Asymmetric Information, Adverse Selection and Online Disclosure: The Case of eBay Motors

By Gregory Lewis

American Economic Review, June 2011

Since Akerlof (1970), economists have understood the adverse selection problem that information asymmetries can create in used goods markets. The remarkable growth in online used goods auctions thus poses a puzzle. Part of the solution is that sellers vol...

Ambiguity Models and the Machina Paradoxes

By Aurélien Baillon, Olivier L'Haridon, and Laetitia Placido

American Economic Review, June 2011

Machina (2009) introduced two examples that falsify Choquet expected utility, presently one of the most popular models of ambiguity. This article shows that Machina's examples falsify not only the model mentioned, but also four other popular models for am...

Optimal Policy Intervention and the Social Value of Public Information

By Jonathan G. James and Phillip Lawler

American Economic Review, June 2011

Svensson (2006) argues that Morris and Shin (2002) is, contrary to what is claimed, pro-transparency. This paper reexamines the issue but with an important modification to the original Morris and Shin framework. Recognizing that central banks impact the e...

Why Do Payment Card Networks Charge Proportional Fees?

By Oz Shy and Zhu Wang

American Economic Review, June 2011

This paper explains why payment card networks charge fees that are proportional to the transaction values instead of charging fixed per-transaction fees. We show that, when card networks and merchants both have market power, card networks earn higher prof...

Information and Prices with Capacity Constraints

By Benjamin Lester

American Economic Review, June 2011

In the theoretical literature on consumer search, one conclusion is nearly universal: as buyers become better able to observe and compare prices ex ante, sellers will set lower prices in equilibrium. In this paper, I examine a standard consumer search mod...

Group Size and Incentives to Contribute: A Natural Experiment at Chinese Wikipedia

By Xiaoquan (Michael) Zhang and Feng Zhu

American Economic Review, June 2011

The literature on the private provision of public goods suggests an inverse relationship between incentives to contribute and group size. We find, however, that after an exogenous reduction of group size at Chinese Wikipedia, the nonblocked contributors d...

Fertility and the Personal Exemption: Comment

By Richard Crump, Gopi Shah Goda, and Kevin J. Mumford

American Economic Review, June 2011

One of the most commonly cited studies on the effect of child subsidies on fertility, Whittington, Alm, and Peters (1990), claimed a large positive effect of child tax benefits on fertility using time series methods. We revisit this question in light of r...

Returns to Education: Evidence from UK Twins: Comment

By Vikesh Amin

American Economic Review, June 2011

In an article published in the American Economic Review, Dorothe Bonjour et al. (2003) used a dataset on female monozygotic twins and showed that the within-twin estimated return to one year of education was 7.7 percent and statistically significant at t...

Corrigendum: Psychological Pressure in Competitive Environments: Evidence from a Randomized Natural Experiment

By Jose Apesteguia and Ignacio Palacios-Huerta

American Economic Review, June 2011

Independent Auditor's Report

American Economic Review, June 2011

Front Matter

American Economic Journal: Applied Economics, July 2011

Front Matter

American Economic Journal: Macroeconomics, July 2011

Government Transfers and Political Support

By Marco Manacorda, Edward Miguel, and Andrea Vigorito

American Economic Journal: Applied Economics, July 2011

This paper estimates the impact of a large anti-poverty cash transfer program, the Uruguayan PANES, on political support for the government that implemented it. Using the discontinuity in program assignment based on a pretreatment eligibility score, we f...

Estimating the Market-Perceived Monetary Policy Rule

By James D. Hamilton, Seth Pruitt, and Scott Borger

American Economic Journal: Macroeconomics, July 2011

We introduce a novel method for estimating a monetary policy rule using macroeconomic news. We estimate directly the policy rule agents use to form their expectations by linking news' effects on forecasts of both economic conditions and monetary policy. E...

Do Value-Added Estimates Add Value? Accounting for Learning Dynamics

By Tahir Andrabi, Jishnu Das, Asim Ijaz Khwaja, and Tristan Zajonc

American Economic Journal: Applied Economics, July 2011

This paper illustrates the central role of persistence in estimating and interpreting value-added models of learning. Using data from Pakistani public and private schools, we apply dynamic panel methods that address three key empirical challenges: imperfe...

Optimal Inflation for the US Economy

By Roberto M. Billi

American Economic Journal: Macroeconomics, July 2011

This paper studies the optimal long-run inflation rate (OIR) in a small New Keynesian model, where the only policy instrument is a short-term nominal interest rate that may occasionally run against a zero lower bound (ZLB). The model allows for worst-case...

Financial Constraints and Inflated Home Prices during the Real Estate Boom

By Itzhak Ben-David

American Economic Journal: Applied Economics, July 2011

During the housing boom, financially constrained home buyers artificially inflated transaction prices in order to draw larger mortgages. Using transaction data from Illinois that includes sellers' offers to inflate prices, I estimate that in 2005-2008, u...

CONDI: A Cost-of-Nominal-Distortions Index

By Stefano Eusepi, Bart Hobijn, and Andrea Tambalotti

American Economic Journal: Macroeconomics, July 2011

We construct a PCE-based price index whose weights minimize the welfare costs of nominal distortions: a cost-of-nominal-distortions index. We compute these weights in a multi-sector New Keynesian model, calibrated to match US data on price stickiness, lab...

Low-Skilled Immigration and the Labor Supply of Highly Skilled Women

By Patricia Cortés and José Tessada

American Economic Journal: Applied Economics, July 2011

Low-skilled immigrants represent a significant fraction of employment in services that are close substitutes of household production. This paper studies whether the increased supply of low-skilled immigrants has led high-skilled women, who have the highes...

Education and Catch-Up in the Industrial Revolution

By Sascha O. Becker, Erik Hornung, and Ludger Woessmann

American Economic Journal: Macroeconomics, July 2011

Research increasingly stresses the role of human capital in modern economic development. Existing historical evidence -- mostly from British textile industries -- however, rejects that formal education was important for the Industrial Revolution. Our new ...