Particulate Pollution and the Productivity of Pear Packers

By Tom Chang, Joshua Graff Zivin, Tal Gross, and Matthew Neidell

American Economic Journal: Economic Policy, August 2016

We study the effect of outdoor air pollution on the productivity of indoor workers at a pear-packing factory. Increases in fine particulate matter (PM2.5), a pollutant that readily penetrates indoors, leads to significant decreases in productiv...

Transfer Pricing by Multinational Firms: New Evidence from Foreign Firm Ownerships

By Anca D. Cristea and Daniel X. Nguyen

American Economic Journal: Economic Policy, August 2016

Using a firm-level dataset of Danish exports between 1999-2006, we find robust evidence for profit shifting by multinational corporations. Our triple difference estimations exploit the response of export unit values to acquisitions of foreign affiliates a...

Extrinsic and Intrinsic Motivations for Tax Compliance: Evidence from a Field Experiment in Germany

By Nadja Dwenger, Henrik Kleven, Imran Rasul, and Johannes Rincke

American Economic Journal: Economic Policy, August 2016

We study extrinsic and intrinsic motivations for tax compliance in the context of a local church tax in Germany. This tax system has historically relied on zero deterrence so that any compliance at baseline is intrinsically motivated. Starting from this z...

Tax Reforms and Intertemporal Shifting of Wage Income: Evidence from Danish Monthly Payroll Records

By Claus Thustrup Kreiner, Søren Leth-Petersen, and Peer Ebbesen Skov

American Economic Journal: Economic Policy, August 2016

This paper uses monthly payroll records for all Danish employees to identify widespread intertemporal shifting of labor income in response to a tax reform that significantly reduced the marginal tax rates for one-fourth of all employees. When ignoring shi...

Can Electronic Procurement Improve Infrastructure Provision? Evidence from Public Works in India and Indonesia

By Sean Lewis-Faupel, Yusuf Neggers, Benjamin A. Olken, and Rohini Pande

American Economic Journal: Economic Policy, August 2016

This paper examines whether electronic procurement (e-procurement), which increases access to information and reduces personal interactions with potentially corrupt officials, improves procurement outcomes. We develop unique datasets from India and Indone...

The Effects of the Massachusetts Health Reform on Household Financial Distress

By Bhashkar Mazumder and Sarah Miller

American Economic Journal: Economic Policy, August 2016

In this paper, we examine the effect of a major health care reform in Massachusetts on a broad set of financial outcomes using credit report data. We exploit variation in the impact of the reform across counties and age groups using pre-reform insurance c...

Front Matter

American Economic Review, August 2016

Dynamic Delegation of Experimentation

By Yingni Guo

American Economic Review, August 2016

I study a dynamic relationship where a principal delegates experimentation to an agent. Experimentation is modeled as a one-armed bandit that yields successes following a Poisson process. Its unknown intensity is high or low. The agent has private informa...

Marijuana on Main Street? Estimating Demand in Markets with Limited Access

By Liana Jacobi and Michelle Sovinsky

American Economic Review, August 2016

Marijuana is the most common illicit drug with vocal advocates for legalization. Among other things, legalization would increase access and remove the stigma of illegality. Our model disentangles the role of access from preferences and shows that selectio...

Endogenous Skill Acquisition and Export Manufacturing in Mexico

By David Atkin

American Economic Review, August 2016

This paper presents empirical evidence that the growth of export manufacturing in Mexico during a period of major trade reforms (the years 1986 to 2000) altered the distribution of education. I use variation in the timing of factory openings across commut...

The Realization Effect: Risk-Taking after Realized versus Paper Losses

By Alex Imas

American Economic Review, August 2016

Understanding how prior outcomes affect risk attitudes is critical for the study of choice under uncertainty. A large literature documents the significant influence of prior losses on risk attitudes. The findings appear contradictory: some studies find gr...

Health Care Exceptionalism? Performance and Allocation in the US Health Care Sector

By Amitabh Chandra, Amy Finkelstein, Adam Sacarny, and Chad Syverson

American Economic Review, August 2016

The conventional wisdom for the health care sector is that idiosyncratic features leave little scope for market forces to allocate consumers to higher performance producers. However, we find robust evidence across several different conditions and performa...

Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance

By Jason Abaluck and Jonathan Gruber

American Economic Review, August 2016

We study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices evolve over time. We find large "foregone savings" from not choosing the lowest cost plan that has grown over time. We deve...

Effects of Deregulation and Consolidation of the Broadcast Television Industry

By Jessica Calfee Stahl

American Economic Review, August 2016

This paper exploits deregulation in the 1990s to estimate viewership and revenue effects of consolidation in broadcast television, then finds cost effects that explain the ownership structure given viewership and revenue effects. Results suggest that cons...

Macroeconomic Effects of Bankruptcy and Foreclosure Policies

By Kurt Mitman

American Economic Review, August 2016

I study the implications of two major debt-relief policies in the United States: the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and the Home Affordable Refinance Program (HARP). To do so, I develop a model of housing and default that...

Financial Intermediation, Investment Dynamics, and Business Cycle Fluctuations

By Andrea Ajello

American Economic Review, August 2016

I use micro data to quantify key features of US firm financing. In particular, I establish that a substantial 35 percent of firms' investment is funded using financial markets. I then construct a dynamic equilibrium model that matches these features and f...

Capital Taxation under Political Constraints

By Florian Scheuer and Alexander Wolitzky

American Economic Review, August 2016

This paper studies optimal dynamic tax policy under the threat of political reform. A policy will be reformed ex post if a large enough coalition of citizens supports reform; thus, sustainable policies are those that will continue to attract enough politi...

Ostracism and Forgiveness

By S. Nageeb Ali and David A. Miller

American Economic Review, August 2016

Many communities rely upon ostracism to enforce cooperation: if an individual shirks in one relationship, her innocent neighbors share information about her guilt in order to shun her, while continuing to cooperate among themselves. However, a strategic v...

Moderating Political Extremism: Single Round versus Runoff Elections under Plurality Rule

By Massimo Bordignon, Tommaso Nannicini, and Guido Tabellini

American Economic Review, August 2016

We compare single round versus runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy, and he...

Monitoring Corruptible Politicians

By Gustavo J. Bobonis, Luis R. Cámara Fuertes, and Rainer Schwabe

American Economic Review, August 2016

Does monitoring corrupt activities induce a sustained reduction in corruption? Using longitudinal data on audits of municipal governments in Puerto Rico, we show corruption is considerably lower in municipalities with timely audits—before elections....