How Punishment Severity Affects Jury Verdicts: Evidence from Two Natural Experiments

By Anna Bindler and Randi Hjalmarsson

American Economic Journal: Economic Policy, November 2018

This paper studies the effect of punishment severity on jury decision-making using archival data from London's Old Bailey Criminal Court from 1772 to 1871. We exploit two natural experiments in English history, resulting in sharp decreases in punishment s...

Snapping Back: Food Stamp Bans and Criminal Recidivism

By Cody Tuttle

American Economic Journal: Economic Policy, May 2019

I estimate the effect of access to food stamps on criminal recidivism. In 1996, a federal welfare reform imposed a lifetime ban from food stamps on convicted drug felons. Florida modified this ban, restricting it to drug traffickers who commit their offen...

The Twin Ds: Optimal Default and Devaluation

By Seunghoon Na, Stephanie Schmitt-Grohé, Martín Uribe, and Vivian Yue

American Economic Review, July 2018

A salient characteristic of sovereign defaults is that they are typically accompanied by large devaluations. This paper presents new evidence of this empirical regularity known as the Twin Ds and proposes a model that rationalizes it as an optimal policy ...

Front Matter

American Economic Review, October 2018

Estimating Risk Preferences in the Field

By Levon Barseghyan, Francesca Molinari, Ted O'Donoghue, and Joshua C. Teitelbaum

Journal of Economic Literature, June 2018

We survey the literature on estimating risk preferences using field data. We concentrate our attention on studies in which risk preferences are the focal object and estimating their structure is the core enterprise. We review a number of models of risk ...

Mutually Consistent Revealed Preference Demand Predictions

By Abi Adams

American Economic Journal: Microeconomics, February 2020

Revealed preference restrictions are increasingly used to predict demand behavior at new budgets of interest and as shape restrictions in nonparametric estimation exercises. However, the restrictions imposed are not sufficient for rationality when predict...

Front Matter

American Economic Journal: Economic Policy, February 2020

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...

Jobs and Matches: Quits, Replacement Hiring, and Vacancy Chains

By Yusuf Mercan and Benjamin Schoefer

American Economic Review: Insights, March 2020

In the canonical DMP model of job openings, all job openings stem from new job creation. Jobs denote worker-firm matches, which are destroyed following worker quits. Yet, employers classify 56 percent of vacancies as quit-driven replacement hiring into ol...

Firms, Informality, and Development: Theory and Evidence from Brazil

By Gabriel Ulyssea

American Economic Review, August 2018

This paper develops and estimates an equilibrium model where heterogeneous firms can exploit two margins of informality: (i) not register their business, the extensive margin; and (ii) hire workers "off the books," the intensive margin. The model encompas...

Preferences and Social Influence

By Chaim Fershtman and Uzi Segal

American Economic Journal: Microeconomics, August 2018

Interaction between decision makers may affect their preferences. We consider a setup in which each individual is characterized by two sets of preferences: his unchanged core preferences and his behavioral preferences. Each individual has a social influen...

Corporate Finance and Monetary Policy

By Guillaume Rocheteau, Randall Wright, and Cathy Zhang

American Economic Review, April 2018

We develop a general equilibrium model where entrepreneurs finance random investment opportunities using trade credit, bank-issued assets, or currency. They search for bank funding in over-the-counter markets where loan sizes, interest rates, and down pay...

Do Human Capital Decisions Respond to the Returns to Education? Evidence from DACA

By Elira Kuka, Na'ama Shenhav, and Kevin Shih

American Economic Journal: Economic Policy, February 2020

This paper studies human capital responses to the availability of the Deferred Action for Childhood Arrivals (DACA) program, which provides temporary work authorization and deferral from deportation for undocumented, high-school-educated youth. We use a s...

Modeling Risk Aversion in Economics

[Symposium: Risk in Economics and Psychology]

By Ted O'Donoghue and Jason Somerville

Journal of Economic Perspectives, Spring 2018

To capture the risk-aversion intuition, the standard approach in economics has been to utilize the model of expected utility, in which risk aversion derives from diminishing marginal utility for wealth (or diminishing marginal utility for aggregate co...

Financing Durable Assets

By Adriano A. Rampini

American Economic Review, February 2019

This paper studies how the durability of assets affects financing. We show that more durable assets require larger down payments making them harder to finance, because durability affects the price of assets and hence the overall financing need more than t...

Front Matter

American Economic Journal: Macroeconomics, October 2018

Is Government Spending at the Zero Lower Bound Desirable?

By Florin O. Bilbiie, Tommaso Monacelli, and Roberto Perotti

American Economic Journal: Macroeconomics, July 2019

We build a medium-scale DSGE model and calibrate it to fit the main macroeconomic variables during the US Great Recession. Using it to evaluate the welfare effects of increasing government consumption at the zero lower bound beyond what was actually obser...

Do Larger Health Insurance Subsidies Benefit Patients or Producers? Evidence from Medicare Advantage

By Marika Cabral, Michael Geruso, and Neale Mahoney

American Economic Review, August 2018

A central question in the debate over privatized Medicare is whether increased government payments to private Medicare Advantage (MA) plans generate lower premiums for consumers or higher profits for producers. Using difference-in-differences variation br...

Do Energy Efficiency Investments Deliver at the Right Time?

By Judson Boomhower and Lucas Davis

American Economic Journal: Applied Economics, January 2020

Most analyses of energy efficiency investments ignore that the value of electricity varies widely across hours. We show how much timing matters. Using novel hourly consumption data from an air conditioner rebate program in California, we find that energy ...

Trust the Police? Self-Selection of Motivated Agents into the German Police Force

By Guido Friebel, Michael Kosfeld, and Gerd Thielmann

American Economic Journal: Microeconomics, November 2019

We conduct experimental games with police applicants in Germany to investigate whether intrinsically motivated agents self-select into this type of public service. Our focus is on trustworthiness and the willingness to enforce norms of cooperation as key ...