Saturday, December 31, 2011

My Year in Review 2011

I started the year as a "Visiting Fellow" (i.e. unemployed but with an office etc. at the university) and ended as a full professor (appointed 15th August). In between I was an associate professor (from 10th January to 15th August). Of course, until mid 2007 I was a tenured associate professor in the US so this wasn't quite as meteoric a rise as it might seem :) (though it's debatable whether a US associate prof is equivalent to Australian one or to an Australian senior lecturer). I gave a "foundation seminar" for the new position on 1st November. The other major career highlight for the year was getting my first ARC grant.



I went on four international trips in the year. In April I went to Austria to be interviewed for a full professor position at Graz, which I didn't blog about at the time. It was a fun trip though pretty tiring. In the end they hired Martin Wagner, who I think is much more suitable for the position than I would have been. In July, I went to Korea for the IPCC, Working Group III first lead author meeting. I also gave a presentation at KEEI and did some sightseeing. In August, another new country - India - for a workshop on climate change policy. The final trip of the year was in late September and October to Ann Arbor, Michigan for another workshop.

On the publication front there were three papers which were officially published in 2011 - my review of energy and growth in Ecological Economics Reviews, publication finally of my paper on elasticities of substitution, and a paper on malaria and climate change with Simon Hay. The latter two papers were each submitted to four journals I think till we got them accepted... A couple of papers were also accepted, which hopefully will be forthcoming soon: Where in the world is it cheapest to cut carbon emissions? and The role of energy in the industrial revolution and modern economic growth. Both of these were published at the first place we sent them, but after a lot of revision. I also wrote a chapter for the Encyclopedia of Environmetrics on ecological economics.

Between all this I did manage to do some teaching :) I taught an introductory microeconomics course - Economic Way of Thinking I and gave a guest lecture at the Treasury as well as a series of three lectures in our flagship CRWF 8000 course.

That's probably enough of me talking about myself! Tomorrow there'll be a post on the most popular blogposts of 2011.

Friday, December 30, 2011

Job Opportunities at University of Maryland



University of Maryland, College Park.


The College of Behavioral and Social Sciences is seeking (3) computational social scientists to expand Maryland's strengths in the computational aspects of global environmental change through interdisciplinary joint appointments. Rank will start at associate professor and tenure will be in the department closest to the applicant's background. Applicants should have disciplinary backgrounds in the social sciences and most importantly, have advanced computational skills which include experience integrating social science data into computational models.

One appointment will be in economics/geography. Experience is preferred in sustainability science in combination with one or more of the following: computational economics, economic geography, spatial modeling or data visualization. Individuals selected will lead their own research, including sustaining external funding through grants, but will participate in ongoing and future interdisciplinary, environmental projects within their departments, and across the college. Faculty hired under this search will be expected to develop a college-wide course on computational social science that would fit into a sequence taken by students to cultivate research and computational skills. Student mentoring and service to the university community will be expected.

Each applicant should submit a cover letter specifying the joint position for which they are applying, along with their relevant qualifications, a curriculum vita, names of three references, and one journal article. Material should be submitted electronically (reference position 117853). Review of applications will continue until the positions are filled, however applications received by February 3, 2012 will receive best consideration. Applicants will be notified prior to reference checks. For questions, please contact the search coordinator, Sarah Goff-Tlemsani. The University of Maryland is an affirmative action/equal opportunity employer and is proud of its diverse faculty, staff, and student body. Women, minorities, veterans, disabled veterans, and individuals with disabilities are encouraged to apply.

Thursday, December 29, 2011

Shuang's Blog Has a New Name


It's still at the same URL but has a new title: "Collective decision-making under uncertainty" instead of "Bioinvasion and ecoservices", which reflects the evolution of her research interests over the last 4 years since coming to CSIRO.

Wednesday, December 28, 2011

Paper Accepted by The Energy Journal

My paper with Astrid Kander The Role of Energy in the Industrial Revolution and Modern Economic Growth has been accepted for publication in The Energy Journal. I discussed the paper when the working paper was added to RePEc. This is the first building block in the research program which is a large part of our ARC grant - the "past" energy transition. A couple more related papers are already in preparation and much more is planned.

Monday, December 26, 2011

Comparing Author Citation Profile Services

There are now three leading services that provide author citation profiles online. I recently discussed the most recent entrant, Google Scholar Citations. The other two are Researcher ID (from the Web of Science) and Scopus Author Details. There are considerable differences between these services:



Google Scholar and Researcher ID require you to set up your profile yourself while Scopus does this for everyone automatically. To do this on Researcher ID you need to search for your publications on the Web of Science and so you will only add those that really belong to you. The profile does not update automatically and so there will be no noise from publications that don't belong to you but it will become out of date if you don't update it. Scopus profiles are usually very noisy unless your name is unique and there may be multiple profiles for the same author. You can request changes online but as the profile updates automatically noise is likely to be added again if your name is common. Google Scholar will suggest groups of articles that might be yours and you can search for missing articles and you can then self edit the profile. But because the profile updates automatically noise is likely to be added again. Google allows editing of the details of entries - you can correct titles, dates of publication etc. Scopus and Researcher ID only allow addition or deletion of articles as a whole. Automatic updating is really nice but it is noisy is the bottom line, especially if your name is something like S Liu.

Scopus profiles are not available publicly - only to other Scopus users which is a big downside for you as a researcher but because they are created automatically they are often my first place to look at a profile of someone. Researcher ID and Google Scholar profiles are still both rare in most fields. CSIRO requires staff to have a Researcher ID profile. I've also noted that in dinosaur paleontology several people have been able to list up to ten coauthors on their Google Scholar profile but this won't be common yet in other fields.

All three services allow you to sort the results by date or times cited. Google Scholar and Researcher ID also allow sorting by title.

The other features in the table are functions of the databases themselves. Google Scholar has the widest coverage of different types of publications. Scopus does include citations to books in the journals it covers but the author details does not. Google Scholar is limited by only looking for citations in materials that are online which does tend to favor recent citations. Do you really think that Einstein's citations increased by so much in recent years?* Scopus only has citations from post 1996 documents. The Web of Science has citations from documents going back to 1945 (if your institution subscribes that far back).

Bottom line is that Google is the most user friendly service but quite "noisy" and so far limited in who is covered. Researcher ID has the lowest noise level and is fairly user friendly. Scopus is noisy, non-public, and not very user friendly, but has the broadest coverage of researchers.

* If you think that Einstein has a lot of citations check out Pierre Bourdieu!

