Template-Type: ReDIF-Article 1.0 Author-Name: Lawrence B. Dacuycuy Author-Workplace-Name: De La Salle University Title: Preferences, government investment, and disbursement sudden stops Abstract: Motivated by a recent fiscal episode in the Philippines, during which a major policy initiative was launched to counter poor fiscal spending performance, this note explores the properties of a neoclassical model when a structure that introduces shocks to authorized spending alongside unanticipated government investment shocks is integrated into the model. With the possibility of disbursement flow stops as a backdrop, it investigates the role of preference structures using the model of Leeper, Walker, and Yang [2010], augmented with some useful features from the fiscal-centric dynamic stochastic general equilibrium (dsge) model of Coenen, Straub, and Trabandt [2013]. We argue that the two shocks are orthogonal, with the former deemed more related to persistent shocks arising from budgetary reforms given trends in disbursement rates. Unlike government consumption, government investments add up to a country’s capital stock, which can predictably improve the efficacy of future government investments and consumption. Results indicate that shocks to government investment have systemic effects on output, labor supply, government investment, and government consumption. More importantly, preference structures do matter in evaluating the impact of various shocks. Classification-JEL: E62,E32 Keywords: fiscal policy, preferences, disbursement sudden stops Journal: Philippine Review of Economics Pages: 1-18 Volume: 53 Issue: 1 Year: 2016 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/933/834 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:53:y:2016:i:1:p:1-18 Template-Type: ReDIF-Article 1.0 Author-Name: Marjorie Pajaron Author-Workplace-Name: University of the Philippines School of Economics Title: The roles of gender and education in the intrahousehold allocation of remittances of Filipino migrant workers Abstract: This paper shows that the individual’s bargaining power within the household, proxied by the gender and the educational attainment of the household head, affects how remittances sent by Overseas Filipino Workers are spent in the Philippines. Generalized linear model estimation and post-estimation tests reveal four main results. First, the gender of the household head, not of the remitter, matters in the allocation of remittances. Second, consistent with the existing literature on intrahousehold allocation, as remittances increase, female heads with absent spouses allocate more remittances to education and health and less remittances to alcohol and tobacco. Third, the presence of the wife matters in terms of the allocation of male heads to education, children’s clothing, and alcohol and tobacco. Fourth, regardless of the gender, household heads with less education allocate more to education than those with more education Classification-JEL: D13, F22, J16, O15, R23 Keywords: international migration, ofws, intrahousehold allocation, gender differential Journal: Philippine Review of Economics Pages: 19-55 Volume: 53 Issue: 1 Year: 2016 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/934/835 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:53:y:2016:i:1:p:19-55 Template-Type: ReDIF-Article 1.0 Author-Name: Stella Quimbo Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Xylee Javier Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Joseph Capuno Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Emmanuel de Dios Author-Workplace-Name: University of the Philippines School of Economics Title: A novel way of measuring the endowment effect of gaining a child Abstract: We test, using national survey data on Filipino women, whether stated fertility preferences are stable and, thus, reliable measures of choice. We compare the expressed ideal number of children of two groups of matched women with that of another group having arguably more stable preferences. Using propensity score matching, we find that the stated ideal number of children is significantly higher than the control group with presumed stable preferences, by about 1 child among the poor and among older women. This difference suggest instability in fertility preferences, which may be due to moving fertility targets, cognitive dissonance or anomalous choice behavior arising from status-quo bias, or endowment effects, with the prohibitive cost of “giving up” additional children causing an upward adjustment of fertility targets. Classification-JEL: J13, I12, D13 Keywords: fertility preferences, endowment effects Journal: Philippine Review of Economics Pages: 56-71 Volume: 53 Issue: 1 Year: 2016 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/935/836 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:53:y:2016:i:1:p:56-71 Template-Type: ReDIF-Article 1.0 Author-Name: Agustin Arcenas Author-Workplace-Name: University of the Philippines School of Economics Title: Ascertaining the link between dengue and climatic conditions Abstract: I examine climate-change related factors affecting the incidence of dengue in the Philippines. Dengue is estimated to cost hundreds of millions of dollars in the Philippines and worldwide in terms of treatment, surveillance and control, lost income, and other indirect costs per year. The disease is a burden especially for the poor, who are less able to access funds for treatment and are more heavily affected by the loss in income due to illness. Econometric results show that temperature, precipitation, and the incidence of La Niña contribute significantly to the cases of dengue in the Philippines, since these conditions enhance the breeding, growth, and development of Aedes aegypti, the dengue carrying mosquito. Better household sanitation practices are also found to reduce dengue cases, indicating that investments to enhance the public’s adoption of hygienic and other health practices lessen the transmission of the disease. Such results are consistent with the findings of studies regarding dengue in other parts of the world and contribute to the growing awareness about the health impacts of climate change. This study provides policy makers with additional guidance as climate change in the region becomes more pronounced. Classification-JEL: Q54, I18 Keywords: dengue, climate change, environmental health Journal: Philippine Review of Economics Pages: 72-86 Volume: 53 Issue: 1 Year: 2016 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/936/837 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:53:y:2016:i:1:p:72-86 Template-Type: ReDIF-Article 1.0 Author-Name: Nikkin Beronilla Author-Workplace-Name: National Anti-Poverty Commission Author-Name: Patrocinio Jude Esguerra Author-Workplace-Name: National Anti-Poverty Commission Author-Name: Jamir Ocampo Author-Workplace-Name: National Anti-Poverty Commission Title: Trade is a good gauge of economic activity. Given the economic and geographical attributes of a place, one can assess the likely levels of trading activity, and this may be used as an indicator of the relative economic potential among the areas. However, trade estimates are available only at the regional level of disaggregation, despite the fact that planning by local governments and even by line agencies of the central government happens mostly at the sub-regional level. In this research, we fill this data gap by estimating trade at town or city level via a gravity model of trade. Normally sub-regional trade is estimated using Ordinary Least Regression, but this research uses Poisson Regression which is better at handling zero trade values without transformation. The research results have been applied by a number of government agencies in their respective programs. Classification-JEL: C01, F17 Keywords: gravity model of trade, Poisson regression, economic potential for growth Journal: Philippine Review of Economics Pages: 87-96 Volume: 53 Issue: 1 Year: 2016 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/937/838 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:51:y:2016:i:1:p:87-96 Template-Type: ReDIF-Article 1.0 Author-Name: Fidelina Natividad-Carlos Author-Workplace-Name: University of the Philippines School of Economics Title: Time inconsistency: the Phillips curve example, an analysis for intermediate macroeconomics Abstract: This paper provides the algebra and a panel diagram to attempt to examine the so-called inflation unemployment (or Phillips curve, or aggregate supply) example, the most popular example in the literature when introducing the concept of “time inconsistency” or “dynamic inconsistency.” The resulting panel diagram, along with the derivations presented in the appendices, is used to analyze the different possible outcomes, depending on the scenarios–rule or pre-commitment, cheating, and equilibrium–and find out whether there is indeed “time inconsistency” or “dynamic inconsistency” in the said example. Classification-JEL: E31, E52, E61 Keywords: Philips curve, aggregate supply, time inconsistency, dynamic inconsistency, short-run optimal policy, long-run optimal policy, rational expectations, rules versus discretion Journal: Philippine Review of Economics Pages: 97-126 Volume: 53 Issue: 1 Year: 2016 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/938/839 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:53:y:2016:i:1:p:97-126