Bartik Instruments: What, When, Why, and How

By Paul Goldsmith-Pinkham, Isaac Sorkin, and Henry Swift

American Economic Review, August 2020

The Bartik instrument is formed by interacting local industry shares and national industry growth rates. We show that the typical use of a Bartik instrument assumes a pooled exposure research design, where the shares measure differential exposure to commo...

Stability and Bayesian Consistency in Two-Sided Markets

By Qingmin Liu

American Economic Review, August 2020

We propose a criterion of stability for two-sided markets with asymmetric information. A central idea is to formulate off-path beliefs conditional on counterfactual pairwise deviations and on-path beliefs in the absence of such deviations. A matching-be...

Comments

Journal of Economic Perspectives, Winter 2003

Front Matter

American Economic Journal: Economic Policy, August 2020

The Perils of High-Powered Incentives: Evidence from Colombia's False Positives

By Daron Acemoglu, Leopoldo Fergusson, James Robinson, Dario Romero, and Juan F. Vargas

American Economic Journal: Economic Policy, August 2020

We investigate the use of high-powered incentives for the Colombian military and show that this practice produced perverse side effects. Innocent civilians were killed and misrepresented as guerillas (a phenomenon known in Colombia as "false positives"). ...

The Rise of Working Mothers and the 1975 Earned Income Tax Credit

By Jacob Bastian

American Economic Journal: Economic Policy, August 2020

The rise of working mothers radically changed the US economy and the role of women in society. In one of the first studies of the 1975 introduction of the Earned Income Tax Credit, I find that this program increased maternal employment by 6 percent, repre...

Youth Enfranchisement, Political Responsiveness, and Education Expenditure: Evidence from the US

By Graziella Bertocchi, Arcangelo Dimico, Francesco Lancia, and Alessia Russo

American Economic Journal: Economic Policy, August 2020

We examine the link between the political participation of the young and fiscal policies in the United States. We generate exogenous variation in participation using the passage of preregistration laws, which allow the young to register before being eligi...

Peer Effects in Residential Water Conservation: Evidence from Migration

By Bryan Bollinger, Jesse Burkhardt, and Kenneth T. Gillingham

American Economic Journal: Economic Policy, August 2020

Social interactions are widely understood to influence consumer decisions in many choice settings. This paper identifies causal peer effects in residential water conservation during the summer using variation from movers. We classify high-resolution remot...

Long-Term Care Insurance: Information Frictions and Selection

By M. Martin Boyer, Philippe De Donder, Claude Fluet, Marie-Louise Leroux, and Pierre-Carl Michaud

American Economic Journal: Economic Policy, August 2020

This paper conducts a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against financial risks associated with long-term care needs. Using exogenous variation in prices from the survey design and ind...

Adopt or Innovate: Understanding Technological Responses to Cap-and-Trade

By Raphael Calel

American Economic Journal: Economic Policy, August 2020

One important motivation for creating cap-and-trade programs for carbon emissions is the expectation that they will stimulate much-needed low-carbon innovation. I construct a new panel of British firms to investigate this hypothesis, finding that the Euro...

Notes

Journal of Economic Perspectives, Winter 2003

Criminal Deterrence When There Are Offsetting Risks: Traffic Cameras, Vehicular Accidents, and Public Safety

By Justin Gallagher and Paul J. Fisher

American Economic Journal: Economic Policy, August 2020

Numerous cities have enacted electronic monitoring programs at traffic intersections in an effort to reduce the high number of vehicle accidents. The rationale is that the higher expected fines for running a red light will induce drivers to stop and lead ...

Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design

By Hsing-Wen Han, Hsien-Ming Lien, and Tzu-Ting Yang

American Economic Journal: Economic Policy, August 2020

This paper estimates the price elasticity of healthcare utilization in early childhood. We employ a regression discontinuity design by exploiting a subsidy that reduces patient cost-sharing for children under age 3 in Taiwan. Using longitudinal medical cl...

Price-Linked Subsidies and Imperfect Competition in Health Insurance

By Sonia Jaffe and Mark Shepard

American Economic Journal: Economic Policy, August 2020

Policymakers subsidizing health insurance often face uncertainty about future market prices. We study the implications of one policy response: linking subsidies to prices to target a given postsubsidy premium. We show that these price-linked subsidies wea...

Taxing Hidden Wealth: The Consequences of US Enforcement Initiatives on Evasive Foreign Accounts

By Niels Johannesen, Patrick Langetieg, Daniel Reck, Max Risch, and Joel Slemrod

American Economic Journal: Economic Policy, August 2020

In 2008, the IRS initiated efforts to curb the use of offshore accounts to evade taxes. This paper uses administrative microdata to examine the impact of enforcement efforts on taxpayers' reporting of offshore accounts and income. We find that enforcement...

Is Occupational Licensing a Barrier to Interstate Migration?

By Janna E. Johnson and Morris M. Kleiner

American Economic Journal: Economic Policy, August 2020

Occupational licensure may limit the interstate movement of workers because it adds to the cost of moving between states. We analyze the interstate migration of 22 licensed occupations, proxying for the difficulty of the regulations by comparing state-spe...

The Buck Stops Where? Federalism, Uncertainty, and Investment in the Brazilian Water and Sanitation Sector

By Evan Plous Kresch

American Economic Journal: Economic Policy, August 2020

This paper documents how regulatory uncertainty may undermine public service when different levels of government share a mandate on public service provision. I examine the Brazilian water and sanitation sector, which presents a natural experiment of share...

Bunching to Maximize Tax Credits: Evidence from Kinks in the US Tax Schedule

By Jacob A. Mortenson and Andrew Whitten

American Economic Journal: Economic Policy, August 2020

We explore bunching at US income tax kinks using a panel of 258 million tax returns from 1996 to 2014. We find bunching at seven kinks, with nearly all bunching occurring at kinks maximizing tax credits. In our sample period, the total number of bunchers ...

Misunderstanding Nonlinear Prices: Evidence from a Natural Experiment on Residential Electricity Demand

By Blake Shaffer

American Economic Journal: Economic Policy, August 2020

This paper examines how consumers respond to nonlinear prices. Exploiting a natural experiment with electricity consumers in British Columbia, I find evidence that some households severely misunderstand nonlinear prices—incorrectly perceiving that the m...

The Fall of Enron

[Symposium: Enron and Conflict of Interest]

By Paul M. Healy and Krishna G. Palepu

Journal of Economic Perspectives, Spring 2003

The financial reporting and disclosure problems at Enron, as well as the high market valuations for its stock raise troubling questions about the functioning of capital market intermediaries, regulators and governance experts whose are supposed to ensure ...