Challenges from State-Federal Interactions in US Climate Change Policy

By Lawrence H. Goulder and Robert N. Stavins

American Economic Review, May 2011

With a focus on two sorts of regulation—renewable electricity and clean energy standards, and automobile fuel-economy standards—we analyze problematic interactions that arise when state policies are nested within the domain of Federal policy. ...

The Role of Trade and Competitiveness Measures in US Climate Policy

By Carolyn Fischer and Alan K. Fox

American Economic Review, May 2011

We review the proposed measures for addressing competitiveness and carbon leakage concerns in recent US climate policy legislation. For eligible energy-intensive, trade-exposed sectors, output-based rebates would initially dampen cost increases; later, bo...

Vertical Targeting and Leakage in Carbon Policy

By James B. Bushnell and Erin T. Mansur

American Economic Review, May 2011

This paper examines the intersection between two aspects of climate policy design. The first is the point of regulation: should it be placed on pollution sources, carbon-rich inputs, or consumers? The second aspect concerns the external effects of a local...

The Effect of Allowing Pollution Offsets with Imperfect Enforcement

By Hilary Sigman and Howard F. Chang

American Economic Review, May 2011

Public policies for pollution control, including climate change policies, sometimes allow polluters in one sector subject to an emissions cap to offset excessive emissions with pollution abatement in another sector. The government may find it more costly ...

Corrective Taxation versus Liability

By Steven Shavell

American Economic Review, May 2011

Taxation and liability are compared as means of controlling harmful externalities, with a view toward explaining why the use of liability predominates over taxation. Taxation suffers from a disadvantage in the analysis: because taxes do not reflect all th...

Optimal Proof Burdens, Deterrence, and the Chilling of Desirable Behavior

By Louis Kaplow

American Economic Review, May 2011

The optimal stringency of the burden of proof is characterized in a model in which relaxing the proof burden enhances deterrence but also chills desirable behavior. The result are strikingly different from those in prior work that uses a simpler model in ...

Trust in Public Institutions over the Business Cycle

By Betsey Stevenson and Justin Wolfers

American Economic Review, May 2011

We document that trust in public institutions—and particularly trust in banks, business and government—has declined over recent years. US time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions....

Predicting and Preventing Shootings among At-Risk Youth

By Dana Chandler, Steven D. Levitt, and John A. List

American Economic Review, May 2011

Each year, more than 250 students in the Chicago Public Schools (CPS) are shot. The authors of this paper worked with the leadership of CPS to build a predictive model of shootings that helped determine which students would be included in a highly targete...

The "Collapse in Quality" Hypothesis

By Andrei A. Levchenko, Logan T. Lewis, and Linda L. Tesar

American Economic Review, May 2011

This paper evaluates the hypothesis that during the 2008-2009 collapse in international trade, imports of higher quality goods experienced larger reductions compared to low-quality imports, using data on US imports disaggregated by HS-10 product category ...

Trade Finance and the Great Trade Collapse

By JaeBin Ahn, Mary Amiti, and David E. Weinstein

American Economic Review, May 2011

Economic models that do not incorporate financial frictions only explain about 70 to 80 percent of the decline in world trade that occurred in the 2008-2009 crisis. We review evidence that shows financial factors also contributed to the great trade collap...

US Trade and Inventory Dynamics

By George Alessandria, Joseph P. Kaboski, and Virgiliu Midrigan

American Economic Review, May 2011

We examine the source of the large fall and rebound in US trade in the recent recession. While trade fell and rebounded more than expenditures or production of traded goods, we find that relative to the magnitude of the downturn, these trade fluctuations ...

Vertical Linkages and the Collapse of Global Trade

By Rudolfs Bems, Robert C. Johnson, and Kei-Mu Yi

American Economic Review, May 2011

A common view is that cross-border vertical linkages played a key role in the 2008-2009 collapse of global trade. This paper presents two accounting results from a global input-output framework that shed light on this channel. We feed in observed changes ...

Does Market Experience Eliminate Market Anomalies? The Case of Exogenous Market Experience

By John A. List

American Economic Review, May 2011

A vibrant literature has emerged that suggests willingness to pay and willingness to accept measures of value are quite different for inexperienced consumers but that value differences erode with market experience. One potential shortcoming of this litera...

The Persistence of Treatment Effects with Norm-Based Policy Instruments: Evidence from a Randomized Environmental Policy Experiment

By Paul J. Ferraro, Juan Jose Miranda, and Michael K. Price

American Economic Review, May 2011

Policymakers increasingly use norm-based messages to promote conservation efforts. Despite the apparent success of such strategies, empirical analyses have thus far focused exclusively on short-run effects. From a policy perspective, however, whether and ...

Can Tailored Communications Motivate Environmental Volunteers? A Natural Field Experiment

By Omar Al-Ubaydli and Min Lee

American Economic Review, May 2011

Volunteering is a significant component of economic activity, especially for environmental organizations. Environmental organizations that rely on volunteers communicate with them using a variety of media, such as newsletters. This is a field experiment i...

Using Artefactual Field Experiments to Learn about the Incentives for Sustainable Forest Use in Developing Economies

By Maarten Voors, Erwin Bulte, Andreas Kontoleon, John A. List, and Ty Turley

American Economic Review, May 2011

We implement a public goods game and a social intervention modeled after a public goods game in rural Sierra Leone near the Gola Forest Reserve. We also collect demographic, economic and forest conservation data on households in the area. We use this data...

Long-Term Consequences of Vietnam-Era Conscription: New Estimates Using Social Security Data

By Joshua D. Angrist, Stacey H. Chen, and Jae Song

American Economic Review, May 2011

We use the draft lottery to construct instrumental variables (IV) estimates of the impact of Vietnam-era military service on veterans' Social Security (SSA) earnings through 2007. We also use SSA data to construct IV estimates for employment (as measured ...

Battle Scars? The Puzzling Decline in Employment and Rise in Disability Receipt among Vietnam Era Veterans

By David H. Autor, Mark G. Duggan, and David S. Lyle

American Economic Review, May 2011

Using Current Population Survey and US Army administrative data, we document that between 2000 and 2010, the employment rate of Vietnam era veterans fell markedly relative to non-veterans of the same cohorts while simultaneously their enrollment increased...

Long-Run Mortality Effects of Vietnam-Era Army Service: Evidence from Australia's Conscription Lotteries

By Peter Siminski and Simon Ville

American Economic Review, May 2011

We estimate the effect of Vietnam-era Army service on mortality, exploiting Australia's conscription lotteries for identification. We utilize population data on deaths during 1994-2007 and military personnel records. The estimates are identified by over 5...

The War at Home: Effects of Vietnam-Era Military Service on Postwar Household Stability

By Dalton Conley and Jennifer Heerwig

American Economic Review, May 2011

Prior researchers have deployed the Vietnam-era draft lottery as an instrument to estimate causal effects of military service on health and earnings. However, household and residential outcomes may be more sensitive to the psychological effects of militar...