Wednesday, December 21, 2011

Transmission of Infectious Parasites Slows with Rising Temperatures, Researchers Find

So says a commentary in Nature on an article in Biology Letters*. This result is from a study with rodent malaria rather than human malaria. If this extends to human malaria it could be another factor explaining why we don't find a positive relationship between temperature and malaria.** Our assumption has been that interventions have been successful in overcoming the tendency to more malaria in warmer climates. But maybe that tendency is not so strong in the first place.

* Link to letter in Biology Letters from Nature is broken and I can't find it on their website.
** My coauthor, Simon Hay, is quoted in the Nature piece.

Friday, December 16, 2011

SNIP Doesn't Work (at least not for area studies)

It has been our practice at the Crawford School to highlight on the website etc. all journal articles that ranked as A or A* (the top 20% of journals) in the ARC's ERA journal ranking list. Unfortunately, the ARC abolished this ranking. We seem to be one of the few groups that were unhappy with that. Most Australian researchers seemed overjoyed.

So we had to look for a replacement listing. One option was Elsevier's SNIP which
I blogged about in May. SNIP is designed to take into account the varying citation practices in different fields. This is very important in an interdisciplinary school like Crawford. If we adopt a common metric like impact factor or article influence score then our colleagues in smaller and book-oriented fields will be disadvantaged relative to those in large journal-oriented fields like economics.

But we found that at least in the case of area studies, rather than ameliorating the problem, SNIP exacerbates it. Using an article influence score of 1 and above, I identified 78 economics journals out of a total of 305 in the Journal Citations Report and only 3 in area studies out of a total of 60 in the JCR. Using a SNIP of 2 or more, I identified 86 economics journals but only one * of the top 15 area studies journals from the JCR had a SNIP of 2 or more. So SNIP was 3 times as discriminatory against area studies than Article Influence Score.

So, reluctantly, we have decided to continue using the ERA journal ranking list for the next year using judgement to decide whether new journals qualify as leading journals. We could use the top 25% of journals in each field in the JCR as an alternative but decided that that would be less transparent. Energy Economics would not be included in the top 25% because it is outside the top 25% in economics but Ecological Economics would be included because it is in the top 25% in environmental studies, though outside the top 25% in economics. This would end up confusing people. Maybe we'll try it in 2013, unless SNIP improves in the meantime.

* This journal - African Affairs - was ranked C by the ARC!

Monday, December 12, 2011

More Musings about Schmith et al.

I got an e-mail from Søren Johansen about my post about the Schmith et al. paper that he coauthored. In response I thought a bit more about whether there could be a long run relationship between atmospheric temperature, sea level, and radiative forcing. I had said that that didn't make much physical sense to me and proposed a statistical explanation for what they found. But the fact is that atmospheric temperature is in equilibrium with the temperature of the ocean surface or the mixed layer (generally the top few tens of metres of the ocean). But heat is being slowly transmitted to the deep ocean and ocean height reflects the temperature of the entire ocean. So the relation between ocean height and atmospheric temperature might need the forcing variable to complete it over the length of the annual time series available. Also of course the oceans are not simply rising from thermal expansion but due to meltwater from glaciers and ice sheets.

Sunday, December 11, 2011

Some Kind of Deal is Agreed in Durban

So Kyoto will be extended but be restricted to Europe. In the meantime most other countries have their Copenhagen pledges to fulfill. Negotiations will proceed to agree a global treaty with "legal force" (whatever that means) by 2015 to come into force in 2020.

This is good, assuming things stay on track because we know that China needs to peak emissions by at least 2020.

I'm not too concerned about whether countries' commitments would limit climate change to 3.5C or 2C. The main thing is to continue the momentum that will foster the innovation that will solve this problem at a reasonable cost. We are seeing this technological change happening in a significant way.

Sunday, December 4, 2011

Economics of the Singularity


I recently read part of this book: "The Lights in the Tunnel". I don't think it makes a lot of sense in terms of the outcome - the economy collapses from lack of demand as unemployment rises. But the basic idea is intriguing. Up till now machines and computers have taken over many tasks but they have acted as "q-complements" to labor in general and particularly skilled labor.* But could the future be one where all simple tasks are automated and the remaining jobs are too hard for people of ordinary ability to do?** And what happens when/if the "Singularity" occurs - when computers become more intelligent than humans? Does inequality continue to grow beyond anything we see today? Will redistribution increase? Is there a middle way? Is this whole idea totally mistaken? Or will humans be enhanced by genetic manipulation or implanting of non-biological computers?

There are economists and entrepreneurs/technologists who have thought about this. But I don't think anyone has any real answers yet.

* If an increase in an input increases the marginal product of another input then those two inputs are q-complements.
** More precisely the most that anyone is willing to pay for a human to do these automatable tasks is less than the minimum amount needed for subsistence.

Microsoft Academic Search



It turns out that Microsoft already had my idea of computing H-Indices for Institutions. I've got no idea how they calculate it, though. Probably based on the number of publications from that institution cited h times rather than the number of researchers cited h times as I suggested.

Microsoft Academic Search is another citation service that is apparently little known outside of library science circles. I only just discovered it despite being a citations junkie. According to them I have only 691 citations, which is just a bit above my count on RePEc and less than half my count on the Web of Science. They also think I'm still at RPI. But that is just my main entry. A whole bunch of my publications seem to be listed under separate identities at the University of Michigan and ANU as well as some smaller entries. So, I'm a bit skeptical about this service.

Contrary to some blogs I read, this service still seems to be under development.

Saturday, December 3, 2011

CCEP Working Papers in November 2011

Downloads were still good this month after relaxing from last month's craziness:



The two top papers from last month continued to get a lot of hits. We added one new paper by Paul Burke. There is a second paper dated November that didn't quite squeeze into the sample. More details of the new papers below:

The National-Level Energy Ladder and its Carbon Implications

Paul J. Burke

Abstract: This paper documents an energy ladder that nations ascend as their per capita incomes increase. On average, economic development results in an overall substitution from the use of biomass to fulfill energy needs to energy sourced from fossil fuels, and then toward nuclear power and certain low-carbon modern renewables such as wind power. The results imply an inverse-U shaped relationship between per capita income and the carbon intensity of energy, which is borne out in the data. Fossil fuel-poor countries are more likely to climb to the upper rungs of the national-level energy ladder and experience reductions in the carbon intensity of energy as they develop than fossil fuel-rich countries. Leapfrogging to low-carbon energy sources on the upper rungs of the national-level energy ladder is one route via which developing countries can reduce the magnitudes of their expected upswings in carbon dioxide emissions.

