The Macro Effects of Unemployment Benefit Extensions: a Measurement Error Approach Q. J. Econ. (IF 7.863) Pub Date : 2018-08-20 Gabriel Chodorow-Reich, John Coglianese, Loukas Karabarbounis
By how much does an extension of unemployment benefits affect macroeconomic outcomes such as unemployment? Answering this question is challenging because U.S. law extends benefits for states experiencing high unemployment. We use data revisions to decompose the variation in the duration of benefits into the part coming from actual differences in economic conditions and the part coming from measurement error in the real-time data used to determine benefit extensions. Using only the variation coming from measurement error, we find that benefit extensions have a limited influence on state-level macroeconomic outcomes. We apply our estimates to the increase in the duration of benefits during the Great Recession and find that they increased the unemployment rate by at most 0.3 percentage points.
The Elusive Costs of Inflation: Price Dispersion during the U.S. Great Inflation Q. J. Econ. (IF 7.863) Pub Date : 2018-08-06 Emi Nakamura, Jón Steinsson, Patrick Sun, Daniel Villar
A key policy question is: How high an inflation rate should central banks target? This depends crucially on the costs of inflation. An important concern is that high inflation will lead to inefficient price dispersion. Workhorse New Keynesian models imply that this cost of inflation is very large. An increase in steady state inflation from 0% to 10% yields a welfare loss that is an order of magnitude greater than the welfare loss from business cycle fluctuations in output in these models. We assess this prediction empirically using a new dataset on price behavior during the Great Inflation of the late 1970’s and early 1980’s in the United States. If price dispersion increases rapidly with inflation, we should see the absolute size of price changes increasing with inflation: price changes should become larger as prices drift further from their optimal level at higher inflation rates. We find no evidence that the absolute size of price changes rose during the Great Inflation. This suggests that the standard New Keynesian analysis of the welfare costs of inflation is wrong and its implications for the optimal inflation rate need to be reassessed. We also find that (nonsale) prices have not become more flexible over the past 40 years.
Should Buyers or Sellers Organize Trade in a Frictional Market? Q. J. Econ. (IF 7.863) Pub Date : 2018-04-14 Shouyong Shi, Alain Delacroix
To answer the question in the title, this article characterizes the socially efficient organization of the market with search frictions. The efficient organization depends on the relative elasticity in the supply between the two sides of the market, the costs of participating in the market and organizing trade, and the (a)symmetry in matching. We also show that the social optimum can be implemented by a realistic market equilibrium where the organizers set up trading sites to direct the other side’s search. The results provide a unified explanation for why trade has often been organized by sellers in the goods market, by buyers (firms) in the labor market, and by both sides in the asset market. The analysis also sheds light on how the efficient market organization can change with innovations such as e-commerce and just-in-time production.
What do Exporters Know? Q. J. Econ. (IF 7.863) Pub Date : 2018-07-05 Michael J Dickstein, Eduardo Morales
Much of the variation in international trade volume is driven by firms’ extensive margin decisions of whether to participate in export markets. We evaluate how the information potential exporters possess influences their decisions. To do so, we estimate a model of export participation in which firms weigh the fixed costs of exporting against the forecasted profits from serving a foreign market. We adopt a moment inequality approach, placing weak assumptions on firms’ expectations. The framework allows us to test whether firms differ in the information they have about foreign markets. We find that larger firms possess better knowledge of market conditions in foreign countries, even when those firms have not exported in the past. Quantifying the value of information, we show that, in a typical destination, total exports rise while the number of exporters falls when firms have access to better information to forecast export revenues.
The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects Q. J. Econ. (IF 7.863) Pub Date : 2018-02-10 Raj Chetty, Nathaniel Hendren
We show that the neighborhoods in which children grow up shape their earnings, college attendance rates, and fertility and marriage patterns by studying more than 7 million families who move across commuting zones and counties in the United States. Exploiting variation in the age of children when families move, we find that neighborhoods have significant childhood exposure effects: the outcomes of children whose families move to a better neighborhood—as measured by the outcomes of children already living there—improve linearly in proportion to the amount of time they spend growing up in that area, at a rate of approximately 4% per year of exposure. We distinguish the causal effects of neighborhoods from confounding factors by comparing the outcomes of siblings within families, studying moves triggered by displacement shocks, and exploiting sharp variation in predicted place effects across birth cohorts, genders, and quantiles to implement overidentification tests. The findings show that neighborhoods affect intergenerational mobility primarily through childhood exposure, helping reconcile conflicting results in the prior literature.
The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates Q. J. Econ. (IF 7.863) Pub Date : 2018-02-10 Raj Chetty, Nathaniel Hendren
We estimate the causal effect of each county in the United States on children’s incomes in adulthood. We first estimate a fixed effects model that is identified by analyzing families who move across counties with children of different ages. We then use these fixed effect estimates to (i) quantify how much places matter for intergenerational mobility, (ii) construct forecasts of the causal effect of growing up in each county that can be used to guide families seeking to move to opportunity, and (iii) characterize which types of areas produce better outcomes. For children growing up in low-income families, each year of childhood exposure to a one standard deviation (std. dev.) better county increases income in adulthood by 0.5%. There is substantial variation in counties’ causal effects even within metro areas. Counties with less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates tend to produce better outcomes for children in poor families. Boys’ outcomes vary more across areas than girls’ outcomes, and boys have especially negative outcomes in highly segregated areas. Areas that generate better outcomes have higher house prices on average, but our approach uncovers many “opportunity bargains”—places that generate good outcomes but are not very expensive.
Interfirm Relationships and Business Performance Q. J. Econ. (IF 7.863) Pub Date : 2017-12-20 Jing Cai, Adam Szeidl
We organized business associations for the owner-managers of young Chinese firms to study the effect of business networks on firm performance. We randomized 2,820 firms into small groups whose managers held monthly meetings for one year, and into a “no-meetings” control group. We find the following. (i) The meetings increased firm revenue by 8.1%, and also significantly increased profit, factors, inputs, the number of partners, borrowing, and a management score. (ii) These effects persisted one year after the conclusion of the meetings. (iii) Firms randomized to have better peers exhibited higher growth. We exploit additional interventions to document concrete channels. (iv) Managers shared exogenous business-relevant information, particularly when they were not competitors, showing that the meetings facilitated learning from peers. (v) Managers created more business partnerships in the regular than in other one-time meetings, showing that the meetings improved supplier-client matching.
