Oliver R. Browne, Ludovica Gazze, Michael Greenstone, Olga Rostapshova
Abstract New technologies allow perfect detection of environmental violations at near-zero marginal cost, but take-up is low. We conducted a field experiment to evaluate enforcement of water conservation rules with smart meters in Fresno, CA. Households were randomly assigned combinations of enforcement method (automated or in-person inspections) and fines. Automated enforcement increased households' punishment rates from 0.1 to 14%, decreased summer water use by 3%, and reduced violations by 17%, while higher fine levels had little effect. However, automated enforcement also increased customer complaints by 1,102%, ultimately causing its cancellation and highlighting that political considerations limit technological solutions to enforcement challenges.
{"title":"Man vs. Machine: Technological Promise and Political Limits of Automated Regulation Enforcement","authors":"Oliver R. Browne, Ludovica Gazze, Michael Greenstone, Olga Rostapshova","doi":"10.1162/rest_a_01316","DOIUrl":"https://doi.org/10.1162/rest_a_01316","url":null,"abstract":"Abstract New technologies allow perfect detection of environmental violations at near-zero marginal cost, but take-up is low. We conducted a field experiment to evaluate enforcement of water conservation rules with smart meters in Fresno, CA. Households were randomly assigned combinations of enforcement method (automated or in-person inspections) and fines. Automated enforcement increased households' punishment rates from 0.1 to 14%, decreased summer water use by 3%, and reduced violations by 17%, while higher fine levels had little effect. However, automated enforcement also increased customer complaints by 1,102%, ultimately causing its cancellation and highlighting that political considerations limit technological solutions to enforcement challenges.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135698395","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper proposes and estimates a dynamic model of household inflation expectations with information frictions and time-varying parameters, where households use a Bayesian learning model to form and update inflation expectations. The model decomposes households' inflation expectation formation process into a learning component, a noisy signal component, and a measurement component. Model-implied household inflation expectations provide a robust fit for the expectation-augmented Phillips curve. As a result of time-varying inflation dynamics, households' attention to inflation is endogenous to its volatility. This insight offers explanations for the anchoring of inflation expectations during the Great Moderation.
{"title":"An Estimated Model of Household Inflation Expectations: Information Frictions and Implications","authors":"Shihan Xie","doi":"10.1162/rest_a_01318","DOIUrl":"https://doi.org/10.1162/rest_a_01318","url":null,"abstract":"\u0000 This paper proposes and estimates a dynamic model of household inflation expectations with information frictions and time-varying parameters, where households use a Bayesian learning model to form and update inflation expectations. The model decomposes households' inflation expectation formation process into a learning component, a noisy signal component, and a measurement component. Model-implied household inflation expectations provide a robust fit for the expectation-augmented Phillips curve. As a result of time-varying inflation dynamics, households' attention to inflation is endogenous to its volatility. This insight offers explanations for the anchoring of inflation expectations during the Great Moderation.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128043940","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Factorial designs are widely used to study multiple treatments in one experiment. While t-tests using a fully-saturated “long” model provide valid inferences, “short” model t-tests (that ignore interactions) yield higher power if interactions are zero, but incorrect inferences otherwise. Of 27 factorial experiments published in top-5 journals (2007–2017), 19 use the short model. After including interactions, over half of their results lose significance. Based on recent econometric advances, we show that power improvements over the long model are possible. We provide practical guidance for the design of new experiments and the analysis of completed experiments.
{"title":"Factorial Designs, Model Selection, and (Incorrect) Inference in Randomized Experiments","authors":"Karthik Muralidharan, Mauricio Romero, Kaspar Wüthrich","doi":"10.1162/rest_a_01317","DOIUrl":"https://doi.org/10.1162/rest_a_01317","url":null,"abstract":"Abstract Factorial designs are widely used to study multiple treatments in one experiment. While t-tests using a fully-saturated “long” model provide valid inferences, “short” model t-tests (that ignore interactions) yield higher power if interactions are zero, but incorrect inferences otherwise. Of 27 factorial experiments published in top-5 journals (2007–2017), 19 use the short model. After including interactions, over half of their results lose significance. Based on recent econometric advances, we show that power improvements over the long model are possible. We provide practical guidance for the design of new experiments and the analysis of completed experiments.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135553698","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
M. Kate Bundorf, Jill DeMatteis, Grant Miller, Maria Polyakova, Jialu L. Streeter, Jonathan Wivagg
Abstract We analyze data from a survey we administered during the COVID19 pandemic to investigate the relationship between people's subjective beliefs about risks and their private protective behaviors. On average, people substantially overestimate the absolute level of risk associated with economic activity, but have directionally correct signals about their relative risk based on their demographic characteristics. Subjective risk beliefs are predictive of changes in economic activities independently of government policies. Government mandates restricting economic behavior, in turn, attenuate the relationship between subjective risk beliefs and protective behaviors.
