News Archive-2012

Dec 4, 2012
Distinguished Visitor Program to begin this week.

Dirk Krueger

This week marks the arrival of the first of three Distinguished Visiting faculty this academic year. Dirk Krueger, Professor of Economics at the University of Pennsylvania arrives at Georgetown this week to meet with faculty and students in the Department of Economics. Professor Krueger has published extensively on issues relating to consumption inequality, redistribution, and social insurance. His work has been prominently cited in top press outlets such as The Economist, the New York Times, and the Wall Street Journal. During his stay at Georgetown, Professor Krueger will present his work on “Intergenerational Redistribution in the Great Recession” in the Macroeconomics workshop.

Professor Krueger joins Guido Lorenzoni, Associate Professor of Economics, at Massachusetts Institute of Technology, and Gianluca Violante,   Professor of Economics, at New York University as the inaugural Distinguished Visiting faculty.

Nov 5, 2012
Prominent Development Economist to inaugurate Edmond D. Villani Chair in Economics.

Martin Ravallion

The Georgetown Department of Economics and the Georgetown Center for Economic Research are very pleased to announce that Martin Ravallion will be joining the Department and GCER in January 2013 as the inaugural Edmond D. Villani Chaired Professor in Economics. Professor Ravallion will be moving to Georgetown from the World Bank where he currently holds the position of Director of the Development Research Group.

With nearly 300 publications, Professor Ravallion is one of the most prominent development economists in the world. His work has led to new ways of thinking about economic decisions and empirical regularities in development.

Professor Ravallion’s research is wide-ranging. His early work on the 1974 famine in Bangladesh explained and documented the various economic and political forces that led to sharply increasing rice prices and later to widespread famine. His work would eventually become a companion to the theory of famines developed around the same time by future Nobel Laureate Amartya Sen. Ravallion would later develop usable indicators of poverty, including the now famous “dollar-a-day” poverty line, and explore the role of limited commitment in the ability of informally organized groups to provide their members with insurance. More recently, Ravallion has written extensively on China and India, assessing the links between growth and poverty reduction in the two countries.

Much of Professor Ravallion’s work is now standard reading for students in development economics. Both the empirical measures and the theories he developed form the basis of countless studies over the past two decades.

Martin Ravallion received his Ph.D. from the London School of Economics and Political Science in 1981. He went on to hold positions at Oxford University and the Australian National University, before joining the World Bank in 1988. As the current Director of the Development Research Group, he manages and supervises a staff that shapes and executes the Bank’s research agenda and provides expertise to policymakers at the highest levels. Professor Ravallion has held visiting positions at numerous institutions including Princeton, Toulouse, Warwick, the Australian National University, the Bangladesh Institute of Development Studies, and Gadja Mada University in Indonesia.

Oct 9, 2012
GCER Fellow William Jack shows Georgetown, students, how to apply their research skills in economics to real-world problems in Kenya.

A recent issue of Georgetown College News reports that Associate Professor and GCER Fellow Billy Jack, sent Yun Ling, Lucie Parker, Alec Villec, and Cindy Yang (F’12) to Nairobi to work with him on his current field projects. Professor Jack has conducted extensive research in eastern Africa. Over the summer, he showed the students how their economics knowledge could be applied to a range of topics from road safety and maternal health saving to financial literacy for Kenyan teens. They also learned how their economic skills can effect change from this trip.

Please see more here.

Sep 20, 2012
2012-2013 Three Distinguished Faculty are set to visit GCER.

During the 2012-2013 academic year, there are three distinguished faculty settings visited GCER and the department of Economics.


Dirk Krueger   
Professor of Economics, 
University of Pennsylvania
Department Administrator

Arrived date: Dec. 6th, 2012
Return date: Feb. 11th – 14th, 2013

[Guido Lorenzoni]

Guido Lorenzoni  
Associate Professor of Economics,
Massachusetts Institute of Technology

Arrive date: Apr. 15th – 18th, 2013


Gianluca Violante   
Professor of Economics, 
New York University

Arrive date: March 11th – 15th, 2013

Sep 12, 2012
Lineup of Speakers set for first IZA-GCER Young Scholar Conference, October 22-26, 2012.

The Inaugural IZA-GCER Young Scholar Conference is set to take place during the week of October 22-26, 2012. The conference is jointly sponsored by IZA, the GU Department of Economics, and GCER. Its main objective is to expose young scholars to the world’s leading labor economists through a week of presentations (for more details on conference objectives, click here).

During the one-week program, each of the five preeminent scholars will present his/her research, and speak to the Y-S participants about academic work in the field of labor economics. The list of speakers includes Josh Angrist (MIT), Raquel Fernandez (NYU), John Ham (University of Maryland), Jean Marc Robin (UCL, Paris), and Petra Todd (U Penn).

The morning talks will take place in the Edward B. Bunn, S.J. Intercultural Center (ICC), 37th and O St., N.W., Room ICC550. Afternoon seminars will take place in various locations around campus – please check the Conference Program schedule below.

Click here for the Complete Program.

