ECOS 3002 US Poor Source of Income from Indonesian Family Question
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Semester 1 2014
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CONFIDENTIAL
Last Name : ____________________________________
First Names : ___________________________________
SID : __________________________________________
THE UNIVERSITY OF SYDNEY
SCHOOL OF ECONOMICS
FACULTY OF ARTS AND SOCIAL SCIENCES
ECOS3002 Development Economics
Mid-semester Examination
May 2014
Time allowed: 1.5 hours + 10 minutes reading time
Instructions to candidates
1. This examination consists of three sections (A, B and C). Section A consists of 8 shortanswer questions and is worth 20 marks. Section B consists of 2 analytical questions and is
worth 10 marks. Section C consists of 1 essay question, and is worth 15 marks. The whole
exam is worth 20% of the final grade from this course.
2. Answer all 8 short-answer questions in Section A and both analytical questions in Section
B in the spaces provided. Anything written outside of the figure boxes and lines of the text
boxes provided will not be considered for marking. Unanswered, incorrect or multiple
answers are given a mark of zero.
3. In Section C choose only 1 of the essay questions, responding in a single booklet that is
provided.
4. No calculators are allowed.
5. This paper may NOT be retained by the candidate.
6. There is some extra workspace in this answer booklet for scratch work that will not be
marked.
Semester 1 2014
Page 2 of 6
Part A: (20 marks)
Instructions: Answer all 8 questions in the spaces provided. Nothing that is written outside
of the spaces provided, with a single line of text per line, will be considered in grading.
1. (2.5 marks) Give one argument for EITHER (1) why economic growth (e.g., growth of
national GDP) and poverty reduction are complements, OR (2) why economic growth and
poverty reduction may be in conflict (i.e., pursuing one objective could make it less likely
that the other is achieved). Please do not give an answer for both (1) and (2).
2. (2.5 marks) What is the main reason that we should be cautious about drawing causal
inferences from cross-sectional comparisons based on non-randomized data (this was called
simple difference in the Balsakhi example)? For example, suppose we want to evaluate a
conditional cash transfer program thats meant to increase primary school attendance. We
collect school attendance rates and test scores from children in the schools where the
government implemented the program, and other schools where it was not implemented,
taking the average difference in outcomes as our estimate of impact of the program.
Semester 1 2014
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3. (2.5 marks) It is tempting to suggest that the behavior of the poor in low-income countries
is irrational. They seem to be willing to choose indulgences (e.g., tasty snacks, sweet tea,
cigarettes, entertainment) over nutritious foods that allow them to meet the recommended
daily intake of calories, and dont take up life-saving health products for themselves or their
children, even when the cost is very low. Provide at least one explanation for this kind of
behavior that doesnt involve dismissing it on the basis of pure irrationality.
4. (2.5 marks) The latter half of the 20th century saw a massive increase in agricultural
productivity, to the point that there is far more food produced in the world than would be
sufficient to feed all the people in the world. Using succinct economic reasoning, give at
least one reason for why (1) in spite of these facts, undernutrition and even starvation are
still present in the world, OR ELSE (2) why the world still faces significant challenges in
meeting food demand in the 21st century. Please do not give an answer for both (1) and (2).
5. (2.5 marks) Suppose you are working for the World Bank as an impact evaluation
consultant and you are asked to evaluate a deworming program in Zambia. You are told that
the Bank worked with the Health Ministry of Zambia early in 1998 to implement a
deworming program in 43 primary schools, in 2 out of the 10 provinces in the country. The
schools were selected based on the judgment of officials in the Health Ministry at the time,
in part based on accessibility, but the process of how schools were selected has been
forgotten. Fortunately the Health Ministry has extremely good records for the program
schools on school attendance for the time period in question, and migration rates are
Semester 1 2014
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extremely low in the regions in question, so you expect to be able to follow up one year later
with 95% or more of the children who received the de-worming program.
Your supervisor at the Bank primarily wants you to evaluate the causal impacts of
the program on students test scores. Would the estimate of ? in the following OLS
regression give an unbiased estimate of the causal impact of the program,
Yit = ? + ?Tit + ?it,
where i indexes individuals, t indexes time periods (t = 1998, then t = 1999), Y represents
test scores, T is a dummy variable taking the value 1 when t = 1999, and ? is the error term
in the regression? If yes, explain one way you could provide more convincing evidence that
is the case. If not, explain why not, and in that case in what direction ? would likely be
biased?
