Marina-Selini Katsaiti's Homepage

"Corruption and Growth Under Weak Identification," (2009) with Philip Shaw and Marius Jurgilas (fothcoming in Economic Inquiry)

Abstract: The goal of this paper is to revisit the influential work of Mauro (1995) focusing on the strength of his results under weak identification. He finds a negative impact of corruption on investment and economic growth that appears to be robust to endogeneity when using two-stage least squares (2SLS). Since the inception of Mauro (1995), much literature has focused on 2SLS methods revealing the dangers of estimation and thus inference under weak identification. We reproduce the original results of Mauro (1995) with a high level of confidence and show that the instrument used in the original work is in fact "weak" as defined by Staiger and Stock (1997). Thus we update the analysis using a test statistic robust to weak instruments. Our results suggest that under Mauro's original model there is a high probability that the parameters of interest are locally almost unidentified in multivariate specifications. To address this problem, we also investigate other instruments commonly used in the corruption literature and obtain similar results. Download

"A Model of Choice: Food Consumption, Weight Preferences and Obesity Rates" (2010)

Abstract: The purpose of this paper is to construct a macroeconomic model that can explain the origins of obesity. We construct an overlapping generations (OLG) heterogeneneous agents model, with two sectors, one producing food and the other producing a composite consumption good. Individuals di er in their patience levels and thus in their equilibrium consumption decisions and weight levels. Moreover, we allow for diff erent fractions of the population in the service sector. We find that in economies where a large fraction of the employment is concentrated in more sedentary jobs, we should expect higher obesity rates. Finally, we introduce borrowing constraints and examine how they in influence consumption decisions. We derive results that explain which factors cause obesity rates to increase. For veri cation purposes we apply econometric methods to identify the extent to which our model can replicate the data.

"Obesity and Happiness", SOEP Papers - DIW Berlin, No. 270, Berlin, February 2010.

Abstract: This paper provides insight on the relationship between obesity and happiness. Using the latest available cross sectional data from Germany (GSOEP 2006), UK (BHPS 2005), and Australia (HILDA 2007). We examine whether there is evidence regarding the impact of overweight on subjective well being. The Hausman test is employed in the univariate and multivariate speci cations chosen and reveals evidence for the presence of endogeneity in the German and the Australian data. Instrumental variable analysis is performed when endogeneity is present whereas for the UK we run simple OLS regressions. Results indicate that in all three countries obesity has a negative and signi cant e ffect on the subjective well being. For Germany, using a di fferences-in-diff erences methodology, we find that non-overweight/non-obese individuals are on average 0.5 units happier (on a 0 to 10 scale) than their overweight/obese counterparts. Our findings also have important implications for the e ffect of other socio-demographic, economic and individual characteristics on well being.(submitted to: Applied Economics) Download

"Evaluating Health Care Externality Costs by Risky Consumption Goods" (2009) with Michael A. Cohen

Abstract: We present an overlapping-generations (OLG) macroeconomic model that applies a behavioral interpretation of preferences for goods that generate health risks. In this paper proneness to poor health is viewed as a cognitive miscalculation by economic agents between their expected health state over various consumption bundles and the actual health care they require for their health outcome. To model this the paper borrows insight from prospect theory and applies the reference-dependent preference framework to the specifi cation of our utility model. In our model of the economy, individual preferences are decomposed into intrinsic consumption utility and gain-loss utility associated with the miscalculation. Agents in the economy are strati ed in their health states as well as their expected health care consumption according to some probability measure over the population. Heterogeneity introduced in this way generates consumers of varied proneness to risk associated with consumption of unhealthy goods because individuals vary in their gain-loss utility valuation. In such a population, when all agents pay the same insurance premium, health-conscious agents shoulder the health care costs of their less health-conscious counterparts and the less health-conscious are engaged in less healthy consumption than they would if they paid actuarially fair premia. We demonstrate these e ffects in simulations by comparing the risk pooling equilibria to the actuarially fair pricing equilibria. This paper introduces the mathematical programming equilibrium constraint (MPEC) computational approach to compute model equilibria; we believe this approach is new to heterogeneous agent OLG model simulation. Download

Other Research:"Connecticut’s Spending Cap: It’s History and An Alternative Spending Growth Rule” (2005) Connecticut Centre for Economic Analysis, Working Paper, University of Connecticut, co-authors: Stanley McMillen, Mark Sheridan, Bryant Goulding, Patrick Flaherty, Sharan Sharma, Bingbo Hu. Download

“The HOPE VI Neighborhood Evaluation: Stamford, Connecticut” (2005) Connecticut Centre for Economic Analysis, Working Paper, University of Connecticut, co-authors: Stan McMillen Patrick Flaherty, Nicholas Jolly, Priscillia Hunt, Maroula Kraiche, James Boudreau, Phililp Shaw. Download

“Neighborhood Baseline Report: Bridgeport, Connecticut” (2007) Connecticut Centre for Economic Analysis, Working Paper, University of Connecticut, co-authors: Philip Shaw, Colin Brennan, Robert Slattery, John Doyle, Jesse Kalinowski and Adnan Nur. Download

“The Economic and Fiscal Impacts of Connecticut’s Estate Tax” (2008) Connecticut Department of Economic and Community Development”, co-authors: Stanley McMillen, Troy Helming, Nandika Weerasinghe