Global Giants and Local Stars: How Changes in Brand Ownership Affect Competition

By Vanessa Alviarez, Keith Head, and Thierry Mayer

American Economic Journal: Microeconomics, February 2025

Large beer and spirits makers expanded abroad mainly by acquiring local brands. Exploiting market share data in 76 countries and changes in brand ownership from 2007 to 2018, we estimate that owners matter little for brand performance, except via a negati...

Front Matter

American Economic Review, February 2025

Empowering Adolescents to Transform Schools: Lessons from a Behavioral Targeting

By Sule Alan and Elif Kubilay

American Economic Review, February 2025

We test the effectiveness of a behavioral program grounded in the idea that status granting and self-persuasion might yield a robust behavioral change in disadvantaged adolescents. We enlist socially connected senior middle school students with high emoti...

Regulating Conglomerates: Evidence from an Energy Conservation Program in China

By Qiaoyi Chen, Zhao Chen, Zhikuo Liu, Juan Carlos Suárez Serrato, and Daniel Yi Xu

American Economic Review, February 2025

We study a prominent energy regulation affecting large Chinese manufacturers that are part of broader conglomerates. Using detailed firm-level data and difference-in-differences research designs, we show that regulated firms cut output and shifted some pr...

A Theory of Dynamic Inflation Targets

By Christopher Clayton and Andreas Schaab

American Economic Review, February 2025

Should central banks' inflation targets remain set in stone? We study a dynamic mechanism design problem between a government and a central bank. The central bank has persistent private information about structural shocks. Firms learn the state from the c...

Sticky Wages on the Layoff Margin

By Steven J. Davis and Pawel M. Krolikowski

American Economic Review, February 2025

We design and field an innovative survey of unemployment insurance (UI) recipients that yields new insights about wage stickiness on the layoff margin. A majority of UI recipients would accept pay cuts of 5–10 percent to save their jobs, and one-third w...

The Good Wife? Reputation Dynamics and Financial Decision-Making inside the Household

By Nina Buchmann, Pascaline Dupas, and Roberta Ziparo

American Economic Review, February 2025

We study reputation dynamics within the household in a setting where women regularly receive transfers from their husbands for household purchases. We propose a signaling model in which wives try to maintain a good reputation in the eyes of their husbands...

Rating Banks: Risk and Uncertainty in an Opaque Industry

By Donald P. Morgan

American Economic Review, September 2002

The pattern of disagreement between bond raters suggests that banks and insurance firms are inherently more opaque than other types of firms. Moody's and S&P split more often over these financial intermediaries, and the splits are more lopsided, as th...

Hedging When Applying: Simultaneous Search with Correlation

By S. Nageeb Ali and Ran I. Shorrer

American Economic Review, February 2025

Applicants to schools, colleges, and jobs hedge by applying to a broad range of options, including reaches, matches, and safeties. We develop a simultaneous-search framework that rationalizes this practice. In this framework, the admissions process is cor...

Robust Monopoly Regulation

By Yingni Guo and Eran Shmaya

American Economic Review, February 2025

We study how to regulate a monopolistic firm using a robust-design, non-Bayesian approach. We derive a policy that minimizes the regulator's worst-case regret, where regret is the difference between the regulator's complete-information payoff and his real...

Political Social Learning: Short-Term Memory and Cycles of Polarization

By Gilat Levy and Ronny Razin

American Economic Review, February 2025

This paper investigates the effect of voters' short-term memory on political outcomes by considering politics as a collective learning process. We find that short-term memory may lead to cycles of polarization and consensus across parties' platforms. Foll...

The Benefits of Revealing Race: Evidence from Minority-Owned Local Businesses

By Abhay Aneja, Michael Luca, and Oren Reshef

American Economic Review, February 2025

Is there latent demand to support Black-owned businesses? We explore this question by analyzing a new feature that made it easier to identify Black-owned restaurants on an online platform. We find that labeling restaurants as minority-owned increased cust...

Start-up Costs and Market Power: Lessons from the Renewable Energy Transition

By Akshaya Jha and Gordon Leslie

American Economic Review, February 2025

Firms expect to recover the fixed costs required to start production by earning positive operating profits in subsequent periods. We develop a dynamic competitive benchmark that accounts for start-up costs, showing that static markups overstate the rents ...

How Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR

By Won Chang and L. Alan Winters

American Economic Review, September 2002

The welfare effects of PTAs are most directly linked to changes in trade prices, i.e., the terms of trade. This paper employs a simple strategic pricing game in segmented markets to measure the effects of MERCOSUR on the pricing of "nonmember" exports to ...

Front Matter

American Economic Journal: Economic Policy, February 2025

Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities, and House Prices

By Lutz Sager and Gregor Singer

American Economic Journal: Economic Policy, February 2025

We assess the US Clean Air Act standards for fine particulate matter (PM2.5). Using high-resolution data, we find that the 2005 regulation reduced PM2.5 levels by 0.4 μg/ m3 over five years, with larger effects in more po...

Uncharted Waters: Effects of Maritime Emission Regulation

By Jamie Hansen-Lewis and Michelle Marcus

American Economic Journal: Economic Policy, February 2025

Maritime shipping emits as much fine particulate matter as half of global road traffic. We are the first to measure the consequences of US maritime emissions standards on air quality, human health, racial exposure disparities, and behavior. The introducti...

Mental Health Consequences of Correctional Sentencing

By Manudeep Bhuller, Laura Khoury, and Katrine V. Løken

American Economic Journal: Economic Policy, February 2025

Understanding whether and in what situations correctional sentencing improves or exacerbates defendants' mental health conditions is important for the design of criminal justice policies. We combine detailed Norwegian data on visits to health care profess...

The Impact of Provider Payments on Health Care Utilization of Low-Income Individuals: Evidence from Medicare and Medicaid

By Marika Cabral, Colleen Carey, and Sarah Miller

American Economic Journal: Economic Policy, February 2025

Provider payments are the key determinant of insurance generosity within many health insurance programs covering low-income populations. This paper analyzes a large, federally mandated provider payment increase for primary care services provided to low-in...

Testing Intertemporal Substitution, Implicit Contracts, and Hours Restriction Models of the Labor Market Using Micro Data

By John C. Ham and Kevin T. Reilly

American Economic Review, September 2002

We present new tests of three theories of the labor market: intertemporal substitution, hours restrictions, and implicit contracts. The intertemporal substitution test we implement is an exclusion test robust to many specification errors and we consistent...