High-Frequency Identification of Monetary Non-Neutrality: The Information Effect Q. J. Econ. (IF 7.863) Pub Date : 2018-01-29 Emi Nakamura, Jón Steinsson
We present estimates of monetary non-neutrality based on evidence from high-frequency responses of real interest rates, expected inflation, and expected output growth. Our identifying assumption is that unexpected changes in interest rates in a 30-minute window surrounding scheduled Federal Reserve announcements arise from news about monetary policy. In response to an interest rate hike, nominal and real interest rates increase roughly one-for-one, several years out into the term structure, while the response of expected inflation is small. At the same time, forecasts about output growth also increase—the opposite of what standard models imply about a monetary tightening. To explain these facts, we build a model in which Fed announcements affect beliefs not only about monetary policy but also about other economic fundamentals. Our model implies that these information effects play an important role in the overall causal effect of monetary policy shocks on output.
Ranking Firms Using Revealed Preference Q. J. Econ. (IF 7.863) Pub Date : 2018-01-17 Isaac Sorkin
This article estimates workers’ preferences for firms by studying the structure of employer-to-employer transitions in U.S. administrative data. The article uses a tool from numerical linear algebra to measure the central tendency of worker flows, which is closely related to the ranking of firms revealed by workers’ choices. There is evidence for compensating differentials when workers systematically move to lower-paying firms in a way that cannot be accounted for by layoffs or differences in recruiting intensity. The estimates suggest that compensating differentials account for over half of the firm component of the variance of earnings.
Long-Range Growth: Economic Development in the Global Network of Air Links Q. J. Econ. (IF 7.863) Pub Date : 2017-12-20 Filipe Campante, David Yanagizawa-Drott
We study the impact of international long-distance flights on the global spatial allocation of economic activity. To identify causal effects, we exploit variation due to regulatory and technological constraints, which gives rise to a discontinuity in connectedness between cities at a distance of 6,000 miles. We show that improving an airport’s position in the network of air links has a positive effect on local economic activity, as captured by satellite-measured night lights. We find that air links increase business links, showing that the movement of people fosters the movement of capital. In particular, this is driven mostly by capital flowing from high-income to middle-income (but not low-income) countries. Taken together, the results suggest that increasing interconnectedness induces links between businesses and generates economic activity at the local level but also gives rise to increased spatial inequality locally, and potentially globally.
Divergent Paths: A New Perspective on Earnings Differences Between Black and White Men Since 1940 Q. J. Econ. (IF 7.863) Pub Date : 2018-01-30 Patrick Bayer, Kerwin Kofi Charles
We present new evidence on the evolution of black–white earnings differences among all men, including both workers and nonworkers. We study two measures: (i) the level earnings gap—the racial earnings difference at a given quantile; and (ii) the earnings rank gap—the difference between a black man's percentile in the black earnings distribution and the position he would hold in the white earnings distribution. After narrowing from 1940 to the mid-1970s, the median black–white level earnings gap has since grown as large as it was in 1950. At the same time, the median black man's relative position in the earnings distribution has remained essentially constant since 1940, so that the improvement then worsening of median relative earnings have come mainly from the stretching and narrowing of the overall earnings distribution. Black men at higher percentiles have experienced significant advances in relative earnings since 1940, due mainly to strong positional gains among those with college educations. Large relative schooling gains by blacks at the median and below have been more than counteracted by rising return to skill in the labor market, which has increasingly penalized remaining racial differences in schooling at the bottom of the distribution.
The Macroeconomic Effects of Government Asset Purchases: Evidence from Postwar U.S. Housing Credit Policy Q. J. Econ. (IF 7.863) Pub Date : 2018-01-17 Andrew J Fieldhouse, Karel Mertens, Morten O Ravn
We document the portfolio activity of federal housing agencies and provide evidence on its impact on mortgage markets and the economy. Through a narrative analysis, we identify historical policy changes leading to expansions or contractions in agency mortgage holdings. Based on those regulatory events that we classify as unrelated to short-run cyclical or credit market shocks, we find that an increase in mortgage purchases by the agencies boosts mortgage lending, in particular refinancing, and lowers mortgage rates. Agency purchases also influence prices in other asset markets, stimulate residential investment, and expand homeownership. We compare these effects to those of conventional monetary policy shocks, and we provide evidence on the interactions between housing credit and monetary policies.
Status Goods: Experimental Evidence from Platinum Credit Cards Q. J. Econ. (IF 7.863) Pub Date : 2017-12-20 Leonardo Bursztyn, Bruno Ferman, Stefano Fiorin, Martin Kanz, Gautam Rao
This article provides field-experimental evidence on status goods. We work with an Indonesian bank that markets platinum credit cards to high-income customers. In a first experiment, we show that demand for the platinum card exceeds demand for a nondescript control product with identical benefits, suggesting demand for the pure status aspect of the card. Transaction data reveal that platinum cards are more likely to be used in social contexts, implying social image motivations. In a second experiment, we provide evidence of positional externalities from the consumption of these status goods. A final experiment provides suggestive evidence that increasing self-esteem causally reduces demand for status goods, indicating that social image might be a substitute for self-image.
Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program Q. J. Econ. (IF 7.863) Pub Date : 2018-01-29 Meredith Fowlie, Michael Greenstone, Catherine Wolfram
A growing number of policies and programs aim to increase investment in energy efficiency, because conventional wisdom suggests that people fail to take up these investments even though they have positive private returns and generate environmental benefits. Many explanations for this energy efficiency gap have been put forward, but there has been surprisingly little field testing of whether the conventional wisdom is correct. This article reports on the results of an experimental evaluation of the nation’s largest residential energy efficiency program—the Weatherization Assistance Program—conducted on a sample of approximately 30,000 households in Michigan. The findings suggest that the upfront investment costs are about twice the actual energy savings. Furthermore, the model-projected savings are more than three times the actual savings. Although this might be attributed to the “rebound” effect—when demand for energy end uses increases as a result of greater efficiency—the article fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits derived from emissions reductions, the costs still substantially outweigh the benefits; the average rate of return is approximately −7.8% annually.
