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  • Industry Input in Policymaking: Evidence from Medicare*
    Q. J. Econ. (IF 7.863) Pub Date : 2019-01-23
    Chan D, Dickstein M.

    In setting prices for physician services, Medicare solicits input from a committee that evaluates proposals from industry. The committee itself comprises members from industry; we investigate whether this arrangement leads to regulatory capture with prices biased toward industry interests. We find that increasing a measure of affiliation between the committee and proposers by one standard deviation increases prices by 10%. We then evaluate whether employing a biased committee as an intermediary may nonetheless be desirable, if greater affiliation allows the committee to extract information needed for regulation. We find industry proposers more affiliated with the committee produce less hard evidence in their proposals. However, on soft information, we find evidence of a trade-off: Private insurers set prices that more closely track Medicare prices generated under higher affiliation.

    更新日期:2019-01-23
  • Protests as Strategic Games: Experimental Evidence from Hong Kong’s Antiauthoritarian Movement*
    Q. J. Econ. (IF 7.863) Pub Date : 2019-01-21
    Cantoni D, Yang D, Yuchtman N, et al.

    Social scientists have long viewed the decision to protest as strategic, with an individual’s participation a function of her beliefs about others’ turnout. We conduct a framed field experiment that recalibrates individuals’ beliefs about others’ protest participation, in the context of Hong Kong’s ongoing antiauthoritarian movement. We elicit subjects’ planned participation in an upcoming protest and their prior beliefs about others’ participation, in an incentivized manner. One day before the protest, we randomly provide a subset of subjects with truthful information about others’ protest plans, and elicit posterior beliefs about protest turnout, again in an incentivized manner. After the protest, we elicit subjects’ actual participation. This allows us to identify the causal effects of positively and negatively updated beliefs about others’ protest participation on subjects’ own turnout. In contrast with the assumptions of many recent models of protest participation, we consistently find evidence of strategic substitutability. We provide guidance regarding plausible sources of strategic substitutability that can be incorporated into theoretical models of protests.

    更新日期:2019-01-23
  • The More We Die, the More We Sell? A Simple Test of the Home-Market Effect*
    Q. J. Econ. (IF 7.863) Pub Date : 2019-01-21
    Costinot A, Donaldson D, Kyle M, et al.

    The home-market effect, first hypothesized by Linder (1961) and later formalized by Krugman (1980), is the idea that countries with larger demand for some products at home tend to have larger sales of the same products abroad. In this paper, we develop a simple test of the home-market effect using detailed drug sales data from the global pharmaceutical industry. The core of our empirical strategy is the observation that a country’s exogenous demographic composition can be used as a predictor of the diseases that its inhabitants are most likely to die from and, in turn, the drugs that they are most likely to demand. We find that the correlation between predicted home demand and sales abroad is positive and greater than the correlation between predicted home demand and purchases from abroad. In short, countries tend to be net sellers of the drugs that they demand the most, as predicted by Linder (1961) and Krugman (1980).

    更新日期:2019-01-23
  • Strategic Default in the International Coffee Market*
    Q. J. Econ. (IF 7.863) Pub Date : 2019-01-22
    Blouin A, Macchiavello R.

    This paper studies strategic default on forward sale contracts in the international coffee market. To test for strategic default, we construct contract-specific measures of unanticipated changes in market conditions by comparing spot prices at maturity with the relevant futures prices at the contracting date. Unanticipated rises in market prices increase defaults on fixed-price contracts but not on price-indexed ones. We isolate strategic default by focusing on unanticipated rises at the time of delivery after production decisions are sunk and suppliers have been paid. Estimates suggest that roughly half of the observed defaults are strategic. We model how strategic default introduces a trade-off between insurance and counterparty risk: relative to indexed contracts, fixed-price contracts insure against price swings but create incentives to default when market conditions change. A model calibration suggests that the possibility of strategic default causes 15.8% average losses in output, significant dispersion in the marginal product of capital, and sizeable negative externalities on supplying farmers.

    更新日期:2019-01-23
  • The Macro Effects of Unemployment Benefit Extensions: a Measurement Error Approach*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-08-20
    Chodorow-Reich G, Coglianese J, Karabarbounis L.

    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 point.

    更新日期:2019-01-11
  • The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-09-04
    Cooper Z, Craig S, Gaynor M, et al.

