What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading

[Symposium: SO2 Trading]

By Robert N. Stavins

Journal of Economic Perspectives, Summer 1998

The most ambitious application ever attempted of a market-based approach to environmental protection has been for the control of acid rain under the Clean Air Act amendments of 1990, which established a sulfur dioxide allowance trading program. This essay...

Wages and Informality in Developing Countries

By Costas Meghir, Renata Narita, and Jean-Marc Robin

American Economic Review, April 2015

We develop an equilibrium wage-posting model with heterogeneous firms that decide to locate in the formal or the informal sector and workers who search randomly on and off the job. We estimate the model on Brazilian labor force survey data. In equilibr...

Understanding PPPs and PPP-Based National Accounts: Comment

By Erwin Diewert

American Economic Journal: Macroeconomics, October 2010

The Causal Effect of Parents' Schooling on Children's Schooling: A Comparison of Estimation Methods

By Helena Holmlund, Mikael Lindahl, and Erik Plug

Journal of Economic Literature, September 2011

We review the empirical literature that estimates the causal effect of parent's schooling on child's schooling, and conclude that estimates differ across studies. We then consider three explanations for why this is: (a) idiosyncratic differences in data s...

Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program

By Gabrielle Fack and Julien Grenet

American Economic Journal: Applied Economics, April 2015

Using comprehensive administrative data on France's single largest financial aid program, this paper provides new evidence on the impact of large-scale need-based grant programs on the college enrollment decisions, persistence, and graduation rates of low...

The Economic and Demographic Transition, Mortality, and Comparative Development

By Matteo Cervellati and Uwe Sunde

American Economic Journal: Macroeconomics, July 2015

This paper develops a quantifiable unified growth theory to investigate cross-country comparative development. The calibrated model can replicate the historical development dynamics in forerunner countries like Sweden and the patterns in cross-country pan...

Understanding International Prices: Customers as Capital

By Lukasz A. Drozd and Jaromir B. Nosal

American Economic Review, February 2012

The article develops a new theory of pricing to market driven by dynamic frictions of building market shares. Our key innovation is a capital theoretic model of marketing in which relations with customers are valuable. We discipline the introduced frictio...

The Health Returns of Education Policies from Preschool to High School and Beyond

By Rucker C. Johnson

American Economic Review, May 2010

Intergenerational Networks, Unemployment, and Persistent Inequality in South Africa

By Jeremy R. Magruder

American Economic Journal: Applied Economics, January 2010

This paper examines the importance of network-based intergenerational correlations in South Africa. I use longitudinal data on young South Africans to examine the covariance of children's employment with the usefulness of parents in their job search. I...

High Frequency Evidence on the Demand for Gasoline

By Laurence Levin, Matthew S. Lewis, and Frank A. Wolak

American Economic Journal: Economic Policy, August 2017

Daily city-level expenditures and prices are used to estimate the price responsiveness of gasoline demand in the United States. Using a frequency of purchase model that explicitly acknowledges the distinction between gasoline demand and gasoline expenditu...

Relative Earnings and Giving in a Real-Effort Experiment

By Nisvan Erkal, Lata Gangadharan, and Nikos Nikiforakis

American Economic Review, December 2011

This paper investigates the relationship between relative earnings and giving in a two-stage, real-effort experiment. In the first stage, four players compete in a tournament that determines their earnings. In the second stage, they decide whether to make...

Student Loan Information Provision and Academic Choices

By Maximilian Schmeiser, Christiana Stoddard, and Carly Urban

American Economic Review, May 2016

We examine the effect of a student loan information intervention on changes in college major using administrative data from the Montana University System from 2002-2014. Our difference-in-difference-in-differences strategy exploits the relative trends for...

Does Trade Cause Growth?

By Jeffrey A. Frankel and David H. Romer

American Economic Review, June 1999

Examining the correlation between trade and income cannot identify the direction of causation between the two. Countries' geographic characteristics, however, have important effects on trade and are plausibly uncorrelated with other determinants of income...

Review of Climbing Mount Laurel: The Struggle for Affordable Housing and Social Mobility in an American Suburb by Douglas S. Massey et al.

By Yannis M. Ioannides

Journal of Economic Literature, June 2017

Climbing Mount Laurel, authored by a group of sociologists led by Douglas S. Massey, is about the efforts by Mount Laurel Township, NJ, residents to have affordable housing built in their community. From when it was first proposed in 1969 and until...

Monetary Policy and Real Borrowing Costs at the Zero Lower Bound

By Simon Gilchrist, David López-Salido, and Egon Zakrajšek

American Economic Journal: Macroeconomics, January 2015

This paper compares the effects of conventional monetary policy on real borrowing costs with those of the unconventional measures employed after the target federal funds rate hit the zero lower bound (ZLB). For the ZLB period, we identify two policy surpr...

The Effect of Price Advertising on Prices: Evidence in the Wake of 44 Liquormart

By Jeffrey Milyo and Joel Waldfogel

American Economic Review, December 1999

The 44 Liquormart decision, eliminating Rhode Island's ban on liquor price advertising, made Rhode Island the subject of a natural experiment for measuring the effect of advertising on prices. Using Massachusetts prices as controls, we find that advertisi...

How Hurricanes Affect Wages and Employment in Local Labor Markets

By Ariel R. Belasen and Solomon W. Polachek

American Economic Review, May 2008

The Economics of Credence Goods: An Experiment on the Role of Liability, Verifiability, Reputation, and Competition

By Uwe Dulleck, Rudolf Kerschbamer, and Matthias Sutter

American Economic Review, April 2011

Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market breakdown. We study in a large experiment with 936 participants the determin...

A Review of Janos Kornai

By Gerard Roland

Journal of Economic Literature, March 2008

This article reviews the memoirs of János Kornai. The famous Hungarian economist describes his life experiences and the concurrent history of Hungary. More importantly, he leads us through his intellectual evolution, explaining how his thinking evolve...

The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000

By Rebecca Diamond

American Economic Review, March 2016

From 1980 to 2000, the rise in the US college/high school graduate wage gap coincided with increased geographic sorting as college graduates concentrated in high wage, high rent cities. This paper estimates a structural spatial equilibrium model to det...