Francisca Antman 

Francisca Antman

 

  • Hispanic Americans in the Labor Market: Patterns over Time and across Generations, Journal of Economic Perspectives,Feb 2023.
  • For Want of a Cup: The Rise of Tea in England and the Impact of Water Quality on Mortality, Review of Economics and Statistics,2022.
    This paper explores the impact of water quality on mortality by exploiting a natural experiment -- the rise of tea consumption in 18th century England. This resulted in an unintentional increase in consumption of boiled water, thereby reducing mortality rates. The methodology uses two identification strategies tying areas with lower initial water quality to larger declines in mortality rates after tea drinking became widespread and following larger volumes of tea imports. Results are robust to the inclusion of controls for income and access to trade. The hypothesis is further bolstered by suggestive evidence from cause-specific deaths and early childhood mortality.


Sara Avila Forcada 

Sara Avila Forcada

 

  • Messages That Foster a Sense of Belonging Improve Learning and Satisfaction: An Experiment in an Online Environment, American Economics Association Papers and Proceedings, Vol. 113, pp. 514-18, May 2023. 
  • Abstract: The literature in pedagogy has shown that having a sense of belonging affects learning. This paper shows the result of a communication experiment in an online environment. For six consecutive terms, the instructor taught Introduction to Statistics. The instructor added a more direct communication strategy during two of those five terms. She used weekly communications that linked course material with events discussed by students previously and a personal message to each student. The intervention resulted in improved learning, measured by better grades, and more enjoyment of the course, measured using student comments in teaching evaluations.


Brian Cadena 

Brian Cadena

 

  • Performance Pay, Productivity, and Strategic Opt-Out: Evidence from a Community Health Center, (with Austin C. Smith) Journal of Public Economics, February 2022.
    Abstract: We use data from a Federally Qualified Health Center to examine changes in med- ical providers’ output in response to a change from a salary-based compensation plan to one that rewarded providers for seeing more patients each month. Leveraging the staggered rollout of the plan and provider-level productivity data, we find an 18 per- cent increase in observed productivity overall, with only a small portion resulting from individual responses to the change in incentives. The small incentive effect is consistent with experimental evidence that effort is less sensitive to financial incentives when in- dividuals work for an organization whose mission is aligned with their values. Further, we demonstrate a less-studied response to piece rates – strategic non-compliance. We find that lower-productivity providers were slower to join the piece-rate plan and that providers managed to time their entry into the plan based on within-person differences in productivity.


Jeronimo Carballo 

Jeronimo Carballo

 

  • The Effect of Transit Systems on International Trade (with Alejandro Graziano, Georg Schaur and Christian Volpe Martincus) Review of Economics and Statistics, forthcoming.
    Abstract: In this paper, we estimate the trade effects of a transit system upgrading that streamlines border processing in developing countries. Our empirical approach combines transaction level export data from El Salvador with unique data that distinguishes export flows that were processed on the transit system. Our results indicate that the new transit system lowered regulatory border costs and raised exports. At the low end, our back-of-the-envelope estimate of the return to investment is US$ 3-to-1. The estimation results also suggest that existing frameworks that emphasize shipping frequency and the formation of new trade relationships are important to interpret trade facilitation policy. This evidence informs an important policy covered by the 2013 WTO Agreement of Trade Facilitation.
  • Online Business Platforms and International Trade (with Marisol Rodriguez Chatruc, Catalina Salas Santa and Christian Volpe Martincus) Journal of International Economics, forthcoming.
    Abstract: International trade is subject to information incompleteness. Firms must therefore engage in a costly search process to find business partners. Online platforms can reduce these search costs and thereby favor firms exports. We examine whether this is actually the case and the underlying mechanisms thereof by focusing on ConnectAmericas, a free, purely informational online platform that, by the end of 2018, connected more than 45,000 firms from 140 countries. In particular, we estimate the impact of using the platform on firms foreign sales utilizing detailed data on both firms participation therein and the entire universe of export transactions for Peru over the period 2010-2018. In so doing, we apply a difference-in-differences strategy and specifically exploit visits firms received to their profiles as a source of identifying variation. Consistent with the interpretation of the platform as a search cost-reducing mechanism, our estimates suggest that ConnectAmericas resulted in increased firms exports, particularly from those that had no digital presence, of differentiated products, and to less familiar destinations.
  • Economic and Policy Uncertainty: Export Dynamics and Value of Agreements (with Kyle Handley and Nuno Limao) Journal of International Economics, forthcoming.
    Abstract: We examine the interaction of economic and policy uncertainty in a dynamic, heterogeneous firms model. Uncertainty about foreign income, trade protection and their interaction dampens export investment. This can be mitigated by trade agreements, which are particularly valuable in periods of increased demand volatility. We use firm data to establish new facts about U.S. export dynamics in 2003-2011 and estimate the model. We find a significant role for uncertainty in explaining the trade collapse in the 2008 crisis and partial recovery in its aftermath. Consistent with the model predictions, we find that the negative effects worked (1) through the extensive margin, (2) in destinations without preferential agreements with the U.S. (accounting for over half its trade) and (3) in industries with higher potential protection. U.S. exports to non- preferential markets would have been 6.5% higher under an agreement—equivalent to an 8% foreign GDP increase. These findings highlight and quantify the value of international policy commitments through agreements that mitigate uncertainty, particularly during downturns.


