An Empirical Dynamic Model of Trade with Consumer Accumulation

By Paul Piveteau

American Economic Journal: Microeconomics, November 2021

This paper develops a dynamic structural model of trade in which firms slowly accumulate consumers in foreign markets. Estimating the model using export data from individual firms and a particle Markov chain Monte Carlo estimator, the model predicts lower...

Obsolescence of Capital and Investment Spikes

By Arthur Fishman and Boyan Jovanovic

American Economic Journal: Microeconomics, November 2021

The prospect of capital obsolescence inhibits investment. Investors thus become more optimistic when the obsolescence of their capital slows down. We propose a model with no fixed costs of investment, and random technological progress that induces obsoles...

Voter Turnout and Preference Aggregation

By Kei Kawai, Yuta Toyama, and Yasutora Watanabe

American Economic Journal: Microeconomics, November 2021

We study how voter turnout affects the aggregation of preferences in elections. Under voluntary voting, election outcomes disproportionately aggregate the preferences of voters with low voting cost and high preference intensity. We show identification of ...

The Times They Are A-Changing: Experimenting with Dynamic Adverse Selection

By Felipe A. Araujo, Stephanie W. Wang, and Alistair J. Wilson

American Economic Journal: Microeconomics, November 2021

We examine a common value dynamic matching environment where adverse selection accrues slowly over time. Theoretical best responses are therefore time varying, and the prior experimental literature suggests that sequential environments might lead to great...

Fair Social Ordering, Egalitarianism, and Animal Welfare

By Marc Fleurbaey and Martin Van der Linden

American Economic Journal: Microeconomics, November 2021

We study fairness in economies where humans consume one private good and one public good representing the welfare of other species. We show that a social evaluator cannot be egalitarian with respect to humans while always respecting humans' unanimous pref...

Inequality, Bipolarization, and Tax Progressivity

By Oriol Carbonell-Nicolau and Humberto Llavador

American Economic Journal: Microeconomics, November 2021

The steady rise in income and wealth inequality in the last four decades, together with the evolution of a vanishing middle class, has raised concerns about potentially pernicious effects of these trends on social stability and economic growth. This paper...

Effects of Copyrights on Science: Evidence from the WWII Book Republication Program

By Barbara Biasi and Petra Moser

American Economic Journal: Microeconomics, November 2021

Copyrights, which establish intellectual property in music, science, and other creative goods, are intended to encourage creativity. Yet, copyrights also raise the cost of accessing existing work—potentially discouraging future innovation. This paper us...

Orchestrating Information Acquisition

By Jingfeng Lu, Lixin Ye, and Xin Feng

American Economic Journal: Microeconomics, November 2021

We study how to orchestrate information acquisition in an environment where bidders endowed with original estimates ("types") about their private values can acquire further information by incurring a cost. We consider both single-round and fully sequentia...

Prosecutor Quality, Witness Participation, Crime, and Reform

By Andrew F. Daughety and Jennifer F. Reinganum

American Economic Journal: Microeconomics, November 2021

We develop a model wherein concerns about prosecutor quality reduce the willingness of witnesses to cooperate with prosecutors. This causes an increase in the crime rate and in wrongly convicted innocent defendants. Because citizens are taxpayers and may ...

The Market for Online Influence

By Itay P. Fainmesser and Andrea Galeotti

American Economic Journal: Microeconomics, November 2021

Recent developments in social media have morphed the age-old practice of paying influential individuals for product endorsements into a multibillion dollar industry, extending well beyond celebrity sponsorships. We develop a parsimonious model in which ...

Front Matter

American Economic Journal: Economic Policy, November 2021

The Internet as a Tax Haven?

By David R. Agrawal

American Economic Journal: Economic Policy, November 2021

If online transactions are tax free, increased online shopping may lower tax rates as jurisdictions seek to reduce tax avoidance; but, if online firms remit taxes, online sales may put upward pressure on tax rates because internet sales help enforce desti...

Subsidizing Fuel-Efficient Cars: Evidence from China's Automobile Industry

By Chia-Wen Chen, Wei-Min Hu, and Christopher R. Knittel

American Economic Journal: Economic Policy, November 2021

This paper examines the response of vehicle purchase behavior to China's largest national subsidy program for fuel-efficient vehicles during 2010 and 2011. Using variation from the program's eligibility cutoffs and the rollout of the subsidy program, the ...

Fiscal Transfers in the Spatial Economy

By Marcel Henkel, Tobias Seidel, and Jens Suedekum

American Economic Journal: Economic Policy, November 2021

Many countries shift substantial public resources across jurisdictions to mitigate spatial economic disparities. We use a general equilibrium model with multiple asymmetric regions, labor mobility, and costly trade to carve out the aggregate implications ...

Local Protectionism, Market Structure, and Social Welfare: China's Automobile Market

By Panle Jia Barwick, Shengmao Cao, and Shanjun Li

American Economic Journal: Economic Policy, November 2021

This study documents the presence of local protectionism and quantifies its impacts on market competition and social welfare in the context of China's automobile market. A salient feature of China's auto market is that vehicle models by joint ventures a...

Corporate Taxation under Weak Enforcement

By Pierre Bachas and Mauricio Soto

American Economic Journal: Economic Policy, November 2021

How should developing countries tax corporate income? We study this question in Costa Rica, where firms face higher average tax rates on profits when revenues marginally increase. We combine discontinuity and bunching designs to estimate the elasticity of...

Democracy and Aid Donorship

By Angelika J. Budjan and Andreas Fuchs

American Economic Journal: Economic Policy, November 2021

Almost half of the world's states provide bilateral development assistance. While previous research takes the set of donor countries as exogenous, this article introduces a new dataset on aid giving that covers all countries in the world, both rich and po...

Disclosure and Subsequent Innovation: Evidence from the Patent Depository Library Program

By Jeffrey L. Furman, Markus Nagler, and Martin Watzinger

American Economic Journal: Economic Policy, November 2021

How important is access to patent documents for subsequent innovation? We examine the expansion of the USPTO Patent Library system after 1975. Patent libraries provided access to patents before the Internet. We find that after patent library opening, loca...

Urban Water Disinfection and Mortality Decline in Lower-Income Countries

By Sonia R. Bhalotra, Alberto Diaz-Cayeros, Grant Miller, Alfonso Miranda, and Atheendar S. Venkataramani

American Economic Journal: Economic Policy, November 2021

Historically, improvements in municipal water quality led to substantial mortality decline in today's wealthy countries. However, water disinfection has not consistently produced large benefits in lower-income countries. We study this issue by analyzing a...

Network Externality and Subsidy Structure in Two-Sided Markets: Evidence from Electric Vehicle Incentives

By Katalin Springel

American Economic Journal: Economic Policy, November 2021

This paper uses new, large-scale vehicle registry data from Norway and a two-sided market framework to show nonneutrality of different subsidies and estimate their impact on electric vehicle adoption when network externalities are present. Estimates sugge...