    We use insurance claims data covering 28% of individuals with employer-sponsored health insurance in the United States to study the variation in health spending on the privately insured, examine the structure of insurer-hospital contracts, and analyze the variation in hospital prices across the nation. Health spending per privately insured beneficiary differs by a factor of three across geographic areas and has a very low correlation with Medicare spending. For the privately insured, half of the spending variation is driven by price variation across regions, and half is driven by quantity variation. Prices vary substantially across regions, across hospitals within regions, and even within hospitals. For example, even for a nearly homogeneous service such as lower-limb magnetic resonance imaging, about a fifth of the total case-level price variation occurs within a hospital in the cross section. Hospital market structure is strongly associated with price levels and contract structure. Prices at monopoly hospitals are 12% higher than those in markets with four or more rivals. Monopoly hospitals also have contracts that load more risk on insurers (e.g., they have more cases with prices set as a share of their charges). In concentrated insurer markets the opposite occurs—hospitals have lower prices and bear more financial risk. Examining the 366 mergers and acquisitions that occurred between 2007 and 2011, we find that prices increased by over 6% when the merging hospitals were geographically close (e.g., 5 miles or less apart), but not when the hospitals were geographically distant (e.g., over 25 miles apart).

    更新日期:2019-01-11
  • Regional Heterogeneity and the Refinancing Channel of Monetary Policy*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-09-03
    Beraja M, Fuster A, Hurst E, et al.

    We argue that the time-varying regional distribution of housing equity influences the aggregate consequences of monetary policy through its effects on mortgage refinancing. Using detailed loan-level data, we show that regional differences in housing equity affect refinancing and spending responses to interest rate cuts, but these effects vary over time with changes in the regional distribution of house price growth. We build a heterogeneous household model of refinancing with mortgage borrowers and lenders and use it to explore the monetary policy implications arising from our regional evidence. We find that the 2008 equity distribution made spending in depressed regions less responsive to interest rate cuts, thus dampening aggregate stimulus and increasing regional consumption inequality, whereas the opposite occurred in some earlier recessions. Taken together, our results strongly suggest that monetary policy makers should track the regional distribution of equity over time.

    更新日期:2019-01-11
  • Consequences of the Clean Water Act and the Demand for Water Quality*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-09-07
    Keiser D, Shapiro J.

    Since the 1972 U.S. Clean Water Act, government and industry have invested over ${\$}$1 trillion to abate water pollution, or ${\$}$100 per person-year. Over half of U.S. stream and river miles, however, still violate pollution standards. We use the most comprehensive set of files ever compiled on water pollution and its determinants, including 50 million pollution readings from 240,000 monitoring sites and a network model of all U.S. rivers, to study water pollution’s trends, causes, and welfare consequences. We have three main findings. First, water pollution concentrations have fallen substantially. Between 1972 and 2001, for example, the share of waters safe for fishing grew by 12 percentage points. Second, the Clean Water Act’s grants to municipal wastewater treatment plants, which account for ${\$}$650 billion in expenditure, caused some of these declines. Through these grants, it cost around ${\$}$1.5 million (2014 dollars) to make one river-mile fishable for a year. We find little displacement of municipal expenditure due to a federal grant. Third, the grants’ estimated effects on housing values are smaller than the grants’ costs; we carefully discuss welfare implications.

    更新日期:2019-01-11
  • From Hyperinflation to Stable Prices: Argentina’s Evidence on Menu Cost Models*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-09-24
    Alvarez F, Beraja M, Gonzalez-Rozada M, et al.

    In this article, we analyze how inflation affects firms’ price-setting behavior. For a class of menu cost models, we derive several predictions about how price-setting changes with inflation at very high and at near-zero inflation rates. Then, we present evidence supporting these predictions using product-level data underlying Argentina’s consumer price index from 1988 to 1997—a unique experience where monthly inflation ranged from almost 200% to less than zero. For low inflation rates, we find that (i) the frequency and absolute size of price changes as well as the dispersion of relative prices do not change with inflation, (ii) the frequency and size of price increases and decreases are symmetric around zero inflation, and (iii) aggregate inflation changes are mostly driven by changes in the frequency of price increases and decreases, as opposed to the size of price changes. For high inflation rates, we find that (iv) the elasticity of the frequency of price changes with respect to inflation is close to two-thirds, (v) the frequency of price changes across different products becomes similar, and (vi) the elasticity of the dispersion of relative prices with respect to inflation is one-third. Our findings confirm and extend available evidence for countries that experienced either very high or near-zero inflation. We conclude by showing that a hyperinflation of 500% a year is associated with a cost of approximately 8.5% of aggregate output a year as a result of inefficient price dispersion alone.

