Bayesian Inference for Parametric Growth Incidence CurvesBook chapterEdwin Fourrier-Nicolaï and Michel Lubrano, In: Research on Economic Inequality: Poverty, Inequality and Shocks, S. Bandyopadhyay (Eds.), 2021-12, Volume 29, pp. 31-55, Emerald Publishing Limited, 2021

The growth incidence curve of Ravallion and Chen (2003) is based on the quantile function. Its distribution-free estimator behaves erratically with usual sample sizes leading to problems in the tails. The authors propose a series of parametric models in a Bayesian framework. A first solution consists in modeling the underlying income distribution using simple densities for which the quantile function has a closed analytical form. This solution is extended by considering a mixture model for the underlying income distribution. However, in this case, the quantile function is semi-explicit and has to be evaluated numerically. The last solution consists in adjusting directly a functional form for the Lorenz curve and deriving its first-order derivative to find the corresponding quantile function. The authors compare these models by Monte Carlo simulations and using UK data from the Family Expenditure Survey. The authors devote a particular attention to the analysis of subgroups.

Bayesian inference for TIP curves: an application to child poverty in GermanyJournal articleEdwin Fourrier-Nicolaï and Michel Lubrano, The Journal of Economic Inequality, Volume 18, Issue 1, pp. 91-111, 2020

TIP curves are cumulative poverty gap curves used for representing the three different aspects of poverty: incidence, intensity and inequality. The paper provides Bayesian inference for TIP curves, linking their expression to a parametric representation of the income distribution using a mixture of log-normal densities. We treat specifically the question of zero-inflated income data and survey weights, which are two important issues in survey analysis. The advantage of the Bayesian approach is that it takes into account all the information contained in the sample and that it provides small sample credible intervals and tests for TIP dominance. We apply our methodology to evaluate the evolution of child poverty in Germany after 2002, providing thus an update the portrait of child poverty in Germany given in Corak et al. (Rev. Income Wealth 54(4), 547–571, 2008).

Lie of the weak: Inconsistent corporate social responsibility activities of Chinese zombie firmsJournal articleShaozhen Han, Guoming Li, Michel Lubrano and Zhou Xun, Journal of Cleaner Production, Volume 253, pp. 119858, 2020

This study investigates the differences between zombie firms and non-zombie firms in corporate social responsibility activities such as reporting, disclosure and fulfillment. Using Chinese listing company data collected from 2009 to 2016, we apply a three stage model with a double Heckman correction to deal with potential self-selection/endogeneity bias and to measure the differences consistently. We found that zombie firms are less willing to release standalone corporate social responsibility reports than non-zombie firms. Among companies that release standalone corporate social responsibility reports, the corporate social responsibility disclosure of zombie firms is at least not worse than non-zombie firms, but the corporate social responsibility fulfillment is significantly lower. We conclude from this gap between disclosure and fulfillment to the hypocritical behavior of zombie firms, due to the absence of control in corporate social responsibility. We suggest that government should enhance supervision over zombie firms’ corporate social responsibility activities and subsidies towards them in order to lower their economic damage. Supplementary analyses provide some clues concerning the heterogeneity of inconsistence in term of external support characteristics, ownership and censorship which require further studies.

A Bayesian look at American academic wages: From wage dispersion to wage compressionJournal articleMajda Benzidia and Michel Lubrano, The Journal of Economic Inequality, Volume 18, Issue 2, pp. 213-238, 2020

OECD countries have experienced a large increase in top wage inequality. Atkinson (2008) attributes this phenomena to the superstar theory leading to a Pareto tail in the wage distribution with a low Pareto coefficient. Do we observe a similar phenomena for academic wages? We examine wage formation in a public US university using for each academic rank a hybrid mixture formed by a lognormal distribution for regular wages and a Pareto distribution for top wages, using a Bayesian approach. The presence of superstars wages would imply a higher dispersion in the Pareto tail than in the lognormal body. We concluded that academic wages are formed in a different way than other top wages. There is an effort to propose competitive wages to some young Assistant Professors. But when climbing up the wage ladder, we found a phenomenon of wage compression which is just the contrary of a superstar phenomenon.

