The specification and estimation of models of consumer and producer demand with kink points are considered. The presence of kink points divides the demand or production schedule into different regimes. Our approach utilizes the concept of virtual prices. The virtual prices transform binding...

This paper provides a theoretically consistent approach to estimating demand relationships in which kink points occur either in the interior or on the vertices of the budget set. There are important classes of problems in developing countries which demonstrate such kinked budget sets including...

This paper discusses issues on the estimation of consumer demand equations subject to binding non-negative constraints. We propose computationally feasible specifications and a simulated maximum likelihood (SML) method for demand systems. Our study shows that the econometric implementation of...

This paper discusses issues on the estimation of consumer demand equations subject to binding non-negative constraints. We propose computationally feasible specifications and a simulated maximum likelihood (SML) method for demand systems. Our study shows that the econometric implementation of...

“The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence,” by David Roodman and Jonathan Morduch (2014) is the most recent of a sequence of papers and postings that seeks to refute the findings of the Pitt and Khandker (1998) article “The Impact of Group-Based Credit...

This paper proposes a novel instrumental variable method for program evaluation that only requires a single cross-section of data on the spatial intensity of programs and outcomes. The instruments are derived from a simple theoretical model of government decision-making in which governments are...

Two econometric issues arise in the estimation of complete systems of producer or consumer demands when many non-negativity constraints are binding for a large share of observations, as frequently occurs with micro-level data. The first is computational. The econometric model is essentially an...

The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence,' by David Roodman and Jonathan Morduch (2014) is the most recent of a sequence of papers and postings that seeks to refute the findings of the Pitt and Khandker (1998) article 'The Impact of Group-Based Credit on Poor...

In this paper we assess the importance of heterogeneity and selectivefertility in altering estimates and interpretations of the determinants ofthe human capital of children. We set out a sequential model of humancapital investments in children incorporating endogenous fertility andheterogeneity...