Big Data: New Tricks for Econometrics

[Symposium: Big Data]

By Hal R. Varian

Journal of Economic Perspectives, Spring 2014

Computers are now involved in many economic transactions and can capture data associated with these transactions, which can then be manipulated and analyzed. Conventional statistical and econometric techniques such as regression often work well, but there...

Immigration Enforcement and Crime

By Paolo Pinotti

American Economic Review, May 2015

Immigration enforcement has ambiguous implications for the crime rate of undocumented immigrants. On the one hand, expulsions reduce the pool of immigrants at risk of committing crimes, on the other they lower the opportunity cost of crime for those who a...

Consumer Prices, the Consumer Price Index, and the Cost of Living

[Symposium: Measuring the CPI]

By Michael J. Boskin, Ellen L. Dulberger, Robert J. Gordon, Zvi Griliches, and Dale W. Jorgenson

Journal of Economic Perspectives, Winter 1998

After presenting major findings and recommendations, the CPI Commission reiterates the estimate of a 1.1 percentage point per annum upward bias. It rejects the contention that the BLS already makes substantial corrections for quality change; that quality ...

Noisy News in Business Cycles

By Mario Forni, Luca Gambetti, Marco Lippi, and Luca Sala

American Economic Journal: Macroeconomics, October 2017

We investigate the role of "noise" shocks as a source of business cycle fluctuations. To do so we set up a simple model of imperfect information and derive restrictions for identifying the noise shock in a VAR model. The novelty of our approach is that id...

Estimating the Impact of Microcredit on Those Who Take It Up: Evidence from a Randomized Experiment in Morocco

By Bruno Crépon, Florencia Devoto, Esther Duflo, and William Parienté

American Economic Journal: Applied Economics, January 2015

We report results from a randomized evaluation of a microcredit program introduced in rural areas of Morocco in 2006. Thirteen percent of the households in treatment villages took a loan, and none in control villages did. Among households identified as mo...

Economic Integration and Political Disintegration

By Alberto Alesina, Enrico Spolaore, and Romain Wacziarg

American Economic Review, December 2000

In a world of trade restrictions, large countries enjoy economic benefits, because political boundaries determine the size of the market. Under free trade and global markets even relatively small cultural, linguistic or ethnic groups can benefit from form...

The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown

By Niels Johannesen and Gabriel Zucman

American Economic Journal: Economic Policy, February 2014

During the financial crisis, G20 countries compelled tax havens to sign bilateral treaties providing for exchange of bank information. Policymakers have celebrated this global initiative as the end of bank secrecy. Exploiting a unique panel dataset, ou...

Equilibrium Fictions: A Cognitive Approach to Societal Rigidity

By Karla Hoff and Joseph E. Stiglitz

American Economic Review, May 2010

Telecommunications Infrastructure and Economic Development: A Simultaneous Approach

By Lars-Hendrik Roller and Leonard Waverman

American Economic Review, September 2001

In this paper we investigate how telecommunications infrastructure affects economic growth. We use evidence from 21 OECD countries over a 20-year period to examine the impacts that telecommunications developments may have had. We jointly estimate a microm...

Aggregation and the PPP Puzzle in a Sticky-Price Model

By Carlos Carvalho and Fernanda Nechio

American Economic Review, October 2011

We study the purchasing power parity (PPP) puzzle in a multisector, two-country, sticky-price model. Sectors differ in the extent of price stickiness, leading to heterogeneous sectoral real exchange rate dynamics. Deviations from PPP are more volatile and...

Hazardous Waste Cleanup, Neighborhood Gentrification, and Environmental Justice: Evidence from Restricted Access Census Block Data

By Shanti Gamper-Rabindran and Christopher Timmins

American Economic Review, May 2011

We test for residential sorting and changes in neighborhood characteristics in response to the cleanup of hazardous waste sites using restricted access fine-geographical-resolution block data. We examine changes between 1990 and 2000 in blocks within 5km ...

Inequality and Economic Growth: The Perspective of the New Growth Theories

By Philippe Aghion, Eve Caroli, and Cecilia Garcia-Penalosa

Journal of Economic Literature, December 1999

We analyze the relationship between inequality and economic growth from two directions. The first part of the survey examines the effect of inequality on growth, showing that when capital markets are imperfect, there is not necessarily a trade-off between...

Classroom Games: Trading in a Pit Market

By Charles A. Holt

Journal of Economic Perspectives, Winter 1996

This paper describes a classroom exercise that resembles trading in the 'pit' of some financial and futures markets. Playing cards are used to induce supply and demand functions. Instructions and helpful hints are provided. The exercise facilitates an und...

News Shocks and the Slope of the Term Structure of Interest Rates: Comment

By Danilo Cascaldi-Garcia

American Economic Review, October 2017

Kurmann and Otrok (2013) establish that the effects on economic activity from news on future productivity growth are similar to the effects from unexpected changes in the slope of the yield curve. This comment shows that these results become substantially...

Ten Little Treasures of Game Theory and Ten Intuitive Contradictions

By Jacob K. Goeree and Charles A. Holt

American Economic Review, December 2001

This paper reports laboratory data for games that are played only once. These games span the standard categories: static and dynamic games with complete and incomplete information. For each game, the treasure is a treatment in which behavior conforms nice...

Infrastructure Quality and the Subsidy Trap

By Shaun McRae

American Economic Review, January 2015

Electricity and water are often subsidized in developing countries to increase their affordability for low-income households. Ideally, such subsidies would create sufficient demand in poor neighborhoods to encourage private investment in their infrastruct...

Incentives and Prosocial Behavior

By Roland Bénabou and Jean Tirole

American Economic Review, December 2006

We develop a theory of prosocial behavior that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. Rewards or punishments (whether material or image-related) create doubt about the true motive fo...

Heuristics and Heterogeneity in Health Insurance Exchanges: Evidence from the Massachusetts Connector

By Keith Marzilli Ericson and Amanda Starc

American Economic Review, May 2012

We examine heuristic decision rules in consumer choice on health insurance exchanges using data from the Massachusetts Connector. Consumers may have difficulty making optimal choices in a complex environment. The heuristic "choose the cheapest plan" is s...

Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments: Comment

By Gary E. Bolton and Axel Ockenfels

American Economic Review, December 2006

Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency

By Kira R. Fabrizio, Nancy L. Rose, and Catherine D. Wolfram

American Economic Review, September 2007

While neoclassical models assume static cost-minimization by firms, agency models suggest that firms may not minimize costs in less-competitive or regulated environments. We test this using a transition from cost-of-service regulation to marketoriented ...