Recent ucsdecon items

The Protective Effects of a Healthy Spouse: Medicare as the Family Member of Last Resort

Tue, 14 Apr 2026 00:00:00 +0000

We use novel Medicare data that link spouses to examine how one spouse's sudden incapacitation affects their partner's need for formal care. A spouse's health shock causes their partner to be 18% more likely to visit a skilled nursing facility. That pattern reflects both a change in health and a shift from informal care to formal care. After one spouse is incapacitated, the other spouse becomes less sensitive to the price of formal care. We explore the implications for optimal health insurance contracts, showing that these within-household spillovers imply that the optimal health insurance contract should provide more generous coverage to those whose spouses are incapacitated relative to those whose spouses are available to provide care.

Getting Permission

Tue, 2 Dec 2025 00:00:00 +0000

A manager has access to expert advisers. The manager selects at most one project and can implement it only if one expert provides support. The game in which the manager consults experts simultaneously typically has multiple equilibria, including one in which at least one expert supports the manager's favorite project. Only one outcome, the experts' most preferred equilibrium outcome, survives iterated deletion of weakly dominated strategies. We show that no sequential procedure can perform better for the manager than the experts' most preferred equilibrium and exhibit a sequential protocol that does as well. (JEL C72, D23, D82)

Signaling Games

Tue, 2 Dec 2025 00:00:00 +0000

Signaling Games

Getting Permission When Options Are Partially Ordered

Tue, 2 Dec 2025 00:00:00 +0000

A manager has access to expert advisers. The manager selects at most one project and can implement it only if one expert provides support. The game in which the manager consults experts simultaneously typically has multiple equilibria including one in which at least one expert supports the manager’s favorite project. We describe the set of outcomes that survive iterative deletion of weakly dominated strategies. These outcomes typically exclude the manager’s most preferred equilibrium outcome. We introduce sequential procedures and compare their performance to the simultaneous game. In general, sequential consultation may be superior or inferior to simultaneous consultation.

Exporting, Wage Profiles, and Human Capital: Evidence from Brazil

Thu, 9 Oct 2025 00:00:00 +0000

Abstract: Export activity shapes workers’ experience-wage profiles. Using employer-employee and customs data for Brazilian manufacturing, we document that workers’ experience-wage profiles are steeper at exporters than at non-exporters and, among exporters, steeper at exporters shipping to high-income destinations. We develop and quantify a model featuring worker-firm wage bargaining, export-market entry by multi-worker firms, and human capital accumulation by workers to interpret the data. Human capital growth can explain one-half of the differences in wage profiles between exporters and non-exporters. We show that increased human capital per worker can account for one-half of the overall gains in real income from trade openness.

The public’s views on climate policies in seven large global south countries

Thu, 11 Sep 2025 00:00:00 +0000

The public’s views on climate policies in seven large global south countries

On the function of language

Mon, 14 Jul 2025 00:00:00 +0000

On the function of language

Extracting Statistical Relationships from Observational Data: Predicting with Full or Partial Information

Thu, 19 Jun 2025 00:00:00 +0000

Decision-makers sometimes rely on past data to learn statistical relationships between variables. However, when predicting a target variable, they must adjust how they aggregate past information depending on the observables available. If agents have information on all observables, it is optimal to understand how the observables jointly predict the target, while with only one observable, they should focus on the unconditional correlation. An experiment examining this process shows that predictions that require the use of unconditional correlations are more challenging for decision-makers.

On the limitations of data‐based price discrimination

Fri, 14 Feb 2025 00:00:00 +0000

The classic third degree price discrimination (3PD) model requires the knowledge of the distribution of buyer valuations and the covariate to set the price conditioned on the covariate. In terms of generating revenue, the classic result shows that 3PD is at least as good as uniform pricing. What if the seller has to set a price based only on a sample of observations from the underlying distribution? Is it still obvious that the seller should engage in 3PD? This paper sheds light on these fundamental questions. In particular, the comparison of the revenue performance between 3PD and uniform pricing is ambiguous overall when prices are set based on samples. This finding is in the nature of statistical learning under uncertainty: a curse of dimensionality, but also other small sample complications.

