Season's Greetings

Happy New Year and Merry Christmas

Շնորհավոր Նոր Տարի եւ Սուրբ Ծնունդ

2010 Household Survey Released

The 2010 Household Integrated Living Conditions Survey was recently released by Armstat. As with previously released surveys, observations are aggregated at the household level and information is released for a subset of the variables. You may download the survey for free but registration is required. A couple of days earlier the survey aggregated at the household member level, with a smaller subset of variables, was also released (no registration required).
The survey of 7872 households (29986 members) is available as an xls and sav (spss) files. See my previous post to read or convert sav files to dta (stata).
The limited number of variables available in these public releases, as well as the aggregate nature of the underlying data, undoubtedly reflect an attempt to protect the confidentiality of respondent information. But by doing so, these surveys have very limited uses. One wonders whether a better approach to confidentiality can be found. Why not drop high income individuals, or regional identifiers, or just cap reported amounts? Otherwise, such a valuable resource will continue to be underutilized!
As always, links to this and other survey data on Armenia are provided in the Resources page of aea.am.

Who is Responsible for the Global Crisis

Many blame financial institutions, mostly in the US, for causing the global crisis. But these views do not seem to be universally held. In the recently released 2010 Life in Transition Survey database by EBRD, 1000 Armenian households were asked (along with those in 33 other countries) which country they blame for the global economic crisis. The raw data shows that 45 percent responded that the Armenian government is partly responsible (question q803aa), 27 percent the US, and so on. When asked who is the most responsible, the Armenian government was held to blame by 37 percent (question q803b). Another 28 percent did not know who to blame.

It is difficult to make the case that much of the population is ill informed. But if the LiTS survey is representative of Armenian households, then this raises questions on a number of fronts with financial literacy way at the top. The bad news is that the blame does not seem to vary much with education (probit estimates). The good news is that Armenia is not alone; similar findings can be obtained for a handful of other countries.

Who is most responsible for the economic crisis?
(computed from the 2010 LiTS Armenia sub-sample)














Note: above are not weighted as sampling weights are not reported on the released file.

Food Prices

Food prices have risen sharply over the past 8 years. The trend in part reflects the de-dollarization of the earlier years followed by the dollarization of the past couple of years, as well as world prices and local competitive conditions. Regardless of the causes, this rise in prices by far exceeds the growth in income of much of the population.

Milk prices have experienced the narrowest swing in prices, from 250 drams in 2002 to 328 Drams in 2010. In contrast, the price of rice rose from 302 to 648 Drams over the same period. As reported in the table beow, similar trends are observed for flour, beef, sugar, and grapes. More is reported on the Resources/Economic Data page of www.aea.am (food_retail_prices.xls).



















Source: Armstat, combined releases

Armenian Economic Association Call for Papers

Deadline extended to July 25, 2011.

The Armenian Economic Association (www.aea.am) will hold its 2011 Conference on October 22-24, at the Yerevan State University (YSU), in Yerevan, Armenia.

Scholars, graduate students, and researchers are invited to present their research in all areas of economics. The language of the conference is Armenian and English, and sessions will be organized by language and JEL fields below:

Mathematical and Quantitative Methods
Microeconomics; Industry Studies
Macroeconomics and Monetary Economics
International Economics
Financial Economics
Public Economics
Labor and Demographic Economics, Health, Education, and Welfare
Growth, Economic Development, and Transition Economics
Agricultural, Natural Resources, and Environmental Economics
Urban, Rural, and Regional Economics

Please send an abstract of less than 500 words to annual2011 [at] aea.am by June 25, 2011, addressed to Zareh Asatryan or Nune Hovhannisyan. Abstracts should include: title of paper, name(s) of author(s), affiliation, current position, an email address, and at least one keyword. In the abstract, please identify the research question, methods, and outcomes obtained or expected. Authors will be informed of the acceptance of their proposals by July 10, 2011.

The final draft is required by October 15, in time to post online before the conference. Select papers, including best student papers (in English), will be considered for publication in the Armenian Journal of Economics (AJE) subject to peer review.

Those interested in attending the meetings but without presenting a paper, and wish to serve as session chairs, discussants, help edit papers, or offer any other assistance, may email annual2011 [at] aea.am. Conference participation is free.

The aim of the conference is to bring together scholars, researchers and students to promote the exchange of ideas and advance economics scholarship.

FDI yet to recover

Foreign Direct Investment (FDI) continued its steep decline from its peak in 2008. In 2010, FDI stood at USD 483 million, almost 60 percent below where it was in 2008. Had it not been for the investment by the french, mostly in telecom, this would have been much lower.

Below are figures for the countries with the largest FDI. As always, more detail is provided on aea.am or here.