Missed Sales and The Pricing of Ancillary Goods Q. J. Econ. (IF 7.863) Pub Date : 2018-06-30 Renato Gomes, Jean Tirole
Firms often sell a basic good as well as ancillary ones. Hold-up concerns have led to ancillary good regulations such as transparency and price caps. The hold-up narrative, however, runs counter to evidence in many retail settings where ancillary good prices are set below cost (e.g. free shipping, or limited card surcharging in countries where the “no-surcharge rule” was lifted). We argue that the key to unifying these conflicting narratives is that the seller may absorb partly or fully the ancillary good’s cost so as not to miss sales on the basic good. A supplier with market power on the ancillary good market then takes advantage of cost absorption and jacks up its wholesale price. Hold-ups occur only when consumers are initially uninformed or naïve about the drip price and shopping costs are high. The price of the basic good then acts as a signal of the drip price, since a high markup on the basic good makes the firm more wary of missed sales. Regardless of whether consumers are informed, uninformed-but-rational, or naïve, mandating price transparency and banning loss-making on the ancillary good leads to (i) an efficient consumption of the ancillary good, and (ii) a reduction of its wholesale price, generating strict welfare gains.
Excess Sensitivity of High-Income Consumers Q. J. Econ. (IF 7.863) Pub Date : 2018-06-12 Lorenz Kueng
Using new transaction data, I find considerable deviations from consumption smoothing in response to large, regular, predetermined, and salient payments from the Alaska Permanent Fund. On average, the marginal propensity to consume (MPC) is 25% for nondurables and services within one quarter of the payments. The MPC is heterogeneous, monotonically increasing with income, and the average is largely driven by high-income households with substantial amounts of liquid assets, who have MPCs above 50%. The account-level data and the properties of the payments rule out most previous explanations of excess sensitivity, including buffer stock models and rational inattention. How big are these ‘mistakes’? Using a sufficient statistics approach, I show that the welfare loss from excess sensitivity depends on the MPC and the relative payment size as a fraction of income. Since the lump-sum payments do not depend on income, the two statistics are negatively correlated such that the welfare losses are similar across households and small (less than 0.1% of wealth), despite the large MPCs.
Religious Competition and Reallocation: The Political Economy of Secularization in The Protestant Reformation Q. J. Econ. (IF 7.863) Pub Date : 2018-06-06 Davide Cantoni, Jeremiah Dittmar, Noam Yuchtman
Using novel microdata, we document an important, unintended consequence of the Protestant Reformation: a reallocation of resources from religious to secular purposes. To understand this process, we propose a conceptual framework in which the introduction of religious competition shifts political markets where religious authorities provide legitimacy to rulers in exchange for control over resources. Consistent with our framework, religious competition changed the balance of power between secular and religious elites: secular authorities acquired enormous amounts of wealth from monasteries closed during the Reformation, particularly in Protestant regions. This transfer of resources had significant consequences. First, it shifted the allocation of upper-tail human capital. Graduates of Protestant universities increasingly took secular, especially administrative, occupations. Protestant university students increasingly studied secular subjects, especially degrees that prepared students for public sector jobs, rather than church sector-specific theology. Second, it affected the sectoral composition of fixed investment. Particularly in Protestant regions, new construction shifted from religious toward secular purposes, especially the building of palaces and administrative buildings, which reflected the increased wealth and power of secular lords. Reallocation was not driven by pre-existing economic or cultural differences. Our findings indicate that the Reformation played an important causal role in the secularization of the West.
Marginal Tax Rates and Income: New Time Series Evidence Q. J. Econ. (IF 7.863) Pub Date : 2018-02-20 Karel Mertens, José Luis Montiel Olea
Using new narrative measures of exogenous variation in marginal tax rates associated with postwar tax reforms in the United States, this study estimates short-run tax elasticities of reported income of around 1.2 based on time series from 1946 to 2012. Estimated elasticities are larger in the top 1% of the income distribution but are also positive and statistically significant for other income groups. Previous time series studies of tax returns data have found little evidence for income responses to taxes outside the top of the income distribution. The different results in this article arise because of additional efforts to account for dynamics, expectations, and especially the endogeneity of tax policy decisions. Marginal rate cuts lead to increases in real GDP and declines in unemployment. There is also evidence that the responses are to marginal tax rates rather than average tax rates. Counterfactual tax cuts targeting the top 1% alone are estimated to have short-run positive effects on economic activity and incomes outside of the top 1%, but to increase inequality in pretax incomes. Cuts for taxpayers outside of the top 1% also lead to increases in incomes and economic activity, but with a longer delay.
Global Evidence on Economic Preferences Q. J. Econ. (IF 7.863) Pub Date : 2018-05-30 Armin Falk, Anke Becker, Thomas Dohmen, Benjamin Enke, David Huffman, Uwe Sunde
This paper studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey dataset of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 individuals in 76 countries. The data reveal substantial heterogeneity in preferences across countries, but even larger within-country heterogeneity. Across individuals, preferences vary with age, gender, and cognitive ability, yet these relationships appear partly country specific. At the country level, the data reveal correlations between preferences and bio-geographic and cultural variables such as agricultural suitability, language structure, and religion. Variation in preferences is also correlated with economic outcomes and behaviors. Within countries and subnational regions, preferences are linked to individual savings decisions, labor market choices, and prosocial behaviors. Across countries, preferences vary with aggregate outcomes ranging from per capita income, to entrepreneurial activities, to the frequency of armed conflicts.
Racial Bias in Bail Decisions Q. J. Econ. (IF 7.863) Pub Date : 2018-05-30 David Arnold, Will Dobbie, Crystal S Yang
This paper develops a new test for identifying racial bias in the context of bail decisions—a high-stakes setting with large disparities between white and black defendants. We motivate our analysis using Becker’s model of racial bias, which predicts that rates of pretrial misconduct will be identical for marginal white and marginal black defendants if bail judges are racially unbiased. In contrast, marginal white defendants will have higher rates of misconduct than marginal black defendants if bail judges are racially biased, whether that bias is driven by racial animus, inaccurate racial stereotypes, or any other form of bias. To test the model, we use the release tendencies of quasi-randomly assigned bail judges to identify the relevant race-specific misconduct rates. Estimates from Miami and Philadelphia show that bail judges are racially biased against black defendants, with substantially more racial bias among both inexperienced and part-time judges. We find suggestive evidence that this racial bias is driven by bail judges relying on inaccurate stereotypes that exaggerate the relative danger of releasing black defendants.