The Effects of High-Skilled Immigration Policy on Firms: Evidence from Visa Lotteries

Thu, 16 Jan 2025 00:00:00 +0000

The Effects of High-Skilled Immigration Policy on Firms: Evidence from Visa Lotteries

Disability Insurance Income Saves Lives

Thu, 16 Jan 2025 00:00:00 +0000

Disability Insurance Income Saves Lives

Boosting Take-Up of the Expanded Child Tax Credit through School-Based Outreach

Thu, 5 Dec 2024 00:00:00 +0000

Boosting Take-Up of the Expanded Child Tax Credit through School-Based Outreach

Preparing for export opportunities

Wed, 4 Sep 2024 00:00:00 +0000

Preparing for export opportunities

Testing Models of Strategic Uncertainty: Equilibrium Selection in Repeated Games

Fri, 19 Jul 2024 00:00:00 +0000

Abstract: In repeated games, where both collusive and noncollusive outcomes can be supported as equilibria, it is crucial to understand the likelihood of selection for each type of equilibrium. Controlled experiments have empirically validated a selection criterion for the two-player repeated prisoner’s dilemma: the basin of attraction for always defect. This prediction device uses the game primitives to measure the set of beliefs for which an agent would prefer to unconditionally defect rather than attempt conditional cooperation. This belief measure reflects strategic uncertainty over others’ actions, where the prediction is for noncooperative outcomes when the basin measure is full, and cooperative outcomes when empty. We expand this selection notion to multi-player social dilemmas and experimentally test the predictions, manipulating both the total number of players and the payoff tensions. Our results affirm the model as a tool for predicting long-term cooperation,...

An Active-Contracting Perspective on Equilibrium Selection in Relational Contracts

Fri, 10 May 2024 00:00:00 +0000

An Active-Contracting Perspective on Equilibrium Selection in Relational Contracts

Mental Models and Learning: The Case of Base-Rate Neglect

Thu, 9 May 2024 00:00:00 +0000

We experimentally document persistence of suboptimal behavior despite ample opportunities to learn from feedback in a canonical updating problem where people suffer from base-rate neglect. Our results provide insights on the mechanisms hindering learning from feedback. Importantly, our results suggest mistakes are more likely to be persistent when they are driven by incorrect mental models that miss or misrepresent important aspects of the environment. Such models induce confidence in initial answers, limiting engagement with and learning from feedback. We substantiate these insights in an alternative scenario where individuals involved in a voting problem overlook the importance of being pivotal. (JEL D83, D91)

Toward personalized inference on individual treatment effects

Thu, 25 Apr 2024 00:00:00 +0000

Toward personalized inference on individual treatment effects

COVID-19 Learning loss and recovery

Thu, 25 Apr 2024 00:00:00 +0000

COVID-19 Learning loss and recovery

A toolkit for setting and evaluating price floors

Thu, 25 Apr 2024 00:00:00 +0000

A toolkit for setting and evaluating price floors

Contingent Thinking and the Sure-Thing Principle: Revisiting Classic Anomalies in the Laboratory#

Fri, 10 Nov 2023 00:00:00 +0000

Abstract: We present an experimental framework to study the extent to which failures of contingent thinking explain classic anomalies in a broad class of environments, including overbidding in auctions and the Ellsberg paradox. We study environments in which the subject’s choices affect payoffs only in some states, but not in others. We find that anomalies are in large part driven by incongruences between choices in the standard presentation of each problem and a ‘contingent’ presentation, which focuses the subject on the set of states where her actions matter. Additional evidence suggests that this phenomenon is in large part driven by people’s failure to put themselves in states that have not yet happened even though they are made aware that their actions only matter in those states.

Context-Dependent Heterogeneous Preferences: A Comment on Barseghyan and Molinari (2023)

Thu, 26 Oct 2023 00:00:00 +0000

Context-Dependent Heterogeneous Preferences: A Comment on Barseghyan and Molinari (2023)

Cognitive Limitations: Failures of Contingent Thinking

Thu, 12 Oct 2023 00:00:00 +0000

In recent years, experiments have documented a new mechanism that leads to failures of profit maximization: the failure of contingent thinking (FCT). This article summarizes key experimental findings, clarifies what constitutes an FCT, and outlines how FCTs can be tested in other environments. Subsequently, we relate FCTs to recent theoretical work on cognitive limitations in behavioral economics. Finally, we connect FCTs to suboptimal behavior documented in applied environments.

Measuring Racial Discrimination in Bail Decisions.

Tue, 10 Oct 2023 00:00:00 +0000

We develop new quasi-experimental tools to measure disparate impact, regardless of its source, in the context of bail decisions. We show that omitted variables bias in pretrial release rate comparisons can be purged by using the quasi-random assignment of judges to estimate average pretrial misconduct risk by race. We find that two-thirds of the release rate disparity between white and Black defendants in New York City is due to the disparate impact of release decisions. We then develop a hierarchical marginal treatment effect model to study the drivers of disparate impact, finding evidence of both racial bias and statistical discrimination.