Table: FDI through 2010, in USD millions. Source: Armstat

One more study of the value of the Dram

A recent IMF working paper addresses the value of the Dram. The paper discusses various methodological aspects of estimation techniques as it replicates previous findings.

Here is the abstract:
This paper uses a range of different methodologies to estimate the equilibrium real exchange rate in Armenia with both single-country and panel estimation techniques. We estimate a country specific autoregressive distributed lag model and then proceed with the estimation of a cointegrated panel consisting of transition economies in Europe and Central Asia. This addresses cross section dependence by using common correlated effects estimators. While our analysis focuses on Armenia, the methods are applicable to a large number of transition economies, and the paper thus provides an overview of methods that can be used to assess a country’s equilibrium exchange rate.

Season's Greetings

This being the season for giving, please consider sponsoring an Armenian student.

Happy New Year and Merry Christmas

Շնորհավոր Նոր Տարի եւ Սուրբ Ծնունդ

2009 Household Survey Released

The 2009 Household Integrated Living Conditions Survey was recently released by Armstat. As with the previously released 2004-2008 surveys, observations are aggregated at the household level and information is released for a subset of the variables. You may download the survey for free but registration is required. As always, links to this and other survey data on Armenia are provided in the Resources page of aea.am.
The survey of 7872 households is available as an xls and sav (spss) files. See my previous post to read or convert sav files to dta (stata).

Paper on the monetary transmission mechanism in Armenia

A recent IMF working paper addresses the effectiveness of monetary policy in Armenia.
Here is a summary:
The introduction of inflation targeting in 2006, together with important economic developments such as dedollarization, marked the beginning of a new macroeconomic framework in Armenia, which is likely to have changed the effectiveness of monetary policy. This paper is the first attempt to analyze whether the transmission mechanism in Armenia has been subject to a structural break by employing a Markov-Switching VAR framework. Results support the existence of such a structural break around the time inflation targeting was introduced and reduced levels of dollarization were observed. Results from introducing a threshold variable into this framework furthermore show that reduced levels of dollarization are an important determinant of the effectiveness of monetary policy.

A very bumpy recovery

The rapid recovery experienced through May of this year seems to have stalled. Except for the drop in July, the economy seems to be growing at a rate around one percent now (compared to same month in 2009). The cumulative growth for the year through September is 2.8 percent.



Source: Cumulative GDP growth from Armstat (Blue); Monthly GDP growth (Orange) computed from Armstat published cumulative GDP and GDP deflator figures. Also see May and January posts.

Real estate prices through 2010Q1

After peaking in 2008, and jolted by the global financial crisis, real estate prices seem to have stabilized recently. Stated in USD, the slide in prices accelerated with the devaluation of the Dram in March of 2009. But stated in Drams, the decline has been more modest. More specifically, the price per sqm in Yerevan in 2010Q1 was 761 USD compared to 968 in 2008; down by 27 percent. Converted to Drams, the respective prices are 271400 vs 296300, for a reduction of 8 percent only.

Properties changing hands also follow a similar pattern but up through 2007. The number of transactions peaked in 2007, with August 2008 as a major turning point.

A recent IMF working paper attributes much of the growth in housing prices in Armenia and a number of countries in the region to factors such as GDP, remittances, and external financing. See House Price Determinants in Selected Countries of the Former Soviet Union.



Average price in USD per sq meter in Yerevan (excluding New Marash): 2003-2010Q1
Source: Calculated from Cadastre data. For greater detail see data page of http://www.aea.am/ (under Resources).








Number of transactions in Armenia: 1998-2009.
Source: Cadastre. For greater detail see data page ttp://www.aea.am/ (under Resources)

Rapid Recovery

The government reported that the economy grew by 7.2 percent during the months January through April when compared to the same period last year. However, if one were to look at indicators for the monthly performance of the economy a much faster growth pattern would emerge. In April, for instance, the economy grew at a rate of 12 percent; 10.5 in March, 2.8 in February, and 2 percent in January. But because the governmental statistical agency (Armstat) reports these figures on a cumulative basis for the year, sharp expansions and contractions are smoothed over. An example of the latter, GDP shrank by some 20 percent in April of last year; the published cumulative figures showed 9.8 percent contraction only.

There are potentially many factors at play in shaping this recovery. But regardless of the nature or sources of these factors, if this trend continues the country is likely to experience very rapid growth that could very well be in the double digits.




Source: Cumulative GDP growth from Armstat (Blue); Monthly GDP growth computed from Armstat published GDP and GDP deflator figures (Orange). Also see earlier post.

2008 Household Survey Released

The 2008 Household Integrated Living Conditions Survey was released recently by Armstat. As with the previously released 2004-2007 surveys, observations are aggregated at the household level and information is released for a subset of the variables. You may download the survey for free but registration is required. As always, links to this and other survey data on Armenia are provided in the Resources page of aea.am.
The survey of 7872 households is available as an xls and sav (spss) files. See my previous post to read or convert sav files to dta (stata).