Political Advertising and Election Results Q. J. Econ. (IF 7.863) Pub Date : 2018-05-05 Jörg L Spenkuch, David Toniatti
We study the persuasive effects of political advertising. Our empirical strategy exploits FCC regulations that result in plausibly exogenous variation in the number of impressions across the borders of neighboring counties. Applying this approach to detailed data on television advertisement broadcasts and viewership patterns during the 2004–12 presidential campaigns, our results indicate that total political advertising has almost no impact on aggregate turnout. By contrast, we find a positive and economically meaningful effect of advertising on candidates’ vote shares. Taken at face value, our estimates imply that a standard deviation increase in the partisan difference in advertising raises the partisan difference in vote shares by about 0.5 percentage points. Evidence from a regression discontinuity design suggests that advertising affects election results by altering the partisan composition of the electorate.
Distributional National Accounts: Methods and Estimates for the United States Q. J. Econ. (IF 7.863) Pub Date : 2017-10-10 Thomas Piketty, Emmanuel Saez, Gabriel Zucman
This article combines tax, survey, and national accounts data to estimate the distribution of national income in the United States since 1913. Our distributional national accounts capture 100% of national income, allowing us to compute growth rates for each quantile of the income distribution consistent with macroeconomic growth. We estimate the distribution of both pretax and posttax income, making it possible to provide a comprehensive view of how government redistribution affects inequality. Average pretax real national income per adult has increased 60% from 1980 to 2014, but we find that it has stagnated for the bottom 50% of the distribution at about $16,000 a year. The pretax income of the middle class—adults between the median and the 90th percentile—has grown 40% since 1980, faster than what tax and survey data suggest, due in particular to the rise of tax-exempt fringe benefits. Income has boomed at the top. The upsurge of top incomes was first a labor income phenomenon but has mostly been a capital income phenomenon since 2000. The government has offset only a small fraction of the increase in inequality. The reduction of the gender gap in earnings has mitigated the increase in inequality among adults, but the share of women falls steeply as one moves up the labor income distribution, and is only 11% in the top 0.1% in 2014.
The Morale Effects of Pay Inequality Q. J. Econ. (IF 7.863) Pub Date : 2017-10-10 Emily Breza, Supreet Kaur, Yogita Shamdasani
Relative-pay concerns have potentially broad labor market implications. In a month-long experiment with Indian manufacturing workers, we randomize whether coworkers within production units receive the same flat daily wage or differential wages according to their (baseline) productivity ranks. When coworkers’ productivity is difficult to observe, pay inequality reduces output by 0.45 standard deviations and attendance by 18 percentage points. It also lowers coworkers’ ability to cooperate in their own self-interest. However, when workers can clearly perceive that their higher-paid peers are more productive than themselves, pay disparity has no discernible effect on output, attendance, or group cohesion. These findings help inform our understanding of when pay compression is more likely to arise in the labor market
Human Capital and Development Accounting: New Evidence from Wage Gains at Migration Q. J. Econ. (IF 7.863) Pub Date : 2017-12-06 Lutz Hendricks, Todd Schoellman
We use new data on the pre- and postmigration wages of immigrants to the United States to measure wage gains at migration. The average immigrant from a middle-income or poor country increases their wage by a factor of two to three upon migration. This wage gain is small relative to the underlying gap in GDP per worker. In a development accounting framework, this finding implies that switching countries accounts for 40% of cross-country income differences, while human capital accounts for 60%. Wage gains decline with education, consistent with imperfect substitution between skill types. We augment our analysis to allow for this possibility and bound the human capital share in development accounting to between one-half and two-thirds. We also provide results on the importance of premigration sector of employment, assimilation, and skill transfer.
Nation Building Through Foreign Intervention: Evidence from Discontinuities in Military Strategies Q. J. Econ. (IF 7.863) Pub Date : 2017-09-11 Melissa Dell, Pablo Querubin
This study uses discontinuities in U.S. strategies employed during the Vietnam War to estimate their causal impacts. It identifies the effects of bombing by exploiting rounding thresholds in an algorithm used to target air strikes. Bombing increased the military and political activities of the communist insurgency, weakened local governance, and reduced noncommunist civic engagement. The study also exploits a spatial discontinuity across neighboring military regions that pursued different counterinsurgency strategies. A strategy emphasizing overwhelming firepower plausibly increased insurgent attacks and worsened attitudes toward the U.S. and South Vietnamese government, relative to a more hearts-and-minds-oriented approach.
Discretion in Hiring Q. J. Econ. (IF 7.863) Pub Date : 2017-10-10 Mitchell Hoffman, Lisa B Kahn, Danielle Li
Job-testing technologies enable firms to rely less on human judgment when making hiring decisions. Placing more weight on test scores may improve hiring decisions by reducing the influence of human bias or mistakes but may also lead firms to forgo the potentially valuable private information of their managers. We study the introduction of job testing across 15 firms employing low-skilled service sector workers. When faced with similar applicant pools, we find that managers who appear to hire against test recommendations end up with worse average hires. This suggests that managers often overrule test recommendations because they are biased or mistaken, not only because they have superior private information.
Transparency and Deliberation Within the FOMC: A Computational Linguistics Approach Q. J. Econ. (IF 7.863) Pub Date : 2017-10-31 Stephen Hansen, Michael McMahon, Andrea Prat
How does transparency, a key feature of central bank design, affect monetary policy makers’ deliberations? Theory predicts a positive discipline effect and negative conformity effect. We empirically explore these effects using a natural experiment in the Federal Open Market Committee in 1993 and computational linguistics algorithms. We first find large changes in communication patterns after transparency. We then propose a difference-in-differences approach inspired by the career concerns literature, and find evidence for both effects. Finally, we construct an influence measure that suggests the discipline effect dominates.
Recommender Systems as Mechanisms for Social Learning Q. J. Econ. (IF 7.863) Pub Date : 2017-12-20 Yeon-Koo Che, Johannes Hörner
This article studies how a recommender system may incentivize users to learn about a product collaboratively. To improve the incentives for early exploration, the optimal design trades off fully transparent disclosure by selectively overrecommending the product (or “spamming”) to a fraction of users. Under the optimal scheme, the designer spams very little on a product immediately after its release but gradually increases its frequency; she stops it altogether when she becomes sufficiently pessimistic about the product. The recommender’s product research and intrinsic/naive users “seed” incentives for user exploration and determine the speed and trajectory of social learning. Potential applications for various Internet recommendation platforms and implications for review/ratings inflation are discussed.