The Wall’s Impact in the Occupied West Bank: A Bayesian Approach to Poverty Dynamics Using Repeated Cross-SectionsJournal articleTareq Sadeq and Michel Lubrano, Econometrics, Volume 6, Issue 2, pp. 29, 2018

In 2002, the Israeli government decided to build a wall inside the occupied West Bank. The wall had a marked effect on the access to land and water resources as well as to the Israeli labour market. It is difficult to include the effect of the wall in an econometric model explaining poverty dynamics as the wall was built in the richer region of the West Bank. So a diff-in-diff strategy is needed. Using a Bayesian approach, we treat our two-period repeated cross-section data set as an incomplete data problem, explaining the income-to-needs ratio as a function of time invariant exogenous variables. This allows us to provide inference results on poverty dynamics. We then build a conditional regression model including a wall variable and state dependence to see how the wall modified the initial results on poverty dynamics. We find that the wall has increased the probability of poverty persistence by 58 percentage points and the probability of poverty entry by 18 percentage points.

A Bayesian Measure of Poverty in the Developing WorldJournal articleZhou Xun and Michel Lubrano, Review of Income and Wealth, Volume 64, Issue 3, pp. 649-678, 2018

We propose a new methodology to revise the international poverty line (IPL) after Ravallion et al. (2009) using the same database, but augmented with new variables to take into account social inclusion in the definition of poverty along the lines of Atkinson and Bourguignon (2001). We provide an estimation of the world income distribution and of the corresponding number of poor people in the developing world. Our revised IPL is based on an augmented two‐regime model estimated using a Bayesian approach, which allows us to take into account uncertainty when defining the reference group of countries where the IPL applies. The influence of weighting by population is discussed, as well as the IPL revision proposed in Deaton (2010). We also discuss the impact of using the new 2011 PPP and the recent IPL revision made by the World Bank.

Simulation Estimation of Two‐tiered Dynamic Panel Tobit Models with an Application to the labour Supply of Married Women: A CommentJournal articleZhou Xun and Michel Lubrano, Journal of Applied Econometrics, Volume 31, Issue 4, pp. 756-761, 2016

We find that the empirical results reported in Chang (Journal of Applied Econometrics 2011; 26(5): 854–871) are contingent on the specification of the model. The use of Heckman's initial conditions combined with observed and not latent lagged dependent variables leads to a counter-intuitive estimation of the true state dependence. The use of Wooldridge's initial conditions together with the observed lagged dependent variable and a proper modelling of censoring provides a much more natural estimate of the true state dependence parameters together with a clearer interpretation of the decision to participate in the labour market in the two-tiered model. Copyright © 2015 John Wiley & Sons, Ltd.

Income inequality decomposition using a finite mixture of log-normal distributions: A Bayesian approachJournal articleMichel Lubrano and Abdoul Aziz Junio Ndoye, Computational Statistics & Data Analysis, Volume 100, Issue C, pp. 830-846, 2016

The log-normal distribution is convenient for modelling the income distribution, and it offers an analytical expression for most inequality indices that depends only on the shape parameter of the associated Lorenz curve. A decomposable inequality index can be implemented in the framework of a finite mixture of log-normal distributions so that overall inequality can be decomposed into within-subgroup and between-subgroup components. Using a Bayesian approach and a Gibbs sampler, a Rao-Blackwellization can improve inference results on decomposable income inequality indices. The very nature of the economic question can provide prior information so as to distinguish between the income groups and construct an asymmetric prior density which can reduce label switching. Data from the UK Family Expenditure Survey (FES) (1979 to 1996) are used in an extended empirical application.

