Faculty Spotlight

Sergey Mityakov, the Truist Associate Professor of Finance in the Florida State University College of Business, discusses his recent paper published in the Journal of Political Economy, “Unobserved Inputs in Household Production”:

In this paper, Tom Mroz from Georgia State University and I argue that almost all existing empirical studies of health, child development and job-training programs over the last 30 to 40 years fail to account for “unobserved” actions that people commonly undertake – rendering the conclusions of those studies incomplete and resulting in possibly misleading policy recommendations.

We show that researchers in those areas can improve their findings through additional information that is likely available in their surveys.

With data you are likely to have already in place, you can come up with a proper economic interpretation of empirical estimates of household production, which researchers didn’t have before our paper. 

To illustrate, consider this scenario: A high school decreases class sizes, then measures the benefit to students. But it does not take into account other possible effects of the move, such as less parental involvement or reduced tutoring.

People take attenuating actions in response to changes, resulting often in a smaller measured benefit, and the literature for the most part has not properly accounted for these effects.