Pub Date : 2024-11-30DOI: 10.1016/j.jebo.2024.106828
Isabel Günther , Bruno Martorano
In an online experiment, we provide US citizens with information on both inequality of outcomes and opportunities and test the impact on preferences for redistribution. Information on wealth inequalities in the US increases consensus on a more progressive tax system, whereas information on lack of social mobility in the US increases participants’ preferences for redistribution via fiscal spending. Both informational treatments have a stronger impact when participants also learn that higher inequality is not a necessary part of economic development. All informational treatments have a stronger impact for citizens who underestimate the current level of inequality, trust the government, or belong to the middle-income group, while there is no clear relationship between political position and the impact of information on preferences for redistribution.
{"title":"Inequality, social mobility and redistributive preferences","authors":"Isabel Günther , Bruno Martorano","doi":"10.1016/j.jebo.2024.106828","DOIUrl":"10.1016/j.jebo.2024.106828","url":null,"abstract":"<div><div>In an online experiment, we provide US citizens with information on both inequality of outcomes and opportunities and test the impact on preferences for redistribution. Information on wealth inequalities in the US increases consensus on a more progressive tax system, whereas information on lack of social mobility in the US increases participants’ preferences for redistribution via fiscal spending. Both informational treatments have a stronger impact when participants also learn that higher inequality is not a necessary part of economic development. All informational treatments have a stronger impact for citizens who underestimate the current level of inequality, trust the government, or belong to the middle-income group, while there is no clear relationship between political position and the impact of information on preferences for redistribution.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106828"},"PeriodicalIF":2.3,"publicationDate":"2024-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142748092","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-30DOI: 10.1016/j.jebo.2024.106775
Aidin Hajikhameneh , Laurence R. Iannaccone
Additive shocks can substantially increase cooperation in otherwise standard public goods game experiments. We study shocks that randomly adjust players’ earnings by a fixed positive or negative amount reported at the end of each round. These adjustments change neither the return to players’ contributions nor the information about other group members. We compare results across four treatments that employ the same group-level adjustment algorithm but frame it differently, with pre-play descriptions that range from omitting all useful information to accurately revealing its 50/50 random nature. In each treatment, overall contributions run about 50% higher than those obtained in the standard no-adjustment game. Contributions run higher still, nearly 100% over baseline, in a treatment that individualizes the adjustments, truthfully describing them as 50/50 random and separately calculated for each player. Our results contrast with those of previous studies, which add risk to public goods games in ways that directly interact with players’ contributions and typically reduce cooperation. Players’ contributions and post-play feedback strongly suggest that our results trace back to a pair of deep-rooted impulses that boost solidarity in response to external risk and rationalize the response with superstitious thinking.
{"title":"From shocks to solidarity and superstition: Exploring the foundations of faith","authors":"Aidin Hajikhameneh , Laurence R. Iannaccone","doi":"10.1016/j.jebo.2024.106775","DOIUrl":"10.1016/j.jebo.2024.106775","url":null,"abstract":"<div><div>Additive shocks can substantially increase cooperation in otherwise standard public goods game experiments. We study shocks that randomly adjust players’ earnings by a fixed positive or negative amount reported at the end of each round. These adjustments change neither the return to players’ contributions nor the information about other group members. We compare results across four treatments that employ the same group-level adjustment algorithm but frame it differently, with pre-play descriptions that range from omitting all useful information to accurately revealing its 50/50 random nature. In each treatment, overall contributions run about 50% higher than those obtained in the standard no-adjustment game. Contributions run higher still, nearly 100% over baseline, in a treatment that individualizes the adjustments, truthfully describing them as 50/50 random and separately calculated for each player. Our results contrast with those of previous studies, which add risk to public goods games in ways that directly interact with players’ contributions and typically reduce cooperation. Players’ contributions and post-play feedback strongly suggest that our results trace back to a pair of deep-rooted impulses that boost solidarity in response to external risk and rationalize the response with superstitious thinking.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106775"},"PeriodicalIF":2.3,"publicationDate":"2024-11-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142748093","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-29DOI: 10.1016/j.jebo.2024.106827
Marco Pangallo
Business cycles tend to comove across countries. However, standard models that attribute comovement to propagation of exogenous shocks struggle to generate a level of comovement that is as high as in the data. In this paper, we consider models that produce business cycles endogenously, through some form of non-linear dynamics—limit cycles or chaos. These models generate stronger comovement, because they combine shock propagation with synchronization of endogenous dynamics. In particular, we study a demand-driven reduced-form model in which business cycles emerge from strategic complementarities within countries, synchronizing their oscillations through international trade linkages. We develop an eigendecomposition that explores the interplay between non-linear dynamics, shock propagation and network structure, and use this theory to understand the mechanisms of synchronization. Next, we calibrate the model to data on 24 countries and show that the empirical level of comovement can only be matched by combining endogenous business cycles with exogenous shocks. Despite the limitations of using a stylized model, our results support the hypothesis that business cycles are at least in part caused by underlying non-linear dynamics.