Jun 3, 2012
Spring/Summer, 2012. Featured Research Profile.

“What a piece of work is a man! How noble in Reason! How infinite in faculties!” † … But how much is he worth?   Huggett and Kaplan provide an answer.

While markets exist that determine the value of houses, cars, and IBM stock, many assets are not marketed. Thus, their value is not precisely known. For example, toll bridges are valuable but their value is not determined by a centralized exchange. GCER Fellow Mark Huggett and co-author Greg Kaplan from the University of Pennsylvania have new research that determines the monetary value of by far the most valuable asset that most people own: themselves.

Their new paper   “The Money Value of a Man”   proposes a method for evaluating the monetary value of an individual. Far from being an esoteric exercise, knowing one’s monetary value is, in fact, quite useful. The most obvious application deals with how one should divide one’s financial wealth between stock and bond holding. If one’s monetary value can be determined then the return on human wealth is simply the future value plus future earnings divided by the current value. If this human wealth r [click to get Huggett paper] eturn looks like the return to low-risk bonds, then one should invest heavily in stock since the overall portfolio is already heavily weighted towards bonds. If, however, one’s human wealth return looks like the return to stock, then one would be wise not to invest at all in stock. A key part of portfolio allocation advice, therefore, boils down to answering the question: what is the monetary value of a man?

To answer this question sensibly, Huggett and Kaplan face two main tasks. First, they determine how male earnings move with the return to stock and bonds. Second, given such a statistical model summarizing how earnings and asset returns move, they measure the value of these future earnings in terms of current dollars.

Huggett and Kaplan found that the average return on human wealth for high school or college-educated U.S. males is several times the mean return to stock early in the working life and that this return declines as males approach retirement. This is driven by the large amount of idiosyncratic earnings risk faced by young males together with the limited ability to share this risk. The authors also find that the stock component of human wealth is smaller on average than the bond component throughout the working lifetime.

† Shakespeare’s Hamlet, Act II, scene II

May 20, 2012
GU Econ PhD student receives prestigious Jordan Award.

The Economic Club of Washington presented its prestigious Vernon E. Jordan Jr Fellowship Award this year to GU Ph.D. student Mauricio Villamizar. The award was given to Mr. Villamizar in recognition of his essay “Identifying the Effects of Monetary Policy Shocks: Evidence from Colombia.” Mr. Villamizar, a fourth-year student in the GU Ph.D. program, completed his paper under the guidance of an advisor and GCER Fellow Guido Kuersteiner. The award ceremony took place at an Economic Club luncheon on May 16 at the Grand Hyatt featuring Robert Zoellick, President of the World Bank.

Apr 15, 2012
Winter/2012 Featured Research Profile.

Happiness is in the air! Levinson uses happiness surveys to put a dollar value on air quality.

[click to get Levinson paper]

The U.S. Environmental Protection Agency (EPA) was responsible for 32 of the 105 major rules issued by U.S. federal agencies in 2010. How do economists put a dollar value on the environmental benefits of such rules? This is one of the greatest challenges facing environmental economics, and a new paper by GCER Faculty Fellow Arik Levinson proposes and tests a new approach.

There are three existing and often-used methods of valuing the environment. The first is the “travel cost” approach which originated in a letter by famed economist Harold Hotelling. Hotelling wrote to the National Park Service in 1947, suggesting that the Park Service examine how much people spend traveling to unpolluted recreational sites. A second method, the hedonic regression approach, regresses housing prices on neighborhood characteristics including air quality. Finally, the contingent valuation approach directly asks people about their willingness to pay for environmental improvements.

In recent work, Levinson proposes and estimates an alternative based on “happiness” surveys. The fundamental idea combines data from two sources. The General Social Survey asks respondents how happy they are, on a three-point scale, along with their incomes and other demographic information. And the EPA collects daily air pollution data from thousands of monitors all over the U.S. Combining these two sources, it is possible to estimate respondents’ happiness as a function of their incomes and the air quality in the place and on the day they were asked the happiness question.

The approach is summarized in two equations. The first is a regression equation with each individual’s response to the happiness survey as the left-hand side variable. On the right-hand side are the individual’s income and demographic data and the local air quality conditions. From this equation, Levinson derives a second equation that describes the individual’s marginal willingness to trade income for pollution reduction. From this second equation, Levinson estimates how much more income people would have to earn in order to feel at least as happy as they would with an improvement in air quality.

Levinson applies this approach to airborne particulates smaller than 10 microns (PM10), a common measure of air pollution. He finds that, on average, people appear to be willing to forgo about $40 of annual income for a one-standard-deviation reduction in particulate pollution for one day. How large is this change? A one-standard-deviation change represents a 50 percent increase (or decrease) in pollution! This corresponds to a move by an individual from an average county in the United States to one of the most polluted counties, for instance, Riverside or San Bernardino, CA. It also corresponds approximately to the improvement in air quality attributed to the 1970 and 1977 Clean Air Acts.

Apr 4, 2012
The upcoming 2012 Razin Policy Lecture to be delivered by David Card.

