Posts Tagged ‘research’

Soal Operation Research

Saturday, December 13th, 2008

Buat rekan komunitas peserta Operation research.
Selamat anda telah menempuh ujian Akhir Pagi ini.
Bagi yang ingin mendapatkan point lebih silahkan download soal berikut.
Jawaban di kirim ke emil : kuliahbersama@gmail.com
Paling lambat Selasa 16 Desember 2008 jam 13.00 WIB.
Soal klik.

Malnutrition makes you less educated

Wednesday, December 12th, 2007

In Indonesia, more than 30% of children under the age of 5 years suffer from chronic malnourishment. The long-term consequences of childhood malnutrition are well established in the literature. Yet, little is known about the extent to which these children are able to recover from some of the long-term deficits in health outcomes caused by childhood undernourishment. To capture the association between nutritional deficiency at young ages and subsequent health status, a panel data is constructed using observations on children between the age of 3 and 59 months in 1993 who are followed through the 1997 and 2000 waves of the Indonesian Family Life Survey. A dynamic conditional health demand function is estimated, where the coefficient on the one-period lagged health status captures the extent of recovery, if any, from childhood malnutrition. This coefficient is also known as the ‘catch-up’ term. … [A] coefficient of 0.23 estimated here indicates that by adolescence, a malnourished child will grow to be only 0.95 cm shorter than a well-nourished child…

That is Subha Mani of the University of Southern California in a recent job market paper. She concludes “poor nutrition at young ages will cause some, but not severe, retardation in the growth of future height indicating partial catch-up effects”.

Once centimeter is still pretty large, I think. Besides, she also calculates that malnourished child will also have 0.6 less year of schooling.

Thanks to Arya Gaduh for the pointer.

Banks comply with capital requirements?

Saturday, September 22nd, 2007

Using dynamic panel data models, we examine the effect of capital requirement on banks’ behavior in Indonesia. We find inconclusive results. Banks tend to comply with capital requirement: They increase their capital ratio when their CAR is lower than, or falling towards, the eight percent regulatory minimum. However, most of our results are statistically significant at 20-30% level of significance only. Moreover, our results are mostly driven by private domestic banks and heavily-undercapitalized banks that were closely monitored by regulator in the aftermath of the 1998 crisis. Whether, in normal circumstances, banks in developing countries like Indonesia comply with capital requirement, therefore, remains questionable.

That’s from another recent working paper by Parinduri and Riyanto. Comments and suggestions are welcome.

Strategic sale works

Sunday, August 12th, 2007

We examine the effect of strategic sale—the sale of banks to strategic foreign investors—on banks’ performance. The Government of Indonesia implemented such a policy as a part of bank restructuring in the aftermath of the 1998 banking crisis. Using difference-in-difference models, we find that strategic sale leads to 12%-15% cost reduction. These results are robust to the use of other estimators such as difference-in-difference matching-estimators and stochastic-frontier analysis, to that of other performance measures such as return on assets and net interest margin, and also to that of different types of samples. These suggest that strategic sale could play an important role in restructuring troubled banks in developing countries.

In short, the sale of Indonesian banks to strategic foreign investors a couple of years ago is a good thing.

That’s from a recent working paper by Parinduri and Riyanto.

The rich are getting richer?

Thursday, April 26th, 2007

The “trends in top incomes does not suggest that there has been a sustained long-term increase in income inequality in Indonesia”, Andrew Leigh and Pierre van der Eng conclude in a recent working paper.

In short, as Indonesia’s economy grows, the rich do get richer. But so do the poor.

Income Share of the Top 10% in Indonesia (Figure 2 in the paper)

Hence, in the last two decades, the income share of the 10 percent richest remains pretty much the same, in the 35%-40% range.