Liquidity and Exchange Rates: An Empirical Investigation

Thu, 14 Sep 2023 00:00:00 +0000

Abstract: We find strong empirical evidence that the liquidity yield on government bonds in combination with standard economic fundamentals can well account for nominal exchange rate movements. We find impressive evidence that changes in the liquidity yield are significant in explaining exchange rate changes for all the G10 countries, and we stress that the US dollar is not special in this relationship. We show how these relationships arise out of a canonical two-country New Keynesian model with liquidity returns. Additionally, we find a role for sovereign default risk and currency swap market frictions.

Sprouting Cities: How Rural America Industrialized

Thu, 8 Jun 2023 00:00:00 +0000

We study the joint process of urbanization and industrialization in the US economy between 1880 and 1940. We show that only a small share of aggregate industrialization is accounted for by the relocation of workers from remote rural areas to industrial hubs like Chicago or New York City. Instead, most sectoral shifts occurred within rural counties, dramatically transforming their sectoral structure. Most within-county industrialization occurred through the emergence of new “factory” cities with notably higher manufacturing shares rather than the expansion of incumbent cities. In contrast, today's shift toward services seems to benefit large incumbent cities the most.

Differential fertility makes society more conservative on family values

Wed, 7 Jun 2023 00:00:00 +0000

Data from the General Social Survey indicate that higher-fertility individuals and their children are more conservative on "family values" issues, especially regarding abortion and same-sex marriage. This pattern implies that differential fertility has increased and will continue to increase public support for conservative policies on these issues. The association of family size with conservatism is specific to traditional-family issues and can be attributed in large part to the greater religiosity and lower educational attainment of individuals from larger families. Over the 2004 to 2018 period, opposition to same-sex marriage and abortion was 3 to 4 percentage points more prevalent than it would have been were traditional-family conservatism independent of family size in the current generation. For same-sex marriage, evolutionary forces have grown in relative importance as society as a whole has liberalized. As of 2018, differential fertility raised the number of US adults opposed...

Something in the water: contaminated drinking water and infant health

Fri, 12 May 2023 00:00:00 +0000

This paper provides estimates of the effects of in utero exposure to contaminated drinking water on fetal health. To do this, we examine the universe of birth records and drinking water testing results for the state of New Jersey from 1997 to 2007. Our data enable us to compare outcomes across siblings who were potentially exposed to differing levels of harmful contaminants from drinking water while in utero. We find small effects of drinking water contamination on all children, but large and statistically significant effects on birth weight and gestation of infants born to less educated mothers. We also show that those mothers who were most affected by contamination were the least likely to move between births in response to contamination.

Early-Life Exposure to the Great Smog of 1952 and the Development of Asthma

Thu, 4 May 2023 00:00:00 +0000

RATIONALE: Little is known about the long-term effects of air pollution exposure and the root causes of asthma. We use exposure to intense air pollution from the 1952 Great Smog of London as a natural experiment to examine both issues. OBJECTIVES: To determine whether exposure to extreme air pollution in utero or soon after birth affects asthma development later in life. METHODS: This was a natural experiment using the unanticipated pollution event by comparing the prevalence of asthma between those exposed to the Great Smog in utero or the first year of life with those conceived well before or after the incident and those residing outside the affected area at the time of the smog. MEASUREMENTS AND MAIN RESULTS: Prevalence of asthma during childhood (ages 0-15) and adulthood (ages >15) is analyzed for 2,916 respondents to the Life History portion of the English Longitudinal Study on Aging born from 1945 to 1955. Exposure to the Great Smog in the first year of life increases...

A Contract-theoretic Model of Conservation Agreements

Thu, 16 Mar 2023 00:00:00 +0000

A Contract-theoretic Model of Conservation Agreements

Nash, John Forbes (1928–2015)

Thu, 16 Mar 2023 00:00:00 +0000

Nash, John Forbes (1928–2015)

Starting small in project choice: A discrete-time setting with a continuum of types

Thu, 16 Mar 2023 00:00:00 +0000

Starting small in project choice: A discrete-time setting with a continuum of types

Thick Market Externality and Concentration of `Money'

Fri, 28 Oct 2022 00:00:00 +0000

A thick market external e ect is applied to a trading post model of N 3 commodities with transaction costs and distinct bid and ask prices. An existence theorem for general equilibrium with external e ects in the trading post model is stated and proved. Media of exchange occur endogenously as liquid commodities, characterized by a narrow bid/ask price spread. The thick market externality can lead to concentration of the endogenously determined media of exchange towards an equilibrium with a single medium. In a class of examples, we show that if the households have su ciently heterogeneous tastes relative to the size of the economy, the monetary equilibrium leads to higher consumption than the barter equilibrium.