Yongmin Chen 

Yongmin Chen

 

  • Experience Goods and Consumer Search, (with Zhuozheng Li and Tianle Zhang) American Economic Journals: Microeconomics, August 2022
    Abstract:  We introduce a search model where products differ in variety and unobserved quality ('experience goods'), and firms can establish quality reputation. We show that the inability of consumers to observe quality before purchase significantly changes how search frictions affect market performance. In equilibrium, higher search costs hinder consumers' search for better-matched variety and increase price, but can boost firms' investment in product quality. Under plausible conditions, both consumer and total welfare initially increase in search cost, whereas both would monotonically decrease if quality were observable. We apply the analysis to online markets, where low search costs coexist with low-quality products.
  • Efficient Liability in Expert Markets, (with Jianpei Li and Jin Zhang), International Economic Review, forthcoming.
    Abstract:  When providing professional services, an expert may misbehave by either prescribing “wrong” treatment for consumer's problem or failing to exert proper effort to diagnose it. We show that under a range of liabilities the expert will recommend the appropriate treatment based on his private information if markups for alternative treatments are close enough; however, a well-designed liability rule is essential for also motivating efficient diagnosis effort. We further demonstrate that unfettered price competition between experts may undermine the efficient role of liability, whereas either a minimum-price constraint or an obligation-to-serve requirement can restore it.


Jonathan Hughes 

Jonathan Hughes

 

  • The Value of Rarity: Evidence from a Collectible Good, Journal of Industrial Economics, 70(1), pp. 147-167.  March 2022.
    Markets for art, coins and other collectibles, culinary delicacies and eco-tourism suggest consumers value the rarity of many goods. While empirical evidence supports higher prices for rare goods, isolating the value of rarity has proven difficult. I analyze prices for a collectible card game and show goods that are designated as rare trade at higher prices than functionally-equivalent substitutes. Importantly, I use novel features of this market to account for scarcity, observed and unobserved product characteristics and separately identify rarity effects. These results have important implications for markets ranging from luxury goods to conservation of endangered species.


Murat Iyigun 

Murat Iyigun

 

