The Nonlinear Relationship between Terrorism and Poverty

By Walter Enders and Gary A. Hoover

American Economic Review, May 2012

In spite of the common wisdom that poverty breeds terrorism, econometric tests usually find that terrorism is influenced by population and various measures of democratic freedom, but not per capita GDP. Unlike previous studies, we use a data set containin...

War and Stature: Growing Up during the Nigerian Civil War

By Richard Akresh, Sonia Bhalotra, Marinella Leone, and Una Okonkwo Osili

American Economic Review, May 2012

The Nigerian civil war of 1967-70 was precipitated by secession of the Igbo-dominated south-eastern region to create the state of Biafra. It was the first civil war in Africa, the predecessor of many. We investigate the legacies of this war four decades l...

Nation Building and Economic Growth

By Ellyn Creasey, Ahmed S. Rahman, and Katherine A. Smith

American Economic Review, May 2012

Over the past half-century there have been over three hundred instances of nation building initiatives, episodes where countries jointly give military and economic aid to a country embroiled in conflict. Despite the prevalence and expense of this foreign...

The Determinants and Consequences of School Choice Errors in Kenya

By Adrienne M. Lucas and Isaac M. Mbiti

American Economic Review, May 2012

School choice systems designed to help disadvantaged groups might be hindered by information asymmetries. Kenyan elite secondary schools admit students from the entire country based on a national test score, district quotas, and stated school choices. We ...

Kinship and Financial Networks, Formal Financial Access, and Risk Reduction

By Cynthia Kinnan and Robert Townsend

American Economic Review, May 2012

Kinship networks are beneficial for smoothing consumption and investment, but the channels are not well understood. We study the financing devices used for consumption and investment by Thai households. Households that are connected to banks achieve signi...

Child Health and Conflict in Côte d'Ivoire

By Camelia Minoiu and Olga Shemyakina

American Economic Review, May 2012

We examine the impact of the 2002-07 civil conflict in Côte d'Ivoire on children's health status measured by height-for-age. We use pre- and post-war survey data coupled with information on the location of violent incidents to capture exposure to th...

How Financial Literacy Affects Household Wealth Accumulation

By Jere R. Behrman, Olivia S. Mitchell, Cindy K. Soo, and David Bravo

American Economic Review, May 2012

This study isolates the causal effects of financial literacy and schooling on wealth accumulation using a new household dataset and an instrumental variables (IV) approach. Financial literacy and schooling attainment are both strongly positively associate...

Financial Education and Timely Decision Support: Lessons from Junior Achievement

By Bruce Ian Carlin and David T. Robinson

American Economic Review, May 2012

Using data from a finance theme park at Junior Achievement of Southern California, we explore how timely decision support is impacted by previous exposure to financial education. Some students received a 19-hour curriculum before participating, and some d...

Financial Knowledge and Financial Literacy at the Household Level

By Alan L. Gustman, Thomas L. Steinmeier, and Nahid Tabatabai

American Economic Review, May 2012

There is evidence of a relation between numeracy and wealth held outside of pensions and Social Security. With pensions and Social Security accounting for half of wealth at retirement, and evidence that those with pensions save more in other forms, one wo...

Effectiveness of Employer-Provided Financial Information: Hiring to Retiring

By Robert L. Clark, Melinda Sandler Morrill, and Steven G. Allen

American Economic Review, May 2012

Workers plan and save for retirement throughout their careers. Individuals must navigate complex financial instruments and understand public and employer-provided retirement plan characteristics. Beginning when a worker is first hired, most employers prov...

Efficient Auctions and Interdependent Types

By Dirk Bergemann, Stephen Morris, and Satoru Takahashi

American Economic Review, May 2012

We consider the efficient allocation of a single good with interdependent values in a quasi-linear environment. We present an approach to modeling interdependent preferences distinguishing between "payoff types" and "belief types" and report a characteriz...

Robustly Ranking Mechanisms

By Tilman Börgers and Doug Smith

American Economic Review, May 2012

For a mechanism designer with an objective such as welfare we propose a method for robustly ranking mechanisms. The method is based on eliminating weakly dominated strategies only, and thus does not require any assumptions about agents' beliefs about each...

Approximation in Mechanism Design

By Jason D. Hartline

American Economic Review, May 2012

This paper considers three challenge areas for mechanism design and describes the role approximation plays in resolving them. Challenge 1: optimal mechanisms are finely tuned to precise details of the distribution on agent preferences. Challenge 2: in en...

Copyright Research in the Digital Age: Moving from Piracy to the Supply of New Products

By Joel Waldfogel

American Economic Review, May 2012

Twelve years into the Napster era, economists have devoted substantial attention to revenue consequences of unpaid file sharing. Yet, this is only one of a host of questions whose answers are needed to inform evidence-based copyright policy in the digita...

Is Wikipedia Biased?

By Shane Greenstein and Feng Zhu

American Economic Review, May 2012

This study empirically examines whether Wikipedia has a neutral point of view. It develops a method for measuring the slant of 28 thousand articles about US politics. In its earliest years, Wikipedia's political entries lean Democrat on average. The slant...

Shifts in Privacy Concerns

By Avi Goldfarb and Catherine Tucker

American Economic Review, May 2012

This paper explores how digitization and the associated use of customer data have affected the evolution of consumer privacy concerns. We measure privacy concerns by reluctance to disclose income in an online marketing research survey. Using over three mi...

New Challenges in Multihospital Kidney Exchange

By Itai Ashlagi and Alvin E. Roth

American Economic Review, May 2012

The growth of kidney exchange presents new challenges for the design of kidney exchange clearinghouses. The players now include directors of transplant centers, who see sets of patient-donor pairs, and can choose to reveal only difficult-to-match pairs to...

Holdout in the Assembly of Complements: A Problem for Market Design

By Scott Duke Kominers and E. Glen Weyl

American Economic Review, May 2012

Holdout problems prevent private (voluntary and self-financing) assembly of complementary goods—such as land or dispersed spectrum—from many self-interested sellers. While mechanisms that fully respect sellers' property rights cannot alleviate...

Stability and Strategy-Proofness for Matching with Constraints: A Problem in the Japanese Medical Match and Its Solution

By Yuichiro Kamada and Fuhito Kojima

American Economic Review, May 2012

Real matching markets are subject to constraints. For example, the Japanese government introduced a new medical matching system in 2009 that imposes a "regional cap" in each of its 47 prefectures, which regulates the total number of medical residents who ...

Understanding Price Controls and Nonprice Competition with Matching Theory

By John William Hatfield, Charles R. Plott, and Tomomi Tanaka

American Economic Review, May 2012

We develop a quality competition model to understand how price controls affect market outcomes in buyer-seller markets with discrete goods of varying quality. While competitive equilibria do not necessarily exist in such markets when price controls are im...