7. (2.5 marks) In the week 6 lecture we discussed the literature in economics that employs
non-unitary models of the household to understand household decision making (in
particular, the division of consumption between husband and wife, and between parents and
children). The idea behind non-unitary models is that household decisions are a function of a
strategic interaction between husband and wife, with decisions a function of relative power
between the two. We learned that there is empirical evidence that if monetary transfers to the
household are given to women rather than men, more of the transfer is likely to pass through
to the children. Briefly discuss how you would interpret this result; in particular, does it
necessarily indicate that women care more about children than men?
Semester 1 2014
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8. (2.5 marks) Suppose that a researcher wants to study the effects of household income on
violence against women in the developing world. Since its debatable whether this issue
would be ethical to study in the context of an experiment, the researchers propose to base
their research design on a natural experiment. In particular, they propose to use rainfall
shocks as an instrumental variable for income (making use of data from agricultural
communities in rural Pakistan). They focus on seasons of more extreme rainfall (cases
where rainfall in a particular season is at least one standard deviation above or below mean
rainfall for that season, which can be taken as unexpected and random). Do you find this to
be a credible instrumental variables strategy? If yes, explain why. If not, explain why and
suggest an alternative instrument.
ANY WRITING BELOW THIS LINE THROUGH THE END OF THE PAGE WILL
NOT BE MARKED.
Semester 1 2014
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ANY WRITING ON THIS PAGE WILL NOT BE MARKED.
Part C: (15 marks)
Instructions: Answer one (1) out of the three essay questions in a single exam booklet (if
multiple exam books are submitted, only one will be considered for marking).
The essays will be graded on the clarity and quality of the writing (20%) and the quality of
the argument, including evidence presented (80%). There will be a heavy emphasis on
constructing a clear and well-developed argument that draws on economic reasoning. It is
advisable to take a couple minutes to sketch a plan for the essay, and then set to writing. A
good suggestion for an essay structure would be an introductory paragraph that motivates
and clearly states the hypothesis of the essay, 2-4 supporting paragraphs, and a short
concluding paragraph that ties up the argument and re-emphasizes the main hypothesis.
Please feel free to use explanatory devices, e.g., figures or lists, if you feel that they will aid
your argument.
1. When left to their own devices, people make problematic choices around fertility
excessive childbirth, sex selection, etc. This is a particular problem in developing
countries, where overpopulation causes significant economic stress, and sex selection
can lead to social stresses due to gender imbalance. Poor countries would develop
more quickly if their governments would intervene directly to influence these
behaviours. Discuss whether you agree or disagree with this statement. If you agree,
discuss at least one plausible policy intervention, while if you disagree, discuss at
least one alternative intervention to influence fertility behaviour, other than directly
trying to control the rate of childbirth or sex selection.
2. Its pretty clear that the general quality of education in the developing world is
pretty low. While impressive progress has been made in the last couple decades in
increasing access to schooling through building schools, increasing the number of
teachers trained, etc., now governments needs to move their focus to quality. This
will of course improve the quality of human capital acquired by those who get
education, and perhaps even more importantly, it will motivate parents who dont
make their children’s schooling a priority to keep their children in school. Discuss
whether you agree or disagree with this statement.
3. The question of whether or not poverty traps exist can have important implications
for economic policy. Suppose that you are a vice-minister for research and
evaluation in the Ministry of Economic Development in a low-income country. Your
team in the Ministry has collaborated with international partners to conduct some
rigorous research indicating the presence of poverty traps in some key regions and
occupations. State your case for 2-4 new policy positions that your Ministry should
adopt based on this research and your broader knowledge about poverty traps. If you
feel any necessary details are missing here, feel free to state your own assumptions
about them.
ANY WRITING ON THIS PAGE WILL NOT BE MARKED.
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ECOS3002: Semester 2, 2021
Current students
During 2021 we will continue to support students who need to study remotely due to the
ongoing impacts of COVID-19 and travel restrictions. Make sure you check the location code
when selecting a unit outline or choosing your units of study in Sydney Student. Find out
more about what these codes mean. [https://www.sydney.edu.au/students/selecting-unitsin-sydney-student.html#codes] Both remote and on-campus locations have the same
learning activities and assessments, however teaching staff may vary. More information
about face-to-face teaching and assessment arrangements for each unit will be provided on
Canvas.