  • Putting the Husband Through: Role of Credit Constraints in Timing of Marriage and Spousal Education, (with Jeanne Lafortune) Journal of Labor Economics, January 2023.
    Abstract: In the United States, age at first marriage was lowest and the education gap between hus- bands and wives was highest during the 1950s. The conventional explanation for such a negative correlation between age at first marriage and educational gap is that early marriage leads to ear- lier and higher fertility, which in turn prevents women from acquiring education. In this paper, we propose a complementary but novel explanation: early marriages enabled couples to over- come some of the credit constraints that could have bound husbands from acquiring education. We show that a model that includes this motive and mechanism, in combination with declining startup costs of marriage, can replicate not only the marriage and education patterns observed in the middle of the century in the United States, but also the trends in both variables over the 20th century. We then use micro-level data to argue that this explanation matches patterns seen in the data, including how changes in minimum marriage age laws impacted differences in spousal educational attainment.
  • Resource Shocks and Conflict, 1400 – 1900 C, (with Joris Muller and Nancy Qian) American Economic Review, May 2024.
    Abstract: This paper provides evidence of the long-run effects of a permanent increase in agricultural productivity on conflict. We construct a newly digitized and geo-referenced dataset of battles in Europe, the Near East and North Africa covering the period between 1400 and 1900 CE. For variation in permanent improvements in agricultural productivity, we exploit the introduction of potatoes from the Americas to the Old World after the Columbian Exchange. We find that the introduction of potatoes permanently reduced conflict for roughly two centuries. The results are driven by a reduction in civil conflicts.


Taylor Jaworski 

Taylor Jaworski

 

  • Spillover Effects of Intellectual Property Protection in the Interwar Aircraft Industry, (with Walker Hanlon) Economic Journal,Vol. 132, No. 645 (July 2022), pp. 1824–1851.
    Abstract: Can strengthening intellectual property protection for producers of one good affect innovation in other related goods? To answer this question, we exploit a unique policy experiment in the interwar military aircraft industry. Airframe designs had little intellectual property protection before 1926, but changes passed by Congress in 1926 provided airframe manufacturers with enhanced property rights over new designs. We show that granting property rights to airframe producers increased innovation in airframes, but slowed innovation in aero-engines, a complementary good where there was no change in the availability of intellectual property protection. We propose and test a simple theory that explains these patterns.
  • Highways and Globalization, (with Carl Kitchens and Sergey Nigai) International Economic Review, accepted.
    Abstract: This paper quantifies the value of US highways. We develop a multisector general equilibrium model with many locations in the United States (i.e., counties) and many countries. In the model, producers choose shipping routes subject to domestic and international trade costs, endogenous congestion, and port efficiency at international transshipment points. We find that removing the Interstate Highway System reduces real GDP by $601.6 billion (or 3.8 percent). We also show how to quantify the value of individual segments using our framework. The results highlight the role of domestic transportation infrastructure in shaping regional comparative advantage as well as the gains from intersectoral and international trade.


Wolfgang Keller 

Wolfgang Keller

 

  • International Trade and Job Polarization: Evidence at the Worker Level, (with Hale Utar), Journal of International Economics, forthcoming.
    Abstract: This paper examines the role of international trade in job polarization. With employer-employee matched data on virtually all workers and firms in Denmark between 1999 and 2009, we show that import competition leads to a reduction in mid-wage employment, and pushes mid-wage workers toward either tail of the occupational hierarchy depending on workers’ education and skill. We show that the specific tasks performed by a worker are central in determining the impact, and workers performing manual tasks are the ones most affected regardless of the routineness of these tasks. Only trade-exposed workers are pushed into low-wage employment, in contrast to workers susceptible to computer-related technological change. Quantitatively, we find that job polarization through import competition-induced occupational movements is at least as strong as through technological change and offshoring.
  • Globalization, Gender, and the Family, (with Hale Utar), Review of Economic Studies, March 2022.
    Abstract: This paper shows that in the presence of labor market shocks, child-bearing and child-rearing have far-reaching implications for gender inequality, household specialization and family structure. Using population register data on all births, marriages, and divorces together with employer-employee linked data for Denmark, we show that reduced labor market opportunities due to Chinese import competition lead to a move towards family, with higher rates of fertility, parental leave, and marriage, as well as lower rates of divorce. This move is driven by women, not men. We document substantial long-run earnings losses concentrated on women, and gender inequality increases. The gender-specific effects are due to a woman’s ability to give birth during a fixed period of life–her biological clock. Women have a higher reservation value for staying in the labor market when young, and a negative trade shock induces women to substitute more to family activities than men. High-earning women in their late 30s contribute strongly to the gender difference in fertility because switching to new comparable employment would require high initial commitment which is incompatible with having a newborn in the short time remaining on the biological clock. There is no gender difference (1) for workers past their fertile age, (2) in the size of the negative labor shock, and (3) due to occupational composition since we exploit within-worker variation. Despite lower labor earnings, positive family responses in Denmark are also sustained by insurance payments and government transfers so that workers can afford the shift to family.


