Civil Liberties in Times of Crisis

By Marcella Alsan, Luca Braghieri, Sarah Eichmeyer, Minjeong Joyce Kim, Stefanie Stantcheva, and David Y. Yang

American Economic Journal: Applied Economics, October 2023

We study people's willingness to trade off civil liberties for increased health security in the context of the COVID-19 pandemic by deploying representative surveys involving around 550,000 responses across 15 countries. We document significant heterogene...

Supervised Machine Learning for Eliciting Individual Demand

By John A. Clithero, Jae Joon Lee, and Joshua Tasoff

American Economic Journal: Microeconomics, November 2023

The canonical direct-elicitation approach for measuring individuals' valuations for goods is the Becker-DeGroot-Marschak procedure, which generates willingness-to-pay (WTP) values that are imprecise and systematically biased. We show that enhancing elicit...

Selection on Welfare Gains: Experimental Evidence from Electricity Plan Choice

By Koichiro Ito, Takanori Ida, and Makoto Tanaka

American Economic Review, November 2023

We study a problem in which policymakers need to screen self-selected individuals by unobserved heterogeneity in social welfare gains from a policy intervention. In our framework, the marginal treatment effects and marginal treatment responses arise as ke...

Digitization and the Market for Physical Works: Evidence from the Google Books Project

By Abhishek Nagaraj and Imke Reimers

American Economic Journal: Economic Policy, November 2023

The free digital distribution of creative works could cannibalize demand for physical versions, but it could also boost physical sales by enabling consumers to discover the original work. We study the impact of the Google Books digitization project on the...

Why Do Retired Households Draw Down Their Wealth So Slowly?

[Symposium: Wealth]

By Eric French, John Bailey Jones, and Rory McGee

Journal of Economic Perspectives, Fall 2023

Retired households, especially those with high lifetime income, decumulate their wealth very slowly, and many die leaving large estates. The three leading explanations for the "retirement savings puzzle" are the desire to insure against uncertain lifespan...

Cash Is Alive: How Economists Explain Holding and Use of Cash

By Oz Shy

Journal of Economic Literature, December 2023

Research on holding and use of cash involves many aspects, such as reasons for holding and hoarding cash, transactional demand for cash, cash management, type of spending paid with cash, type of consumer who pays cash, merchant acceptance, how consumers g...

Does Exposure to Other Ethnic Regions Promote National Integration? Evidence from Nigeria

By Oyebola Okunogbe

American Economic Journal: Applied Economics, January 2024

This paper examines how temporary exposure to a different ethnic region affects national integration, using original survey data from participants in Africa's largest national youth service program. Seven years later, participants randomly assigned to ser...

The Value of Leisure Synchronization

By Simon Georges-Kot, Dominique Goux, and Eric Maurin

American Economic Journal: Applied Economics, January 2024

This paper explores the extent to which workers are willing to trade hours worked for leisure time shared with their spouse. We use the fact that the number and timing of paid vacation days to which French employees are entitled vary in a quasi-random way...

Scarred Consumption

By Ulrike Malmendier and Leslie Sheng Shen

American Economic Journal: Macroeconomics, January 2024

We show that prior lifetime experiences can "scar" consumers. Consumers who have lived through times of unemployment exhibit persistent pessimism about their future financial situation and spend significantly less years later, controlling for income, empl...

Old Age Risks, Consumption, and Insurance

By Richard Blundell, Margherita Borella, Jeanne Commault, and Mariacristina De Nardi

American Economic Review, February 2024

In the United States, after age 65, households face income and health risks, and a large fraction of these risks are transitory. While consumption significantly responds to transitory income shocks, out-of-pocket medical expenses do not. In contrast, both...

The Effect of Macroeconomic Uncertainty on Household Spending

By Olivier Coibion, Dimitris Georgarakos, Yuriy Gorodnichenko, Geoff Kenny, and Michael Weber

American Economic Review, March 2024

We use randomized treatments that provide different types of information about the first and/or second moments of future economic growth to generate exogenous changes in the perceived macroeconomic uncertainty of treated households. The effects on their s...

What's behind Her Smile? Health, Looks, and Self-Esteem

By Francisco A. Gallego, Cristian Larroulet Philippi, and Andrea Repetto

American Economic Journal: Applied Economics, April 2024

This paper examines how improving dental health affects economic, social, and psychological outcomes. In a randomized experiment, we provide a low-income group free dental care, including prostheses, and find significant and persistent impacts on men's an...

Anticipatory Anxiety and Wishful Thinking

By Jan B. Engelmann, Maël Lebreton, Nahuel A. Salem-Garcia, Peter Schwardmann, and Joël J. van der Weele

American Economic Review, April 2024

Across five experiments (N = 1,714), we test whether people engage in wishful thinking to alleviate anxiety about adverse future outcomes. Participants perform pattern recognition tasks in which some patterns may result in an electric shock or a monetary ...

Motivated Errors

By Christine L. Exley and Judd B. Kessler

American Economic Review, April 2024

Myriad environments allow for the possibility of confusion. Agents may appeal to such confusion—or the possibility of making an honest mistake—to justify their behavior. In three sets of experiments involving thousands of subjects, we document evidenc...

Ambiguity Aversion and Heterogeneity in Households' Beliefs

By Claudio Michelacci and Luigi Paciello

American Economic Journal: Macroeconomics, April 2024

UK households that wish for lower inflation and lower nominal interest rates have higher expected inflation. We interpret the evidence through the lens of a New Keynesian model where ambiguity-averse households differ in wealth, skill, labor market partic...

Uncertainty and Information Acquisition: Evidence from Firms and Households

By Heiner Mikosch, Christopher Roth, Samad Sarferaz, and Johannes Wohlfart

American Economic Journal: Macroeconomics, April 2024

We leverage the small open economy Switzerland as a testing ground for basic premises of macroeconomic models of endogenous information acquisition, using tailored surveys of firms and households. Firms and households perceiving a greater exposure to exch...

The Fake News Effect: Experimentally Identifying Motivated Reasoning Using Trust in News

By Michael Thaler

American Economic Journal: Microeconomics, May 2024

Motivated reasoning posits that people distort how they process information in the direction of beliefs they find attractive. This paper creates a novel experimental design to identify motivated reasoning from Bayesian updating when people have preconceiv...

Variety-Based Congestion in Online Markets: Evidence from Mobile Apps

By Daniel Ershov

American Economic Journal: Microeconomics, May 2024

In many online markets, consumers have to spend time and effort browsing through products. The addition of new products could make other products less visible, creating congestion externalities. Using Android app store data, I take advantage of a natural ...

The Welfare Effects of Vertical Integration in China's Movie Industry

By Luming Chen, Lisa Xuejie Yi, and Chuan Yu

American Economic Journal: Microeconomics, May 2024

This paper investigates the welfare effects of vertical integration in China's movie industry. We leverage data covering all theaters and 423 popular movies in China during 2014–2018. We find no evidence of integrated movies being foreclosed to rival th...

Household Labor Supply and the Value of Social Security Survivors Benefits

By David Coyne, Itzik Fadlon, Shanthi P. Ramnath, and Patricia K. Tong

American Economic Review, May 2024

We combine quasi-experimental variation in spousal death and age eligibility for survivors benefits using US tax records to study the effects on American households' labor supply and the design of social security's survivors insurance. Benefit eligibility...