new in IREE (2020-1)

Not Evidence for Baumol’s Cost Disease. A replication study of Hartwig (Journal of Health Economics, 2008)

by Akinwande Atanda and W. Robert Reed

Abstract
In his 2008 Journal of Health Economics paper, Jochen Hartwig claimed that Baumol’s Cost Disease (BCD) theory could explain observed increases in health care expenditures in OECD countries. This paper replicates Hartwig’s results and demonstrates that he tested the wrong hypothesis. When one tests the correct hypothesis, Hartwig’s conclusions are not supported. Rather than providing evidence in favor of BCD, Hartwig’s estimation procedures, when applied correctly, strongly reject BCD as an explanation for health expenditure increases for the OECD data he examined.

» Read this replication study here.
» See a list of all publications in IREE here.

recently published in IREE (2019-6)

Semiparametric Value-At-Risk Estimation of Portfolios. A replication study of Dias (Journal of Banking & Finance, 2014)

by Jiahua Xu

Abstract
This paper aims to replicate the semiparametric Value-At-Risk model by Dias (2014) and to test its legitimacy. The study confirms the superiority of semiparametric estimation over classical methods such as mixture normal and Student-t approximations in estimating tail distribution of portfolios, which can be credited to the model’s uniqueness in combining strengths of both extreme value theory (EVT) models and other multivariate models. The author however discovers, in one instance, the infeasibility of the Dias model, and suggests a modification.

» Read this replication study here.
» See a list of all publications in IREE here.

new publication (2019-4)

Meta-analysis and publication bias: How well does the FAT-PET-PEESE procedure work? A replication study of Alinaghi & Reed (Research Synthesis Methods, 2018).

by Sanghyun Hong

Abstract
A meta-analysis is a tool for aggregating estimates of a similar “effect” across many studies. Publication bias is the phenomenon where literature is sample selected in favor of studies having statistically significant results and/or having estimates that satisfy pre-conceived expectations. A popular procedure used for conducting meta-analyses in the presence of publication bias is the FAT-PET-PEESE (FPP) procedure. In a recent paper published in Research Synthesis Methods, Alinaghi and Reed (2018), utilizing Monte Carlo simulations, report that the FPP procedure does not work well when used in “realistic” data environments where true effects differ both across and within studies. AR’s findings are important because the FPP approach is dominant in the economics meta-analysis literature. I replicate their results and discover two mistakes, which I subsequently correct. The first mistake is found in a descriptive statistics table, misrepresenting the overview of simulated dataset. The second is associated with the fixed effect estimation, generating erroneous estimated effects and Type I error. Further, I extend their analysis by making their simulation environment even more realistic. Despite producing somewhat different results, my replications generally confirm AR’s conclusions about the unreliability of the FPP procedure in realistic data environments.

» Read this replication study here.
» See a list of all publications in IREE here.