Peer Preferences, School Competition, and the Effects of Public School Choice

By Levon Barseghyan, Damon Clark, and Stephen Coate

American Economic Journal: Economic Policy, November 2019

This paper develops a new economic model of public school choice. The key innovation is to model competition between schools in an environment in which parents have peer preferences. The analysis yields three main findings. First, peer preferences dampen ...

The Impact of College Diversity on Behavior toward Minorities

By Scott E. Carrell, Mark Hoekstra, and James E. West

American Economic Journal: Economic Policy, November 2019

This paper estimates the impact of racially diverse peers on white males' subsequent behavior toward minorities. To overcome selection bias, we exploit data from the US Air Force Academy where students are randomly assigned to autonomous peer groups. A ra...

The Rise of NGO Activism

By Julien Daubanes and Jean-Charles Rochet

American Economic Journal: Economic Policy, November 2019

Activist nongovernmental organizations (NGOs) increasingly oppose firms' practices. We suggest this might be related to the vulnerability of public regulation to corporate influence. We examine a potentially harmful industrial project subject to regulator...

Who Is Screened Out? Application Costs and the Targeting of Disability Programs

By Manasi Deshpande and Yue Li

American Economic Journal: Economic Policy, November 2019

We study the effect of application costs on the targeting of disability programs. We identify these effects using the closings of Social Security Administration field offices, which provide assistance with filing disability applications. Closings lead to ...

Employed for Higher Pay? How Medicare Payment Rules Affect Hospital Employment of Physicians

By David Dranove and Christopher Ody

American Economic Journal: Economic Policy, November 2019

Hospitals employ an increasing number of physicians and bill for a growing share of outpatient procedures. We exploit a plausibly exogenous increase in Medicare prices for hospital-employed physicians relative to Medicare prices for other physicians to sh...

Long-Term Orientation and Educational Performance

By David Figlio, Paola Giuliano, Umut Özek, and Paola Sapienza

American Economic Journal: Economic Policy, November 2019

We study the role of Long-Term Orientation on the educational attainment of immigrant students. Controlling for the quality of schools and socioeconomic characteristics, students from long-term oriented cultures perform better in third grade reading and m...

Reducing Inequality through Dynamic Complementarity: Evidence from Head Start and Public School Spending

By Rucker C. Johnson and C. Kirabo Jackson

American Economic Journal: Economic Policy, November 2019

We compare the adult outcomes of cohorts who were differentially exposed to policy-induced changes in Head Start and K–12 spending, depending on place and year of birth. IV and sibling-difference estimates indicate that, for poor children, these policie...

Randomized Safety Inspections and Risk Exposure on the Job: Quasi-experimental Estimates of the Value of a Statistical Life

By Jonathan M. Lee and Laura O. Taylor

American Economic Journal: Economic Policy, November 2019

The value of a statistical life (VSL) is a critical driver of estimated benefits for federal policies designed to improve human health, safety, and environmental exposures. The vast majority of empirical evidence on the magnitude of the VSL arises from he...

Public Spillovers from Private Insurance Contracting: Physician Responses to Managed Care

By Michael R. Richards and D. Sebastian Tello-Trillo

American Economic Journal: Economic Policy, November 2019

Managed care is rebounding as more emphasis is placed on cost containment. These efforts may benefit consumers but challenge providers; however, empirical evidence on how supply-side managed care influences physicians is incomplete. We leverage a quasi-ex...

New Evidence on Information Disclosure through Restaurant Hygiene Grading

By Daniel E. Ho, Zoe C. Ashwood, and Cassandra Handan-Nader

American Economic Journal: Economic Policy, November 2019

The case of restaurant hygiene grading occupies a central role in information disclosure scholarship. Comparing Los Angeles, which enacted grading in 1998, with California from 1995–1999, Jin and Leslie (2003) found that grading reduced foodborne illnes...

New Evidence on Information Disclosure through Restaurant Hygiene Grading: Reply

By Ginger Zhe Jin and Phillip Leslie

American Economic Journal: Economic Policy, November 2019

Ho, Ashwood, and Handan-Nader (forthcoming) replicates table VI of Jin and Leslie (2003) but questions its research design. Robustness checks support our original conclusion—foodborne hospitalizations, as defined in JL, declined in Los Angeles County (L...

Front Matter

American Economic Review, December 2019

Does Diversity Matter for Health? Experimental Evidence from Oakland

By Marcella Alsan, Owen Garrick, and Grant Graziani

American Economic Review, December 2019

We study the effect of physician workforce diversity on the demand for preventive care among African American men. In an experiment in Oakland, California, we randomize black men to black or non-black male medical doctors. We use a two-stage design, measu...

Predicting and Understanding Initial Play

By Drew Fudenberg and Annie Liang

American Economic Review, December 2019

We use machine learning to uncover regularities in the initial play of matrix games. We first train a prediction algorithm on data from past experiments. Examining the games where our algorithm predicts correctly, but existing economic models don't, leads...

The Term Structure of Currency Carry Trade Risk Premia

By Hanno Lustig, Andreas Stathopoulos, and Adrien Verdelhan

American Economic Review, December 2019

Fixing the investment horizon, the returns to currency carry trades decrease as the maturity of the foreign bonds increases. Across developed countries, the local currency term premia, which increase with the maturity of the bonds, offset the currency ris...

The Mortality and Medical Costs of Air Pollution: Evidence from Changes in Wind Direction

By Tatyana Deryugina, Garth Heutel, Nolan H. Miller, David Molitor, and Julian Reif

American Economic Review, December 2019

We estimate the causal effects of acute fine particulate matter exposure on mortality, health care use, and medical costs among the US elderly using Medicare data. We instrument for air pollution using changes in local wind direction and develop a new app...

Sovereign Debt and Structural Reforms

By Andreas Müller, Kjetil Storesletten, and Fabrizio Zilibotti

American Economic Review, December 2019

We construct a dynamic theory of sovereign debt and structural reforms with limited enforcement and moral hazard. A sovereign country in recession wishes to smooth consumption. It can also undertake costly reforms to speed up recovery. The sovereign can r...

Occupations and Import Competition: Evidence from Denmark

By Sharon Traiberman

American Economic Review, December 2019

I argue that the winners and losers from trade are decided primarily by occupation. In addition to fixed adjustment costs, workers build up specific human capital over time that is destroyed when they must change occupations. I show that ignoring human ca...

Does Strategic Ability Affect Efficiency? Evidence from Electricity Markets

By Ali Hortaçsu, Fernando Luco, Steven L. Puller, and Dongni Zhu

American Economic Review, December 2019

Oligopoly models of price competition predict that strategic firms exercise market power and generate inefficiencies. However, heterogeneity in firms' strategic ability also generates inefficiencies. We study the Texas electricity market where firms exhib...

Self-Fulfilling Debt Crises: A Quantitative Analysis

By Luigi Bocola and Alessandro Dovis

American Economic Review, December 2019

This paper investigates the role of self-fulfilling expectations in sovereign bond markets. We consider a model of sovereign borrowing featuring endogenous debt maturity, risk-averse lenders, and self-fulfilling crises à la Cole and Kehoe (2000). In this...