Michael S. Delgado’s research while affiliated with Purdue University West Lafayette and other places

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Publications (71)


Social interactions and household fuel choice: evidence from rural China
  • Article

December 2024

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6 Reads

Environment and Development Economics

Hang Fang

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Xuechen Jiang

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Qianheng Chen

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Michael S. Delgado

We study household fuel choice in rural China through the lens of social interactions, deploying a structural discrete choice interaction model to explain peer-dependence in household fuel choice. The data comes from the China Family Panel Studies 2010–2020, and we use multiple strategies to examine the robustness of the social interaction effects. We find a significant endogenous social effect, meaning that whether a household chooses non-solid clean fuel for cooking is directly affected by the choice in cooking fuel made by its neighbors in the village. Households with lower non-farm income are more sensitive to the choices of others, and the fuel choices of households with a higher education and/or a higher income attracts more attention from others. Modern communication technologies facilitate information exchange among rural residents, thereby strengthening the endogenous social effect. We suggest that public policies can accelerate rural energy transition by stimulating positive social spillovers.


When your neighbour is the village cadre: allocation of public resources in the social network

August 2024

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2 Citations


Kernel density plots of the parameter estimates across 1000 Monte Carlo simulations for the correctly specified second-order model with n = 900
Local spatial difference-in-differences models: treatment correlations, response interactions, and expanded local models
  • Article
  • Publisher preview available

May 2024

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41 Reads

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5 Citations

Empirical Economics

We propose spatial difference-in-differences (DID) models that are able to incorporate treatment effect spillovers through modeling spatial interactions in the response and spatial correlations in treatment status among individuals. We first explore the ways in which combinations of spatial interaction and spatial correlation bias the conventional DID estimator, and then we develop spatial DID models, estimators, and specification tests that allow for a flexible order of local spatial structures. We consider both simultaneous and dynamic treatment. The local spatial DID models with a flexible order of spatial structure allow for different types of heterogeneity in the treatment effects. Monte Carlo simulations support our discussions of the bias in the conventional DID model under spatial interaction and correlation, and demonstrate the finite sample performance of our proposed models, estimators, and tests.

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Foreign capital inflows, exchange rates, and government stability

November 2023

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73 Reads

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7 Citations

Empirical Economics

In theory, changes in a host country exchange rate can be a cause or consequence of changes in its level of foreign direct investment (FDI), and recent incidences suggest that government stability may have sizable implications for the interactions between FDI and the exchange rate. This paper uses a semiparametric system of simultaneous equations to empirically characterize the relationship between FDI and the exchange rate, with each country’s level of government stability serving as a moderator. The results suggest that across developed and developing economies the most prevalent type of symbiosis between FDI and the exchange rate is a positive effect of FDI on the exchange rate, but no effect of the exchange rate on FDI. This significant FDI effect is heterogeneous, with an interquartile range of 1.241. At the median, a 10% increase in FDI inflows relative to GDP causes approximately a 13.29% increase in the annual change in the exchange rate. Government stability acts as a moderator variable by strengthening the relationship between FDI and the exchange rate in some countries, but eliminates the relationship in other countries.





When and where does it pay to be green? – A look into socially responsible investing and the cost of equity capital

February 2023

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70 Reads

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11 Citations

International Journal of Corporate Social Responsibility

We investigate the circumstances under which socially responsible investing (SRI) enhances firm long-term financial performance, and therefore provides incentives for firms to self-regulate their environmental performance. Aggregating portfolios across SRI mutual funds, we estimate the effect of SRI investment with environmental screening criteria on firm cost of equity capital. We find that accounting for interactions between firm and non-shareholder stakeholders, and potential agency costs associated with certain environmental activities of the firm, SRI can facilitate the alignment of firms’ environmental and financial goals. We also find that an industry group’s environmental performance and diversity influence the extent to which a firm in that group can benefit from SRI investment.




Citations (56)


... Many rural areas in developing countries face governance challenges similar to those encountered in the early histories of developed nations [1,2]. Existing literature highlights the significant role of village heads' knowledge and education in promoting rural economic development, increasing agricultural output, and raising farmers' incomes [6,7,9,[12][13][14][15][16]. However, there is ongoing debate about whether well-educated village heads are more favorable for enhancing the supply of public goods during the resource allocation process [14,[16][17][18][19]. ...