Regional Research-Practice-Policy Partnerships in Response to Climate-Related Disparities: Promoting Health Equity in the Pacific

Mon, 19 Sep 2022 00:00:00 +0000

Although climate change poses a threat to health and well-being globally, a regional approach to addressing climate-related health equity may be more suitable, appropriate, and appealing to under-resourced communities and countries. In support of this argument, this commentary describes an approach by a network of researchers, practitioners, and policymakers dedicated to promoting climate-related health equity in Small Island Developing States and low- and middle-income countries in the Pacific. We identify three primary sets of needs related to developing a regional capacity to address physical and mental health disparities through research, training, and assistance in policy and practice implementation: (1) limited healthcare facilities and qualified medical and mental health providers; (2) addressing the social impacts related to the cooccurrence of natural hazards, disease outbreaks, and complex emergencies; and (3) building the response capacity and resilience to climate-related...

Naturally occurring combinations of receptors from single cell transcriptomics in endothelial cells

Fri, 22 Jul 2022 00:00:00 +0000

VEGF inhibitor drugs are part of standard care in oncology and ophthalmology, but not all patients respond to them. Combinations of drugs are likely to be needed for more effective therapies of angiogenesis-related diseases. In this paper we describe naturally occurring combinations of receptors in endothelial cells that might help to understand how cells communicate and to identify targets for drug combinations. We also develop and share a new software tool called DECNEO to identify them. Single-cell gene expression data are used to identify a set of co-expressed endothelial cell receptors, conserved among species (mice and humans) and enriched, within a network, of connections to up-regulated genes. This set includes several receptors previously shown to play a role in angiogenesis. Multiple statistical tests from large datasets, including an independent validation set, support the reproducibility, evolutionary conservation and role in angiogenesis of these naturally occurring...

Distributional conformal prediction

Mon, 27 Jun 2022 00:00:00 +0000

We propose a robust method for constructing conditionally valid prediction intervals based on models for conditional distributions such as quantile and distribution regression. Our approach can be applied to important prediction problems, including cross-sectional prediction, k-step-ahead forecasts, synthetic controls and counterfactual prediction, and individual treatment effects prediction. Our method exploits the probability integral transform and relies on permuting estimated ranks. Unlike regression residuals, ranks are independent of the predictors, allowing us to construct conditionally valid prediction intervals under heteroskedasticity. We establish approximate conditional validity under consistent estimation and provide approximate unconditional validity under model misspecification, under overfitting, and with time series data. We also propose a simple "shape" adjustment of our baseline method that yields optimal prediction intervals.

An Exact and Robust Conformal Inference Method for Counterfactual and Synthetic Controls

Fri, 29 Apr 2022 00:00:00 +0000

An Exact and Robust Conformal Inference Method for Counterfactual and Synthetic Controls

Decentralization estimators for instrumental variable quantile regression models

Fri, 29 Apr 2022 00:00:00 +0000

The instrumental variable quantile regression (IVQR) model (Chernozhukov and Hansen (2005)) is a popular tool for estimating causal quantile effects with endogenous covariates. However, estimation is complicated by the nonsmoothness and nonconvexity of the IVQR GMM objective function. This paper shows that the IVQR estimation problem can be decomposed into a set of conventional quantile regression subproblems which are convex and can be solved efficiently. This reformulation leads to new identification results and to fast, easy to implement, and tuning‐free estimators that do not require the availability of high‐level “black box” optimization routines.

Detecting p‐Hacking

Fri, 29 Apr 2022 00:00:00 +0000

We theoretically analyze the problem of testing for p‐hacking based on distributions of p‐values across multiple studies. We provide general results for when such distributions have testable restrictions (are non‐increasing) under the null of no p‐hacking. We find novel additional testable restrictions for p‐values based on t‐tests. Specifically, the shape of the power functions results in both complete monotonicity as well as bounds on the distribution of p‐values. These testable restrictions result in more powerful tests for the null hypothesis of no p‐hacking. When there is also publication bias, our tests are joint tests for p‐hacking and publication bias. A reanalysis of two prominent data sets shows the usefulness of our new tests.