{"title":"Risk Perceptions and Private Protective Behaviors: Evidence from COVID-19 Pandemic","authors":"M. Kate Bundorf, Jill DeMatteis, Grant Miller, Maria Polyakova, Jialu L. Streeter, Jonathan Wivagg","doi":"10.1162/rest_a_01309","DOIUrl":"https://doi.org/10.1162/rest_a_01309","url":null,"abstract":"Abstract We analyze data from a survey we administered during the COVID19 pandemic to investigate the relationship between people's subjective beliefs about risks and their private protective behaviors. On average, people substantially overestimate the absolute level of risk associated with economic activity, but have directionally correct signals about their relative risk based on their demographic characteristics. Subjective risk beliefs are predictive of changes in economic activities independently of government policies. Government mandates restricting economic behavior, in turn, attenuate the relationship between subjective risk beliefs and protective behaviors.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135698390","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract In the absence of strong incentives, public service delivery crucially depends on bureaucrat selection. Despite wide adoption by governments, it is unclear whether civil service examinations reliably select for job performance. We investigate this question focusing on state judges in Brazil. Exploring monthly data on judicial output and cross-court movement, we estimate that judges account for at least 23% of the observed variation in number of cases disposed. With novel data on admission examinations, we show that judges with higher grades perform better than lower-ranked peers. Our results suggest competitive examinations can be an effective way to screen candidates.
{"title":"Selecting Top Bureaucrats: Admission Exams and Performance in Brazil","authors":"Ricardo Dahis, Laura Schiavon, Thiago Scot","doi":"10.1162/rest_a_01311","DOIUrl":"https://doi.org/10.1162/rest_a_01311","url":null,"abstract":"Abstract In the absence of strong incentives, public service delivery crucially depends on bureaucrat selection. Despite wide adoption by governments, it is unclear whether civil service examinations reliably select for job performance. We investigate this question focusing on state judges in Brazil. Exploring monthly data on judicial output and cross-court movement, we estimate that judges account for at least 23% of the observed variation in number of cases disposed. With novel data on admission examinations, we show that judges with higher grades perform better than lower-ranked peers. Our results suggest competitive examinations can be an effective way to screen candidates.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135598953","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The entry of High-Speed Railways (HSR) represents a disruptive competition to airlines. Utilizing a unique dataset of all flights departing from Beijing to 113 domestic destinations in China since January 2009, we employ a difference-in-differences approach to examine the effects of HSR entry on on-time performance and to identify the channels. We document two main findings. First, the entry of HSR leads to significant reductions in the mean and variance of travel delays on the affected airline routes. Second, the reductions in departure delays and taxi-in time at the destination airports are identified as the main channels.
{"title":"Competition and Quality: Evidence from High-Speed Railways and Airlines","authors":"Hanming Fang, Long Wang, Yang Yang","doi":"10.1162/rest_a_01294","DOIUrl":"https://doi.org/10.1162/rest_a_01294","url":null,"abstract":"Abstract The entry of High-Speed Railways (HSR) represents a disruptive competition to airlines. Utilizing a unique dataset of all flights departing from Beijing to 113 domestic destinations in China since January 2009, we employ a difference-in-differences approach to examine the effects of HSR entry on on-time performance and to identify the channels. We document two main findings. First, the entry of HSR leads to significant reductions in the mean and variance of travel delays on the affected airline routes. Second, the reductions in departure delays and taxi-in time at the destination airports are identified as the main channels.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"58 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136371698","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Enrico Berkes, Olivier Deschenes, Ruben Gaetani, Jeffrey Lin, Christopher Severen
Abstract Does social distancing harm innovation? We estimate the effect of non-pharmaceutical interventions (NPIs)—policies that restrict interactions in an attempt to slow the spread of disease—on local invention. We construct a panel of issued patents and NPIs adopted by 50 large US cities during the 1918 flu pandemic. Difference-in-differences estimates show that cities adopting longer NPIs did not experience a decline in patenting during the pandemic relative to short-NPI cities, and recorded higher patenting afterward. Rather than reduce local invention by restricting localized knowledge spillovers, NPIs adopted during the pandemic may have preserved other inventive factors.