Frontier Knowledge and Scientific Production: Evidence from the Collapse of International Science Q. J. Econ. (IF 7.863) Pub Date : 2018-01-15 Alessandro Iaria, Carlo Schwarz, Fabian Waldinger
We show that World War I and the subsequent boycott against Central scientists severely interrupted international scientific cooperation. After 1914, citations to recent research from abroad decreased and paper titles became less similar (evaluated by latent semantic analysis), suggesting a reduction in international knowledge flows. Reduced international scientific cooperation led to a decline in the production of basic science and its application in new technology. Specifically, we compare productivity changes for scientists who relied on frontier research from abroad, to changes for scientists who relied on frontier research from home. After 1914, scientists who relied on frontier research from abroad published fewer papers in top scientific journals, produced less Nobel Prize–nominated research, introduced fewer novel scientific words, and introduced fewer novel words that appeared in the text of subsequent patent grants. The productivity of scientists who relied on top 1% research declined twice as much as the productivity of scientists who relied on top 3% research. Furthermore, highly prolific scientists experienced the starkest absolute productivity declines. This suggests that access to the very best research is key for scientific and technological progress.
Double for Nothing? Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia Q. J. Econ. (IF 7.863) Pub Date : 2017-11-13 Joppe de Ree, Karthik Muralidharan, Menno Pradhan, Halsey Rogers
How does a large unconditional increase in salary affect the performance of incumbent employees in the public sector? We present experimental evidence on this question in the context of a policy change in Indonesia that led to a permanent doubling of teacher base salaries. Using a large-scale randomized experiment across a representative sample of Indonesian schools that accelerated this pay increase for teachers in treated schools, we find that the large pay increase significantly improved teachers' satisfaction with their income, reduced the incidence of teachers holding outside jobs, and reduced self-reported financial stress. Nevertheless, after two and three years, the increase in pay led to no improvement in student learning outcomes. The effects are precisely estimated, and we can rule out even modest positive impacts on test scores. Our results suggest that unconditional pay increases are unlikely to be an effective policy option for improving the effort and productivity of incumbent employees in public-sector settings.
Social Mobility and Stability of Democracy: Reevaluating De Tocqueville Q. J. Econ. (IF 7.863) Pub Date : 2017-11-06 Daron Acemoglu, Georgy Egorov, Konstantin Sonin
An influential thesis often associated with de Tocqueville views social mobility as a bulwark of democracy: when members of a social group expect to join the ranks of other social groups in the near future, they should have less reason to exclude these other groups from the political process. In this article, we investigate this hypothesis using a dynamic model of political economy. As well as formalizing this argument, our model demonstrates its limits, elucidating a robust theoretical force making democracy less stable in societies with high social mobility: when the median voter expects to move up (respectively down), she would prefer to give less voice to poorer (respectively richer) social groups. Our theoretical analysis shows that in the presence of social mobility, the political preferences of an individual depend on the potentially conflicting preferences of her “future selves,” and that the evolution of institutions is determined through the implicit interaction between occupants of the same social niche at different points in time.
Clans, Guilds, and Markets: Apprenticeship Institutions and Growth in the Preindustrial Economy Q. J. Econ. (IF 7.863) Pub Date : 2017-07-10 David de la Croix, Matthias Doepke, Joel Mokyr
In the centuries leading up to the Industrial Revolution, Western Europe gradually pulled ahead of other world regions in terms of technological creativity, population growth, and income per capita. We argue that superior institutions for the creation and dissemination of productive knowledge help explain the European advantage. We build a model of technological progress in a preindustrial economy that emphasizes the person-to-person transmission of tacit knowledge. The young learn as apprentices from the old. Institutions such as the family, the clan, the guild, and the market organize who learns from whom. We argue that medieval European institutions such as guilds, and specific features such as journeymanship, can explain the rise of Europe relative to regions that relied on the transmission of knowledge within closed kinship systems (extended families or clans). JEL Codes: E02, J24, N10, N30, O33, O43.
Excess Volatility: Beyond Discount Rates Q. J. Econ. (IF 7.863) Pub Date : 2017-08-26 Stefano Giglio, Bryan Kelly
We document a form of excess volatility that is difficult to reconcile with standard models of prices, even after accounting for variation in discount rates. We compare prices of claims on the same cash flow stream but with different maturities. Standard models impose precise internal consistency conditions on the joint behavior of long- and short-maturity claims and these are strongly rejected in the data. In particular, long-maturity prices are significantly more variable than justified by the behavior at short maturities. We reject internal consistency conditions in all term structures that we study, including equity options, currency options, credit default swaps, commodity futures, variance swaps, and inflation swaps. JEL Codes: G12, G40.
Do Banks Pass through Credit Expansions to Consumers Who want to Borrow? Q. J. Econ. (IF 7.863) Pub Date : 2017-07-10 Sumit Agarwal, Souphala Chomsisengphet, Neale Mahoney, Johannes Stroebel
We propose a new approach to studying the pass-through of credit expansion policies that focuses on frictions, such as asymmetric information, that arise in the interaction between banks and borrowers. We decompose the effect of changes in banks’ cost of funds on aggregate borrowing into the product of banks’ marginal propensity to lend (MPL) to borrowers and those borrowers’ marginal propensity to borrow (MPB), aggregated over all borrowers in the economy. We apply our framework by estimating heterogeneous MPBs and MPLs in the U.S. credit card market. Using panel data on 8.5 million credit cards and 743 credit limit regression discontinuities, we find that the MPB is declining in credit score, falling from 59% for consumers with FICO scores below 660 to essentially zero for consumers with FICO scores above 740. We use a simple model of optimal credit limits to show that a bank’s MPL depends on a small number of parameters that can be estimated using our credit limit discontinuities. For the lowest FICO score consumers, higher credit limits sharply reduce profits from lending, limiting banks’ optimal MPL to these consumers. The negative correlation between MPB and MPL reduces the impact of changes in banks’ cost of funds on aggregate household borrowing, and highlights the importance of frictions in bank-borrower interactions for understanding the pass-through of credit expansions. JEL Codes: D14, E51, G21.