Omitted Variable Bias of Lasso-Based Inference Methods: A Finite Sample Analysis

Fri, 29 Apr 2022 00:00:00 +0000

Abstract: We study the finite sample behavior of Lasso-based inference methods such as post–double Lasso and debiased Lasso. We show that these methods can exhibit substantial omitted variable biases (OVBs) due to Lasso's not selecting relevant controls. This phenomenon can occur even when the coefficients are sparse and the sample size is large and larger than the number of controls. Therefore, relying on the existing asymptotic inference theory can be problematic in empirical applications. We compare the Lasso-based inference methods to modern high-dimensional OLS-based methods and provide practical guidance.

Location-Scale and Compensated Effects in Unconditional Quantile Regressions

Mon, 10 Jan 2022 00:00:00 +0000

This paper proposes an extension of the unconditional quantile regression analysis to (i) location-scale shifts, and (ii) compensated shifts. The first case is intended to study a counterfactual policy analysis aimed at increasing not only the mean or location of a covariate but also its dispersion or scale. The compensated shift refers to a situation where a shift in a covariate is compensated at a certain rate by another covariate. Not accounting for these possible scale or compensated effects will result in an incorrect assessment of the potential policy effects on the quantiles of an outcome variable. More general interventions and compensated shifts are also considered. The unconditional policy parameters are estimated with simple semiparametric estimators, for which asymptotic properties are studied. Monte Carlo simulations are implemented to study their finite sample performances, and the proposed approach is applied to a Mincer equation to study the effects of a location...

Temperature and work: Time allocated to work under varying climate and labor market conditions

Mon, 27 Dec 2021 00:00:00 +0000

Workers in climate exposed industries such as agriculture, construction, and manufacturing face increased health risks of working on high temperature days and may make decisions to reduce work on high-heat days to mitigate this risk. Utilizing the American Time Use Survey (ATUS) for the period 2003 through 2018 and historical weather data, we model the relationship between daily temperature and time allocation, focusing on hours worked by high-risk laborers. The results indicate that labor allocation decisions are context specific and likely driven by supply-side factors. We do not find a significant relationship between temperature and hours worked during the Great Recession (2008-2014), perhaps due to high competition for employment, however during periods of economic growth (2003-2007, 2015-2018) we find a significant reduction in hours worked on high-heat days. During periods of economic growth, for every degree above 90 on a particular day, the average high-risk worker reduces...

The Effects of Providing Fixed Compensation and Lottery-Based Rewards on Uptake of Medical Male Circumcision in Kenya

Mon, 26 Jul 2021 00:00:00 +0000

BACKGROUND: Effective demand creation strategies are needed to increase uptake of medical male circumcision and reduce new HIV infections in eastern and southern Africa. Building on insights from behavioral economics, we assessed whether providing compensation for opportunity costs of time or lottery-based rewards can increase male circumcision uptake in Kenya. METHODS: Uncircumcised men aged 21-39 years were randomized in 1:1:1 ratio to 2 intervention groups or a control group. One intervention group was offered compensation of US $12.50 conditional on circumcision uptake. Compensation was provided in the form of food vouchers. A second intervention group was offered the opportunity to participate in a lottery with high-value prizes on undergoing circumcision. The primary outcome was circumcision uptake within 3 months. RESULTS: Among 903 participants enrolled, the group that received compensation of US $12.50 had the highest circumcision uptake (8.4%, 26/308), followed by the...

Identification and Estimation of Unconditional Policy Effects of an Endogenous Binary Treatment: an Unconditional MTE Approach

Thu, 22 Jul 2021 00:00:00 +0000

This paper studies the identification and estimation of unconditional policy effects when the treatment is binary and endogenous. We first characterize the asymptotic bias of the unconditional regression estimator that ignores the endogeneity and elaborate on the channels that the endogeneity can render the unconditional regressor estimator inconsistent. We show that even if the treatment status is exogenous, the unconditional regression estimator can still be inconsistent when there are common covariates affecting both the treatment status and the outcome variable. We introduce a new class of marginal treatment effects (MTE) based on the influence function of the functional underlying the policy target. We show that an unconditional policy effect can be represented as a weighted average of the newly defined MTEs over the individuals at the margin of indifference. Point identification is achieved using the local instrumental variable approach. Furthermore, the unconditional policy...