Unit of study_
ECOS3002: Development Economics
Overview
?
This unit examines the economic transformation of less-developed countries from
microeconomic and macroeconomic perspectives. It covers applied topics such as education,
health, nutrition, demographics, labour, agriculture and the private sector, focusing on how
policies attempt to overcome market and institutional failures that are particularly acute in the
developing world. Focus is given to applying theoretical and empirical tools necessary to
conceptualise, analyse and interpret various issues in economic development. Applied examples
from developing countries are used throughout the unit.
Details
Academic unit
Economics
Unit code
ECOS3002
Unit name
Development Economics
https://www.sydney.edu.au/units/ECOS3002/2021-S2C-ND-CC
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ECOS3002: Semester 2, 2021
Session, year
?
Semester 2, 2021
Attendance mode
Normal day
Location
Camperdown/Darlington, Sydney
Credit points
6
Enrolment rules
Prohibitions
Prerequisites
Corequisites
None
?
?
?
Available to study
abroad and
exchange students
ECOS2001 or ECOS2901 or ECOS2002 or ECOS2902
None
Yes
Teaching staff and contact details
Coordinator
Russell Dean Toth, russell.toth@sydney.edu.au
Assessment
?
Type
Description
Weight Due
Length
Final exam (Open
book) C
Final exam
Both short answer as well as short essay
type questions will be included.
50%
Formal
exam
period
2 hours
30%
Week 09
50
minutes
Outcomes assessed: LO1 LO2 LO3
In-semester test
(Open book) C
Mid-semester exam
Both short answer as well as short essay
type questions will be included.
Due date:
11 Oct 2021
Outcomes assessed: LO2 LO3
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ECOS3002: Semester 2, 2021
Type
Description
Weight Due
Length
Assignment
Written assessment
Long answer/essay, online submission. See
assignment description.
20%
1000
words
Week 12
Due date:
05 Nov
2021
Outcomes assessed: LO1 LO2 LO3
= group assignment with individually assessed component
?
C = Type C in-semester exam
C = Type C final exam
?
?
Detailed information for each assessment can be found on Canvas.
Assessment criteria
The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).
As a general guide, a High distinction indicates work of an exceptional standard, a Distinction a
very high standard, a credit a good standard, and a pass an acceptable standard.
Result name
Mark
range
High
distinction
85 – 100
Distinction
75 – 84
Credit
65 – 74
Pass
50 – 64
Fail
0 – 49
Description
When you dont meet the learning outcomes of the unit to a
satisfactory standard.
For more information see sydney.edu.au/students/guide-to-grades
https://www.sydney.edu.au/units/ECOS3002/2021-S2C-ND-CC
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Late submission
In accordance with University policy, these penalties apply when written work is submitted after
11:59pm on the due date:
Deduction of 5% of the maximum mark for each calendar day after the due date.
After ten calendar days late, a mark of zero will be awarded.
Special consideration
If you experience short-term circumstances beyond your control, such as illness, injury or
misadventure or if you have essential commitments which impact your preparation or
performance in an assessment, you may be eligible for special consideration or special
arrangements.
Academic integrity
The Current Student website provides information on academic honesty, academic dishonesty,
and the resources available to all students.
The University expects students and staff to act ethically and honestly and will treat all allegations
of academic dishonesty or plagiarism seriously.
We use similarity detection software to detect potential instances of plagiarism or other forms of
academic dishonesty. If such matches indicate evidence of plagiarism or other forms of
dishonesty, your teacher is required to report your work for further investigation.
Weekly schedule
?
