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Impact in Economics

Impact in Economics

Our research is increasing our understanding of the world and helping to tackle some of the complex challenges we face in the 21st century

If you would like to get in touch in relation to any of this research, please contact Dr Juan Pablo Rud at juan.rud@royalholloway.ac.uk.

Our published work

At at a time where self-employment and small business activity is an increasingly important feature of most advanced economies, women are held back when it comes to starting and growing their own businesses by significant financial constraints that are stronger for them than for men.

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Children born in crises face different initial conditions. Data on children born in East Germany just after the Berlin Wall came down confirms that this corresponds to worse adult outcomes. ‘Children of the Wall’ have 40% higher arrest rates, are 33% more likely to have repeated a grade by age 12, and are 9% more likely to have been put into a lower educational track. This column argues that these negative outcomes can be explained by the lower average parenting skills of those who decided to have children during a period of high economic uncertainty.

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There is widespread concern that economic recessions may lead to increases in intimate partner violence. In this research we combine high quality data from the Crime Survey for England and Wales on domestic abuse with Labour Force Survey data on local area unemployment rates among men and women in order to explore the relationship between adverse labour market conditions and women’s experiences of abuse between 2004 and 2011. In contrast to the traditionally held view that unemployment and economic hardship in general is positively related to abusive behaviour we find that women’s exposure to abuse increases with the female unemployment rate but decreases with the male unemployment rate.  Moreover, exposure to abuse is only related to male and female rate of unemployment within the own age group – not other age groups. Our results suggest that the relative labour market conditions for men and women matter more for the incidence of abuse towards women than does the overall level of unemployment.

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The 2016 RES prize was awarded to Dan Anderberg (Royal Holloway, University of London), Helmut Rainer (University of Munich and Ifo Institute), Jonathan Wadsworth (Royal Holloway, University of London) and Tanya Wilson (University of Stirling) at the Royal Economic Society's 2017 Conference for this article.  Watch a video here.

We examine stock index futures and Treasury futures around the release time of 30 U.S. macroeconomic announcements. Nine of the 20 announcements that move markets show evidence of substantial informed trading before the official release time. Prices begin to move in the “correct” direction about 30 minutes before the release time. The pre-announcement price drift accounts on average for about 40% of the total price adjustment. This implies that some traders have private information about macroeconomic fundamentals. Preannouncement drift might originate from a combination of information leakage and superior forecasting that incorporates proprietary data.

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The rise in obesity has largely been attributed to an increase in calorie consumption. This column investigates this claim by examining the evolving consumption and lifestyles of English households between 1980 and 2013. While there has been an increase in calories from restaurants, fast food, soft drinks, and confectionery, there has been an overall decrease in total calories purchased. This decline in calories can be partially rationalised with weight gain by the decline in the strenuousness of work and daily life, and increasingly sedentary lifestyles. 

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Scientific progress can accelerate when scientists are less than fully informed about the advances their peers are achieving. Even though isolated scientists may have to work on projects whose productivity is less promising, they are also forced to select riskier research projects. Strangely, it is the riskier scientific projects that in the long run can lead to the greatest progress. A good example is provided by the success of particle physicists in the Soviet Union during the cold war, who worked in isolation from their Western counterparts.

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Our ongoing work

This paper examines how subsistence farmers respond to extreme heat. Using micro-data from Peruvian households, we find that high temperatures reduce agricultural productivity, increase area planted, and change crop mix. These findings are consistent with farmers using input adjustments as a short-term mechanism to attenuate the effect of extreme heat on output. This response seems to complement other coping strategies, such as selling livestock, but exacerbates the drop in yields, a standard measure of agricultural productivity. Using our estimates, we show that accounting for land adjustments is important to quantify damages associated with climate change.

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The paper studies the impact of change in IP regime in India brought about by the Patents Amendment Act of 2002. Earlier, only processes could be patented: a product invented by one firm could also be sold by another firm as long as it used a different process, which allowed easy imitation. The Act of 2002 strengthened intellectual property protection by introducing product patents: the same product could no longer be produced by other firms irrespective of the process used. Studying a large cross-section of the Indian manufacturing firms, we demonstrate that this change lead to an increase in wage inequality between managers and workers. Moreover, this increase in wage disparity is larger for firms that were technologically advanced before the legislation was introduced. In effect, the change increased the value of patents and led to increased capital investment especially in firms that were already ahead in the race for patents. Since managerial skills are complementary to technological capital, the value of managers relative to workers increased in these firms.  

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In markets with a small number of firms, antitrust authorities usually interpret the information sharing among competitors as evidence of collusion. This paper shows that, under certain conditions, some level of information sharing prior to competition could be good for firms and customers. Experimental evidence shows high levels of information sharing in situations in which collusion is not feasible.

Drone strikes are followed by strongly elevated rates of suicide attacks. On average, roughly one additional suicide attack occurred during a 30-day window following a drone strike in Pakistan. This suicide attack caused, on average, 20 deaths and 48 injuries. The trend of strike followed by suicide attack was elevated under Bush compared to Obama.

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This study uses administrative records of economics students at a university in the London metropolitan area to show that, contrary to commonly held beliefs about negative spill-overs from foreign students, the performance of English-speaking students is unaffected by the share of non-English-speaking students and the linguistic diversity of a classroom. Furthermore, increased linguistic diversity improves the academic performance of non-English-speaking students, especially for low-achieving students. This result appears to be driven by changed patterns of classroom interactions across ethnicities. Asked about their experiences, non-English-speaking students revealed they were much more likely to interact with English-speaking students when they were assigned to a more diverse classroom.

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Inadequate sanitation is a leading cause of poverty in developing countries, largely because it causes premature mortality. But policymakers in Nigeria still struggle to improve sanitation practices despite their importance to national health and poverty eradication strategies. IFS and Royal Holloway researchers, in partnership with WaterAid, provide new evidence on the effectiveness of one of the most popular interventions used by policy-makers and NGOs to improve rural sanitation practices in developing countries.

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Changes in the prize of gold on international markets affect the location of crime in the UK. Using detailed data on reported crime, Arnaud Chevalier and co-authors show that burglars alter their behaviour and increase their activities in neighbourhoods with a greater share of Asian households when the prize of gold goes up. This is because Asian households have a greater proclivity for holding gold – in the form of jewellery – making targeting these households rational when the prize of gold is high.

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