Theoretical Foundations of Relational Incentive Contracts

Wed, 7 Jul 2021 00:00:00 +0000

This article describes the emerging game-theoretic framework for modeling long-term contractual relationships with moral hazard. The framework combines self-enforcement and external enforcement, accommodating alternative assumptions regarding how actively the parties initially set and renegotiate the terms of their contract. A progression of theoretical components is reviewed, building from the recursive formulation of equilibrium continuation values in repeated games. A principal-agent setting serves as a running example.

Lectures on the Theory of Competitive Equilibrium

Thu, 27 May 2021 00:00:00 +0000

Summaries by Nobel laureate Kenneth J. Arrow of his 1962 lectures on general equilibrium theory at Northwestern University. These summaries were widely circulated but unpublished. Reissued here, edited with updated notation. With permission of the Arrow family.

The effect of social distancing on the reach of an epidemic in social networks

Mon, 22 Mar 2021 00:00:00 +0000

How does social distancing affect the reach of an epidemic in social networks? We present Monte Carlo simulation results of a susceptible–infected–removed with social distancing model. The key feature of the model is that individuals are limited in the number of acquaintances that they can interact with, thereby constraining disease transmission to an infectious subnetwork of the original social network. While increased social distancing typically reduces the spread of an infectious disease, the magnitude varies greatly depending on the topology of the network, indicating the need for policies that are network dependent. Our results also reveal the importance of coordinating policies at the ‘global’ level. In particular, the public health benefits from social distancing to a group (e.g. a country) may be completely undone if that group maintains connections with outside groups that are not following suit.

Local regression distribution estimators

Wed, 17 Mar 2021 00:00:00 +0000

Local regression distribution estimators

Efficient mechanisms for level-k bilateral trading

Wed, 3 Mar 2021 00:00:00 +0000

Efficient mechanisms for level-k bilateral trading

From Empty Pews to Empty Cradles: Fertility Decline among European Catholics

Thu, 10 Dec 2020 00:00:00 +0000

Total fertility in the Catholic countries of Southern Europe has dropped to remarkably low rates (=1.4) despite continuing low rates female labor force participation and high historic fertility. We model three ways in which religion affects the demand for children – through norms, market wages, and childrearing costs. We estimate these effects using new panel data on church attendance and clergy employment for 13 European countries from 1960 to 2000, spanning the Second Vatican Council (1962–65). Using nuns per capita as a proxy for service provision, we estimate fertility effects on the order of 300 to 400 children per nun. Moreover, nuns outperform priests as a predictor of fertility, suggesting that changes in childrearing costs dominate changes in theology and norms. Reduced church attendance also predicts fertility decline, but only for Catholics, not for Protestants. Service provision and attendance complement each other, a finding consistent with club models of religion.

Asymptotic F test in Regressions with Observations Collected at High Frequency over Long Span

Thu, 29 Oct 2020 00:00:00 +0000

This paper proposes tests of linear hypotheses when the variables may be continuous-time processes with observations collected at a high sampling frequency over a long span. Utilizing series long run variance (LRV) estimation in place of the traditional kernel LRV estimation, we develop easy-to-implement and more accurate F tests in both stationary and nonstationary environments. The nonstationary environment accommodates endogenous regressors that are general semimartinglales. The F tests can be implemented in exactly the same way as in the usual discrete-time setting. The F tests are, therefore, robust to the continuous-time or discrete-time nature of the data. Simulations demonstrate the improved size accuracy and competitive power of the F tests relative to existing continuous-time testing procedures and their improved versions. The F tests are of practical interest as recent work by Chang et al. (2018) demonstrates that traditional inference methods can become invalid and...

On the emergence of a power law in the distribution of COVID-19 cases

Mon, 7 Sep 2020 00:00:00 +0000

The first confirmed case of Coronavirus Disease 2019 (COVID-19) in the US was reported on January 21, 2020. By the end of March, 2020, there were more than 180,000 confirmed cases in the US, distributed across more than 2000 counties. We find that the right tail of this distribution exhibits a power law, with Pareto exponent close to one. We investigate whether a simple model of the growth of COVID-19 cases involving Gibrat's law can explain the emergence of this power law. The model is calibrated to match (i) the growth rates of confirmed cases, and (ii) the varying lengths of time during which COVID-19 had been present within each county. Thus calibrated, the model generates a power law with Pareto exponent nearly exactly equal to the exponent estimated directly from the distribution of confirmed cases across counties at the end of March.

