Sequentially Rationalizable Choice

By Paola Manzini and Marco Mariotti

American Economic Review, December 2007

A sequentially rationalizable choice function is a choice function that can be retrieved by applying sequentially to each choice problem the same fixed set of asymmetric binary relations (rationales) to remove inferior alternatives. These concepts tran...

Assessing the Case for Social Experiments

[Symposium: Social Experiments]

By James J. Heckman and Jeffrey A. Smith

Journal of Economic Perspectives, Spring 1995

This paper analyzes the method of social experiments. The assumptions that justify the experimental method are exposited. Parameters of interest in evaluating social programs are discussed. The authors show how experiments sometimes serve as instrumental ...

Health Care Costs: On the Rise Again

By Sherry Glied

Journal of Economic Perspectives, Spring 2003

Since 1999, health care costs have been growing faster than national income. This rapid growth has occurred as the ability of private and public purchasers to reduce service utilization and bargain for lower prices has fallen, insurers have recouped lost ...

Capital Tax Reform and the Real Economy: The Effects of the 2003 Dividend Tax Cut

By Danny Yagan

American Economic Review, December 2015

This paper tests whether the 2003 dividend tax cut—one of the largest reforms ever to a US capital tax rate—stimulated corporate investment and increased labor earnings, using a quasi-experimental design and US corporate tax returns from years...

Who Gets the Job Referral? Evidence from a Social Networks Experiment

By Lori Beaman and Jeremy Magruder

American Economic Review, December 2012

We use recruitment into a laboratory experiment in Kolkata, India to analyze how social networks select individuals for jobs. The experiment allows subjects to refer actual network members for casual jobs as experimental subjects under exogenously varied...

Genes, Eyeglasses, and Social Policy

[Symposium: Genetics and Economics]

By Charles F. Manski

Journal of Economic Perspectives, Fall 2011

Someone reading empirical research relating human genetics to personal outcomes must be careful to distinguish two types of work: An old literature on heritability attempts to decompose cross-sectional variation in observed outcomes into unobservable gene...

Evaluating the Classification of Economic Activity into Recessions and Expansions

By Travis J. Berge and Òscar Jordà

American Economic Journal: Macroeconomics, April 2011

The Business Cycle Dating Committee of the National Bureau of Economic Research provides a historical chronology of business cycle turning points. We investigate three central aspects of this chronology. How skillful is the Dating Committee when classifyi...

Happiness and Time Preference: The Effect of Positive Affect in a Random-Assignment Experiment

By John Ifcher and Homa Zarghamee

American Economic Review, December 2011

We conduct a random-assignment experiment to investigate whether positive affect impacts time preference, where time preference denotes a preference for present over future utility. Our result indicates that, compared to neutral affect, mild positive affe...

The Effects of Rural Electrification on Employment: New Evidence from South Africa

By Taryn Dinkelman

American Economic Review, December 2011

This paper estimates the impact of electrification on employment growth by analyzing South Africa's mass roll-out of electricity to rural households. Using several new data sources and two different identification strategies (an instrumental variables str...

Platform Siphoning: Ad-Avoidance and Media Content

By Simon P. Anderson and Joshua S. Gans

American Economic Journal: Microeconomics, November 2011

Content providers rely on advertisers to pay for content. TiVo, remote controls, and pop-up ad blockers are examples of ad-avoidance technologies that allow consumers to view content without ads, and thereby siphon off the content without paying the "pri...

Divergence, Big Time

[Symposium: Distribution of World Income]

By Lant Pritchett

Journal of Economic Perspectives, Summer 1997

Historical data are unnecessary to demonstrate that perhaps the basic fact of modern economic history is massive absolute divergence in per capita income across countries. A plausible lower bound on per capita income can be combined with estimates of its ...

Costly Expertise

By Dino Gerardi and Leeat Yariv

American Economic Review, May 2008

Innovation and Foreign Ownership

By Maria Guadalupe, Olga Kuzmina, and Catherine Thomas

American Economic Review, December 2012

This paper uses a rich panel dataset of Spanish manufacturing firms (1990-2006) and a propensity score reweighting estimator to show that multinational firms acquire the most productive domestic firms, which, on acquisition, conduct more product and proce...

Informality and Development

[Symposium: Classic Ideas in Development]

By Rafael La Porta and Andrei Shleifer

Journal of Economic Perspectives, Summer 2014

In developing countries, informal firms account for up to half of economic activity. They provide livelihood for billions of people. Yet their role in economic development remains controversial with some viewing informality as pent-up potential and others...

Tax Compliance and Loss Aversion

By Per Engström, Katarina Nordblom, Henry Ohlsson, and Annika Persson

American Economic Journal: Economic Policy, November 2015

We study if taxpayers are loss averse when filing returns. Preliminary deficits might be viewed as losses assuming zero preliminary balances as reference points. Swedish taxpayers can to try to escape such losses by claiming deductions after receiving inf...

Does Wage Persistence Matter for Employment Fluctuations? Evidence from Displaced Workers

By Johannes F. Schmieder and Till von Wachter

American Economic Journal: Applied Economics, July 2010

Previous literature has found that tight labor market conditions during a job raise wages. Using the Displaced Worker Survey from 1984 to 2006, we show that wage gains associated with good labor market conditions disappear at job loss. We also find that ...

Human Capital Investment and the Gender Division of Labor in a Brawn-Based Economy

By Mark M. Pitt, Mark R. Rosenzweig, and Mohammad Nazmul Hassan

American Economic Review, December 2012

A model of human capital investment and activity choice is used to explain facts describing gender differentials in the levels and returns to human capital investments and occupational choice. These include the higher return to and level of schooling, the...

In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers

By Till von Wachter and Stefan Bender

American Economic Review, December 2006

We examine administrative data on young German workers and their employers to study the long-term effects of an early career job loss. To account for nonrandom sorting of workers into firms with different turnover rates and for selective job mobility, ...

Understanding Productivity: Lessons from Longitudinal Microdata

By Eric J. Bartelsman and Mark Doms

Journal of Economic Literature, September 2000

This paper reviews research that uses longitudinal microdata to document productivity movements and to examine factors behind productivity growth. The research explores the dispersion of productivity across firms and establishments, the persistence of pro...

The Role of Bequests in Shaping Wealth Inequality: Evidence from Danish Wealth Records

By Simon H. Boserup, Wojciech Kopczuk, and Claus T. Kreiner

American Economic Review, May 2016

Using Danish administrative data, we estimate the impact of bequests on the level and inequality of wealth. We compare the distributions of wealth over time of people whose parent died and those whose parent did not. Bequests account for 26 percent of the...