In Search of a New Effective International Climate Framework for Post-2020: A Proposal for an Upstream Global Carbon Market

Mutsuyoshi Nishimura and Akinobu Yasumoto

Abstract: Given the urgency and the magnitude of emission cuts required to arrest the global temperature rise at an acceptable level (like 2 degrees Celsius), it is imperative that action to mitigate climate change is taken at the lowest cost. This can be done if a cost effective set of policy tools with a focus on carbon pricing is applied as broadly as possible across all emission sources. In view of the emerging consensus on the temperature target like 2 degrees Celsius, it is imperative that climate scheme caps global emissions rather than allowing governments to arbitrarily pledge their intended cuts. Global emissions must be contained within the limit of carbon budget that achieves temperature objectives. Emission allowances must be issued in accordance with such limit and be sold to the global demand of emitters. Such sales of carbon budget give rise to both the most accurate carbon pricing as well as new revenue that can be used for much needed climate financing for developing countries. A new climate regime along those lines would stop global warming at an acceptable level, provide a new large climate funding that would integrate developing countries to a global low-carbon growth and transformation and keep all economies thriving, whether they are developing, emerging or developed. The post-2020 climate regime must be nimble and effective, not unwieldy and least burdensome. It must also be durable and fully congruent to the economic realities of the coming decades

Sunday, November 27, 2011

Playing with Google Scholar Citations

Google Scholar Citations has only been public for 10 days but already an analysis has appeared. I hadn't thought of searching by institution myself but this is a good idea. For example:

Australian National University
CSIRO

This means that it is now easy to construct a kind of h-index for institutions: where h is the number of authors cited h times. ANU's h-index is 37: and CSIRO's is 58. Of course, this is very early days and not many people have signed up yet. Harvard scored 141. I suspect based on this that something along the lines of the Wu-index (Wu = n where n is the number of articles cited 10n times) or some other variant is going to be more useful.

Wednesday, November 23, 2011

Bob Gregory on the Mining Boom



Over the weekend I attended the 2011 PhD Conference in Economics and Business at the University of Queensland. This is an annual event held at ANU, UWA, and now UQ that has apparently been running for 24 years. Final year PhD students from across Australia present papers each of which has a faculty discussant. I was discussing Marjan Nazifi's paper on convergence (or lack of it) between EUA and CER permit prices on the European carbon exchange. My student Md Shahiduzzaman was also presenting a paper on interfuel substitution in Australia.

There was also a conference keynote given by Bob Gregory based on his paper with Peter Sheehan on the Australian mining boom. The key figure is this one:



which shows the gap that has opened up between Gross Domestic Income and Gross Domestic Product since 2003 due to the increase in the terms of trade. The increase in prices of minerals have boosted nominal mining income but this isn't reflected in the GDP numbers. I am still trying to get my head around the technicalities of this. It seems to be another case of where you need to be very careful about how national accounts are computed.

Monday, November 21, 2011

Debate on Australia's Coal Exports

I was featured along with Frank Jotzo and others in this blogpost on DotEarth by Andy Revkin. I'm still confused about why people want Australia to go beyond its obligations under the UNFCCC. And it's not as if China isn't doing its part too, though very soon China will need to start reducing emissions rather than just emissions intensity. Wait to be surprised on that count I think.

Friday, November 18, 2011

Thursday, November 17, 2011

Tom Stanley's Presentation at the Wiley Online Economics Conference

See Tom Stanley's presentation on meta-analysis. There is also a commentary by Randall Rosenberger and a free "virtual issue" of the Journal of Economic Surveys.

Google Scholar Citations Now Open to All


Google Scholar Citations is a new academic profile service that is very similar to Researcher ID but using Google Scholar citations instead. The service has been in limited release but now is open to everyone. I found that I didn't need to make too many edits to my profile. The main issue is the entries which are prefaced by "[Citation]" in Google Scholar. These are sources that Google Scholar has found cited in publications but cannot find on the web. Most of these are not included in my profile and I couldn't add all of them. As a result my H-Index in the profile is one point lower than the number I computed direct from Google Scholar. The total citation count is 0.5% lower than what I found with my manual search in Google Scholar. Overall, I think this is a great innovation though I would like to be able to get a bit more access to the numbers of citations per year rather than just having a graph at the top of the profile. Still, I'm sure it is early days at this point.

New Journal: Ecosystem Services



A new journal from Elsevier with an editorial board with a lot of well-known names from ecological economics. From the homepage:

Ecosystem Services, associated with Ecosystem Services Partnership (ESP), is an international, interdisciplinary journal that deals with the science, policy and practice of Ecosystem Services in the following disciplines: ecology and economics, institutions, planning and decision making, economic sectors such as agriculture, forestry and outdoor recreation, and all types of ecosystems.

The aims of the journal are:
(1) to improve our understanding of the dynamics, benefits and social and economic values of ecosystem services,
(2) to provide insight in the consequences of policies and management for ecosystem services with special attention to sustainability issues,
(3) to create a scientific interface to policymakers in the field of ecosystem services assessment and practice, and
(4) to integrate the fragmented knowledge about ecosystem services, synergies and trade-offs, currently found in a wide field of specialist disciplines and journals.

From Correlation to Granger Causality Added to New Crawford School Research Papers Series

My paper From Correlation to Granger Causality has been added to the Crawford School Research Papers series on RePEc. I'm now working on revising the paper and doing new tests in collaboration with Kerstin Enflo. This version represents the conference paper I gave in Michigan at the "Annual Institute on Joint Outcomes for Sustainability" (which was not an annual institute but a once off workshop) organized by Arun Agrawal. Both Shuang and myself were invited to the workshop. Shuang's work was more directly relevant looking at decision-making for dealing with invasive species. I was asked to talk about "from correlation to causal inference" in a session of that topic where different econometric methods were discussed. Most relevant in that session to the topic at hand was Paul Ferraro's presentation on the effects of protected areas in Costa Rica on poverty in surrounding districts.

Wednesday, November 16, 2011

Google Scholar Continues to Improve

Every few months Google Scholar seems to undergo a rebuild of their database and housekeeping exercise. Before the exercise, lists of references are no longer in exact order of the number of citations they have received. Rather they are in order of the number they received at the last rebuild. Another rebuild has occurred today. In this rebuild they have managed to aggregate together stray citations much better than ever before. All the citations to my two most cited articles (both in World Development) have now been aggregated into single entries in the database rather than being spread across several entries with slightly different bibliographic data. I don't know whether accuracy has similarly improved in terms of number of citations. Previously, there could be some double counting of the same paper in the list of citations to an article. It's likely that that has improved too. There are still some split entries but it is much better than before and should be much more user-friendly for counting h-indices etc.

