In developing countries, child labor has become a significant problem with adverse effects in the present and future for society and individuals. There are many causes that obligate children to abandon school and start working. Economic, social, familiar, and personal problems can expel children from school, inhibiting them from living appropriately. Polls like the ENAHO in Peru tried to recollect relevant data as much as possible to explain this problem. With many variables, it is necessary to have a methodology to build an algorithm with enough explanatory power to explain the situation. Therefore, this research elaborated an algorithm through Lasso to proportionate a statistical explanation of child labor. Due to the type of data, the regression was logistic.

The current study analyzed the determinants of the Peruvian coca illegal plantations in the period 2003-2019. Hence, the DEVIDA database variables were gathered at first. Then, a machine learning-based technique is employed to select the most relevant variables for the study. That technique, Lasso, selected as accurate variables eradication of coca plantations and pasta base. Both OLS and VAR are employed to analyze the relevance of the selected variables. OLS finds that eradication was negatively related to the dependent variable. Nonetheless, pb confiscation had a positive relationship with illegal coca crops. Furthermore, VAR encounters that only pb confiscation affected the dependent variable. Supplementary tests are carried to ensure the accuracy of the results. In consequence, it is concluded that eradication policies by themselves were not enough to discourage the coca plantations. Farmers should get instruction about alternative crops and financial help. Furthermore, it has been claimed that pb confiscation generates scarcity of the drug, which elevates its price. Thus, coca farmers are more motivated to plant coca because of the higher prices. Therefore, as long as the international demand, which is disposed to pay high prices, the coca illegal crops and its illicit products will exist.

Education is the future. Education is the only way for a country to start developing and reducing poverty. In countries with medium incomes like Peru, the resources to spend on education is not unlimited. Therefore, it is necessary to have quality in investment. However, risks and uncertainty can make a project surpass its initial budget. Therefore, statistic based methods like Monte Carlo simulation is a powerful tool to forecast possible events that might endanger the profitability and sustainability of a project. Although there is not plenty of academic literature about Monte Carlo empirical usage, many projects employ this method to manage the possible risks the project could have. In consequence, the current research analyzed both risk and sensitivity of an elementary school building project. Both analyses showed that this project had huge probabilities to surpass the current profit and return estimations. However, the sensitivity analysis portrayed that the project could be endangered because of infrastructure overspending. Moreover, it indicated that students’ attendance is also a critical factor to ensure the sustainability of the project.

The coca leaf has many uses in the Peruvian culture. Although there are legal usages, people employ coca for illicit business. The most infamous illegal use is cocaine production. The cocaine business is highly profitable, but it harms human health. Then, what are the determinants of cocaine price? The current analysis aims to get the variables with the capability to explain the cocaine prices in Peru. The period analyzed is 2003-2019. The study gathered variables from DEVIDA and UNDOC databases. The Lasso technique selected the variables with the best capability to predict cocaine price. Those variables were: ENACO acquisition, coca seizures, and coca crops. OLS, VAR, and Granger analyses employed those variables to analyze the relationship between them. According to the OLS analysis, both ENACO acquisition and coca crops had adverse effects on cocaine prices, while coca seizures were positively related to the cocaine price. VAR analysis showed that only ENACO acquisition had a short-term relationship with the dependent variable. Moreover, it showed that the whole set of variables influenced the dependent variable. The Granger analysis proved that there was a cause-effect relationship between ENACO acquisition and cocaine price. Hence, the ENACO purchases expansion can rest the attractiveness of illegal groups to farmers. However, lowering cocaine prices might attract more users. Therefore, educational activities are also required.