Recent Scientific Accomplishments

McKelvey’s primary area of research is development economics. Over the past several years he has written several papers analyzing the prices of goods and services in developing countries, and determining how households react when these prices change. In one chapter of his dissertation, he investigates the impact of a large change in the price of contraceptives in Indonesia, brought about by the Asian financial crisis, on contraceptive use and method choice, finding that the demand for contraceptives is remarkably insensitive to price changes. In another chapter, he notes that researchers commonly estimate the impact of an increase in the price of a commodity, say meat, on the amount spent for that commodity, and use this to infer the effect of the price change on the quantity of meat purchased. This method ignores the possibility that households could respond to the price increase by purchasing the same quantity of meat, but substituting to cheaper cuts of meat in order to save money. Using price data collected from the household (in addition to prices collected at nearby stores), McKelvey introduces an alternative method for estimating household responses to price changes that allows households to reduce either the quantity or the quality of the goods consumed. Since the nutritional consequences of a reduction in the quantity of meat consumed is quite different than the consequences of a reduction in the quality of meat consumed, it is essential to estimate these effects correctly if we want to understand the effect of price changes on nutrition. This paper is currently under review at the American Economic Review. As a graduate student at UCLA, McKelvey also became involved in the Work and Iron Status Evaluation (Duncan Thomas is the PI). This project is evaluating the impact of a randomized and controlled iron supplementation on health, productivity, and well-being in a rural area of Central Java, Indonesia. As a member of this research team, McKelvey has done extensive field work and has participated in the design, implementation, and management of a large scale data collection project.

Funded Research

At this time, McKelvey does not have any externally funded research. He currently has an R03 pending review at NICHD, to test hypotheses about bargaining power and prices paid by the poor in Indonesia.

Future Plans

In future research, McKelvey is planning to investigate an empirical regularity that has been pointed out by several studies - poor households in developing countries tend to pay more than rich households when purchasing similar goods, further exacerbating their poverty. Existing research has speculated that this is because the poor cannot afford to buy in bulk, or to travel to distant stores that have lower prices, but these studies are unable to rule out other equally plausible explanations. For example, in societies where individuals bargain to determine prices, it may be that the poor have less bargaining skill, or that they have less bargaining power due to their low social status. Understanding the reason for these price differences is a crucial step in helping to alleviate poverty in developing countries. McKelvey is currently preparing to undertake a data collection project in Indonesia that is specifically designed to gather the data necessary to distinguish between these alternative hypotheses.