Monday, November 14, 2011

Schmith, Johansen, and Thejll on Atmospheric Temperature and Sea Level Rise

Three Danish researchers, including famous time series econometrician Soren Johansen, recently posted a paper on SSRN on a cointegration analysis of atmospheric temperature, sea level, and radiative forcing. The study has some odd results. From their abstract:

"We find a relationship between sea level and temperature and find that temperature causally depends on the sea level, which can be understood as a consequence of the large heat capacity of the ocean."

They find that sea level is an exogenous variable and drives atmospheric temperature. I think this is a plausible explanation for this result given that the data is annual and as they say later in the abstract:

"We hypothesize that this is due to a long adjustment time scale of the ocean and show that the number of years of data needed to build statistical models that have the relationship expected from physics exceeds what is currently available by a factor of almost ten."

The slow adjustment of the ocean to changes in radiative forcing is a major challenge for time series modelling of the global climate system using historical data. I debated Michael Beenstock on this issue last year on this blog and in an e-mail exchange with him. The problem is that as Schmith et al. find here the atmospheric temperature depends on the temperature of the ocean. Directly modelling the effect of radiative forcing on the atmospheric temperature using a short time series can result in biased estimates. My approach was to use ocean heat content as an additional variable that acts as a second transmission path for the effects of radiative forcing changes on atmospheric temperature. Using sea level might work in a similar way though it depends on glacier melt and other factors potentially as well as thermal expansion of the ocean. An advantage of sea level is that a much longer time series is available.

Schmith et al.'s stranger result is:

"In a second step, we use the total radiative forcing as an explanatory variable, but unexpectedly find that the sea level does not depend on the forcing."

I would have expected them to find an effect of radiative forcing on sea level. But using a Monte Carlo analysis they argue that it would take 1000 years of data to get a significant result.

I'm not sure that this is the final word that can be said on this. They find only one long relationship between the three key variables.* This relationship is as follows:

zt = Tt - 1.4 St - 0.3 Ft

zt is the residual in year t, T is atmospheric temperature, S is sea level, and F is radiative forcing. My problem is that this doesn't make sense to me physically as an equilibrium relationship. It could make sense that there are long-run relationships between T and S, between S and F, and between T and F. But, as written, sea level can substitute for forcing in affecting atmospheric temperature and vice versa. I suspect that this result is because the volcanic events render the forcing series relatively stationary and, therefore, cointegration cannot be rejected for this relationship. The forcing series looks like this:



In my work, I instead assumed which variables had long-run relationships based on physical theory and I used a multicointegration type approach. So I'm not surprised that sea level doesn't react to this disequilibrium in their analysis. I would be interested in what results they get if they also test a forcing series without the volcanic effects or disaggregate the stationary (volcanics) and non-stationary (GHGs, aerosols, solar irradiation) forcing components.

Of course, this relationship might actually make sense and I could be totally wrong here. Let me know what you think.

I'm really happy, though, that time series analysis is increasingly being used now to investigate these questions. Robert Kaufmann and I pretty much pioneered this but I gave up as I found it hard to get much positive interest from climate modellers. I never published my final paper on the topic. Robert Kaufmann has continued to work on this with greater success.

* In the paper there is a typo where they say that the p-value for the test of one cointegrating vector against two is 0.01. It is in fact 0.9117 the authors tell me in an e-mail.

Paper Accepted by AJARE

My paper with Jack Pezzey and Ross Lambie: "Where in the world is it cheapest to cut carbon emissions?" has been accepted for publication by the Australian Journal of Agricultural and Resource Economics. It will be a while till it is available online. In the meantime there is a working paper version available here. The paper arose from the observation that countries like Australia which at first glance seem to use energy wastefully and have abundant opportunities to cut emissions at low costs can have high total costs of addressing climate change because they are so emissions intensive. Where it is cheap to cut emissions depends on whether we rank countries by marginal costs of reducing emissions or by total costs of reducing emissions.

In the paper, we test this idea using the results of the models that participated in the EMF-22 climate policy simulation exercise and the results seem to support this conjecture. This might explain both debates within countries about what to do about climate change and the different stances of countries in the international negotiations. For example environmentalists might look at the cheap ways (in the marginal sense) to cut emissions in countries like Australia and be outraged that they're not happening while business might look at the total costs of meeting a given policy...

Also the paper gives estimates of the marginal abatement cost curve for the 4 main countries/regions based on the consensus of existing models. They show that to get substantial cuts in emissions on the order of the Copenhagen pledges you would need carbon prices a lot above the $23 initial price of the Australian ETS. The models might be over-estimating the cost of abatement. But when you take into account the half of Australian abatement expected to come from offsets and the amount that will be removed by direct action (RET) the amount of remaining domestic abatement required is in the ballpark of this kind of price.

ARC Announces DECRAs and Future Fellows

Only two Future Fellowships were awarded in economics. Benno Torgler (QUT) got one for "The role of moral sentiments and emotions in human nature: an interdisciplinary empirical approach". Michael Smith at Uni Melbourne got one for an econometric theory project. Obviously, it wasn't the turn of economics...

John Tang at College of Business and Economics got a DECRA to work on "Understanding industrialisation, entrepreneurship, and technology adoption in emerging economies: new evidence from historical Japanese firms". This is the only economics award ANU got in this round of announcements.

Sunday, November 13, 2011

Estimating Cointegration Models with Structural Breaks

The Johansen cointegration procedure is one of the most popular methods of testing for cointegration. The tests and estimation are carried out by restricting a vector autoregression model. One of the key issues is deciding on the types of time trends and constant terms to include in the model. This is important because the distribution of the test statistics is different for each possible combination. The basic versions of the procedure assume that any linear time trend has a constant slope. But in reality the slope of the trend - which might represent a variable such as technological change - might not be constant. Johansen et al., 2000 investigated this issue and derived test distributions for the case where there are known structural breaks that cause the trend to change slope as well as for shifts in the model intercepts too. If you use EViews there seems to be a fairly user friendly way of carrying out these tests and estimating the model provided by David Giles at University of Victoria (Canada). David also has a lengthy blogpost explaining how to carry out this kind of analysis.

Reference:

Johansen, S., Mosconi, R. and B. Nielsen (2000), Cointegration Analysis in the Presence of Structural Breaks in the Deterministic Trend, Econometrics Journal, 3, 216- 249.