Tournaments and Superstar Models: A Mixture of Two Pareto DistributionsBook chapterMichel Lubrano and Abdoul Aziz Junio Ndoye, In: Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting, J. Bishop and J. G. Rodríguez (Eds.), 2014, Volume 22, pp. 449-479, Emerald Publishing Ltd, 2014

We provide a Bayesian inference for a mixture of two Pareto distributions which is then used to approximate the upper tail of a wage distribution. The model is applied to the data from the CPS Outgoing Rotation Group to analyze the recent structure of top wages in U.S. from 1992 through 2009. We found enormous earnings inequality between the very highest wage earners (“the superstars”), and the other high wage earners. These findings are largely in accordance with the alternative explanations combining the model of super-stars and the model of tournaments in hierarchical organization structure. The approach can be used to analyze the recent pay gaps among top executives in large firms so as to exhibit the “superstar” effect.

Bayesian Unconditional Quantile Regression: An Analysis of Recent Expansions in Wage Structure and Earnings Inequality in the US 1992-2009Journal articleMichel Lubrano and Abdoul Aziz Junio Ndoye, Scottish Journal of Political Economy, Volume 61, Issue 2, pp. 129-153, 2014

We develop Bayesian inference for an unconditional quantile regression model. Our approach provides better estimates in the upper tail of the wage distribution as well as valid small sample confidence intervals for the Oaxaca–Blinder decomposition. We analyze the recent changes in the US wage structure using data from the CPS Outgoing Rotation Group from 1992 to 2009. We find that the largest part of the recent changes is explained mainly by differences in returns to education while the decline in the unionization rate has a small impact, and that earnings inequality is rising more at the top end of the wage distribution.

The Bayesian approach to poverty measurementBook chapterMichel Lubrano and Zhou Xun, In: Handbook of Research on Measuring Poverty and Deprivation, J. Silber (Eds.), Edward Elgar Publishing, Forthcoming

In this chapter, we revisit the origins and genesis of the french school of proximity and its evolution trough time, in order to better understand how and why the small group of researchers who were the driving force of this new way of thinking were quickly able to get a real legitimacy and effective recognition. First of all, it was clear that the role of space in economic dynamics was too often the subject of confusion and abusive assertions. Asking this question in terms of coordination made it possible to consider non-spatial factors in the analysis. The notion of proximity as a polysemic concept therefore opened the way to understanding how space matters or not, together with these other factors thus a renewed approach of questions related to space and territories. But, even starting from issues of economic nature, such an approach could not remain limited to its economic dimension, the questions of coordination involving social individuals, located in geographical space but also embedded in bundles of relationships and in institutions. Thus, it had to broaden very quickly to other disciplines in social sciences which largely contributed to consolidate the bases of what became a multidisciplinary approach and to develop theoretical as well as empirical tools.

Optimal lockdowns for COVID-19 pandemics: Analyzing the efficiency of sanitary policies in EuropeJournal articleEwen Gallic, Michel Lubrano and Pierre Michel, Journal of Public Economic Theory, Volume n/a, Issue n/a, Forthcoming

Two main nonpharmaceutical policy strategies have been used in Europe in response to the COVID-19 epidemic: one aimed at natural herd immunity and the other at avoiding saturation of hospital capacity by crushing the curve. The two strategies lead to different results in terms of the number of lives saved on the one hand and production loss on the other hand. Using a susceptible–infected–recovered–dead model, we investigate and compare these two strategies. As the results are sensitive to the initial reproduction number, we estimate the latter for 10 European countries for each wave from January 2020 till March 2021 using a double sigmoid statistical model and the Oxford COVID-19 Government Response Tracker data set. Our results show that Denmark, which opted for crushing the curve, managed to minimize both economic and human losses. Natural herd immunity, sought by Sweden and the Netherlands does not appear to have been a particularly effective strategy, especially for Sweden, both in economic terms and in terms of lives saved. The results are more mixed for other countries, but with no evident trade-off between deaths and production losses.