American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article The Iceberg Theory of Campaign Contributions: Political Threats and Interest Group Behavior MarcosChamonIMF EthanKaplanU MD 1 31 We present a model where special interest groups condition contributions on the receiving candidate's support and also her opponent's. This allows interest groups to obtain support from contributions as well as from threats of contributing. Out-of-equilibrium contributions help explain the missing money puzzle. Our framework contradicts standard models in predicting that interest groups give to only one side of a race. We also predict that special interest groups will mainly target lopsided winners, whereas general interest groups will contribute mainly to candidates in close races. We verify these predictions in FEC data for US House elections from 1984-1990. (JEL D72) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.1 10.1257/pol.5.1.1 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Let Them Have Choice: Gains from Shifting Away from Employer-Sponsored Health Insurance and toward an Individual Exchange LeemoreDafnyNorthwestern U KateHoColumbia U MauricioVarelaU AZ 32 58 Most nonelderly Americans purchase health insurance through their employers, which sponsor a limited number of plans. Using a panel dataset representing over ten million insured lives, we estimate employees' preferences for different health plans and use the estimates to predict their choices if more plans were made available to them on the same terms, i.e., with equivalent subsidies and at large-group prices. Using conservative assumptions, we estimate a median welfare gain of 13 percent of premiums. A proper accounting of the costs and benefits of a transition from employer-sponsored to individually-purchased insurance should include this nontrivial gain. (JEL G22, I13, J32) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.32 10.1257/pol.5.1.32 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Effects of Terms of Trade Gains and Tariff Changes on the Measurement of US Productivity Growth Robert C.FeenstraU CA, Davis Benjamin R.MandelFederal Reserve Bank of New York Marshall B.ReinsdorfUS Bureau of Economic Analysis Matthew J.SlaughterDartmouth College 59 93 The acceleration in US productivity growth since 1995 is often attributed to declining prices for information technology (IT ) goods, and therefore enhanced productivity growth in that sector. We investigate an alternative explanation for these IT price movements: gains in the US terms of trade and tariff reductions, especially for IT products, which led to greater gains than shown by official indexes. We do not, however, investigate the indexes used to deflate the domestic absorption components of GDP, and if upward biases are present in those indexes that could offset some of the effects of mismeasured export and import indexes. (JEL C43, E23, F13, F14, J24) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.59 10.1257/pol.5.1.59 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Political Price Cycles in Regulated Industries: Theory and Evidence Rodrigo M. S.MoitaInsper Institute, Sao Paulo ClaudioPaivaCA State U, Channel Islands 94 121 The early work of Stigler (1971) treats the regulatory process as the arbitration of conflicting economic and political interests rather than a pure welfare-maximizing effort. This paper builds on these ideas and models the regulatory process as a game where the industry-lobby, consumers-voters, and a regulator-politician interact to define the regulated price, in alternating electoral and non-electoral periods. The equilibrium that emerges consists of a fully rational political price cycle in a regulated industry. Using monthly data for regulated gasoline and electricity prices from Brazil, we find strong evidence pointing towards the existence of electoral price cycles in both markets. (JEL D72, L51, L71, L78, L94, L98, O14) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.94 10.1257/pol.5.1.94 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Long-Term Impacts of Individual Development Accounts on Homeownership among Baseline Renters: Follow-Up Evidence from a Randomized Experiment MichalGrinstein-WeissWashington U in St Louis MichaelSherradenWashington U in St Louis William G.GaleBrookings Institution William M.RoheU NC MarkSchreinerWashington U in St Louis ClintonKeyU NC 122 45 We examine the long-term effects of a 1998-2003 randomized experiment in Tulsa, Oklahoma with Individual Development Accounts that offered low-income households 2:1 matching funds for housing down payments. Prior work shows that, among households who rented in 1998, homeownership rates increased more through 2003 in the treatment group than for controls. We show that control group renters caught up rapidly with the treatment group after the experiment ended. As of 2009, the program had an economically small and statistically insignificant effect on homeownership rates, the number of years respondents owned homes, home equity, and foreclosure activity among baseline renters. (JEL D14, H75, R21, R31) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.122 10.1257/pol.5.1.122 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article The Demand for Food of Poor Urban Mexican Households: Understanding Policy Impacts Using Structural Models ManuelaAngelucciU MI and IZA, Bonn OrazioAttanasioU College London 146 78 We use Oportunidades, a conditional cash transfer to women, to show that standard demand models do not represent the sample's behavior: Oportunidades increases eligible households' food budget shares, despite food being a