The Impact of Including, Adding, and Subtracting a Tax on Demand

By Naomi E. Feldman and Bradley J. Ruffle

American Economic Journal: Economic Policy, February 2015

We test the equivalence of tax-inclusive, tax-exclusive and tax-rebate prices through a series of experiments differing only in their handling of the tax. Subjects receive a cash budget and decide how much to keep and how much to spend on various attracti...

The Role of Proximity in Foreclosure Externalities: Evidence from Condominiums

By Lynn M. Fisher, Lauren Lambie-Hanson, and Paul Willen

American Economic Journal: Economic Policy, February 2015

We measure the effect of foreclosures on the sale prices of nearby properties using a dataset of condominiums in Boston. A foreclosure in the same association and at the same address depresses the sale price by 2.5 percent, but properties in the same asso...

The Effects of Voting Costs on the Democratic Process and Public Finances

By Roland Hodler, Simon Luechinger, and Alois Stutzer

American Economic Journal: Economic Policy, February 2015

Increasing the attractiveness of voting is often seen as a remedy for unequal participation and the influence of special-interest groups on public policy. However, lower voting costs may also bring less informed citizens to the poll, thereby inviting effo...

Income, the Earned Income Tax Credit, and Infant Health

By Hilary Hoynes, Doug Miller, and David Simon

American Economic Journal: Economic Policy, February 2015

This paper uses quasi-experimental variation from federal tax reform to evaluate the effect of the EITC on infant health outcomes. We find that the EITC reduces the incidence of low birth weight and increases mean birth weight: a $1,000 treatment-on-the-t...

Using Taxes to Reduce Carbon Dioxide Emissions Rates of New Passenger Vehicles: Evidence from France, Germany, and Sweden

By Thomas Klier and Joshua Linn

American Economic Journal: Economic Policy, February 2015

France, Germany, and Sweden link taxes to passenger vehicles' carbon dioxide (CO2) emissions rates. Based on new vehicle registration data from 2005 to 2010, we find that CO2 taxes reduce registrations. The effect is larger in France than in either German...

Diagnosing Hospital System Bargaining Power in Managed Care Networks

By Matthew S. Lewis and Kevin E. Pflum

American Economic Journal: Economic Policy, February 2015

We investigate the impact of hospital system membership on negotiations between hospitals and managed care organizations (MCOs). Previous research finds that system hospitals secure higher reimbursements by exploiting local market concentration. By levera...

Would People Behave Differently If They Better Understood Social Security? Evidence from a Field Experiment

By Jeffrey B. Liebman and Erzo F. P. Luttmer

American Economic Journal: Economic Policy, February 2015

This paper presents the results of a randomized field experiment that provided information about key Social Security features to older workers. The experiment was designed to examine whether it is possible to affect individual behavior using a relatively ...

Quasi-Experimental Evidence on the Connection between Property Taxes and Residential Capital Investment

By Byron Lutz

American Economic Journal: Economic Policy, February 2015

Do low property taxes attract new home construction? This question is answered using a large shock to property tax burdens caused by an unusual school finance reform in the state of New Hampshire. The estimates suggest that, in most of the state, communit...

New Estimates of the Value of a Statistical Life Using Air Bag Regulations as a Quasi-experiment

By Chris Rohlfs, Ryan Sullivan, and Thomas Kniesner

American Economic Journal: Economic Policy, February 2015

Due to federal regulations, automobile air bag availability was a model-specific discontinuous function of model year for used vehicles in the 1990s and early 2000s. We use the discontinuities and the gradual increase in the supply of air bags to trace ou...

Front Matter

American Economic Journal: Economic Policy, February 2015

The Impact of the Great Migration on Mortality of African Americans: Evidence from the Deep South

By Dan A. Black, Seth G. Sanders, Evan J. Taylor, and Lowell J. Taylor

American Economic Review, February 2015

The Great Migration–the massive migration of African Americans out of the rural South to largely urban locations in the North, Midwest, and West–was a landmark event in US history. Our paper shows that this migration increased mortality of African Ame...

Overconfidence in Political Behavior

By Pietro Ortoleva and Erik Snowberg

American Economic Review, February 2015

This paper studies, theoretically and empirically, the role of overconfidence in political behavior. Our model of overconfidence in beliefs predicts that overconfidence leads to ideological extremeness, increased voter turnout, and stronger partisan ide...

Robustness and Linear Contracts

By Gabriel Carroll

American Economic Review, February 2015

We consider a moral hazard problem where the principal is uncertain as to what the agent can and cannot do: she knows some actions available to the agent, but other, unknown actions may also exist. The principal demands robustness, evaluating possible ...

Systemic Risk and Stability in Financial Networks

By Daron Acemoglu, Asuman Ozdaglar, and Alireza Tahbaz-Salehi

American Economic Review, February 2015

This paper argues that the extent of financial contagion exhibits a form of phase transition: as long as the magnitude of negative shocks affecting financial institutions are sufficiently small, a more densely connected financial network (corresponding...

Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial

By Jessica Cohen, Pascaline Dupas, and Simone Schaner

American Economic Review, February 2015

Both under- and over-treatment of communicable diseases are public bads. But efforts to decrease one run the risk of increasing the other. Using rich experimental data on household treatment- seeking behavior in Kenya, we study the implications of this...

Self-Confirming Equilibrium and Model Uncertainty

By Pierpaolo Battigalli, Simone Cerreia-Vioglio, Fabio Maccheroni, and Massimo Marinacci

American Economic Review, February 2015

We analyze a notion of self-confirming equilibrium with non-neutral ambiguity attitudes that generalizes the traditional concept. We show that the set of equilibria expands as ambiguity aversion increases. The intuition is quite simple: by playing the ...

Environmental Health Risks and Housing Values: Evidence from 1,600 Toxic Plant Openings and Closings

By Janet Currie, Lucas Davis, Michael Greenstone, and Reed Walker

American Economic Review, February 2015

Regulatory oversight of toxic emissions from industrial plants and understanding about these emissions' impacts are in their infancy. Applying a research design based on the openings and closings of 1,600 industrial plants to rich data on housing marke...

Bankruptcy as Implicit Health Insurance

By Neale Mahoney

American Economic Review, February 2015

This paper examines the implicit health insurance that households receive from the ability to declare bankruptcy. Exploiting multiple sources of variation in asset exemption law, I show that uninsured households with a greater financial cost of bankrup...

Leader Punishment and Cooperation in Groups: Experimental Field Evidence from Commons Management in Ethiopia

By Michael Kosfeld and Devesh Rustagi

American Economic Review, February 2015

We conduct a social dilemma experiment in which real-world leaders can punish group members as a third party. Despite facing an identical environment, leaders are found to take remarkably different punishment approaches. The different leader types reve...

The Price of Experience

By Hyeok Jeong, Yong Kim, and Iourii Manovskii

American Economic Review, February 2015

We identify a key role of factor supply, driven by demographic changes, in shaping several empirical regularities that are a focus of active research in macro and labor economics. In particular, demographic changes alone can account for the large movement...