Ban the Box, Criminal Records, and Racial Discrimination: A Field Experiment Q. J. Econ. (IF 7.863) Pub Date : 2017-08-02 Amanda Agan, Sonja Starr
“Ban the Box” (BTB) policies restrict employers from asking about applicants’ criminal histories on job applications and are often presented as a means of reducing unemployment among black men, who disproportionately have criminal records. However, withholding information about criminal records could risk encouraging racial discrimination: employers may make assumptions about criminality based on the applicant's race. To investigate BTB’s effects, we sent approximately 15,000 online job applications on behalf of fictitious young, male applicants to employers in New Jersey and New York City before and after the adoption of BTB policies. These applications varied whether the applicant had a distinctly black or distinctly white name and the felony conviction status of the applicant. We confirm that criminal records are a major barrier to employment: employers that asked about criminal records were 63% more likely to call applicants with no record. However, our results support the concern that BTB policies encourage racial discrimination: the black-white gap in callbacks grew dramatically at companies that removed the box after the policy went into effect. Before BTB, white applicants to employers with the box received 7% more callbacks than similar black applicants, but BTB increased this gap to 43%. We believe that the best interpretation of these results is that employers are relying on exaggerated impressions of real-world racial differences in felony conviction rates. JEL Codes: J15, J78, K31, K42.
Human Decisions and Machine Predictions Q. J. Econ. (IF 7.863) Pub Date : 2017-08-26 Jon Kleinberg, Himabindu Lakkaraju, Jure Leskovec, Jens Ludwig, Sendhil Mullainathan
Can machine learning improve human decision making? Bail decisions provide a good test case. Millions of times each year, judges make jail-or-release decisions that hinge on a prediction of what a defendant would do if released. The concreteness of the prediction task combined with the volume of data available makes this a promising machine-learning application. Yet comparing the algorithm to judges proves complicated. First, the available data are generated by prior judge decisions. We only observe crime outcomes for released defendants, not for those judges detained. This makes it hard to evaluate counterfactual decision rules based on algorithmic predictions. Second, judges may have a broader set of preferences than the variable the algorithm predicts; for instance, judges may care specifically about violent crimes or about racial inequities. We deal with these problems using different econometric strategies, such as quasi-random assignment of cases to judges. Even accounting for these concerns, our results suggest potentially large welfare gains: one policy simulation shows crime reductions up to 24.7% with no change in jailing rates, or jailing rate reductions up to 41.9% with no increase in crime rates. Moreover, all categories of crime, including violent crimes, show reductions; these gains can be achieved while simultaneously reducing racial disparities. These results suggest that while machine learning can be valuable, realizing this value requires integrating these tools into an economic framework: being clear about the link between predictions and decisions; specifying the scope of payoff functions; and constructing unbiased decision counterfactuals. JEL Codes: C10, C55, K40.
A Model of the International Monetary System Q. J. Econ. (IF 7.863) Pub Date : 2017-08-21 Emmanuel Farhi, Matteo Maggiori
We propose a simple model of the international monetary system. We study the world supply and demand for reserve assets denominated in different currencies under a variety of scenarios: a hegemon versus a multipolar world; abundant versus scarce reserve assets; and a gold exchange standard versus a floating rate system. We rationalize the Triffin dilemma, which posits the fundamental instability of the system, as well as the common prediction regarding the natural and beneficial emergence of a multipolar world, the Nurkse warning that a multipolar world is more unstable than a hegemon world, and the Keynesian argument that a scarcity of reserve assets under a gold standard or at the zero lower bound is recessionary. Our analysis is both positive and normative. JEL Codes: D42, E12, E42, E44, F3, F55, G15, G28.
The Global Distribution of Economic Activity: Nature, History, and the Role of Trade Q. J. Econ. (IF 7.863) Pub Date : 2017-09-11 J Vernon Henderson, Tim Squires, Adam Storeygard, David Weil
We explore the role of natural characteristics in determining the worldwide spatial distribution of economic activity, as proxied by lights at night, observed across 240,000 grid cells. A parsimonious set of 24 physical geography attributes explains 47% of worldwide variation and 35% of within-country variation in lights. We divide geographic characteristics into two groups, those primarily important for agriculture and those primarily important for trade, and confront a puzzle. In examining within-country variation in lights, among countries that developed early, agricultural variables incrementally explain over 6 times as much variation in lights as do trade variables, while among late developing countries the ratio is only about 1.5, even though the latter group is far more dependent on agriculture. Correspondingly, the marginal effects of agricultural variables as a group on lights are larger in absolute value, and those for trade smaller, for early developers than for late developers. We show that this apparent puzzle is explained by persistence and the differential timing of technological shocks in the two sets of countries. For early developers, structural transformation due to rising agricultural productivity began when transport costs were still high, so cities were localized in agricultural regions. When transport costs fell, these agglomerations persisted. In late-developing countries, transport costs fell before structural transformation. To exploit urban scale economies, manufacturing agglomerated in relatively few, often coastal, locations. Consistent with this explanation, countries that developed earlier are more spatially equal in their distribution of education and economic activity than late developers. JEL Codes: O13, O18, R12.
Tuskegee and the Health of Black Men Q. J. Econ. (IF 7.863) Pub Date : 2017-08-02 Marcella Alsan, Marianne Wanamaker
For 40 years, the Tuskegee Study of Untreated Syphilis in the Negro Male passively monitored hundreds of adult black men with syphilis despite the availability of effective treatment. The study’s methods have become synonymous with exploitation and mistreatment by the medical profession. To identify the study’s effects on the behavior and health of older black men, we use an interacted difference-in-difference-in-differences model, comparing older black men to other demographic groups, before and after the Tuskegee revelation, in varying proximity to the study’s victims. We find that the disclosure of the study in 1972 is correlated with increases in medical mistrust and mortality and decreases in both outpatient and inpatient physician interactions for older black men. Our estimates imply life expectancy at age 45 for black men fell by up to 1.5 years in response to the disclosure, accounting for approximately 35% of the 1980 life expectancy gap between black and white men and 25% of the gap between black men and women. JEL Codes: I14, O15.