Crawford School Research Papers

I often post about our CCEP Working Paper series. We also have a new Crawford School Research Paper series that unifies the previous paper series from various Crawford School entities. The series is starting to get a decent amount of downloads and abstract views.

Wednesday, November 9, 2011

Does Open Access Increase Citations?

PLoS ONE has a high impact factor despite publishing 70% of submitted papers. It is, of course, the best known open access journal. Does open access increase the rate of citation? The naive answer would be that it must obviously do so. Taking a barrier to access away must result in more people reading and citing a paper. On the other hand most research libraries are going to subscribe to the top journals in each field so this might be more important for lower ranked journals than highly ranked journals. Analysis can also be confounded if higher quality articles are submitted to open access journals as is argued for PLoS ONE due to its publication fee. A 2006 article in PLoS Biology compared open access and non-open access articles in the same journal - PNAS - and concluded that the open access articles were cited more. But more recent research across broader samples of journals seems to be mixed. I haven't done any detailed research on this but need to include something on this in a presentation on Friday. Any feedback would be welcome.

Monday, November 7, 2011

6. The Energy Cost Share Declines Over Time

This fact is at the moment only supported by the data from Sweden and so isn't much of a fact. In Sweden the share of costs represented by energy use has declined over time:



It seems that this might be a general phenomenon. I have seen references elsewhere to a declining income share for land too. The implication is that the elasticity of substitution between energy and other inputs is different from unity. Stern and Kander show it to be about 0.65 in Sweden.

Sunday, November 6, 2011

5. Energy Intensity Declines Over Time

Though energy use has generally increased over time it has grown more slowly than has GDP. Globally it grew at about half the rate of GDP in the last 30 years. As a result energy intensity (energy per dollar of GDP) has declined globally:



Energy intensity has declined in most key countries. This chart shows the trends from 1971 to 2007:



Note that though China was very energy intensive in the 1970s, India was not. Hence there was not a lot of correlation between income per capita and energy intensity back then either. In fact (as Stephen Howes raised at my seminar on Tuesday) energy intensity has increased in some countries over time. These appear to be mostly in Latin America. We don't see this trend in any developed country. So it is a stylized but not universal fact that energy intensity has declined over time.

When we ignore traditional sources of energy such as biomass and animal power a very different pattern emerges:



As fossil fuel use was once zero in most countries (some countries have used coal for a very long time) energy intensity based on only modern energy sources must also have been zero and then increased. This results in an inverted U shape path as shown in this chart.

Saturday, November 5, 2011

4. Energy/Capital is Negatively Correlated with GDP per Capita

I've blogged about the energy capital ratio before. Here is a snapshot for 85 non-oil producing countries in 2007:



There is a much stronger relationship here than for energy intensity... This suggests that this indicator is maybe closer to a measure of true energy efficiency. Astrid Kander shows that the inverse - capital/energy - it also has risen over long-run:

Friday, November 4, 2011

3. Energy Intensity is not Correlated with GDP per Capita



As you can see from the chart this claim is only partially true. Energy intensity (energy per dollar of GDP) does seem somewhat higher in the less developed countries. But energy intensity does not seem to vary across middle and high income countries. As GDP per capita is very closely related to output per worker, otherwise known as labor productivity (the productivity number the media is often talking about) it's curious that there is no relationship. This suggests that energy intensity is not a good proxy for energy efficiency in an underlying technological sense. My main environmental economics research hub paper discusses this issue at length. I find that underlying energy efficiency varies much more with GDP per capita than does energy intensity but a bunch of other factors including climate and economic structure also affect energy intensity. Countries like China that use a lot of coal are going to be more energy intensive, for example, because coal is a lower quality - a less productive - fuel than oil or natural gas.

As RePEc Grows Downloads per Person Continue to Decline

I first reported on this issue a couple of years ago. The trend continues:



As RePEc membership and the number of items online continues to grow, the number of abstract views and downloads per person continues to fall. The chart shows abstract views and downloads each month per RePEc member. The number of downloadable or viewable items per member is actually constant or rising. Possible explanations are:

1. The average quality of papers is declining - assuming better economists joined earlier on average.

2. Too much supply relative to demand. The total community of economists doesn't expand as fast as the number of RePEc members.

3. Of course, the average paper is getting older and older papers will be downloaded less.

4. A lot of people's papers were already on RePEc as journal articles and also working papers but they weren't registered. They are not adding papers as they register and so the number of downloads per person registered is declining.

5. A new phenomenon is that total downloads and abstract views have begun to fall:



Maybe this is attributable to improvements in Google Scholar and other means of finding papers that bypass RePEc?

Whatever the cause, a given number of abstract views or downloads is getting a higher RePEc ranking over time.

Thursday, November 3, 2011

2. Energy Use Per Capita Increases With GDP Per Capita



Because energy is used to transform and transport matter and energy must be extracted from the environment and then returned to it in waste form, energy use can be seen as a rough proxy for environmental impact in general. Of course, some forms of energy use are more environmentally disruptive than others and some things we can do with energy are worse then others. There is a clear linear relationship here between the logs of income and energy use per capita. There is again no sign of an environmental Kuznets curve.

Sovereign Wealth Fund as a Solution to the Dutch Disease?


Yesterday, Max Corden gave a public lecture on the topic "The Dutch Disease in Australia: Policy Options for a Three-Speed Economy". A working paper is available here. Corden was a pioneer in the analysis of the Dutch Disease. This is where a booming mining sector leads to an appreciation of the exchange rate and a negative impact on other tradables sectors of the economy. "Dutch" refers to the natural gas boom in the Netherlands in the 1950s. Australia is currently suffering from this Dutch Disease.

He laid out three potential policies:

1. Do nothing
2. Protect the suffering industries
3. Sovereign wealth fund invested overseas

The idea of the SWF is that the outflow of capital will put negative pressure on the exchange rate. Of course, he didn't like policy #2. But in the end Corden was ambivalent between options #1 and #3. However, he recognizes that there is a push for option 2 and, therefore, promoting an SWF might help head-off that push.

Only 26 DORA's Were Awarded Australiawide

It turns out that the ARC only made 26 Discovery Outstanding Researcher Awards in this funding round. The consultation paper that the ARC put out before the changes to the scheme had proposed awarding up to 70 DORA's per year.

Wednesday, November 2, 2011

CCEP Working Papers in October 2011

This was a great month for CCEP Working Papers with a large number of downloads and abstract views. In fact, we had the highest number of downloads per paper in the world. And the series is ranked third over the last 12 months.

