trading cycles (TTC) mechanism is minimally unstable among eﬃcient and strategy-proof mechanisms in one-to-one matching. An important consequence is the robustness of a recent result by Abdulkadiroĝlu et al. (2019), which uses a particular stability comparison method where an assignment is more stable than another assignment if the set of blocking pairs in the former assignment is a subset of the set of blocking pairs in the latter assignment. Our unifying approach covers basically all natural comparison methods and it includes many cardinal stability comparison methods as special cases.
Accès libre
Imposing equilibrium restrictions in the estimation of dynamic discrete games
Aguirregabiria, Victor; Marcoux, Mathieu; Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques (Université de Montréal. Département de sciences économiques., 2019-09)
Imposing equilibrium restrictions provides substantial gains in the estimation of dynamic discrete games. Estimation algorithms imposing these restrictions – MPEC, NFXP, NPL, and variations – have different merits and limitations. MPEC guarantees local convergence, but requires the computation of high-dimensional Jacobians. The NPL algorithm avoids the computation of these matrices, but – in games – may fail to converge to the consistent NPL estimator. We study the asymptotic properties of the NPL algorithm treating the iterative procedure as performed in finite samples. We find that there are always samples for which the algorithm fails to converge, and this introduces a selection bias. We also propose a spectral algorithm to compute the NPL estimator. This algorithm satisfies local convergence and avoids the computation of Jacobian matrices. We present simulation evidence illustrating our theoretical results and the good properties of the spectral algorithm.

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