    更新日期:2019-01-11
  • Moral Hazard: Experimental Evidence from Tenancy Contracts*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-09-24
    Burchardi K, Gulesci S, Lerva B, et al.

    Agricultural productivity is particularly low in developing countries. Output-sharing rules that make farmers less-than-full residual claimants are seen as a potentially important driver of low agricultural productivity. We report results from a field experiment designed to estimate and understand the effects of sharecropping contracts on agricultural input choices, risk-taking, and output. The experiment induced variation in the terms of sharecropping contracts. After agreeing to pay 50% of their output to the landlord, tenants were randomized into three groups: (i) some kept 50% of their output; (ii) others kept 75%; (iii) others kept 50% of output and received a lump-sum payment at the end of their contract, either fixed or stochastic. We find that tenants with higher output shares used more inputs, cultivated riskier crops, and produced 60% more output relative to control. Income or risk exposure have at most a small effect on farm output; the increase in output should be interpreted as an incentive effect of the output-sharing rule.

    更新日期:2019-01-11
  • The Mission: Human Capital Transmission, Economic Persistence, and Culture in South America*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-10-08
    Valencia Caicedo F.

    This article examines the long-term consequences of a historical human capital intervention. The Jesuit order founded religious missions in 1609 among the Guaraní, in modern-day Argentina, Brazil, and Paraguay. Before their expulsion in 1767, missionaries instructed indigenous inhabitants in reading, writing, and various crafts. Using archival records, as well as data at the individual and municipal level, I show that in areas of former Jesuit presence—within the Guaraní area—educational attainment was higher and remains so (by 10%–15%) 250 years later. These educational differences have also translated into incomes that are 10% higher today. The identification of the positive effect of the Guaraní Jesuit missions emerges after comparing them with abandoned Jesuit missions and neighboring Franciscan Guaraní missions. The enduring effects observed are consistent with transmission mechanisms of structural transformation, occupational specialization, and technology adoption in agriculture.

    更新日期:2019-01-11
  • Busting the “Princelings”: The Campaign Against Corruption in China’s Primary Land Market*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-10-22
    Chen T, Kung J.

    Using data on over a million land transactions during 2004–2016 where local governments are the sole seller, we find that firms linked to members of China's supreme political elites—the Politburo—obtained a price discount ranging from 55.4% to 59.9% compared with those without the same connections. These firms also purchased slightly more land. In return, the provincial party secretaries who provided the discount to these “princeling” firms are 23.4% more likely to be promoted to positions of national leadership. To curb corruption, President Xi Jinping stepped up investigations and strengthened personnel control at the province level. Using a spatially matched sample (e.g., within a 500-meter radius), we find a reduction in corruption of between 42.6% and 31.5% in the provinces either targeted by the central inspection teams or whose party secretary was replaced by one appointed by Xi. Accordingly, this crackdown on corruption has also significantly reduced the promotional prospects of those local officials who rely on supplying a discount to get ahead.

    更新日期:2019-01-11
  • Forward and Spot Exchange Rates in a Multi-Currency World*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-10-25
    Hassan T, Mano R.

    Separate literatures study violations of uncovered interest parity (UIP) using regression-based and portfolio-based methods. We propose a decomposition of these violations into a cross-currency, a between-time-and-currency, and a cross-time component that allows us to analytically relate regression-based and portfolio-based facts and to estimate the joint restrictions they put on models of currency returns. Subject to standard assumptions on investors’ information sets, we find that the forward premium puzzle (FPP) and the “dollar trade” anomaly are intimately linked: both are driven almost exclusively by the cross-time component. By contrast, the “carry trade” anomaly is driven largely by cross-sectional violations of UIP. The simplest model that the data do not reject features a cross-sectional asymmetry that makes some currencies pay permanently higher expected returns than others, and larger time series variation in expected returns on the U.S. dollar than on other currencies. Importantly, conventional estimates of the FPP are not directly informative about expected returns because they do not correct for uncertainty about future mean interest rates. Once we correct for this uncertainty, we never reject the null that investors expect high-interest-rate currencies to depreciate, not appreciate.