WK
Topic
Learning activity
Learning outcomes
Week
01
Introductory lecture
(2 hr)
LO1 LO3
Week
02
Lecture 2
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 2
(1 hr)
LO1 LO2 LO3
Week
03
Lecture 3
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 3
(1 hr)
LO1 LO2 LO3
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WK
Topic
Learning activity
Learning outcomes
Week
04
Lecture 4
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 4
(1 hr)
LO1 LO2 LO3
Week
05
Lecture 5
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 5
(1 hr)
LO1 LO2 LO3
Week
06
Lecture 6
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 6
(1 hr)
LO1 LO2 LO3
Week
07
Lecture 7
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 7
(1 hr)
LO1 LO2 LO3
Week
08
Lecture 8
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 8
(1 hr)
LO1 LO2 LO3
Week
10
Lecture 9
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 9
(1 hr)
LO1 LO2 LO3
Week
11
Lecture 10
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 10
(1 hr)
LO1 LO2 LO3
Week
12
Lecture 11
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 11
(1 hr)
LO1 LO2 LO3
Week
13
Lecture 12
(2 hr)
LO1 LO2 LO3
Tutorial for lecture 12
(1 hr)
LO1 LO2 LO3
Attendance and class requirements
Attendance: According to Faculty Board Resolutions, students in the Faculty of Arts and
Social Sciences are expected to attend 90% of their classes. If you attend less than 50% of
classes, regardless of the reasons, you may be referred to the Examiners Board. The
Examiners Board will decide whether you should pass or fail the unit of study if your
attendance falls below this threshold.
Lecture recording: Most lectures (in recording-equipped venues) will be recorded and may
be made available to students on the LMS. However, you should not rely on lecture recording
to substitute your classroom learning experience.
Preparation: Students should commit to spend approximately three hours preparation time
(reading, studying, homework, essays, etc.) for every hour of scheduled instruction.
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Study commitment
Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit
point for units of study offered over a full semester. For a 6 credit point unit, this equates to
roughly 120-150 hours of student effort in total.
Required readings
Required textbook:
de Janvry, Alain, and Elisabeth Sadoulet. 2021. Development Economics: Theory and Practice, 2nd
edition. Routledge.
https://www.routledge.com/Development-Economics-Theory-and-Practice/JanvrySadoulet/p/book/9780367456474
Also see companion website for the required text:*
https://routledgetextbooks.com/textbooks/9781138885318/
For all other readings, see the weekly modules on the ECOS3002 Canvas site.
*This is the companion website for the 1st edition. We will migrate to the companion website for
the 2nd edition if and when it becomes available.
Learning outcomes
?
Learning outcomes are what students know, understand and are able to do on completion of a
unit of study. They are aligned with the Universitys graduate qualities and are assessed as part of
the curriculum.
At the completion of this unit, you should be able to:
LO1. understand the key microeconomic issues relating to economic development and poverty
reduction
LO2. utilise common empirical tools in development microeconomics
LO3. formulate, evaluate and communicate about development policies and interventions.
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ECOS3002: Semester 2, 2021
Graduate qualities
The graduate qualities are the qualities and skills that all University of Sydney graduates must
demonstrate on successful completion of an award course. As a future Sydney graduate, the set
of qualities have been designed to equip you for the contemporary world.
GQ1 Depth of disciplinary expertise
Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge,
understanding and skills of a recognised discipline defined by scholarly activity, as well as
familiarity with evolving practice of the discipline.
GQ2 Critical thinking and problem solving
Critical thinking and problem solving are the questioning of ideas, evidence and
assumptions in order to propose and evaluate hypotheses or alternative arguments before
formulating a conclusion or a solution to an identified problem.
GQ3 Oral and written communication
Effective communication, in both oral and written form, is the clear exchange of meaning
in a manner that is appropriate to audience and context.
GQ4 Information and digital literacy
Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt,
integrate, create and convey information using appropriate resources, tools and
strategies.
GQ5 Inventiveness
Generating novel ideas and solutions.
GQ6 Cultural competence
Cultural Competence is the ability to actively, ethically, respectfully, and successfully
engage across and between cultures. In the Australian context, this includes and
celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature
understanding of contemporary issues.
GQ7 Interdisciplinary effectiveness
Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and
practices, working effectively across disciplinary boundaries.
GQ8 Integrated professional, ethical, and personal identity
An integrated professional, ethical and personal identity is understanding the interaction
between ones personal and professional selves in an ethical context.
https://www.sydney.edu.au/units/ECOS3002/2021-S2C-ND-CC
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GQ9 Influence
Engaging others in a process, idea or vision.
Outcome map
Learning
outcomes
Graduate qualities
GQ1
GQ2
GQ3
GQ4
GQ5
GQ6
GQ7
GQ8
GQ9
Closing the loop
?
NA; new version of course.
Key dates
Student administration
Key dates through the academic year, including
teaching periods, census, payment deadlines and
exams.
