Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Comment

By Aditya Shrinivas and Marcel Fafchamps

American Economic Review, October 2018

Mazzocco and Saini (2012) propose and implement a test of efficient risk sharing that allows for preference heterogeneity. They motivate their approach as yielding different results from those of standard efficiency test with homogeneous preferences. We s...

Testing Efficient Risk Sharing with Heterogeneous Risk Preferences: Reply

By Maurizio Mazzocco and Shiv Saini

American Economic Review, October 2018

The Price of Growth: Consumption Insurance in China 1989–2009

By Raül Santaeulàlia-Llopis and Yu Zheng

American Economic Journal: Macroeconomics, October 2018

We exploit a novel and unique opportunity to document the transmission of income risk to consumption in a growing economy. Our laboratory is China, an economy that has witnessed enormous and sustained growth. We build a long panel of household-level consu...

The Effect of Consumer Sentiment on Consumption: Cross-Sectional Evidence from Elections

By Christian Gillitzer and Nalini Prasad

American Economic Journal: Macroeconomics, October 2018

We seek to identify the causal effect of sentiment innovations on consumption. Using unique Australian consumer sentiment survey data we show that, immediately after elections with a change of government, supporters of the winning party report substantial...

Can Small Incentives Have Large Effects? The Impact of Taxes versus Bonuses on Disposable Bag Use

By Tatiana A. Homonoff

American Economic Journal: Economic Policy, November 2018

This paper examines a simple element of financial incentive design—whether the incentive takes the form of a fee for bad behavior or a reward for good behavior—to determine if the framing of the incentive influences the policy's effectiveness. I inves...

A Dynamic Model of Housing Supply

By Alvin Murphy

American Economic Journal: Economic Policy, November 2018

This paper estimates a dynamic microeconometric model of housing supply. The model features forward-looking landowners who optimally choose both the timing and the nature of construction while taking into account expectations about future prices and costs...

How Are SNAP Benefits Spent? Evidence from a Retail Panel

By Justine Hastings and Jesse M. Shapiro

American Economic Review, December 2018

We use a novel retail panel with detailed transaction records to study the effect of the Supplemental Nutrition Assistance Program (SNAP) on house-hold spending. We use administrative data to motivate three approaches to causal inference. The marginal pro...

Speed, Accuracy, and the Optimal Timing of Choices

By Drew Fudenberg, Philipp Strack, and Tomasz Strzalecki

American Economic Review, December 2018

We model the joint distribution of choice probabilities and decision times in binary decisions as the solution to a problem of optimal sequential sampling, where the agent is uncertain of the utility of each action and pays a constant cost per unit time f...

The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications: Reply

By Olivier Coibion, Yuriy Gorodnichenko, and Gee Hee Hong

American Economic Review, January 2019

We address how using different censoring thresholds and imputation procedures affects the baseline results of Coibion, Gorodnichenko, and Hong (2015). Higher censoring thresholds introduce measurement error and outliers that generate wide variability in r...

Randomizing Endowments: An Experimental Study of Rational Expectations and Reference-Dependent Preferences

By Annette Cerulli-Harms, Lorenz Goette, and Charles Sprenger

American Economic Journal: Microeconomics, February 2019

We test expectations-based reference dependence in market experiments with probabilistic forced exchange. Koszegi and Rabin (2006) predict that when the probability of forced exchange increases, individuals cannot expect to stick with the status quo, an...

Are Consumers Poorly Informed about Fuel Economy? Evidence from Two Experiments

By Hunt Allcott and Christopher Knittel

American Economic Journal: Economic Policy, February 2019

It is often asserted that consumers are poorly informed about and inattentive to fuel economy, causing them to buy low-fuel economy vehicles despite their own best interest. This paper presents evidence on this assertion through two experiments providing ...

Best Prices: Price Discrimination and Consumer Substitution

By Judith A. Chevalier and Anil K. Kashyap

American Economic Journal: Economic Policy, February 2019

This paper proposes a method for aggregating prices when retailers use periodic sales to price-discriminate amongst heterogeneous customers. In the motivating model, loyal customers buy one brand and do not strategically time purchases, while Bargain Hunt...

Soft Commitments, Reminders, and Academic Performance

By Oliver Himmler, Robert Jäckle, and Philipp Weinschenk

American Economic Journal: Applied Economics, April 2019

We provide first evidence that a soft commitment device enhances progress in education and, more generally, improves the completion of complex tasks—such as passing exams. In our field experiment, students can sign a nonbinding agreement and commit to s...

Beyond Truth-Telling: Preference Estimation with Centralized School Choice and College Admissions

By Gabrielle Fack, Julien Grenet, and Yinghua He

American Economic Review, April 2019

We propose novel approaches to estimating student preferences with data from matching mechanisms, especially the Gale-Shapley deferred acceptance. Even if the mechanism is strategy-proof, assuming that students truthfully rank schools in applications may ...

Minimum Wages, Morality, and Efficiency: A Choice Experiment

By Conor Lennon, Jose Fernandez, Stephan Gohmann, and Keith Teltser

AEA Papers and Proceedings, May 2019

We use a choice experiment to examine public support for minimum wages. We first elicit respondents' moral assessment of two labor market systems: one with a minimum wage and one without. Then, we present four pairs of hypothetical employment outcomes and...

Cognitive Abilities and Inflation Expectations

By Francesco D'Acunto, Daniel Hoang, Maritta Paloviita, and Michael Weber

AEA Papers and Proceedings, May 2019

Cognitive abilities help explain the large cross-sectional variation in inflation expectations at the household level. But which type of cognitive abilities are important? We find that not only quantitative abilities but also logical and verbal abilities ...

Disability Benefits, Consumption Insurance, and Household Labor Supply

By David Autor, Andreas Kostøl, Magne Mogstad, and Bradley Setzler

American Economic Review, July 2019

There is no evaluation of the consequences of Disability Insurance (DI) receipt that captures the effects on households' net income and consumption expenditure, family labor supply, or benefits from other programs. Combining detailed register data from ...

An Experimental Comparison of Risky and Riskless Choice—Limitations of Prospect Theory and Expected Utility Theory

By Hui-Kuan Chung, Paul Glimcher, and Agnieszka Tymula

American Economic Journal: Microeconomics, August 2019

Prospect theory, used descriptively for decisions under both risk and certainty, presumes concave utility over gains and convex utility over losses, a pattern widely seen in lottery tasks. Although such discontinuous gain-loss reference-dependence is also...

The Local Economic and Welfare Consequences of Hydraulic Fracturing

By Alexander W. Bartik, Janet Currie, Michael Greenstone, and Christopher R. Knittel

American Economic Journal: Applied Economics, October 2019

Exploiting geological variation and timing in the initiation of hydraulic fracturing, we find that fracking leads to sharp increases in oil and gas recovery and improvements in a wide set of economic indicators. There is also evidence of deterioration in ...

Does Cheap Talk Affect Market Outcomes? Evidence from eBay

By Daniel W. Elfenbein, Raymond Fisman, and Brian McManus

American Economic Journal: Applied Economics, October 2019

We study cheap talk by firms and responses by their consumers, focusing on unverifiable promises of charitable donations on eBay during 2005–2006. Cheap talk listings have lower sales probabilities but sell at higher prices when successful. The negative...