We also had a new paper from Frank Jotzo and Peter Wood titled: Fulfilling Australia's international climate finance commitments: Which sources of financing are promising and how much could they raise?. This paper was downloaded 202 times and was a major contributor to the month's results. The other big contribution to downloads was the guest blogpost I did on the Oil Drum, which discussed my paper on the role of energy in economic growth. This generated 387 downloads! A recent much discussed paper assesses the impact of blogs on the download of papers. This again shows how being featured on a high traffic blog has an impact.

Video of Foundation Seminar

There is a video of my "foundation seminar" now available here. Slides are available here.

1. Energy Use Per Capita Increases Over Time

This is the first of my posts on "Energy and Growth: The Stylized Facts". There is nothing definitive about these facts and eventually I might adopt a different set. Astrid Kander picked seven facts which only partially overlap with mine.

The first fact is true globally:



and within individual countries:



In Sweden per capita energy use has been stable, in fact, for the last few decades, but there is no sign of an environmental Kuznets curve type relationship where energy use per capita falls at high income levels. Of course, energy use might be falling in countries suffering falling income. So this fact might be better combined with the second one (energy use per capita is higher in richer countries) as; "Energy use per capita rises with income per capita both within and across countries". As we see in Sweden the rate of growth of energy use is probably also dependent on the rate of growth of the economy. In slower growing countries improvements in energy intensity might just balance the "scale effect". This isn't so surprising as we see the same thing for carbon and maybe sulfur.

But I stated this fact in terms of time because the assumption of standard growth models that innovation is continuous over time and, therefore, so is economic growth.

Tuesday, November 1, 2011

ARC Grant

The Australian Research Council announced Discovery and Linkage grants starting in 2012 today. My team: Astrid Kander, Jack Pezzey, Chunbo Ma, and myself got a grant for our project: Energy transitions: past, present, and future. As is often the case we got much less money than we asked for - about a third. But I had applied for a DORA fellowship which I didn't get so we should be able to do most of what we planned with the money we got with some ingenuity. I'll post some more on our plans when I have more details. Congratulations also to Crawford School colleagues Michael Ward and Quentin Grafton who also got a grant to look at adaptive management of Australia's urban water; to Adrian Kay for: "The making and unmaking of Australian public policy: using Historical Institutionalism theory to understand the path from Medibank to Medicare": and Sango Mahanty for "Project Title: The political ecology of forest carbon: mainland Southeast Asia's new commodity frontier?".

Congratulations also to colleagues at the Research School of Economics John Stachurski and Renée Fry who also got grants. And at the Research School of Social Sciences, Simon Niemeyer. Well there are a lot more ANU people who got grants, these are just a few who I know.

From our Vice-Chancellor:

"ANU scholars won over 10 per cent of all funding.

102 projects from disciplines across the campus won a total of $34 million from a total pool of $310 million.

I particularly note that this year we have built on our traditionally high success rates with a very impressive 37 per cent of ANU applications under the Discovery Projects scheme awarded funding. This will see 90 projects begin in 2012, supported by $31.5 million.

This sets ANU at the top of the national scale for Discovery Project earnings."

Note that ANU is much smaller than most other Go8 universities and that the average success rate of Discovery proposals is just over 20%.

P.S. I've labelled this post with a new category "DP12". All posts about research resulting from this grant will be also labelled DP12.

Sunday, October 30, 2011

Foundation Seminar Slides

As I previously wrote, my "foundation seminar" is this Tuesday, 1st November at Crawford School at 12:30pm (yes, Melbourne Cup Day). There will also be some lunch/drinks before that. The slides are now online. I'm thinking to do a blogpost series on the stylized facts after I give the seminar. Maybe someday this will be a paper too.

Thursday, October 27, 2011

Energy and Climate Policy

The NYT has special section on energy. It's a mixed picture with stories about technological breakthroughs mixed with stories about reduced public support for some alternative energy sources. Meanwhile, Clive Spash has a new paper with Alex Lo on Australian climate policy. As you'd expect they are critical of it as it's not radical enough and is too generous to large polluters in their opinion.

Sunday, October 23, 2011

How Does PLoS ONE Have Such a High Impact Factor?

The journal accepts 70% of papers, so how come it has an ISI impact factor of more than 4? The journal accepts all papers that are technically correct, irrespective of significance. That's why we sent our recent paper on malaria and climate change there after dealing with reviewers who didn't like the work or claimed it not to be important at other journals.

An article from last year says that it is due to the $1350 publication fee. Authors who have the money are probably stronger as they have research grants or work at well-funded universities.* Though as the article points out they will waive the fee for anyone who claims they can't afford to pay. Also impact factors are higher in biomedical areas than others. The typical medical article in an ISI journal gets 6 citations after 2 years, which implies an impact factor of 3. I think another reason is that the journal is open access.

The author, Phil Davis, thinks that PLoS ONE could face a problem if they get a flood of low quality articles chasing the impact factor, which would impose costs on the journal as they would have to reject them and not get paid. At the moment the academic editors are volunteers and so the costs of rejected articles are lower than that of accepted ones. But they could move to a submission fee model in that case and only waive fees for developing country authors or not at all.

In 2010 PLoS ONE's IF increased despite publishing more articles.

(HT: Tom Kompas)

* There is an assumption that an author won't pay the fee from their private funds. We paid the fee using my coauthor's funding from the Wellcome Trust who mandate open access publication.

Greenhouse Gas Emissions from Shale Gas


"Unconventional" shale gas obtained through hydraulic fracturing or fracking has been very controversial recently. Local residents have claimed that their water has been contaminated in areas of Pennsylvania by the activities of the gas companies. There has also been concern about earthquakes triggered by the process. It turns out according to Robert Howarth (brother of Rich Howarth, editor of Ecological Economics) et al. that due to heightened methane emissions, gas obtained in this way has a higher total warming potential in the short run (of several decades) than does using coal. This is despite the fact that when burnt gas emits around half the CO2 for each joule than does coal and gas combustion is on average more efficient in producing electricity - it is a higher quality fuel. I've long wondered about whether leakage of methane gas negated the benefit of reduced carbon dioxide from natural gas, which is one reason I researched the literature on global emissions of methane. It turns out that emissions from conventional gas production and distribution systems do not negate the greenhouse benefits of gas.* But emissions from fracking might.

* Wigley (2011) argues that in the short-run switching to conventional natural gas from coal increases global warming even without any methane leakage. This depends on the reduction in sulfate aerosols produced by burning coal, which cool the climate. But sulfate aerosols are being reduced anyway even if we stick with coal use. This is taken into account in Wigley's analysis - switching to gas though still results in a faster than BAU reduction in aerosols. OTOH even under a 10% leakage rate switching to gas reduces climate change relative to BAU after 2140.

