Empirical Economics

Abstract This study examines how heterogeneity in classroom characteristics affects the influence of peer interactions on educational outcomes. Using unique friendship network data from German upper secondary schools, we investigate the roles of class size and gender composition in shaping academic achievement. To capture these dynamics, we propose a multivariate instrumental variable (MVIV) appr…

Abstract Medical marijuana was legalized in Oklahoma as recently as 2018, and since then Oklahoma has rapidly grown to have the largest number of medical marijuana dispensaries of any states in the USA. What have been the impacts of this rapid proliferation of legalized medical marijuana? We use a hedonic pricing model to assess how legalized marijuana dispensary activity (both distance to the ne…

Abstract I estimate that the implementation of state-level Earned Income Tax Credit (EITC) supplements results in a 3% reduction in the likelihood of downward occupational mobility among single mothers aged 19 to 35. This outcome, characterized by an elasticity of $$-$$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:mo>-</mml:mo> </mml:math> 1.4, is not attributable to shifts in o…

Abstract This paper investigates whether incorporating daily U.S. fiscal flows improves the explanatory power of traditional asset pricing models. Using data from October 2005 to April 2024, we assess model performance through both classical alpha testing and Bayesian model comparison following the framework of Bryzgalova, Huang, and Julliard (2023). The results show that the inclusion of the fis…

Abstract Risk-based portfolio allocation strategies using the so-called hierarchical risk clustering have recently attracted attention from both academics and practitioners, mainly because of their ability to construct well-diversified portfolios through machine learning algorithms without the need to invert the covariance matrix. However, despite this innovative approach, the existing literature…

Abstract We develop a nonparametric similarity-based approach for binary time series that exploits recurring historical patterns to construct probability forecasts for all feasible multi-period outcome sequences. In contrast to conventional horizon-specific parametric models, our path forecasts are obtained simultaneously for all the horizons and remain internally consistent across them. Simulati…

Abstract We estimate novel narrative monetary policy shocks for Brazil, derived from the Central Bank’s reaction function and accounting for both constant and time-varying systematic monetary policy. We then examine the effects of these shocks on Brazilian macroeconomic variables using structural vector autoregressions with external instruments. Our results indicate a reduction in the magnitude a…