Preference for the Workplace, Investment in Human Capital, and Gender Q. J. Econ. (IF 7.863) Pub Date : 2017-08-26 Matthew Wiswall, Basit Zafar
We use a hypothetical choice methodology to estimate preferences for workplace attributes from a sample of high-ability undergraduates attending a highly selective university. We estimate that women on average have a higher willingness to pay (WTP) for jobs with greater work flexibility and job stability, and men have a higher WTP for jobs with higher earnings growth. These job preferences relate to college major choices and to actual job choices reported in a follow-up survey four years after graduation. The gender differences in preferences explain at least a quarter of the early career gender wage gap. JEL Codes: J24, J16.
Cooperation in the Finitely Repeated Prisoner’s Dilemma Q. J. Econ. (IF 7.863) Pub Date : 2017-08-26 Matthew Embrey, Guillaume R Fréchette, Sevgi Yuksel
More than half a century after the first experiment on the finitely repeated prisoner’s dilemma, evidence on whether cooperation decreases with experience—as suggested by backward induction—remains inconclusive. This article provides a meta-analysis of prior experimental research and reports the results of a new experiment to elucidate how cooperation varies with the environment in this canonical game. We describe forces that affect initial play (formation of cooperation) and unraveling (breakdown of cooperation). First, contrary to the backward induction prediction, the parameters of the repeated game have a significant effect on initial cooperation. We identify how these parameters impact the value of cooperation—as captured by the size of the basin of attraction of always defect—to account for an important part of this effect. Second, despite these initial differences, the evolution of behavior is consistent with the unraveling logic of backward induction for all parameter combinations. Importantly, despite the seemingly contradictory results across studies, this article establishes a systematic pattern of behavior: subjects converge to use threshold strategies that conditionally cooperate until a threshold round; conditional on establishing cooperation, the first defection round moves earlier with experience. Simulation results generated from a learning model estimated at the subject level provide insights into the long-term dynamics and the forces that slow down the unraveling of cooperation. JEL Codes: C72, C73, C92.
Measuring the Sensitivity of Parameter Estimates to Estimation Moments Q. J. Econ. (IF 7.863) Pub Date : 2017-06-06 Isaiah Andrews, Matthew Gentzkow, Jesse M. Shapiro
We propose a local measure of the relationship between parameter estimates and the moments of the data they depend on. Our measure can be computed at negligible cost even for complex structural models. We argue that reporting this measure can increase the transparency of structural estimates, making it easier for readers to predict the way violations of identifying assumptions would affect the results. When the key assumptions are orthogonality between error terms and excluded instruments, we show that our measure provides a natural extension of the omitted variables bias formula for nonlinear models. We illustrate with applications to published articles in several fields of economics. JEL Codes: C10, C52.
The Growing Importance of Social Skills in the Labor Market* Q. J. Econ. (IF 7.863) Pub Date : 2017-06-06 David J. Deming
The labor market increasingly rewards social skills. Between 1980 and 2012, jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the U.S. labor force. Math-intensive but less social jobs—including many STEM occupations—shrank by 3.3 percentage points over the same period. Employment and wage growth were particularly strong for jobs requiring high levels of both math skill and social skills. To understand these patterns, I develop a model of team production where workers “trade tasks” to exploit their comparative advantage. In the model, social skills reduce coordination costs, allowing workers to specialize and work together more efficiently. The model generates predictions about sorting and the relative returns to skill across occupations, which I investigate using data from the NLSY79 and the NLSY97. Using a comparable set of skill measures and covariates across survey waves, I find that the labor market return to social skills was much greater in the 2000s than in the mid-1980s and 1990s. JEL Codes: I20, I24, J01, J23, J24, J31.
Uncertainty Traps Q. J. Econ. (IF 7.863) Pub Date : 2017-05-29 Pablo D. Fajgelbaum, Edouard Schaal, Mathieu Taschereau-Dumouchel
We develop a theory of endogenous uncertainty and business cycles in which short-lived shocks can generate long-lasting recessions. In the model, higher uncertainty about fundamentals discourages investment. Since agents learn from the actions of others, information flows slowly in times of low activity and uncertainty remains high, further discouraging investment. The economy displays uncertainty traps: self-reinforcing episodes of high uncertainty and low activity. Although the economy recovers quickly after small shocks, large temporary shocks may have long-lasting effects on the level of activity. The economy is subject to an information externality but uncertainty traps may remain in the efficient allocation. Embedding the mechanism in a standard business cycle framework, we find that endogenous uncertainty increases the persistence of large recessions and improves the performance of the model in accounting for the Great Recession. JEL Codes: E32, D80.
Optimal Tax Progressivity: An Analytical Framework Q. J. Econ. (IF 7.863) Pub Date : 2017-06-23 Jonathan Heathcote, Kjetil Storesletten, Giovanni L. Violante
What shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax system can counteract inequality in initial conditions and substitute for imperfect private insurance against idiosyncratic earnings risk. On the other hand, progressivity reduces incentives to work and to invest in skills, distortions that are especially costly when the government must finance public goods. We develop a tractable equilibrium model that features all of these trade-offs. The analytical expressions we derive for social welfare deliver a transparent understanding of how preference, technology, and market structure parameters influence the optimal degree of progressivity. A calibration for the U.S. economy indicates that endogenous skill investment, flexible labor supply, and the desire to finance government purchases play quantitatively similar roles in limiting optimal progressivity. In a version of the model where poverty constrains skill investment, optimal progressivity is close to the U.S. value. An empirical analysis on cross-country data offers support to the theory. JEL Codes: D30, E20, H20, H40, J22, J24.
Household Debt and Business Cycles Worldwide Q. J. Econ. (IF 7.863) Pub Date : 2017-05-26 Atif Mian, Amir Sufi, Emil Verner
An increase in the household debt to GDP ratio predicts lower GDP growth and higher unemployment in the medium run for an unbalanced panel of 30 countries from 1960 to 2012. Low mortgage spreads are associated with an increase in the household debt to GDP ratio and a decline in subsequent GDP growth, highlighting the importance of credit supply shocks. Economic forecasters systematically over-predict GDP growth at the end of household debt booms, suggesting an important role of flawed expectations formation. The negative relation between the change in household debt to GDP and subsequent output growth is stronger for countries with less flexible exchange rate regimes. We also uncover a global household debt cycle that partly predicts the severity of the global growth slowdown after 2007. Countries with a household debt cycle more correlated with the global household debt cycle experience a sharper decline in growth after an increase in domestic household debt. JEL Codes: D14, E21, E32, E44, E51, G01.