Conservation Agreements: Relational Contracts with Endogenous Monitoring

Tue, 21 Jul 2020 00:00:00 +0000

This article examines the structure and performance of conservation agreements, which are relational contracts used across the world to protect natural resources. Key elements of these agreements are (1) they are ongoing arrangements between a local community and an outside party, typically a nongovernmental organization (NGO); (2) they feature payments in exchange for conservation services; (3) the prospects for success depend on the NGO engaging in costly monitoring to detect whether the community is foregoing short-term gains to protect the resource; (4) lacking a strong external enforcement system, they rely on self-enforcement; and (5) the parties have the opportunity to renegotiate at any time. A repeated-game model is developed and utilized to organize an evaluation of real conservation agreements, using three case studies as representative examples. (JEL D74, D86, Q20, Q56).

A Random Attention Model

Tue, 7 Jul 2020 00:00:00 +0000

A Random Attention Model

News Shocks in Open Economies: Evidence from Giant Oil Discoveries

Fri, 3 Jul 2020 00:00:00 +0000

News Shocks in Open Economies: Evidence from Giant Oil Discoveries

Ten Years After the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?

Fri, 3 Jul 2020 00:00:00 +0000

This paper takes stock of what we have learned from the “Renaissance” in fiscal research in the ten years since the financial crisis. I first discuss the new innovations in methodology and various strengths and weaknesses of the main approaches to estimating fiscal multipliers. Reviewing the estimates, I come to the surprising conclusion that the bulk of the estimates for average spending and tax change multipliers lie in a fairly narrow range, 0.6 to 1 for spending multipliers and -2 to -3 for tax change multipliers. However, I identify economic circumstances in which multipliers lie outside those ranges. Finally, I review the debate on whether multipliers were higher for the 2009 Obama stimulus spending in the United States or for fiscal consolidations in Europe.

Macroeconomic Shocks and Their Propagation

Fri, 3 Jul 2020 00:00:00 +0000

Macroeconomic Shocks and Their Propagation

Free Time: The Forgotten American Dream. By Benjamin Kline Hunnicutt. Philadelphia, PA: Temple University Press. 2013. Pp. vii, 237. $34.95, paper; also available as an eBook.

Fri, 3 Jul 2020 00:00:00 +0000

Free Time: The Forgotten American Dream. By Benjamin Kline Hunnicutt. Philadelphia, PA: Temple University Press. 2013. Pp. vii, 237. $34.95, paper; also available as an eBook.

Comment

Fri, 3 Jul 2020 00:00:00 +0000

Comment

A closed-form estimator for quantile treatment effects with endogeneity

Tue, 9 Jun 2020 00:00:00 +0000

A closed-form estimator for quantile treatment effects with endogeneity

Generic Inference on Quantile and Quantile Effect Functions for Discrete Outcomes

Tue, 9 Jun 2020 00:00:00 +0000

Generic Inference on Quantile and Quantile Effect Functions for Discrete Outcomes

New insights on the impact of coefficient instability on ratio-correlation population estimates

Tue, 26 May 2020 00:00:00 +0000

In this study we examine the regression-based ratio-correlation method and suggest some new tools for assessing the magnitude and impact of coefficient instability on population estimation errors. We use a robust sample of 904 counties from 11 states and find that: (1) coefficient instability is not a universal source of error in regression models for population estimation and its impact is less than commonly assumed; (2) coefficient instability is not related to bias, but it does decrease precision and increase the allocation error of population estimates; and (3) unstable coefficients have the greatest impact on counties under 20,000 in population size. Our findings suggest that information about the conditions that affect coefficient instability and its impact on estimation error might lead to more targeted and efficient approaches for improving population estimates developed from regression models.

A Comparison of Two Quantile Models With Endogeneity

Tue, 26 May 2020 00:00:00 +0000

A Comparison of Two Quantile Models With Endogeneity

Heat, Disparities, and Health Outcomes in San Diego County's Diverse Climate Zones

Wed, 20 May 2020 00:00:00 +0000

Climate variability and change are issues of growing public health importance. Numerous studies have documented risks of extreme heat on human health in different locations around the world. Strategies to prevent heat-related morbidity and reduce disparities are possible but require improved knowledge of health outcomes during hot days at a small-scale level as important within-city variability in local weather conditions, socio-demographic composition, and access to air conditioning (AC) may exist. We analyzed hospitalization data for three unique climate regions of San Diego County alongside temperature data spanning 14 years to quantify the health impact of ambient air temperature at varying exceedance threshold levels. Within San Diego, coastal residents were more sensitive to heat than inland residents. At the coast, we detected a health impact at lower temperatures compared to inland locations for multiple disease categories including heat illness, dehydration, acute...