Enrolment, course planning, fees, graduation,
support services, student IT
Expectations of student conduct
Academic appeals
Code of Conduct for Students, Conditions of
Enrollment, University Privacy Statement,
Academic Integrity
Academic appeals process, special consideration,
rules and guidelines, advice and support
Learning and teaching policy
Financial support
Policy register, policy search
Scholarships, interest free loans, bursaries, money
management
Study resources
Health and support
Learning Centre, faculty and school programs,
Library, online resources
Student Centre, counselling & psychological
services, University Health Service, general health
and wellbeing
Disclaimer
The University reserves the right to amend units of study or no longer offer certain units,
including where there are low enrolment numbers.
https://www.sydney.edu.au/units/ECOS3002/2021-S2C-ND-CC
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ECOS3002: Semester 2, 2021
This unit of study outline was last modified on 08 Sep 2021.
To help you understand common terms that we use at the University, we offer an online glossary.
Leadership for good starts here
https://www.sydney.edu.au/units/ECOS3002/2021-S2C-ND-CC
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ECOS3002: Semester 2, 2021
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ECOS3002: Semester 2, 2021
11/11
ECOS3002 Development Economics
Mid-Semester Exam: Replacement
Semester 2 2021
Section 1. Draw, calculate, interpret
1. (15 points) Inequality analysis. Suppose a village has 5 households, with expenditure
levels 1, 3, 4, 7 and 10. Suppose the poverty line is 4.
a. (5 points) Draw the Lorenz curve for this village.
b. (5 points) Calculate the Gini coefficient for this village.
c. (5 points) Suppose you implement a tax redistribution scheme that takes 1 unit
from the two richest households and gives a cash transfer of 1 unit to each of
the two poorest households. Will this increase or decrease inequality? By how
much (in terms of the Gini coefficient)?
Section 2. Interpret a quasi-experiment
2. (10 points) Interpret a differences-in-differences (DiD) quasi-experiment. Suppose
that state governments in Brazil want to increase their agricultural productivity,
specifically soybean. To do so, starting in 2015, some of the states (T) provide
subsidized fertilizer to smallholder soybean farmers, while some of the states dont do
so (C). Suppose that two years later, you work with the Ministry of Agriculture,
which regularly collects representative survey data on soybean and other crop yields,
to evaluate this subsidy program using a DiD design.
a. (5 points) Interpret the results of the DiD from the following figure, including
providing the DiD estimate of the impact of the subsidy program.
b. (5 points) Name one potential threat to the validity of this DiD design, and
what you would do to test for it.
Section 3. Short answer
3. (5 points) Migration and remittances. Suppose that a woman from a rural area of
Indonesia decides to migrate to Hong Kong to work as a maid. Give one reason for
why this woman might send remittances back to her family in Indonesia, and what
you would do to test for whether this is an important motivation for her to send
remittances.
4. (5 points) Evaluate a randomized control trial (RCT). Suppose that the African
Development Bank is working with the Ministry of Agriculture in Kenya to increase
the adoption of more climate resilient seeds by smallholder farmers. To see what
works for increasing seed uptake, they work with a team of researchers to design an
RCT across 150 villages: in 50 randomly-selected villages, all farmers are given a
50% discount on the price of seeds and the Ministry organizes to have agricultural
extension workers give a 2-hour demonstration of the seeds in the village center at a
convenient time. In 50 other randomly-selected villages, the agricultural extension
workers identify 10 influential lead farmers to get free seeds and a full-day intensive
training on the use of the seeds. In the other 50 villages there is no intervention.
Farmers in all three sets of villages are surveyed at baseline and two years after the
intervention: 25 randomly-selected farmers in each village, plus the 10 influential
farmers in those 50 villages. How would you calculate the intent-to-treat (ITT) and
the treatment-on-treated (ToT) effect of each intervention? (it is fine to succinctly
describe what you would do, in words, without writing down mathematical formulas
or regression equations)
Section 4. Short essay
5. (15 points) Short essay. Suppose you are talking with a senior staff member from a
non-government organization (NGO) that supports microentrepreneurs in developing
countries. This NGO is involved in a number of programs to support
microentrepreneurs, including microfinance and business training. The staff member
points out that in spite of their efforts, only about 20% of eligible households take up
microfinance loans in the areas the NGO works in, and turnout for business training
programs is even lower. Explain why this may not be inconsistent with rational
economic behavior, giving at least three reasons, making precise use of concepts from
ECOS3002 to illustrate your arguments.
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Economic transformation
Indonesian Family
source of income
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