Educational assortative mating

The choices that men and women make in who to marry have implications that go well beyond the social fabric of a society. Income mobility, for instance, is an important consideration. If highly educated women always marry highly educated men, and the least educated intermarry, then little income mobility may take place.

The 2001 Armenian population census provides an opportunity to gauge the extent of educational assortative mating in Armenia. Do Armenian women marry men of similar education, do they marry down, or do they marry up? These questions can be explored by comparing the educational level of husbands and wives.

The top panel of the table below summarizes the choices made by women as gleaned from a 10 percent sub-sample of the 2001 census data (Armstat). About 60 percent married men with similar educational attainment (sum of main diagonal), 20 percent married down and 20 percent married up. About 8.2 percent of women had education below the fourth grade (primary or less). Close to 18 percent had completed tertiary education (university), but only 15 percent married university graduates.

The middle panel reports similar statistics but restricted to women born in the 1920s. About 62 percent of women married men with similar education, 23 percent married up, and 15 percent married down. About one third have an education below the fourth grade level, and around 10 percent are university graduates; 15 percent of male partners are university graduates.

The bottom panel replicates the analysis for those born in the 1960s. Here 60 percent of women married men of similar education, 19 percent married up, and 21 percent married down; more marry men with lower education when contrasted with the older generation. About one percent of the women have an education at the third grade level or below in contrast to one third of those born in the 1920s. This highlights the spectacular educational expansion from the formative years of Soviet Armenia.

This is part of a paper co-authored with Shushan which contains further description of the data and additional analyses that address the choices made in the 1930s, 1940s, and 1950s, as well as estimation of the probability of the various choices made (ordered probit). One finding of interest is that women who marry younger men are more likely to have married down. Drop a note if interested.

Is the worst over?

Here is the monthly year over year real GDP growth in Armenia. Is the economy at a turning point?




Source: Constructed from cumulative monthly GDP and deflator figures reported by Armstat. Any errors are mine.

Armenian micro data

As an early present for the new year, Armstat made available for public use household surveys for the years 2004 through 2007. For the first time researchers will be able to examine the size and sources of household income, among other variables of interest; registration is required to access the databases.

The variables made available represent a subset of those compiled by Armstat (see databases on armstat.am or armstat.info). For instance, information is available at the household and not its members level. Obviously confidentiality of the information is critical, and the new releases strike a balance between the interest of the research community and the protection of the privacy of those surveyed.

Earlier in the year, Armstat made available a 10 percent subset of the 2001 population census for public use. The provision of these micro databases is nothing short of impressive. It would be good to see researchers make use of these.

Technical notes:

The surveys are available in xls and so there is little need for programming skills. But for more advance analyses they would need to be imported into some statistical software. Fortunately, the data are also available in SPSS. However, spss files (sav files) are not very useful to economists. But it is very easy to convert these files into Stata. Just install an ado file, and the data can be converted into dta files (and retain the labels). More specifically, in Stata type the following to install (and describe) usespss ado file.

ssc describe usespss
ssc install usespss

Next, and at any time using Stata to read "sav" files, type:

usespss using "filename.sav"

For more further info, consult the Stata website as well as RePEc.
As always, links to the databases are reported in the data page of aea.am.

Season's Greetings

This being the season for giving, please consider sponsoring an Armenian student, a teacher, or, if it is within your means, a school.

Happy New Year and Merry Christmas

Շնորհավոր Նոր Տարի եւ Սուրբ Ծնունդ

Resources for Economists-Armenia

The Internet provides incredible amount of economic data and information. Conveniently almost all of them, especially for economists in the U.S. or about the U.S., are available through a single gateway "Resources for Economists", http://www.aeaweb.org/RFE/ The site is part of the web site of the American Economic Association and is managed form many years by Bill Goffe of State University of New York at Oswego.

There are many sections, such as:
• Data
• Dictionaries, Glossaries, & Encyclopedias
• Economists, Departments, & Universities
• Jobs, Grants, Grad School, & Advice
• Meetings & Conferences
• Organizations & Associations
• Other Internet Guides
• Software
• Teaching Resources
• Blogs, Commentaries, and Podcasts
• Neat Stuff
If you just try the “Teaching Resources” you would find out incredible amount of lectures and economic learning resources available on line.

Clearly we, Armenians, and Armenia, need a similar web site. My impression is that the www.aea.am is designed to play such a role; however it requires lots of additional work and effort to get better and to provide a superior service. We could learn from the experience and format of “Resources for Economists” and improve the aea.am. I hope more volunteers join and support the effort of aea.am .

The negotiators in Switzerland

A scorecard of the negotiators in Switzerland -- just to put things in perspective.