Ramírez Hassan, A. and Montoya Blandón, S. (2019) Welfare gains of the poor: an endogenous Bayesian approach with spatial random effects. Econometric Reviews, 38(3), pp. 301-318. (doi: 10.1080/07474938.2016.1261062)
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Abstract
We introduce a Bayesian instrumental variable procedure with spatial random effects that handles endogeneity, and spatial dependence with unobserved heterogeneity. We find through a limited Monte Carlo experiment that our proposal works well in terms of point estimates and prediction. We apply our method to analyze the welfare effects generated by a process of electricity tariff unification on the poorest households. In particular, we deduce an Equivalent Variation measure where there is a budget constraint for a two-tiered pricing scheme, and find that 10% of the poorest municipalities attained welfare gains above 2% of their initial income.
Item Type: | Articles |
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Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Montoya-Blandon, Dr Santiago |
Authors: | Ramírez Hassan, A., and Montoya Blandón, S. |
Subjects: | H Social Sciences > HA Statistics |
College/School: | College of Social Sciences > Adam Smith Business School > Economics |
Journal Name: | Econometric Reviews |
Publisher: | Taylor & Francis |
ISSN: | 0747-4938 |
ISSN (Online): | 1532-4168 |
Published Online: | 18 November 2016 |
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