Violence and Risk Preference: Experimental Evidence from Afghanistan

By Michael Callen, Mohammad Isaqzadeh, James D. Long, and Charles Sprenger

American Economic Review, January 2014

We investigate the relationship between violence and economic risk preferences in Afghanistan combining: (i) a two-part experimental procedure identifying risk preferences, violations of Expected Utility, and specific preferences for certainty; (ii) co...

Consumption Risk-Sharing in Social Networks

By Attila Ambrus, Markus Mobius, and Adam Szeidl

American Economic Review, January 2014

We develop a model in which connections between individuals serve as social collateral to enforce informal insurance payments. We show that: (i) The degree of insurance is governed by the expansiveness of the network, measured with the per capita numbe...

Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution

By William Jack and Tavneet Suri

American Economic Review, January 2014

We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce...

Estimating a Structural Model of Herd Behavior in Financial Markets

By Marco Cipriani and Antonio Guarino

American Economic Review, January 2014

We develop a new methodology to estimate herd behavior in financial markets. We build a model of informational herding that can be estimated with financial transaction data. In the model, rational herding arises because of information-event uncertainty...

Worktime Regulations and Spousal Labor Supply

By Dominique Goux, Eric Maurin, and Barbara Petrongolo

American Economic Review, January 2014

We study interdependencies in spousal labor supply by exploiting the design of the French workweek reduction, which introduced exogenous variation in one's spouse's labor supply, at constant earnings. Treated employees work on average two hours less pe...

One Swallow Doesn't Make a Summer: New Evidence on Anchoring Effects

By Zacharias Maniadis, Fabio Tufano, and John A. List

American Economic Review, January 2014

Some researchers have argued that anchoring in economic valuations casts doubt on the assumption of consistent and stable preferences. We present new evidence that explores the strength of certain anchoring results. We then present a theoretical framew...

Partnerships versus Corporations: Moral Hazard, Sorting, and Ownership Structure

By Ayca Kaya and Galina Vereshchagina

American Economic Review, January 2014

Team production takes advantage of technological complementarities but comes with the cost of free-ridership. When workers differ in skills, the choice of sorting pattern may be associated with a nontrivial trade-off between exploiting the technologica...

Social Ideology and Taxes in a Differentiated Candidates Framework

By Stefan Krasa and Mattias Polborn

American Economic Review, January 2014

Many observers argue that political polarization, particularly on social and cultural issues, has increased in the United States. How does this influence the political competition on economic issues? We analyze this question using a framework in which ...

Term Premia and Inflation Uncertainty: Empirical Evidence from an International Panel Dataset: Comment

By Michael D. Bauer, Glenn D. Rudebusch, and Jing Cynthia Wu

American Economic Review, January 2014

Term premia implied by maximum likelihood estimates of affine term structure models are misleading because of small-sample bias. We show that accounting for this bias alters the conclusions about the trend, cycle, and macroeconomic determinants of the ...

Term Premia and Inflation Uncertainty: Empirical Evidence from an International Panel Dataset: Reply

By Jonathan H. Wright

American Economic Review, January 2014

Bauer, Rudebusch, and Wu (2014) advocate the use of bias-corrected estimates in their comment on Wright (2011). Econometric estimation of a macro-finance VAR provides quite imprecise estimates of future short-term interest rates. Nonetheless, compariso...

Front Matter

American Economic Review, January 2014

Dynamic Implications of Subjective Expectations: Evidence from Adult Smokers

By Yang Wang

American Economic Journal: Applied Economics, January 2014

We set up a dynamic discrete choice model with subjective expectations data to explain adult smokers' find important differences between subjective survival probabilities and those estimated using observed mortality data. Subjectively, individuals att...

Influenza Vaccination Campaigns: Is an Ounce of Prevention Worth a Pound of Cure?

By Courtney J. Ward

American Economic Journal: Applied Economics, January 2014

This paper estimates the overall impact and externality effects of an influenza vaccination program expanding coverage outside the typical target group. Using a triple-difference design, which exploits the introduction of a broad based vaccination prog...

Small Steps for Workers, a Giant Leap for Productivity

By Igal Hendel and Yossi Spiegel

American Economic Journal: Applied Economics, January 2014

We document the evolution of productivity in a steel mini mill with fixed capital, producing an unchanged product with Leontief technology working 24/7. Despite—almost—unchanged production conditions, output doubled within the sample period (12 yea...

The Great Equalizer: Health Care Access and Infant Mortality in Thailand

By Jonathan Gruber, Nathaniel Hendren, and Robert M. Townsend

American Economic Journal: Applied Economics, January 2014

This paper analyzes Thailand's 2001 healthcare reform, "30 Baht." The program increased funding available to hospitals to care for the poor and reduced copays to 30 Baht (~$0.75). Our estimates suggest the supply-side funding of the program increased h...

Awarding Price, Contract Performance, and Bids Screening: Evidence from Procurement Auctions

By Francesco Decarolis

American Economic Journal: Applied Economics, January 2014

This paper presents evidence on the perverse trade-off that first price auctions induce between low prices at the awarding stage and poor ex post performance when bids are not binding commitments. By exploiting the different timing with which first pri...

Competitive Effects of Means-Tested School Vouchers

By David Figlio and Cassandra M. D. Hart

American Economic Journal: Applied Economics, January 2014

We use the introduction of a means-tested voucher program in Florida to examine whether increased competitive pressure on public schools affects students' test scores. We find greater score improvements in the wake of the program introduction for stude...

Child Gender and Parental Investments in India: Are Boys and Girls Treated Differently?

By Silvia Helena Barcellos, Leandro S. Carvalho, and Adriana Lleras-Muney

American Economic Journal: Applied Economics, January 2014

Previous research has not always found that boys and girls are treated differently in rural India. However estimates of the effect of gender on parental investments could be biased if girls end up in larger families due to son-biased stopping rules. Us...

The Historically Evolving Impact of the Ogallala Aquifer: Agricultural Adaptation to Groundwater and Drought

By Richard Hornbeck and Pinar Keskin

American Economic Journal: Applied Economics, January 2014

Agriculture on the American Plains has been constrained historically by water scarcity. Post-WWII technologies enabled farmers over the Ogallala aquifer to extract groundwater for large-scale irrigation. Comparing counties over the Ogallala with nearby...

Selection and Economic Gains in the Great Migration of African Americans: New Evidence from Linked Census Data

By William J. Collins and Marianne H. Wanamaker

American Economic Journal: Applied Economics, January 2014

The onset of World War I spurred the "Great Migration" of African Americans from the US South, arguably the most important internal migration in US history. We create a new panel dataset of more than 5,000 men matched from the 1910 to 1930 census manus...