The Deposits Channel of Monetary Policy Q. J. Econ. (IF 7.863) Pub Date : 2017-05-29 Itamar Drechsler, Alexi Savov, Philipp Schnabl
We present a new channel for the transmission of monetary policy, the deposits channel. We show that when the Fed funds rate rises, banks widen the spreads they charge on deposits, and deposits flow out of the banking system. We present a model where this is due to market power in deposit markets. Consistent with the market power mechanism, deposit spreads increase more and deposits flow out more in concentrated markets. This is true even when we control for lending opportunities by only comparing different branches of the same bank. Since deposits are the main source of liquid assets for households, the deposits channel can explain the observed strong relationship between the liquidity premium and the Fed funds rate. Since deposits are also a uniquely stable funding source for banks, the deposits channel impacts bank lending. When the Fed funds rate rises, banks that raise deposits in concentrated markets contract their lending by more than other banks. Our estimates imply that the deposits channel can account for the entire transmission of monetary policy through bank balance sheets. JEL Codes: E52, E58, G12, G21.
Who Becomes A Politician?* Q. J. Econ. (IF 7.863) Pub Date : 2017-06-01 Ernesto Dal Bó, Frederico Finan, Olle Folke, Torsten Persson, Johanna Rickne
Can a democracy attract competent leaders, while attaining broad representation? Economic models suggest that free-riding incentives and lower opportunity costs give the less competent a comparative advantage at entering political life. Moreover, if elites have more human capital, selecting on competence may lead to uneven representation. This article examines patterns of political selection among the universe of municipal politicians and national legislators in Sweden, using extraordinarily rich data on competence traits and social background for the entire population. We document four new facts that together characterize an “inclusive meritocracy.” First, politicians are on average significantly smarter and better leaders than the population they represent. Second, this positive selection is present even when conditioning on family (and hence social) background, suggesting that individual competence is key for selection. Third, the representation of social background, whether measured by parental earnings or occupational social class, is remarkably even. Fourth, there is at best a weak trade-off in selection between competence and social representation, mainly due to strong positive selection of politicians of low (parental) socioeconomic status. A broad implication of these facts is that it is possible for democracy to generate competent and socially representative leadership. JEL Codes: H1, H70, J45, P16.
Capital Allocation and Productivity in South Europe Q. J. Econ. (IF 7.863) Pub Date : 2017-06-20 Gita Gopinath, Şebnem Kalemli-Özcan, Loukas Karabarbounis, Carolina Villegas-Sanchez
Starting in the early 1990s, countries in southern Europe experienced low productivity growth alongside declining real interest rates. We use data for manufacturing firms in Spain between 1999 and 2012 to document a significant increase in the dispersion of the return to capital across firms, a stable dispersion of the return to labor, and a significant increase in productivity losses from capital misallocation over time. We develop a model with size-dependent financial frictions that is consistent with important aspects of firms’ behavior in production and balance sheet data. We illustrate how the decline in the real interest rate, often attributed to the euro convergence process, leads to a significant decline in sectoral total factor productivity as capital inflows are misallocated toward firms that have higher net worth but are not necessarily more productive. We show that similar trends in dispersion and productivity losses are observed in Italy and Portugal but not in Germany, France, and Norway. JEL Codes: D24, E22, F41, O16, O47.
Reference-Dependent Job Search: Evidence from Hungary Q. J. Econ. (IF 7.863) Pub Date : 2017-05-04 Stefano DellaVigna, Attila Lindner, Balázs Reizer, Johannes F. Schmieder
We propose a model of job search with reference-dependent preferences, with loss aversion relative to recent income (the reference point). In this model, newly unemployed individuals search hard since consumption is below their reference point. Over time, though, they get used to lower income and thus reduce their search effort. In anticipation of a benefit cut, their search effort rises again, then declines once they get accustomed to the lower postcut benefit level. The model fits the typical pattern of exit from unemployment, even with no unobserved heterogeneity. To distinguish between this and other models, we use a unique reform in the unemployment insurance (UI) benefit path. In 2005, Hungary switched from a single-step UI system to a two-step system, with overall generosity unchanged. The system generated increased hazard rates in anticipation of, and especially following, benefit cuts in ways the standard model has a hard time explaining. We estimate a model with optimal consumption, endogenous search effort, and unobserved heterogeneity. The reference-dependent model fits the hazard rates substantially better than plausible versions of the standard model, including habit formation. Our estimates indicate a slow-adjusting reference point and substantial impatience, likely reflecting present-bias. JEL Codes: D03, J64, J65.
The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network Q. J. Econ. (IF 7.863) Pub Date : 2017-05-29 Shaun Larcom, Ferdinand Rauch, Tim Willems
We present evidence that a significant fraction of commuters on the London Underground do not travel on their optimal route. We show that a strike on the Underground, which forced many commuters to experiment with new routes, brought lasting changes in behavior. This effect is stronger for commuters who live in areas where the Underground map is more distorted, which points to the importance of informational imperfections. Information resulting from the strike improved network efficiency. Search costs alone are unlikely to explain the suboptimal behavior. JEL Codes: D83, L91, R41.
Erratum to “The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya” Q. J. Econ. (IF 7.863) Pub Date : 2017-10-10 Johannes Haushofer, Jeremy Shapiro
Tables I and II in Haushofer and Shapiro (2016) erroneously calculated FWER-adjusted p-values using only 1,000 bootstrap iterations. The corrected tables report bootstrapped p-values with 10,000 iterations.
Erratum to “Leveraging Lotteries for School Value-Added: Testing and Estimation” Q. J. Econ. (IF 7.863) Pub Date : 2017-10-10 Joshua D. Angrist, Peter D. Hull, Parag A. Pathak, Christopher R. Walters
This document corrects an error in our article “Leveraging Lotteries for School Value-Added: Testing and Estimation,” published in the Quarterly Journal of Economics in February 2017. Due to a programming error, the standard errors for the variance components in Table VI of the published article are not correct. A corrected version of this table appears below. In view of these changes, two sentences on p. 906 should be revised as follows:
Some contents have been Reproduced by permission of The Royal Society of Chemistry.
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