Reference:

The impact of village heads’ educational levels on adolescent academic performance: Evidence from rural China
When your neighbour is the village cadre: allocation of public resources in the social network
  • Citing Article
  • August 2024

... Also, as previously discussed in Section 1.1.1, when the assumption of reciprocal independence among the individuals under study is violated, the SUTVA assumption is dramatically violated as well, leading to identifiability issues with the actual treatment effect (Sun and Delgado, 2024). ...

Local spatial difference-in-differences models: treatment correlations, response interactions, and expanded local models

Empirical Economics

... Moreover, the decline in export revenues and foreign exchange earnings associated with commodity price busts can exacerbate macroeconomic imbalances and external vulnerabilities (Jin et al., 2021). In resource-rich economies, a significant portion of government revenues and foreign exchange inflows are derived from commodity exports, and a sharp decline in these inflows can put pressure on exchange rates, fiscal balances, and external debt sustainability (Jin et al., 2021;McCloud, Delgado, & Jin, 2023). ...

Foreign capital inflows, exchange rates, and government stability

Empirical Economics

... Favorable external impacts typically lead farmers and enterprises to expand production, increasing market supply [60], while negative shocks result in production capacity reductions [61]. Strong market interventions, such as government reserve meat delivery or pig purchases, can directly alter market structures, causing sharp supply fluctuations [62,63]. ...

Risk, arbitrage, and spatial price relationships: Insights from China's hog market under the African Swine Fever
  • Citing Article
  • October 2023

Journal of Development Economics

... In doing so, it is expected that a certain social and economic effect will be obtained from a strategic perspective. (Graafland & Smid, 2019), (Wang, Delgado & Xu, 2023). ...

Correction: When and where does it pay to be green? – A look into socially responsible investing and the cost of equity capital

International Journal of Corporate Social Responsibility

... When complying with stricter environmental regulations, coal companies prioritising short-term profitability without considering social and environmental responsibilities may incur additional costs. These costs, whether in the form of fines or significant investments in adopting ecofriendly technologies, can erode profit margins and ultimately lower company value (Wang et al., 2022); (Wang et al., 2023). ...

When and where does it pay to be green? – A look into socially responsible investing and the cost of equity capital

International Journal of Corporate Social Responsibility

... It is a generally accepted fact that individuals are influenced by the beliefs and decisions of their peers. Recent studies have found peer effects in the contexts of household consumption, technology diffusion, and agricultural production (Sampson and Perry, 2018;Roychowdhury, 2019;De Giorgi et al., 2020;Fang et al., 2023), and in areas of sustainability, such as the diffusion of organic fertilizers, the adoption of solar panels, water conservation, and waste classification (Busic-Sontic and Fuerst, 2018;Wuepper et al., 2018;Bryan et al., 2020;Zheng et al., 2023). Specifically, these papers provide empirical evidence that individual decision-making is affected by the behavior or decisions of one's neighbors. ...

Peer correlations in income: Evidence from a Guanxi network in rural China
  • Citing Article
  • December 2022

Economics Letters

... Interpreting the results can also be challenging when differences are minimal or data are dispersed. Therefore, it is important to combine BWS with other approaches for a more precise evaluation (Bir et al., 2022). However, compared to other methods, BWS provides better estimates of varietal choices (Burton et al., 2021). ...

Development, Implementation, and Evaluation of a More Efficient Method of Best-Worst Scaling Data Collection

Agricultural and Resource Economics Review

... However, this claim exists outside the scope of this research and should be investigated further. Moreover, political instability and conflicts in the region may further limit access to education (Delgado et al., 2013). The lagged Gini variable displayed a positive significant effect on the Gini coefficient. ...

Does Education Matter for Economic Growth?
  • Citing Article
  • January 2013

SSRN Electronic Journal

... To match the pork safety records to wholesale price information, we exclude the records (i) whose sampling location is not at wholesale markets, (ii) the pork is not sourced from wholesale markets. Meanwhile, to avoid confounding effects of Asian Swine Flu and Covid-19 on pork prices, observations on two periods, namely 2018 August to 2019 March, and 2019 December to 2020 March (Delgado et al., 2021;Ruan et al., 2021), are dropped from our sample. In addition, other datasets are combined and used to conduct heterogeneous analyses of our treatment effects, including the China city statistical yearbook, China public health statistical yearbook, and fiscal investment on food safety regulation available at the official websites of the provincial Administration for Market Regulation. ...

Exploring Spatial Price Relationships: The Case of African Swine Fever in China
  • Citing Article
  • January 2021

SSRN Electronic Journal