    更新日期:2019-01-11
  • Firming Up Inequality*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-10-25
    Song J, Price D, Guvenen F, et al.

    We use a massive, matched employer-employee database for the United States to analyze the contribution of firms to the rise in earnings inequality from 1978 to 2013. We find that one-third of the rise in the variance of (log) earnings occurred within firms, whereas two-thirds of the rise occurred due to a rise in the dispersion of average earnings between firms. However, this rising between-firm variance is not accounted for by the firms themselves but by a widening gap between firms in the composition of their workers. This compositional change can be split into two roughly equal parts: high-wage workers became increasingly likely to work in high-wage firms (i.e., sorting increased), and high-wage workers became increasingly likely to work with each other (i.e., segregation rose). In contrast, we do not find a rise in the variance of firm-specific pay once we control for the worker composition in firms. Finally, we find that two-thirds of the rise in the within-firm variance of earnings occurred within mega (10,000+ employee) firms, which saw a particularly large increase in the variance of earnings compared with smaller firms.

    更新日期:2019-01-11
  • Kinship, Cooperation, and the Evolution of Moral Systems*
    Q. J. Econ. (IF 7.863) Pub Date : 2019-01-10
    Enke B.

    Across the social sciences, a key question is how societies manage to enforce cooperative behavior in social dilemmas such as public goods provision or bilateral trade. According to an influential body of theories in psychology, anthropology, and evolutionary biology, the answer is that humans have evolved moral systems: packages of functional psychological and biological mechanisms that regulate economic behavior, including a belief in moralizing gods; moral values; negative reciprocity; and emotions of shame, guilt, and disgust. Based on a stylized model, this paper empirically studies the structure and evolution of these moral traits as a function of historical heterogeneity in extended kinship relationships. The evidence shows that societies with a historically tightly knit kinship structure regulate behavior through communal moral values; revenge taking; emotions of external shame; and notions of purity and disgust. In loose kinship societies, on the other hand, cooperation appears to be enforced through universal moral values; internalized guilt; altruistic punishment; and an apparent rise and fall of moralizing religions. These patterns point to the presence of internally consistent, but culturally variable, functional moral systems. Consistent with the model, the relationship between kinship ties, economic development, and the structure of the mediating moral systems amplified over time.

    更新日期:2019-01-11
  • Exchange Arrangements Entering the 21ST Century: Which Anchor Will Hold?
    Q. J. Econ. (IF 7.863) Pub Date : 2019-01-05
    Ilzetzki E, Reinhart C, Rogoff K.

    This paper provides a comprehensive history of anchor or reference currencies, exchange rate arrangements, and a new measure of foreign exchange restrictions for 194 countries and territories over 1946–2016. We find that the often-cited post-Bretton Woods transition from fixed to flexible arrangements is overstated; regimes with limited flexibility remain in the majority. Even if central bankers’ communications jargon has evolved considerably in recent decades, it is apparent that many still place a large implicit weight on the exchange rate. The US dollar scores as the world's dominant anchor currency, and by a very large margin. By some metrics, its use is far wider today than 70 years ago. In contrast, the global role of the euro appears to have stalled. We argue that in addition to the usual safe assets story, the record accumulation of reserves since 2002 may also have to do with many countries’ desire to stabilize exchange rates in an environment of markedly reduced exchange rate restrictions or, more broadly, capital controls: an important amendment to the conventional portrayal of the macroeconomic trilemma.

    更新日期:2019-01-06
  • Sell Low and Buy High: Arbitrage and Local Price Effects in Kenyan Markets
    Q. J. Econ. (IF 7.863) Pub Date : 2018-12-28
    Burke M, Bergquist L, Miguel E.