The fiscal cost of weak governance: Evidence from teacher absence in India

Wed, 20 May 2020 00:00:00 +0000

The relative return to strategies that augment inputs versus those that reduce inefficiencies remains a key open question for education policy in low-income countries. Using a new nationally-representative panel dataset of schools across 1297 villages in India, we show that the large public investments in education over the past decade have led to substantial improvements in input-based measures of school quality, but only a modest reduction in inefficiency as measured by teacher absence. In our data, 23.6% of teachers were absent during unannounced school visits, and we estimate that the salary cost of unauthorized teacher absence is $1.5 billion/year. We find two robust correlations in the nationally-representative panel data that corroborate findings from smaller-scale experiments. First, reductions in student-teacher ratios are correlated with increased teacher absence. Second, increases in the frequency of school monitoring are strongly correlated with lower teacher...

Iterated weak dominance and interval‐dominance supermodular games

Fri, 15 May 2020 00:00:00 +0000

This paper extends Milgrom and Robert's treatment of supermodular games in two ways. It points out that their main characterization result holds under a weaker assumption. It refines the arguments to provide bounds on the set of strategies that survive iterated deletion of weakly dominated strategies. I derive the bounds by iterating the best-response correspondence. I give conditions under which they are independent of the order of deletion of dominated strategies. The results have implications for equilibrium selection and dynamic stability in games.

On the relationship between individual and group decisions

Fri, 15 May 2020 00:00:00 +0000

Each member of a group receives a signal about the unknown state of the world and decides on a utility-maximizing recommendation on the basis of that signal. The individuals have identical preferences. The group makes a decision that maximizes the common utility function assuming perfect pooling of the information in individual signals. An action profile is a group action and a recommendation from each individual. A collection of action profiles is rational if there exists an information structure under which all elements in the collection arise with positive probability. With no restrictions on the information structure, essentially all action profiles are rational. In fact, given any distribution over action profiles, it is possible to find an information structure that approximates the distribution. In a monotone environment in which individuals receive conditionally independent signals, essentially any single action profile is rational, although some collections of action...

Ten possible experiments on communication and deception

Thu, 14 May 2020 00:00:00 +0000

Lying Aversion and the Size of the Lie

Thu, 14 May 2020 00:00:00 +0000

Lying Aversion and the Size of the Lie

How Should Taxes Be Designed to Encourage Entrepreneurship?

Tue, 12 May 2020 00:00:00 +0000

How Should Taxes Be Designed to Encourage Entrepreneurship?

How Should Income from Multinationals Be Taxed?

Tue, 12 May 2020 00:00:00 +0000

How Should Income from Multinationals Be Taxed?

On the outside-option principle with one-sided options

Wed, 29 Apr 2020 00:00:00 +0000

On the outside-option principle with one-sided options

Testing for a trend with persistent errors

Tue, 28 Apr 2020 00:00:00 +0000

Testing for a trend with persistent errors

Boundedly rational versus optimization-based models of strategic thinking and learning in games

Tue, 28 Apr 2020 00:00:00 +0000

The paper is a comment on the article by R. Harstad and R. Selten and considers the tradeoff between bounded rationality and optimization models in the game-theoretic context. The author shows that in most of the models elements of opimization are still retained and that it is thus more productive to further improve the optimization-based modeling rather than to abandon them altogether in favour of bounded rationality.

The Effects of Prize Structures on Innovative Performance

Tue, 17 Mar 2020 00:00:00 +0000

Successful innovation is essential for the survival and growth of organizations, but how best to incentivize innovation is poorly understood. We compare how two common incentive schemes affect innovative performance in a field experiment run in partnership with a large life sciences company. We find that a winner-takes-all compensation scheme generates significantly more novel innovation relative to a compensation scheme that offers the same total compensation but shares it across the ten best innovations. Moreover, the winner-takes-all scheme does not reduce innovative output on average and, among teams of innovators, generates more output than the less risky prize structure.

Statistical evidence and the problem of robust litigation

Tue, 3 Mar 2020 00:00:00 +0000

Statistical evidence and the problem of robust litigation

Fat tails and spurious estimation of consumption‐based asset pricing models

Tue, 3 Mar 2020 00:00:00 +0000

Fat tails and spurious estimation of consumption‐based asset pricing models

New Directions for Modelling Strategic Behavior: Game-Theoretic Models of Communication, Coordination, and Cooperation in Economic Relationships