Saturday, October 22, 2011

Economic Logic Links CCEP Paper to Current US Political Debate

Some republican candidates for president are saying that they would create jobs by cutting regulation, and in particular environmental regulation, as recently discussed by Paul Krugman. The Economic Logic blog links Bruce Chapman's recent CCEP paper to this current US political debate. In the Australian case, the mining industry is growing and predicted job losses are in terms of fewer net jobs being created in the industry rather than absolute losses. And the headline figures ignore the number of jobs being created elsewhere. Bruce also shows how the numbers are small compared to the annual flows of workers in and out of employment. So even if the predictions are true the effects are unlikely to be noticeable to anyone in particular.

2010 Annual Energy Review is Released

The US Energy Information Administration has released the 2010 Annual Energy Review. It is a great resource. I often use graphics from the AER when teaching. Gregor.us posted a great chart from the report of the cost of addition to oil reserves. But, very disappointingly, they have dropped the chapter on international trends from this year's report. This was the chapter that was most useful for me.

Thursday, October 20, 2011

Foundation Seminar

As I am a new professor and continuing academic staff member in the Crawford School I am scheduled to give what is called a "Foundation Seminar" also known as an "Inaugural Lecture". This will be on Tuesday, 1st November in the Acton Theatre at the Crawford School. There will be drinks from 12pm with the seminar from 12:30-1:30pm. The title and abstract follow:

Energy and Economic Growth: The “Stylized Facts”

In 1961, Nicholas Kaldor highlighted six “stylized’’ facts to summarize the patterns that economists had discovered in national income accounts and to shape the growth models being developed to explain them. Recently Charles Jones and Paul Romer introduced a set of “new Kaldor facts” for growth economics. This lecture will attempt to summarize what we know about energy and economic growth in a similar set of stylized facts and to explain the patterns we see. It will draw on the recent research of the speaker and colleagues in Australia and Europe.

There should be a video available after the event and I'll post the slides too.

Guest Post on the "Oil Drum"

A guest post written by me appeared today on the blog "The Oil Drum". It's a summary and commentary on my paper "The Role of Energy in Economic Growth" which appeared in Ecological Economics Reviews this year. There are a lot of comments. Go over there to read them. I'll try to respond to some of them soon (it's a crazy day over, today for me (Energy Change Institute open day where I'm presenting, CRWF8000 teaching, and the IPCC WG3 ZOD deadline looming). I've also added "The Oil Drum" to the blogroll.

Monday, October 17, 2011

Special Issue of Climatic Change on RCP Scenarios

A little while ago I blogged about van Vuuren et al.'s paper that provides an overview of the new emissions scenarios - called RCPs - that will be used in the IPCC's 5th Assessment Report (AR5). You can now access all the papers in the special issue from a summary page. I think that these are all open access papers. There is also a special issue on the way the AR5 will deal with uncertainty. A number of these papers are open access.

Wednesday, October 12, 2011

Pascual et al. Respond

Mercedes Pascual and colleagues have written a response to our paper in PLoS ONE. Our paper is largely a response to the Pascual and colleagues criticism of our 2002 papers in Nature, Emerging Infectious Diseases, and Trends in Parasitology.

I won't comment on it further at this stage until my colleagues have had time to read it.

Tuesday, October 11, 2011

Sims and Sargent Win Nobel Prize in Economics


Sims and Sargent were announced as winners of the Nobel Prize in economics on Monday. I've been a heavy user of vector autoregression models in my career including this recent paper, which discusses some of the issues that Sims discussed in his 1980 paper "Macroeconomics and Reality". I met Sims once at Princeton. I visited the department for a few days to work with David Bradford. I gave a presentation on applying time series econometrics to climate change, which he attended. That was a bit scary :)

BTW, this is also the 500th post on Stochastic Trend!

Friday, September 23, 2011

Do You have Good Examples of the Role of Energy in the Economy?

A journalist wrote to me for help. They are writing a popular book on the effects of energy scarcities on our economy, wealth and way of living. What good non-academic sources are there that he could use? He is especially looking for strong examples that people can relate to to illustrate two things: our massive reliance on energy in everyday life, and the key that it holds for growth.

Thursday, September 22, 2011

Completed a Choice Modeling Survey

This week, I was a respondent to a choice modeling survey for the first time. The purpose of the survey was to find out about reliability of supply of water, electricity, gas etc. So this was something that I as a consumer have a lot of knowledge about and a lot of interest in and it is a clear private market. So all the criticisms about environmental valuation don't apply here. Choice modeling is often used to obtain environmental valuations and I think it is superior to other approaches in that application.

The online survey gave us eight different scenarios of possible packages with varying prices and utility reliability that we could pick from. Each scenario had three different packages - our current service plus two alternatives. Each alternative had around 10 different characteristics. I've always wondered whether survey respondents could handle that and thought that you just need to give each respondent one choice set and survey more people. I was just overwhelmed with information.



I chose the current package in every case. Partly because of the information overload but also because saving $50-$400 a year on my utility bill is just not worth it to me to suffer from multiple power cuts each year and the like, which is what the trade-offs were about. Even when I lived in East Jerusalem in the 1980s as an undergrad student we didn't have that many power cuts (Troy, NY was almost as bad :)). So I'm thinking the results of this survey will be pretty insensitive to price except for the more extreme scenarios at low incomes. $400 is a big deal to someone on $30,000 a year (Australian full time minimum wage), but $50 isn't for someone on $60,000 (average wages).

Being a social science researcher myself I always feel sympathetic to people carrying out surveys and often do them. But I get really annoyed when a surveyer has me on the phone for more than a quarter of an hour asking endless questions or when an online survey turns out to have tens of pages of questions. Why do people design surveys like this that are going to either have less patient people drop out of or refuse to respond or just give random answers to either from impatience or choice fatigue?

Wednesday, September 21, 2011

Wiley-JoES Online Conference: Communications with Economists

The Journal of Economic Surveys will be holding an online conference from 16th to 18th November. Keynote speakers are Tom Stanley, David Hendry, and Charles Nossair and there are other interesting sessions too. Registration is free. There will be live videocast of the key sessions on the web and they will also be viewable after the event. There will be commissioned discussants as well as discussion by partcipants. Sounds like an interesting venture and I plan on participating.