    Large and regular seasonal price fluctuations in local grain markets appear to offer African farmers substantial intertemporal arbitrage opportunities, but these opportunities remain largely unexploited: small-scale farmers are commonly observed to “sell low and buy high” rather than the reverse. In a field experiment in Kenya, we show that credit market imperfections limit farmers’ abilities to move grain intertemporally. Providing timely access to credit allows farmers to buy at lower prices and sell at higher prices, increasing farm revenues and generating a return on investment of 29%. To understand general equilibrium effects of these changes in behavior, we vary the density of loan offers across locations. We document significant effects of the credit intervention on seasonal price fluctuations in local grain markets, and show that these GE effects shape individual-level profitability estimates. In contrast to existing experimental work, the results indicate a setting in which microcredit can improve firm profitability, and suggest that GE effects can substantially shape microcredit’s effectiveness. In particular, failure to consider these GE effects could lead to underestimates of the social welfare benefits of microcredit interventions.

    更新日期:2019-01-01
  • Household Time Use Among Older Couples: Evidence and Implications for Labor Supply Parameters*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-12-05
    Rogerson R, Wallenius J.

    Using the Consumption Activities Mail Survey (CAMS) module in the HRS we document how individual time allocations change when one or more members transitions from full-time work to not working. We find that the ratio of home production to leisure time is approximately constant for both family members. Using a model of household labor supply to understand the implications of this finding, we conclude that the elasticity of substitution between the leisure of the two members is quite large. This elasticity plays a key role in models of household labor supply and is important for understanding how changes in relative wages and taxes affect household labor supply.

    更新日期:2018-12-07
  • The Unequal Gains from Product Innovations: Evidence from the U.S. Retail Sector*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-12-04
    Jaravel X.

    This paper examines how product innovations led to inflation inequality in the United States from 2004 to 2015. Using scanner data from the retail sector, I find that annual inflation for retail products was 0.661 (s.e. 0.0535) percentage points higher for the bottom income quintile relative to the top income quintile. When including changes in product variety over time, this difference increases to 0.8846 (s.e. 0.0739) percentage points per year. In CEX-CPI data covering the full consumption basket, the annual inflation difference is 0.368 (s.e. 0.0502) percentage points. I then investigate the following hypothesis: (1) the relative demand for products consumed by high-income households increased because of growth and rising inequality; (2) in response, firms introduced more new products catering to such households; (3) as a result, the prices of continuing products in these market segments fell due to increased competitive pressure. Using a shift-share research design, I find causal evidence that increasing relative demand leads to increasing product variety and lower inflation for continuing products. A calibration indicates that the hypothesized channel accounts for a large fraction (over 50%) of observed inflation inequality.

    更新日期:2018-12-05
  • Who Becomes an Inventor in America? The Importance of Exposure to Innovation*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-11-29
    Bell A, Chetty R, Jaravel X, et al.

    We characterize the factors that determine who becomes an inventor in the United States, focusing on the role of inventive ability (“nature”) vs. environment (“nurture”). Using de-identified data on 1.2 million inventors from patent records linked to tax records, we first show that children’s chances of becoming inventors vary sharply with characteristics at birth, such as their race, gender, and parents’ socioeconomic class. For example, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. These gaps persist even among children with similar math test scores in early childhood - which are highly predictive of innovation rates - suggesting that the gaps may be driven by differences in environment rather than abilities to innovate. We then directly establish the importance of environment by showing that exposure to innovation during childhood has significant causal effects on children’s propensities to invent. Children whose families move to a high-innovation area when they are young are more likely to become inventors. These exposure effects are technology-class and gender specific. Children who grow up in a neighborhood or family with a high innovation rate in a specific technology class are more likely to patent in exactly the same class. Girls are more likely to invent in a particular class if they grow up in an area with more women (but not men) who invent in that class. These gender- and technology class-specific exposure effects are more likely to be driven by narrow mechanisms such as role-model or network effects than factors that only affect general human capital accumulation, such as the quality of schools. Consistent with the importance of exposure effects in career selection, women and disadvantaged youth are as underrepresented among high-impact inventors as they are among inventors as a whole. These findings suggest that there are many “lost Einsteins” - individuals who would have had highly impactful inventions had they been exposed to innovation in childhood - especially among women, minorities, and children from low-income families.

    更新日期:2018-11-29
  • Hannelling Fisher: Randomization Tests and the Statistical Insignificance of Seemingly Significant Experimental Results*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-11-21
    Young A.

