Smoke Gets in Your Eyes: Cigarette Tax Salience and Regressivity

By Jacob Goldin and Tatiana Homonoff

American Economic Journal: Economic Policy, February 2013

Recent evidence suggests consumers pay less attention to commodity taxes levied at the register than to taxes included in a good's posted price. If this attention gap is larger for high-income consumers than for low-income consumers, policymakers can m...

Front Matter

American Economic Journal: Economic Policy, February 2013

The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development

By Quamrul Ashraf and Oded Galor

American Economic Review, February 2013

This research advances and empirically establishes the hypothesis that, in the course of the prehistoric exodus of Homo sapiens out of Africa, variation in migratory distance to various settlements across the globe affected genetic diversity and has ha...

Pandering to Persuade

By Yeon-Koo Che, Wouter Dessein, and Navin Kartik

American Economic Review, February 2013

An agent advises a principal on selecting one of multiple projects or an outside option. The agent is privately informed about the projects' benefits and shares the principal's preferences except for not internalizing her value from the outside option. ...

School Admissions Reform in Chicago and England: Comparing Mechanisms by Their Vulnerability to Manipulation

By Parag A. Pathak and Tayfun Sönmez

American Economic Review, February 2013

In Fall 2009, Chicago authorities abandoned a school assignment mechanism midstream, citing concerns about its vulnerability to manipulation. Nonetheless, they asked thousands of applicants to re-rank schools in a new mechanism that is also manipulable...

Coercive Contract Enforcement: Law and the Labor Market in Nineteenth Century Industrial Britain

By Suresh Naidu and Noam Yuchtman

American Economic Review, February 2013

British Master and Servant law made employee contract breach a criminal offense until 1875. We develop a contracting model generating equilibrium contract breach and prosecutions, then exploit exogenous changes in output prices to examine the effects of...

Price Discrimination and Bargaining: Empirical Evidence from Medical Devices

By Matthew Grennan

American Economic Review, February 2013

Many important issues in business-to-business markets involve price discrimination and negotiated prices, situations where theoretical predictions are ambiguous. This paper uses new panel data on buyer-supplier transfers and a structural model to empiri...

Selection on Moral Hazard in Health Insurance

By Liran Einav, Amy Finkelstein, Stephen P. Ryan, Paul Schrimpf, and Mark R. Cullen

American Economic Review, February 2013

We use employee-level panel data from a single firm to explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral ("moral hazard") response to insurance, a phenomenon we label "selection on mora...

Are Consumers Myopic? Evidence from New and Used Car Purchases

By Meghan R. Busse, Christopher R. Knittel, and Florian Zettelmeyer

American Economic Review, February 2013

We investigate whether car buyers are myopic about future fuel costs. We estimate the effect of gasoline prices on short-run equilibrium prices of cars of different fuel economies. We then compare the implied changes in willingness-to-pay to the associat...

The Impact of Medical Liability Standards on Regional Variations in Physician Behavior: Evidence from the Adoption of National-Standard Rules

By Michael Frakes

American Economic Review, February 2013

I explore the association between regional variations in physician behavior and the geographical scope of malpractice standards of care. I estimate a 30-50 percent reduction in the gap between state and national utilization rates of various treatments ...

Innovation and Institutional Ownership

By Philippe Aghion, John Van Reenen, and Luigi Zingales

American Economic Review, February 2013

We find that greater institutional ownership is associated with more innovation. To explore the mechanism, we contrast the "lazy manager" hypothesis with a model where institutional owners increase innovation incentives through reducing career risks. T...

Cross-Country Differences in Productivity: The Role of Allocation and Selection

By Eric Bartelsman, John Haltiwanger, and Stefano Scarpetta

American Economic Review, February 2013

This paper investigates the effect of idiosyncratic (firm-level) policy distortions on aggregate outcomes. Exploiting harmonized firm-level data for a number of countries, we show that there is substantial and systematic cross-country variation in the ...

Making Sense of Nonbinding Retail-Price Recommendations

By Stefan Buehler and Dennis L. Gärtner

American Economic Review, February 2013

We model retail-price recommendations (RPRs) as a communication device in vertical supply relations with private manufacturer information on production costs and consumer demand. With static trade, RPRs are irrelevant, and the equilibrium outcome is inef...

Entropy and the Value of Information for Investors

By Antonio Cabrales, Olivier Gossner, and Roberto Serrano

American Economic Review, February 2013

Consider an investor who fears ruin when facing investments that satisfy no-arbitrage. Before investing he can purchase information about the state of nature as an information structure. Given his prior, information structure α investment dominat...

Technological Diversification

By Miklós Koren and Silvana Tenreyro

American Economic Review, February 2013

Economies at early stages of development are frequently shaken by large changes in growth rates, whereas advanced economies tend to experience relatively stable growth rates. To explain this pattern, we propose a model of technological diversification....

Dictating the Risk: Experimental Evidence on Giving in Risky Environments

By J. Michelle Brock, Andreas Lange, and Erkut Y. Ozbay

American Economic Review, February 2013

We study if and how social preferences extend to risky environments. We provide experimental evidence from different versions of dictator games with risky outcomes and establish that preferences that are exclusively based on ex post or on ex ante compa...

Children's Resources in Collective Households: Identification, Estimation, and an Application to Child Poverty in Malawi

By Geoffrey R. Dunbar, Arthur Lewbel, and Krishna Pendakur

American Economic Review, February 2013

The share of household resources devoted to children is hard to identify because consumption is measured at the household level and goods can be shared. Using semiparametric restrictions on individual preferences within a collective model, we identify ...

Cultural Change as Learning: The Evolution of Female Labor Force Participation over a Century

By Raquel Fernández

American Economic Review, February 2013

This paper develops a learning model of cultural change to investigate why women's labor force participation (LFP) and attitudes toward women's work both changed dramatically. In the model, women's beliefs about the long-run payoff from working evolve end...

Submission Fees and Response Times in Academic Publishing

By Christopher Cotton

American Economic Review, February 2013

Both submission fees and response times enable editors to maintain an acceptable refereeing burden by discouraging the submission of articles with low probability of acceptance. When authors differ in their ability or willingness to pay submission fees an...

Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior

By Matthias Sutter, Martin G. Kocher, Daniela Glätzle-Rützler, and Stefan T. Trautmann

American Economic Review, February 2013

We study risk attitudes, ambiguity attitudes, and time preferences of 661 children and adolescents, aged ten to eighteen years, in an incentivized experiment and relate experimental choices to field behavior. Experimental measures of impatience are found ...