Agreeing to disagree

[Research Highlight]

March 26, 2020

Why can’t professional forecasters come to a consensus even with the same information?

Report: Committee on the Status of Women in the Economics Profession (CSWEP)

By Shelly Lundberg

AEA Papers and Proceedings, May 2018

Will work for insurance

[Page]

Americans put off retirement to keep employer-provided prescription drug benefits.

The Effects of Pretrial Detention on Conviction, Future Crime, and Employment: Evidence from Randomly Assigned Judges

By Will Dobbie, Jacob Goldin, and Crystal S. Yang

American Economic Review, February 2018

Over 20 percent of prison and jail inmates in the United States are currently awaiting trial, but little is known about the impact of pretrial detention on defendants. This paper uses the detention tendencies of quasi-randomly assigned bail judges to esti...

The Violent Legacy of Conflict: Evidence on Asylum Seekers, Crime, and Public Policy in Switzerland

By Mathieu Couttenier, Veronica Petrencu, Dominic Rohner, and Mathias Thoenig

American Economic Review, December 2019

We study empirically how past exposure to conflict in origin countries makes migrants more violence-prone in their host country, focusing on asylum seekers in Switzerland. We exploit a novel and unique dataset on all crimes reported in Switzerland by the ...

The Changing Face of Debt and Financial Fragility at Older Ages

By Annamaria Lusardi, Olivia S. Mitchell, and Noemi Oggero

AEA Papers and Proceedings, May 2018

We investigate changes in older individuals' financial fragility as they stand on the verge of retirement. Using data from the Health and Retirement Study (HRS), we compare how debt has changed for successive cohorts of people age 56–61. Our analysis sh...

Familiarity Does Not Breed Contempt: Generosity, Discrimination, and Diversity in Delhi Schools

By Gautam Rao

American Economic Review, March 2019

I exploit a natural experiment in Indian schools to study how being integrated with poor students affects the social behaviors and academic outcomes of rich students. Using administrative data, lab and field experiments to measure outcomes, I find that ha...

Retrospectives: Adam Smith's Discovery of Trade Gravity

By Bruce Elmslie

Journal of Economic Perspectives, Spring 2018

The gravity equation is a current workhorse of empirical trade theory. It is generally acknowledged that this theory, which relates the extent of trade between countries to their respective sizes, distances, and relative trade barriers, was first develo...

How FinTech Enters China's Credit Market

By Harald Hau, Yi Huang, Hongzhe Shan, and Zixia Sheng

AEA Papers and Proceedings, May 2019

How does FinTech credit mitigate local credit supply frictions in China's segmented credit market? In our simple theoretical models, we show that FinTech credit (i) expands the extensive margin of credit to borrowers of lower credit scores and (ii) provid...

The Dynamics of Discrimination: Theory and Evidence

By J. Aislinn Bohren, Alex Imas, and Michael Rosenberg

American Economic Review, October 2019

We model the dynamics of discrimination and show how its evolution can identify the underlying source. We test these theoretical predictions in a field experiment on a large online platform where users post content that is evaluated by other users on the ...

Financing Constraints, Radical versus Incremental Innovation, and Aggregate Productivity

By Andrea Caggese

American Economic Journal: Macroeconomics, April 2019

I provide new empirical evidence on the negative relationship between financial frictions and productivity growth over a firm's life cycle. I show that a model of firm dynamics with incremental innovation cannot explain this evidence. However, further inc...

Strategy Choice in the Infinitely Repeated Prisoner's Dilemma

By Pedro Dal Bó and Guillaume R. Fréchette

American Economic Review, November 2019

We use a novel experimental design to reliably elicit subjects' strategies in an infinitely repeated prisoner's dilemma experiment with perfect monitoring. We find that three simple strategies represent the majority of the chosen strategies: Always Defect...

Alternative Sources of the Gains from International Trade: Variety, Creative Destruction, and Markups

[Symposium: Does the US Really Gain From Trade?]

By Robert C. Feenstra

Journal of Economic Perspectives, Spring 2018

The modern theory of international trade identifies several additional sources of the gains from international trade beyond the gains from traditional comparative advantage. These are the gains from importing new product varieties; the gains from "creativ...

Good Cop, Bad Cop: Using Civilian Allegations to Predict Police Misconduct

By Kyle Rozema and Max Schanzenbach

American Economic Journal: Economic Policy, May 2019

In response to high-profile cases of police misconduct, reformers are calling for greater use of civilian allegations in identifying potential problem officers. This paper applies an Empirical Bayes framework to data on civilian allegations and civil righ...

Quantifying Economic Damages from Climate Change

[Symposium: Climate Change]

By Maximilian Auffhammer

Journal of Economic Perspectives, Fall 2018

Climate scientists have spent billions of dollars and eons of supercomputer time studying how increased concentrations of greenhouse gases and changes in the reflectivity of the earth's surface affect dimensions of the climate system relevant to human soc...

Ending Global Poverty: Why Money Isn't Enough

[Symposium: Development and State Capacity]

By Lucy Page and Rohini Pande

Journal of Economic Perspectives, Fall 2018

Between 1981 and 2013, the share of the global population living in extreme poverty fell by 34 percentage points. This paper argues that such rapid reductions will become increasingly hard to achieve for two reasons. First, the majority of the poor now ...

Deliberately Stochastic

By Simone Cerreia-Vioglio, David Dillenberger, Pietro Ortoleva, and Gil Riella

American Economic Review, July 2019

We study stochastic choice as the outcome of deliberate randomization. We derive a general representation of a stochastic choice function where stochasticity allows the agent to achieve from any set the maximal element according to her underlying preferen...

Regulating Markups in US Health Insurance

By Steve Cicala, Ethan M. J. Lieber, and Victoria Marone

American Economic Journal: Applied Economics, October 2019

A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims, or the inverse markup over average claims cost. The Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully insured commerci...

The Returns to a Large Community College Program: Evidence from Admissions Lotteries

By Michel Grosz

American Economic Journal: Economic Policy, February 2020

This paper estimates the labor market returns to the associate's degree in nursing (ADN), which is one of the most popular community college programs. I use student-level academic and earnings records across two decades for all community college student...

Menu Costs, Aggregate Fluctuations, and Large Shocks

By Peter Karadi and Adam Reiff

American Economic Journal: Macroeconomics, July 2019

We document that the aggregate price level responds flexibly and asymmetrically to large positive and negative value-added tax changes. We present a price-setting model with menu costs, trend inflation, and fat-tailed product-level shocks that is consiste...