The 2012 Razin Policy Lecture will be delivered by David Card, the Class of 1950 Professor of Economics at UC Berkeley. This year’s Razin Lecture is entitled “Social Interactions” and takes place on Tuesday, April 17, 2012, at 4:00 pm in the BSB 490 Fisher Colloquium at Georgetown University.

Professor Card was honored by the American Economic Association in 1995 with the John Bates Clark Medal. More he received the Frisch Medal in 2007 for an outstanding research paper (with D. Hyslop) published in Econometrica in 2005, and the IZA Prize in Labor Economics in 2006, from Germany’s Institute for the Study of Labor, the leading award for labor economists. David Card’s research spans a wide range of issues and problems in labor economics. His research topics include the effect of minimum wage, the impacts of immigration, the consequences of racial segregation, and the effects of policy changes on health insurance utilization and on health. Card’s most recent work studies peer effects and inequality in the workplace.

The Razin Lecture is accompanied by the awarding of the Razin Prize for the best research paper by an advanced graduate student. This year’s prize goes to David Phillips (pictured at right) for his essay, “Getting to Work: Experimental Evidence on Job Search and Transportation Costs,” produced under the guidance of Prof. William Jack. Click here for more on the Razin Prize and Policy Lecture, its background, and history.

Mar 26, 2012
Call for Nominations: First IZA@DC Young Scholar Program

Organizers: Steffen Kunn (IZA), Francis Vella (Georgetown University, GCER, and IZA)
Place: Georgetown University, Washington, DC, USA
Date: October 22 – October 26, 2012

The GU Economics Department and GCER join with IZA to host the inaugural IZA@DC Young Scholar Program. Its main objective is to expose young scholars to the world’s leading labor economists through a week of presentations and to give them the opportunity to collaborate on research projects with IZA Research Fellows in the DC area.

For more details and for procedures to apply see IZA Call for Nominations.

Mar 24, 2012
GCER Fellow’s Inequality Research Featured at Becker-Friedman Conference.

Prof. Axel Anderson

The inaugural conference on at the Becker-Friedman Institute on Measuring and Interpreting Inequality featured a plenary address by Lones Smith (U. Wisconsin), on his joint work with GCER Fellow Axel Anderson entitled “Matching with Evolving Human Capital”. The paper revisits Nobelist Gary Becker’s classic 1973 paper “A Theory of Marriage”, adding in an important unexplored feature — namely, that individuals are changed by their peers. When postdocs take low-wage temporary positions or parents pay for expensive private schooling to keep their children away from bad influences, they make a clear sacrifice of current for future welfare. Anderson and Smith’s paper develops the general theory of such matching and shows how one model simultaneously explains a myriad of time series and cross-sectional wage and matching patterns in the economy.

Mar 10, 2012
GCER Announces Intensive Econometrics Training Courses.

As part of GCER’ s mission to contribute to the quality of economic research and training in the Washington DC area, we are delighted to announce a new initiative in econometric training. In collaboration with the Center for Continuing and Professional Education, GCER will offer an Econometrics intensive seminar program, with the option of earning a non-credit professional Certificate in Econometrics. Program participants may elect to take individual intensive seminars, or to take three seminars in order to earn the Certificate in Econometrics. Taught by internationally renowned economists, Georgetown’s econometrics seminars are designed to be of practical and immediate use to individuals across the private and public sectors who seek tools to solve complex problems and inform both policy and practice. Each seminar includes applied experience in the estimation, interpretation, and evaluation of economic relationships. For more information see Econometrics Training. Jan 26, 2012
GU Econ Department and IZA sign the collaborative agreement. On January 24, 2012, the Economics Department and Graduate School at Georgetown University reached a collaborative agreement with IZA,   the internationally renowned research institute focusing on labor market issues.

The agreement was finalized on the GU campus and signed by Department and Villani Chair Frank Vella,   IZA Director Klaus F. Zimmermann,   and Graduate Dean Gerald Mara   (all pictured at left).

The memorandum extends the existing collaborative efforts between the Econ Department and IZA and initiates a number of new programs that include formal exchanges of faculty and graduate students and jointly sponsored workshops and conferences. These initiatives will largely work through GCER in coordination with IZA.

Jan 20, 2012
Science Magazine highlights findings of Habyarimana and Jack

Professors Habyarimana and Jack

A recently published study by GCER Fellows James Habyarimana and William Jack on traffic fatalities in Kenya was picked up by the editors of Science Magazine. The Editor’s Choice section of the January issue discusses a field experiment by Habyarimana and Jack that was shown to significantly decrease accidents involving public buses — a serious problem on Kenyan roadways. Jan 5, 2012
GCER Fellow’s Inequality Research featured in GU College News.

Two recent articles highlight research by GCER Fellow Luca Flabbi on wage inequality between men and women in the workplace.

A December article in Georgetown College News and a January article in Georgetown University headline news discuss much of Flabbi’s recent research on hiring practices, job and wage inequality, and the effects of job search and bargaining in the U.S. labor market.