The study considers the inclusion of dummy explanatory variables (in regression estimation) in both cross –section and time series data. In survey data, a continuous variable may be categorized into a dummy variable dataset whenever the quality, reliability and internal consistency of the continuous data is put into question. In the process of categorization, vita information may be compromised: in other words there is loss of information. Furthermore, an arbitrary choice of cutoff points may yield different regression estimates depending on the cutoff point.

Pro-environmental behavior is the willingness to cooperate and contribute to environmental public goods. A good understanding of why individuals undertake pro-environmental actions is important in order to construct policies that are aligned with preferences and actual behavioral patterns, such as concern for social esteem and reputation.

Using data spanning 15 years, we study subjective and consumption poverty in urban Ethiopia. Despite rapid economic growth and declining consumption poverty, subjective poverty remains largely unchanged.

Levels of trust are measured by asking standard survey questions on trust and by observing the behaviour in a trust game using a random sample in rural Bangladesh.

This paper examines the adverse effect of natural resources scarcity on children's schooling and the possible gender bias of resource collection work against girls' schooling. It uses cross-sectional data on 316 children aged 7–18 years collected from 120 rural households in Tigray, northern Ethiopia. The two-stage conditional maximum likelihood estimation technique is employed to take care of endogeneity between schooling and collection intensity decisions.

A critical issue in the design of incentive mechanisms is the choice of whom to target. For forests, the leading schemes: [i] target locations with high ecosystem-service density; [ii] target additionality, i.e., locations where conservation would not occur without the incentive; or, at least effectively, [iii] reward previous private choices to conserve forest. We use a field experiment to examine the changes in contributions to forest conservation when we introduce each of those three selection rules.

Incentives conditioned on socially desired acts such as donating blood, departing conflict or mitigating climate change have increased in popularity. Many incentives are targeted, excluding some of the potential participants based upon characteristics or prior actions. We hypothesize that pro-sociality is reduced by exclusion, in of itself (i.e., fixing prices and income), and that the rationale for exclusion influences such 'behavioral spillovers'. 

This is a PhD dissertation by Haileselassie Medhin and containing seven self-contained papers: