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Phan, D.H., 2023. Lights and GDP relationship: What does the computer tell us? Empirical Economics, pp.1-38. [(ABDC journal ranking A)] [PDF] [Online Appendix]
The relationship between nighttime lights and GDP varies from country to country. However, which factors drive variations in the lights-GDP relationship across countries remains unclear. This paper examines the significance of approximately 600 potential drivers of uncertainty in the relationship between night lights and GDP worldwide. I employ three novel modern statistical techniques to select variables within a high-dimensional context: LASSO, minimax concave penalty, and spike-and-slab regression. Institutional quality emerges as the most important factor in explaining the difference between luminosity data and GDP across countries.
Conference/seminar: Vietnam Symposium in International Business Conference (Vietnam), Asian and Australasian Society of Labour Economics (University of Tokyo, Japan).
Adverse effects of extreme temperature on human development: Empirical evidence from household data for Vietnam across regions [PDF] (sole author, Revise and Resubmit, Ecological Economics)
Abstract: This paper develops a new method to construct the household-based Human Development Index to examine the effects of extreme temperature shocks on human development at the household level. Four waves of the Vietnam Household Living Standard Survey from 2012 to 2018 are used to analyse the effects of temperature shocks on households in different regions. The findings reveal that if temperatures deviate from the long-run average by more than two standard deviations, the Human Development Index score will decline by 2 to 3.5 percentage points, with the most significant effect identified for households in the South and CentralHighlands. Additionally, the paper identifies agricultural production, alcohol consumption and energy poverty as channels through which extreme temperatures affect human development. Finally, the findings suggest that policies aimed at mitigating the effects of climate change on vulnerable regions should focus on supporting households in these areas through measures such as developing climate-resistant crops, encouraging agricultural adaptation strategies, integrating local labour markets, and improving energy access.
Cycles of Adversity: Parental Joblessness in Childhood and Energy Poverty in Adulthood [PDF] (JMP) (with Sefa Awaworyi Churchill, Russell Smyth, and Trong-Anh Trinh)
Abstract: This study examines the causal relationship between exposure to father's joblessness during childhood and adolescence and experiencing energy poverty in adulthood using data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. To address concerns that father's joblessness is endogenous, we employ the interaction between the average number of recessions that occurred in the period before the individual was age 14 and maternal education level as an instrumental variable. We find that for individuals whose fathers were unemployed for six months or more growing up, the likelihood of being in energy poverty as an adult measured by subjective ability to heat the home, the objective Low-Income-High-Cost (LIHC) measure and the 10% threshold indicator increases by 29.9 percentage points, 58.5 percentage points and 16.9 percentage points, respectively. We find that this relationship is mediated by education, health, labour market outcomes, locus of control and social capital.
Measurements of true income: Do PWT, UQICD and WDI behave similarly? [PDF]
Abstract: Internationally comparable income is obtained using purchasing power parity (PPP) adjustments over space and time across countries. The method used to adjust can lead to differences in the PPP adjusted income. National accounts GDP in local currency can be converted to PPP adjusted income, and some authors in the poverty measurement literature have suggested using income obtained from household surveys. In their recent QJE paper, Pinkovskiy and Sala-i-Martin (2016a) (P&Sa) proposed a combination method whereby optimum weights are given to GDP and surveys’ based income. They used World Development Indicators (WDI)’s GDP income for their study. This thesis extends their work in three directions: First, the robustness of the findings is tested by using four alternative PPP adjusted GDP income to WDI, they are PWT 7.1, PWT 8.1, PWT 9.0 and UQICDv2.1.1. This also extends the recent NBER paper (P&Sb) which evaluated WDI income against PWT 7.1, PWT 8.0 and PWT 8.1. Second, the robustness of the findings is tested by running the models by income and geographical country groups. Third, the robustness of the findings is tested by using an alternative econometric estimation approach to obtain the optimum weights.
Conference/seminar: The Vietnam Economist Annual Meeting (VEAM 2016)
Does energy consumption lead to economic growth over time? Evidence from semi-parametric estimation for a panel of Asia Pacific countries. (Under review) [PDF] (with Russell Smyth, Mita Bhattacharya, and Xibin Zhang) [Data & Code]
Abstract: Energy consumption changes over time and across countries because of how countries use energy in their various stages of growth. This paper extends the empirical literature on estimating energy demand elasticities in two directions. First, we employ nighttime light data as an instrumental variable for energy consumption. Second, we consider a semi-parametric model to examine country-specific and year-specific energy elasticities, allowing the coefficients to vary with continuous and categorical variables. We apply these strategies to explore the effect of energy consumption on the gross domestic product in the Asia-Pacific region between 1992 and 2018. We find that while the elasticities of energy consumption are time-varying and heterogeneous across countries, their magnitude is generally between 0.1 and 0.2 and exhibits an inverted U shape. We also find that the coefficients of energy elasticities are downward biased without accounting for endogeneity.
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