Dynamics of Consumer Responses to Medical Price Changes

By Norihiro Komura and Shun-Ichiro Bessho

American Economic Review: Insights, December 2025

How individuals respond to coinsurance rates is fundamental for insurance market design, but most existing estimates speak only to short-run responses. We exploit a unique policy experiment that increased the coinsurance rate some elderly individuals face...

Electric Vehicles and the Energy Transition: Unintended Consequences of Time-of-Use Pricing

By Megan R. Bailey, David P. Brown, Erica Myers, Blake Shaffer, and Frank A. Wolak

American Economic Review: Insights, December 2025

The growth of electric vehicles (EVs) raises new challenges for electricity systems. We implement a field experiment to assess the effect of time-of-use (TOU) pricing and managed charging on EV charging behavior. We find that while TOU pricing is effectiv...

Data Linkages and Privacy Regulation

By Rossella Argenziano and Alessandro Bonatti

American Economic Journal: Microeconomics

We assess the efficacy of privacy regulation when consumers are privacy conscious. We develop a model of data linkages where a consumer interacts sequentially with two firms: one firm collects data on consumer behavior, and the other firm leverages the...

Gravity with Gravitas: A Solution to the Border Puzzle

By James E. Anderson and Eric van Wincoop

American Economic Review, March 2003

Gravity equations have been widely used to infer trade flow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias...

The Missing Middle Managers: Labor Costs, Firm Structure, and Development

By Jonas Hjort, Hannes Malmberg, and Todd Schoellman

American Economic Review: Insights

Using data obtained from human resources consulting firms, we document the cost to large firms of hiring managers and business professionals in 146 countries worldwide. The average pay in the poorest decile of countries is $18,000 per year, which is 9....

TFPR: Dispersion and Cyclicality

By Russell Cooper and Ozgen Ozturk

American Economic Journal: Macroeconomics

This paper studies the determinants of the cyclicality of TFPR. The distribution of TFPR is dependent upon exogenous shocks and the endogenous determination of prices. An overlapping generations model studies the factors that shape the TFPR distribution. ...

Rational Misspecification: Framework and Applications

By Ran Eilat and Kfir Eliaz

American Economic Journal: Microeconomics

This paper proposes a framework for assessing whether misspecified decision makers would be willing to pay for information that can potentially make them less misspecified. We introduce a prior-free approach, based on “constrained” maximal regret, ...

Patenting Life: Tales from the Front Lines of Intellectual Property and the New Biology by Jorge Goldstein

By Josh Lerner

Journal of Economic Literature

Collective Bargaining Rights, Policing, and Civilian Deaths

By Jamein P. Cunningham and Rob Gillezeau

American Economic Journal: Economic Policy

Using an event-study design, we examine whether states' introduction of duty to bargain requirements for police unions led to meaningful changes in civilians killed by law enforcement. We find that the introduction of collective bargaining rights signific...

The Effect of Deactivating Facebook and Instagram on Users’ Emotional State

By Hunt Allcott, Matthew Gentzkow, Benjamin Wittenbrink, Taylor Brown, Juan C. Cisneros, Adriana Crespo-Tenorio, Drew Dimmery, Deen Freelon, Sandra González-Bailón, Andrew M. Guess, Young Mie Kim, David Lazer, Neil Malhotra, Devra Moehler, Sameer Nair-Desai, Brendan Nyhan, Jennifer Pan, Jaime Settle, Emily Thorson, Rebekah Tromble, Carlos Velasco Rivera, Arjun Wilkins, Magdalena Wojcieszak, Annie Franco, Chad Kiewiet de Jonge, Winter Mason, Natalie Jomini Stroud, and Joshua A. Tucker

American Economic Journal: Economic Policy

We estimate the effect of social media deactivation on users’ emotional state in two large randomized experiments before the 2020 U.S. election. People who deactivated Facebook for the six weeks before the election reported a 0.060 standard deviation...

Portfolio Choice and Trading in a Large 401(k) Plan

By Julie Agnew, Pierluigi Balduzzi, and Annika Sundén

American Economic Review, March 2003

We study nearly 7,000 retirement accounts during the April 1994-August 1998 period. Several interesting patterns emerge. Most asset allocations are extreme (either 100 percent or zero percent in equities) and there is inertia in asset allocations. Equity ...

Early Grade Retention Harms Adult Earnings

By Jiee Zhong

American Economic Journal: Applied Economics

This paper provides new causal evidence on the effects of grade retention on educational attainment, behavioral outcomes, and labor market performance by analyzing Texas’s reading test-based retention policy. Using a fuzzy regression discontinuity des...

The Economics of Discriminatory Job Reservations

By James P. Choy

American Economic Journal: Microeconomics

A society reserves certain jobs for members of a politically dominant social group to maximize the wages of workers in that group. Through an appropriate choice of reserved jobs, the dominant group chooses both the size of the set of reserved jobs and ...

Front Matter

American Economic Review, December 2025

When Product Markets Become Collective Traps: The Case of Social Media

By Leonardo Bursztyn, Benjamin Handel, Rafael Jiménez-Durán, and Christopher Roth

American Economic Review, December 2025

Individuals might experience negative utility from not consuming a popular product. With such externalities to nonusers, standard consumer surplus measures, which take aggregate consumption as given, fail to appropriately capture consumer welfare. We prop...

Supply, Demand, Institutions, and Firms: A Theory of Labor Market Sorting and the Wage Distribution

By Daniel Haanwinckel

American Economic Review, December 2025

This paper examines how workforce composition, labor demand, and minimum wage jointly determine wages through their effects on worker-task assignments, firm wage premiums, and firm-worker sorting. Using an estimated model of monopsonistic local labor mark...

Downward Rigidity in the Wage for New Hires

By Jonathon Hazell and Bledi Taska

American Economic Review, December 2025

Wage rigidity is an important explanation for unemployment fluctuations. In benchmark models wages for new hires are key, but there is limited evidence on this margin. We use wages posted on vacancies, with job and establishment information, to measure th...

Gender Differences in Financial Advice

By Tabea Bucher-Koenen, Andreas Hackethal, Johannes Koenen, and Christine Laudenbach

American Economic Review, December 2025

Based on data gathered from 27,000 real-world meetings between financial advisors and clients of a large German bank, we show that advisors offer more self-serving advice to women, while men are more likely to receive sales fee rebates and less likely to ...

A Goldilocks Theory of Fiscal Deficits

By Atif Mian, Ludwig Straub, and Amir Sufi

American Economic Review, December 2025

We develop a tractable framework for deficit and debt dynamics. A "free lunch" fiscal deficit—one that raises spending without higher future taxes—is sustainable without zero lower bound (ZLB) only when R < G − φ, where φ is the sensitivity of the...

Strategic Voting in Two-Party Legislative Elections

By Niall Hughes

American Economic Review, December 2025

I study multidistrict legislative elections with two parties and two binary dimensions of policy. Strategic voters focus on the dimension where their district is most likely to be pivotal in the legislature. Anticipating this, candidates select different ...