necessity; demand for food and high-protein food changes over time only in treatment areas; the treatment effects on food and high-protein food consumption are larger than the prediction from the Engel curves at baseline; and the curves do not change in eligible households with high baseline bargaining power for the transfer recipient. Thus, handing transfers to women is a likely determinant of the observed nutritional changes. (JEL D12, H23, J16, O12) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.146 10.1257/pol.5.1.146 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Public Transfers and Domestic Violence: The Roles of Private Information and Spousal Control Gustavo J.BobonisU Toronto MelissaGonzález-BrenesCove Strategy, Somerville, MA RobertoCastroRegional Center for Multidisciplinary Research, UNAM 179 205 We study whether transfer programs in which funds are targeted to women decrease the incidence of spousal abuse. We examine the impact of the Mexican Oportunidades program on spousal abuse rates and threats of violence using data from a specialized survey. Beneficiary women are 40 percent less likely to be victims of physical abuse, but are more likely to receive violent threats with no associated abuse. This evidence is consistent with a model of decision-makers' interactions with asymmetric information in the male partner's gains to marriage, who can then use threats of violence to extract rents from their female partners. (JEL D82, J12, J16, K42, O15, O17) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.179 10.1257/pol.5.1.179 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Targeting with Agents PaulNiehausU CA, San Diego AntoniaAtanassovaNielsen Co, New York, NY MarianneBertrandU Chicago SendhilMullainathanHarvard U 206 38 Targeting assistance to the poor is a central problem in development. We study the problem of designing a proxy means test when the implementing agent is corruptible. Conditioning on more poverty indicators may worsen targeting in this environment because of a novel tradeoff between statistical accuracy and enforceability. We then test necessary conditions for this tradeoff using data on Below Poverty Line card allocation in India. Less eligible households pay larger bribes and are less likely to obtain cards, but widespread rule violations yield a de facto allocation much less progressive than the de jure one. Enforceability appears to matter. (JEL D12, I32, I38, O12, O15) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.206 10.1257/pol.5.1.206 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool Orley C.AshenfelterPrinceton U Daniel S.HoskenUS Federal Trade Commission Matthew C.WeinbergDrexel U 239 61 Many experts speculate that US antitrust policy towards horizontal mergers has been too lenient. We estimate the price effects of Whirlpool's acquisition of Maytag to provide new evidence on this debate. We compare price changes in appliance markets most affected by the merger to markets where concentration changed much less or not at all. We estimate price increases for dishwashers and relatively large price increases for clothes dryers, but no price effects for refrigerators or clothes washers. The combined firm's market share fell across all four affected categories, and the number of distinct appliance products offered for sale fell. (JEL G34, K21, L11, L41, L68) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.239 10.1257/pol.5.1.239 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Unemployment in an Interdependent World Gabriel J.FelbermayrU Munich and GEP, U Nottingham MarioLarchU Bayreuth and CESifo, Munich WolfgangLechthalerIfW, Kiel 262 301 How do changes in labor market institutions, like more generous unemployment benefits in one country, affect labor market outcomes in other countries? We set up a two-country Armingtonian trade model with frictions on the goods and labor markets. Contrary to the literature, higher labor market frictions increase unemployment at home and abroad. The strength of the spillover depends on the relative size of countries and on trade costs. It is exacerbated when real wages are rigid. Using panel data for 20 rich OECD countries, and controlling for institutions as well as for business cycle comovement, we confirm our theoretical predictions. (JEL E24, F16, J64, J65) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.262 10.1257/pol.5.1.262 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Smoke Gets in Your Eyes: Cigarette Tax Salience and Regressivity JacobGoldinPrinceton U TatianaHomonoffPrinceton U 302 36 Recent evidence suggests consumers pay less attention to commodity taxes levied at the register than to taxes included in a good's posted price. If this attention gap is larger for high-income consumers than for low-income consumers, policymakers can manipulate a tax's regressivity by altering the fraction of the tax imposed at the register. We investigate income differences in attentiveness to cigarette taxes, exploiting state and time variation in cigarette excise and sales tax rates. Whereas all consumers respond to taxes that appear in cigarettes' posted price, our results suggest that only low-income consumers respond to taxes levied at the register. (JEL D12, H22, H25, H71, L66) http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.302 10.1257/pol.5.1.302 American Economic Association Nashville, TN 1945-7731 1945-774X American Economic Journal: Economic Policy http://www.aeaweb.org/aej-pol/ 5 1 February 2013 http://www.aeaweb.org/issue.php?journal=POL&volume=5&issue=1 Journal Article Front Matter i vi http://www.aeaweb.org/articles.php?doi=10.1257/pol.5.1.i 10.1257/pol.5.1.i