Monday, September 19, 2011

Why Our Malaria and Climate Change Research is Important

This morning I was interviewed by Clement Paligaru on the Breakfast Show on Radio Australia. This is Australia's international broadcaster. One of the questions that he asked me was why it was important to know that malaria was declining despite climate change rather than thinking that malaria incidence was increasing due to climate change. What I came up with was that if we think that the disease will just become more widespread in the face of climate change regardless of what we do we might be apathetic about doing the things which have reduced the incidence of the disease. I'm not sure how convincing that is. But the rise in cases in the 1990s was probably due to resistance to chloroquine, an older antimalarial drug, and not climate change. That is something that is important to know.

Saturday, September 17, 2011

Good Casual Analysis from Bad

Recently, I wrote about Tatu Westling's paper on "male organ" length and economic growth. I argued that it was likely a case of omitted variables bias and there wasn't real causality here. And certainly this relationship wasn't stable over time. This paper did get a lot of media coverage and hence a lot of downloads. Now Westling has teamed up with a fellow student to analyse the incident. They find that other papers on their website also experienced an increase in downloads which can be attributed to a spillover effect from the interest in Westling's paper. They use differences in differences and regression discontinuity methods. This sounds pretty solid as the interest in the paper in question was a pretty exogenous shock. So having star papers in your working paper series will help increase downloads of other papers. This is similar to the Matthew effect in citations. Authors with lots of citations tend to get more and more citations and publishing a landmark paper will result in your other papers getting cited more too.

Malaria Cases in Kericho, Kenya

In my IPCC AR5 chapter writing group we have been told to think of "iconic figures" we could use in the chapter. In our paper on malaria and climate change in East Africa, I think this is the iconic figure:



It just shows monthly malaria cases at the tea estate hospital in Kericho, Kenya. The increase in malaria in the 90s was linked by some researchers to climate change. But in this decade, malaria cases have collapsed at this location. In the meantime we find that there does seem to be a significant increase in temperature especially when the most recent years are included in the analysis. The figure is simple and really easy to understand.

Friday, September 16, 2011

Temperature and Malaria Trends in Highland East Africa

Our article: "Temperature and Malaria Trends in Highland East Africa" is published today in PLoS ONE. I've noted some of the key points already in a series of posts as the article developed. The key points are:

  • In 2002 we (Hay et al., 2002) could find little evidence of significant increase in temperature or precipitation in the East African highlands in a period of a surge in malaria cases. It, therefore, seemed most likely that the increased malaria was mainly due to other causes such as increased drug resistance.

  • This was a very controversial finding, which has been discussed by various other researchers who generally find that there has been a significant increase in temperature in these areas and that, therefore the increase in malaria was likely due to this.

  • We have now tested the more recent versions of the UEA CRU database as well as the temperature series from Kericho in Kenya prepared by Omumbo et al. (2011) using a new robust test for trends in series.

  • Using the new test, we find that there is no significant trend in the data we originally tested but that there is a significant increase in mean temperature in the newer versions of the CRU database for the same pre 1995 period. This change in data explains the results of several of our critics.

  • When the post 1995 data is included in our tests the results show an even more significant increase in temperature.

  • We do not find a significant increase in temperature in the Kericho data for the period up to 1995 but there is a significant trend when post 1995 data is included.

  • We conclude that there is now clear evidence of increased temperatures in highland East Africa especially in the last 15 years.
  • The twist is that malaria incidence has now declined. So it's still not clear if climate change was the main cause of the surge in malaria and despite recent warming malaria has radically reduced and, therefore, other factors appear to be more important than climate in malaria incidence.



Press release version.

Monday, September 12, 2011

Launch of the Masters of Energy Change and Public Seminar

An Energy Change Institute public seminar. Program:


Monday 26 September 2011 5.30 – 6:30pm, followed by light refreshments.

Tours of ANU energy research facilities at 4:30

Building 131 Finkel Lecture Theatre, John Curtin School of Medical Research, Garran Road.

The official launch of the new ANU Master of Energy Change will follow the event.

Sunday, September 4, 2011

Econometrics for Grumblers

Econometrics for Grumblers is the title of a recent paper in the Journal of Economic Surveys by Markus Eberhardt and Francis Teal (Working paper version). It is a survey of the cross-country economic growth literature with an emphasis on the econometric problems encountered. The biggest problem is that the state of technology or productivity is unobserved - the famous "residual" in the Solow model - and that:

1. The levels of the inputs - human capital and labor etc - which are usually explanatory variables in a growth model are affected by this unobserved variable. This results in a correlation between the error term in the model and the explanatory variables. The explanatory variables are then said to be endogenous.

2. The state of technology is non-stationary and probably has a stochastic trend.

3. The level of technology and rate of change are different in every country.

4. But the level of technology and rate of change are likely correlated across countries.

These aren't the only problems of course :) These issues have lead many to reject the usefulness of doing cross-country economic growth econometrics. Eberhardt and Teal review the literature thoroughly highlighting the underlying assumptions of each study and suggesting a new approach that they have used in their work.

I have been struggling with the issues in 1 to 4 above in a lot of my recent research, particularly on the environmental Kuznets curve and energy efficiency. I've used a variety of econometric techniques to try to deal with the issues but this gives me some new ideas to check out in more depth.

Friday, September 2, 2011

CCEP Working Papers in August 2011

We put up several new papers and so got quite a lot of downloads this month. Papers tend to get a lot of downloads when they first appear on NEP. We got out highest number of abstract views and second highest number of downloads this month since launching the series. In terms of downloads per item, only two STATA related series rank higher in the world! But new series tend to have a high rate of downloads per item, of course.

Erratum: Elasticities of substitution and complementarity, Journal of Productivity Analysis 36(1): 79-89

I hate looking at my published papers because there are often typos in them which I didn't catch at the proofs stage... One of our PhD students, Nitin Gupta, found a typo in my paper: Elasticities of substitution and complementarity, Journal of Productivity Analysis 36(1): 79-89. The formula in equation (20) for the Allen Elasticity of Substitution between inputs Xi and Xj, AESij, should be:



The denominator is wrong in the formula in the paper. The formula for AESii is correct. Note that these formulae only make sense if you have normalized the data in some way. If, for example, you have indexed all variables to one in the first year then the formula will give the elasticity in the first year. It makes the most sense when like me you have normalized on the sample mean for each variable and so this elasticity is at some notional mean point. If you want to calculate the elasticity at different points in time or you haven't normalized the data then you can't use this formula. This is because the parameters associated with the first order terms in the translog function depend on the units used.

The good news is that I used the correct formula in all the calculations in the paper. The bigger picture message is don't believe that a formula is correct just because it is printed in a refereed journal!