What Explains Changes in Retirement Plans during the Great Recession?

By Gopi Shah Goda, John B. Shoven, and Sita Nataraj Slavov

American Economic Review, May 2011

We examine changes in subjective probabilities regarding retirement between the 2006 and 2008 waves of the Health and Retirement Study. Using a first-difference approach to eliminate individual heterogeneity, we find that the steep drop in asset prices in...

Time to Retire? The Effect of State Fiscal Policies on Retirement Decisions

By Tami Gurley-Calvez and Brian Hill

American Economic Review, May 2011

Our research addresses the importance of state fiscal policies on the probability of retirement using a panel of individual tax return data. Results indicate that a one percentage point increase in the income or sales tax rate reduces the probability of r...

Crash and Wait? The Impact of the Great Recession on the Retirement Plans of Older Americans

By Brooke Helppie McFall

American Economic Review, May 2011

This study uses data from pre- and post-crash surveys from the Cognitive Economics study to examine the impact of recent stock and labor market wealth losses on the planned retirement ages of older Americans. Regression estimates imply that the average we...

Does Concentration Matter? Measurement of Petroleum Merger Price Effects

By Daniel Hosken, Louis Silvia, and Christopher Taylor

American Economic Review, May 2011

We have estimated the price effects of two changes in market structure resulting from two changes in the ownership of gasoline refineries in the San Francisco Bay area: Tosco's purchase of Unocal's Rodeo refinery in April 1997 and UDS's purchase of Tosco'...

More Evidence on the Performance of Merger Simulations

By Matthew C. Weinberg

American Economic Review, May 2011

Merger simulations are commonly used to simulate the effects of potential mergers. Despite the large resources devoted to merger review, little evidence exists on the accuracy of these methods. This paper uses the acquisition of Tambrands by Proctor and G...

Challenges in Merger Simulation Analysis

By Christopher R. Knittel and Konstantinos Metaxoglou

American Economic Review, May 2011

In this paper, we share our experience with merger simulations using a Random Coefficient Logit model on the demand side and assuming a static Bertrand game on the supply side. Drawing largely from our work in Knittel and Metaxoglou (2008), we show that d...

The Effect of Bottle Laws on Income: New Empirical Results

By Bevin Ashenmiller

American Economic Review, May 2011

Eleven US states have "bottle laws," deposit-refund programs that combine a consumption tax with a recycling rebate. When states set the bottle deposit low enough it becomes a tax on high wage earners, for whom the opportunity cost of their time prevents ...

Promoting Recycling: Private Values, Social Norms, and Economic Incentives

By W. Kip Viscusi, Joel Huber, and Jason Bell

American Economic Review, May 2011

Evidence from a nationally representative sample of households illuminates the determinants of recycling behavior for plastic water bottles. Private values of the environment are influential in promoting recycling, as are personal norms for pro-environmen...

The Environmental Consequences of Global Reuse

By Thomas Kinnaman and Hide-Fumi Yokoo

American Economic Review, May 2011

This paper summarizes a two-country model that solves for optimal tax rates to achieve efficiency in an economy with international trade in used consumer electronics. If only the developed nation can tax the disposal of e-waste, then the global Pareto Opt...

The Diffusion of Energy Efficiency in Building

By Nils Kok, Marquise McGraw, and John M. Quigley

American Economic Review, May 2011

We analyze the diffusion of buildings certified for energy efficiency across US property markets. Using a panel of 48 metropolitan areas (MSAs) observed over the last 15 years, we model the geographic patterns and dynamics of building certification, relat...

Do Residential Customers Respond to Hourly Prices? Evidence from a Dynamic Pricing Experiment

By Frank A. Wolak

American Economic Review, May 2011

This paper uses the results of a dynamic pricing experiment for households in the District of Columbia to determine whether the reduction in demand associated with an hourly price signal is economically different from the demand reduction associated with ...

Electricity Consumption and Durable Housing: Understanding Cohort Effects

By Dora L. Costa and Matthew E. Kahn

American Economic Review, May 2011

We find that households living in California homes built in the 1960s and 1970s had high electricity consumption in 2000 relative to houses of more recent vintages because the price of electricity at the time of home construction was low. Homes built in t...

Is an Automaker's Road to Bankruptcy Paved with Customers' Beliefs?

By Ali Hortaçsu, Gregor Matvos, Chaehee Shin, Chad Syverson, and Sriram Venkataraman

American Economic Review, May 2011

We explore the role the feedback loop between firms' financial health and consumers' demand for their products plays in the auto market. We construct a simple model of an automaker making pricing and debt service (continuation) decisions while recognizing...

Consumers' Perceptions and Misperceptions of Energy Costs

By Hunt Allcott

American Economic Review, May 2011

This paper presents three initial stylized facts from the Vehicle Ownership and Alternatives Survey (VOAS), a nationally representative survey that elicits consumers' beliefs about gasoline prices and the relative energy costs of autos with different fuel...

Fuel Economy, Car Class Mix, and Safety

By Mark R. Jacobsen

American Economic Review, May 2011

Fuel economy standards change the composition of the vehicle fleet, potentially influencing accident fatality risks. I estimate the direction and magnitude of this impact, introducing a correction for selection on driver behavior. A policy application usi...

Forecasting Gasoline Prices Using Consumer Surveys

By Soren T. Anderson, Ryan Kellogg, James M. Sallee, and Richard T. Curtin

American Economic Review, May 2011

This paper analyzes the predictive power of a new data set of consumer gasoline price forecasts taken from the Michigan Survey of Consumers (MSC). MSC data generally perform as well as a no-change forecast in predicting future gasoline prices, and they su...

Credit Ratings and Security Prices in the Subprime MBS Market

By Adam Ashcraft, Paul Goldsmith-Pinkham, Peter Hull, and James Vickery

American Economic Review, May 2011

We present and discuss preliminary evidence suggesting that credit ratings significantly influenced prices for subprime mortgage-backed securities issued in the period leading up to the recent financial crisis. Ratings are closely correlated with prices e...

Credit Ratings Accuracy and Analyst Incentives

By Heski Bar-Isaac and Joel Shapiro

American Economic Review, May 2011

The financial crisis has brought a new focus on the accuracy of credit rating agencies (CRAs). In this paper, we highlight the incentives of analysts at the CRAs to provide accurate ratings. We construct a model in which analysts initially work at a CRA a...

Did Credit Rating Agencies Make Unbiased Assumptions on CDOs?

By John M. Griffin and Dragon Yongjun Tang

American Economic Review, May 2011

We compare key CDO assumptions from two departments within the same rating agency but with different financial incentives. Assumptions made by the ratings division are more favorable than those by the surveillance department. The differences are not expla...

Credit Ratings and the Evolution of the Mortgage-Backed Securities Market

By Jie He, Jun Qian, and Philip E. Strahan

American Economic Review, May 2011

We compare the structure and performance of private (non-GSE) mortgage-backed securities sold by large issuers vs. those sold by small issuers over the period 2000-2006. Securities sold by large issuers have less subordination—a greater fraction of ...