{"title":"Lockdowns and Innovation: Evidence from the 1918 Flu Pandemic","authors":"Enrico Berkes, Olivier Deschenes, Ruben Gaetani, Jeffrey Lin, Christopher Severen","doi":"10.1162/rest_a_01289","DOIUrl":"https://doi.org/10.1162/rest_a_01289","url":null,"abstract":"Abstract Does social distancing harm innovation? We estimate the effect of non-pharmaceutical interventions (NPIs)—policies that restrict interactions in an attempt to slow the spread of disease—on local invention. We construct a panel of issued patents and NPIs adopted by 50 large US cities during the 1918 flu pandemic. Difference-in-differences estimates show that cities adopting longer NPIs did not experience a decline in patenting during the pandemic relative to short-NPI cities, and recorded higher patenting afterward. Rather than reduce local invention by restricting localized knowledge spillovers, NPIs adopted during the pandemic may have preserved other inventive factors.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"47 10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136371390","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
An administrative rule in North Carolina allowed students who failed an exam to retake it approximately two weeks later, triggering a brief yet intense test preparation period. We develop a structural model that accounts for selection and find that these students score much higher on the retest. Using a regression discontinuity design, we find substantial fade-out of the test score gains after one year but some persistence thereafter. Unlike other interventions that produce similar initial increases in performance, we do not observe benefits to long-term outcomes. Our findings highlight that persistence should be accounted for when comparing educational interventions.
{"title":"Focused Interventions and Test Score Fade-Out","authors":"Michael Gilraine, J. Penney","doi":"10.1162/rest_a_01299","DOIUrl":"https://doi.org/10.1162/rest_a_01299","url":null,"abstract":"\u0000 An administrative rule in North Carolina allowed students who failed an exam to retake it approximately two weeks later, triggering a brief yet intense test preparation period. We develop a structural model that accounts for selection and find that these students score much higher on the retest. Using a regression discontinuity design, we find substantial fade-out of the test score gains after one year but some persistence thereafter. Unlike other interventions that produce similar initial increases in performance, we do not observe benefits to long-term outcomes. Our findings highlight that persistence should be accounted for when comparing educational interventions.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130889218","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper quantifies the impact of battery electric vehicle (BEV) subsidy program in China. We build a structural model of dynamic demand and Bertrand Nash supply to study price elasticity and changes in production costs. The model highlights four channels through which the subsidy program impacts the market: the temporal elasticity, in response to a current price change, the intertemporal elasticity, in response to a future price change, and the multiplication effects through peer and learning by doing (LBD). Combining these estimates, we simulate outcomes under four subsidy schemes and find a phase-out policy could be the most costeffective while achieving higher sales promotion compared with alternative policies that provide larger subsidies over more prolonged periods.
{"title":"Subsidy Phase-Out and Consumer Demand Dynamics: Evidence from the Battery Electric Vehicle Market in China","authors":"Yunyi Hu, Haitao Yin, Li Zhao","doi":"10.1162/rest_a_01295","DOIUrl":"https://doi.org/10.1162/rest_a_01295","url":null,"abstract":"\u0000 This paper quantifies the impact of battery electric vehicle (BEV) subsidy program in China. We build a structural model of dynamic demand and Bertrand Nash supply to study price elasticity and changes in production costs. The model highlights four channels through which the subsidy program impacts the market: the temporal elasticity, in response to a current price change, the intertemporal elasticity, in response to a future price change, and the multiplication effects through peer and learning by doing (LBD). Combining these estimates, we simulate outcomes under four subsidy schemes and find a phase-out policy could be the most costeffective while achieving higher sales promotion compared with alternative policies that provide larger subsidies over more prolonged periods.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124525890","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
James Bessen, Maarten Goos, Anna Salomons, Wiljan van den Berge
Abstract We estimate the impact of firm-level automation on individual worker outcomes by combining Dutch micro-data with a direct measure of automation expenditures covering all private non-financial sector firms. Using a novel difference-in-differences event-study design leveraging lumpy investment, we find that automation increases the probability of incumbent workers separating from their employers. Workers experience a 5-year cumulative wage income loss of 9 percent of one year's earnings, driven by decreases in days worked. These adverse impacts of automation are larger in smaller firms, and for older and middle-educated workers. By contrast, no such losses are found for firms' investments in computers.
{"title":"What Happens to Workers at Firms that Automate?","authors":"James Bessen, Maarten Goos, Anna Salomons, Wiljan van den Berge","doi":"10.1162/rest_a_01284","DOIUrl":"https://doi.org/10.1162/rest_a_01284","url":null,"abstract":"Abstract We estimate the impact of firm-level automation on individual worker outcomes by combining Dutch micro-data with a direct measure of automation expenditures covering all private non-financial sector firms. Using a novel difference-in-differences event-study design leveraging lumpy investment, we find that automation increases the probability of incumbent workers separating from their employers. Workers experience a 5-year cumulative wage income loss of 9 percent of one year's earnings, driven by decreases in days worked. These adverse impacts of automation are larger in smaller firms, and for older and middle-educated workers. By contrast, no such losses are found for firms' investments in computers.","PeriodicalId":275408,"journal":{"name":"The Review of Economics and Statistics","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136297701","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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