    I follow R.A. Fisher's The Design of Experiments (1935), using randomization statistical inference to test the null hypothesis of no treatment effects in a comprehensive sample of 53 experimental papers drawn from the journals of the American Economic Association. In the average paper randomization tests of the significance of individual treatment effects find 13 to 22 percent fewer significant results than found using authors’ methods. In joint tests of multiple treatment effects appearing together in tables, randomization tests yield 33 to 49 percent fewer statistically significant results than conventional tests. Bootstrap and jackknife methods support and confirm the randomization results.

    更新日期:2018-11-24
  • Marginal Tax Rates and Income: New Time Series Evidence*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-02-20
    Mertens K, Montiel Olea J.

    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.

    更新日期:2018-10-10
  • Should Buyers or Sellers Organize Trade in a Frictional Market?*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-04-14
    Shi S, Delacroix A.

    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.

    更新日期:2018-10-10
  • Political Advertising and Election Results*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-05-05
    Spenkuch J, Toniatti D.

    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 one 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.

    更新日期:2018-10-10
  • Racial Bias in Bail Decisions*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-05-30
    Arnold D, Dobbie W, Yang C.

    This article 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.

    更新日期:2018-10-10
  • Global Evidence on Economic Preferences*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-05-30
    Falk A, Becker A, Dohmen T, et al.

    This article studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey data set of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 people 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 biogeographic 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.

    更新日期:2018-10-10
  • Religious Competition and Reallocation: the Political Economy of Secularization in the Protestant Reformation*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-06-06
    Cantoni D, Dittmar J, Yuchtman N.

    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 preexisting economic or cultural differences. Our findings indicate that the Reformation played an important causal role in the secularization of the West.

    更新日期:2018-10-10
  • Excess Sensitivity of High-Income Consumers*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-06-12
    Kueng L.

    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.

    更新日期:2018-10-10
  • Missed Sales and the Pricing of Ancillary Goods*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-06-30
    Gomes R, Tirole J.

    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 naive 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 naive, 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.

    更新日期:2018-10-10
  • What do Exporters Know?*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-07-05
    Dickstein M, Morales E.

    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. 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.

    更新日期:2018-10-10
  • The Elusive Costs of Inflation: Price Dispersion during the U.S. Great Inflation*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-08-06
    Nakamura E, Steinsson J, Sun P, et al.

    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 data set on price behavior during the Great Inflation of the late 1970s and early 1980s 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.

    更新日期:2018-10-10
  • Status Goods: Experimental Evidence from Platinum Credit Cards*
    Q. J. Econ. (IF 7.863) Pub Date : 2017-12-20
    Bursztyn L, Ferman B, Fiorin S, et al.

    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.

    更新日期:2018-09-15
  • Long-Range Growth: Economic Development in the Global Network of Air Links*
    Q. J. Econ. (IF 7.863) Pub Date : 2017-12-20
    Campante F, Yanagizawa-Drott D.

    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.

    更新日期:2018-09-15
  • Interfirm Relationships and Business Performance*
    Q. J. Econ. (IF 7.863) Pub Date : 2017-12-20
    Cai J, Szeidl A.

    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.

    更新日期:2018-09-15
  • Ranking Firms Using Revealed Preference*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-01-17
    Sorkin I.

    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.

    更新日期:2018-09-15
  • 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
    Fieldhouse A, Mertens K, Ravn M.

    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.

    更新日期:2018-09-15
  • Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-01-29
    Fowlie M, Greenstone M, Wolfram C.

    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.

    更新日期:2018-09-15
  • High-Frequency Identification of Monetary Non-Neutrality: The Information Effect*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-01-29
    Nakamura E, Steinsson J.

    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.

    更新日期:2018-09-15
  • 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
    Bayer P, Charles K.

    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.

    更新日期:2018-09-15
  • The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-02-10
    Chetty R, Hendren N.

    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.

    更新日期:2018-09-15
  • The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects*
    Q. J. Econ. (IF 7.863) Pub Date : 2018-02-10
    Chetty R, Hendren N.

    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.

    更新日期:2018-09-15
  • 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.

    更新日期:2018-04-07
  • 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

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-04-07
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
  • 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.

    更新日期:2018-01-12
Some contents have been Reproduced with permission of the American Chemical Society.
Some contents have been Reproduced by permission of The Royal Society of Chemistry.
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