Xiaodong Liu 

Xiaodong Liu

 

  • A Structural Model for the Coevolution of Networks and Behavior, (with Chih-Sheng Hsieh andMichael Kӧnig) The Review of Economics and Statistics, 104, 355-367, 2022.
    Abstract: This paper introduces a structural model for the coevolution of networks and behavior. We characterize the equilibrium of the underlying game and adopt the Bayesian Double Metropolis-Hastings algorithm to estimate the model. We further extend the model to incorporate unobserved heterogeneity and show that ignoring this heterogeneity can lead to biased estimates in simulation experiments. We apply the model to study R&D investment and collaboration decisions in the chemical and pharmaceutical industry and find a positive knowledge spillover effect. Our model also provides a tractable framework for a long-run key player analysis.


Adam McCloskey 

Adam McCloskey

 

  • Short and Simple Confidence Intervals when the Directions of Some Effects are Known, (with Philipp Ketz) Review of Economics and Statistics conditionally accepted.
    Abstract:  We introduce adaptive confidence intervals on a parameter of interest in the presence of nuisance parameters, such as coefficients on control variables, with known signs. Our confidence intervals are trivial to compute and can provide significant length reductions relative to standard ones when the nuisance parameters are small. At the same time, they entail minimal length increases at any parameter values. We apply our confidence intervals to the linear regression model, prove their uniform validity and illustrate their length properties in an empirical application to a factorial design field experiment and a Monte Carlo study calibrated to the empirical application.


Sergey Nigai 

Sergey Nigai

 

  • Highways and Globalization, (with Taylor Jaworski and Carl Kitchens) International Economic Review, accepted.
    Abstract: This paper quantifies the value of US highways. We develop a multisector general equilibrium model with many locations in the United States (i.e., counties) and many countries. In the model, producers choose shipping routes subject to domestic and international trade costs, endogenous congestion, and port efficiency at international transshipment points. We find that removing the Interstate Highway System reduces real GDP by $601.6 billion (or 3.8 percent). We also show how to quantify the value of individual segments using our framework. The results highlight the role of domestic transportation infrastructure in shaping regional comparative advantage as well as the gains from intersectoral and international trade.
  • Selection Effects, Inequality, and Aggregate Gains from Trade, Journal of International Economics, May 2023.
    Abstract: This paper argues that the cost of trade-induced inequality in terms of aggregate gains from trade is decreasing with globalization. I use a general equilibrium model of trade and show that at low levels of trade openness, a 1% point increase in real per capita income due to higher trade is associated with percentage point increases of 0.5, 0.85, and 0.92 in the Gini, Atkinson and Theil indices, respectively. These trade-offs, however, quickly decline upon opening up to trade and converge toward zero as trade barriers disappear. I find that at high levels of openness, more firms are exporters such that the elasticity of income inequality to reductions in trade costs converges to a constant, whereas the elasticity of average real income keeps increasing. Trade liberalization has positive marginal welfare effects for a wide range of social welfare function parameters. Existing taxation and redistributive policies can reinforce this relationship.


Yangwei Song 

Yangwei Song

 

  • "Approximate Bayesian implementation and exact maxmin implementation: An equivalence," Games and Economic Behavior, May 2023.
    Abstract: This paper provides a micro-foundation for approximate incentive compatibility using ambiguity aversion. In particular, we propose a novel notion of approximate interim incentive compatibility, approximate local incentive compatibility, and establish an equivalence between approximate local incentive compatibility in a Bayesian environment and exact interim incentive compatibility in the presence of a small degree of ambiguity. We then apply our result to the implementation of efficient allocations. In particular, we identify two economic settings—including ones in which approximately efficient allocations are implementable and ones in which agents are informationally small—in which efficient allocations are approximately locally implementable when agents are Bayesian. Applying our result to those settings, we conclude that efficient allocations are exactly implementable when agents perceive a small degree of ambiguity..