{"title":"Synchronization of endogenous business cycles","authors":"Marco Pangallo","doi":"10.1016/j.jebo.2024.106827","DOIUrl":"10.1016/j.jebo.2024.106827","url":null,"abstract":"<div><div>Business cycles tend to comove across countries. However, standard models that attribute comovement to propagation of exogenous shocks struggle to generate a level of comovement that is as high as in the data. In this paper, we consider models that produce business cycles endogenously, through some form of non-linear dynamics—limit cycles or chaos. These models generate stronger comovement, because they combine shock propagation with synchronization of endogenous dynamics. In particular, we study a demand-driven reduced-form model in which business cycles emerge from strategic complementarities within countries, synchronizing their oscillations through international trade linkages. We develop an eigendecomposition that explores the interplay between non-linear dynamics, shock propagation and network structure, and use this theory to understand the mechanisms of synchronization. Next, we calibrate the model to data on 24 countries and show that the empirical level of comovement can only be matched by combining endogenous business cycles with exogenous shocks. Despite the limitations of using a stylized model, our results support the hypothesis that business cycles are at least in part caused by underlying non-linear dynamics.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106827"},"PeriodicalIF":2.3,"publicationDate":"2024-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142748094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-29DOI: 10.1016/j.jebo.2024.106823
Hirokazu Ishise
In early modern Japan, infanticide was used for birth control and sex selection. However, some historians hypothesized that people who believed in the True Pure Land (TPL) sect of Japanese Buddhism were less likely to commit infanticide. I statistically examine this hypothesis using a quasi-natural experiment of hinoeuma (fire-horse) year with a two-way fixed-effects estimation. Girls born in a hinoeuma year were reckoned to be inauspicious and subjected to sex-selective infanticide. In 1846 and 1906 hinoeuma, TPL-dominant areas experienced a smaller increase in the male-to-female ratio in the cohort than the areas with less TPL dominance. Additional regressions support the hypothesis that the TPL’s prohibition of infanticide led to this smaller effect.
{"title":"Religion as an informal institution: A case of true pure land Buddhism and missing women in early modern Japan","authors":"Hirokazu Ishise","doi":"10.1016/j.jebo.2024.106823","DOIUrl":"10.1016/j.jebo.2024.106823","url":null,"abstract":"<div><div>In early modern Japan, infanticide was used for birth control and sex selection. However, some historians hypothesized that people who believed in the True Pure Land (TPL) sect of Japanese Buddhism were less likely to commit infanticide. I statistically examine this hypothesis using a quasi-natural experiment of <em>hinoeuma</em> (fire-horse) year with a two-way fixed-effects estimation. Girls born in a <em>hinoeuma</em> year were reckoned to be inauspicious and subjected to sex-selective infanticide. In 1846 and 1906 <em>hinoeuma</em>, TPL-dominant areas experienced a smaller increase in the male-to-female ratio in the cohort than the areas with less TPL dominance. Additional regressions support the hypothesis that the TPL’s prohibition of infanticide led to this smaller effect.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106823"},"PeriodicalIF":2.3,"publicationDate":"2024-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142747530","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-28DOI: 10.1016/j.jebo.2024.106824
Kohei Daido , Takeshi Murooka
We study multitasking problems where an agent engages in both a contractible and a non-contractible task, which are substitutes. The agent has private information on the value of the non-contractible task, and there are followers (e.g., another agent, a third party, or a principal) who also contribute to this task. The agent’s effort can serve as a signal of the value as in the literature on leading-by-example (Hermalin, 1998). We derive the condition in which the principal provides high-powered incentives for the contractible task to mitigate the agent’s excessive signaling.
{"title":"Multitasking and leadership in optimal incentive contracts","authors":"Kohei Daido , Takeshi Murooka","doi":"10.1016/j.jebo.2024.106824","DOIUrl":"10.1016/j.jebo.2024.106824","url":null,"abstract":"<div><div>We study multitasking problems where an agent engages in both a contractible and a non-contractible task, which are substitutes. The agent has private information on the value of the non-contractible task, and there are followers (e.g., another agent, a third party, or a principal) who also contribute to this task. The agent’s effort can serve as a signal of the value as in the literature on leading-by-example (Hermalin, 1998). We derive the condition in which the principal provides high-powered incentives for the contractible task to mitigate the agent’s excessive signaling.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106824"},"PeriodicalIF":2.3,"publicationDate":"2024-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142747531","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-26DOI: 10.1016/j.jebo.2024.106814
Haichao Fan , Guangyuan Guo , Yu Liu , Huanhuan Wang
This study investigates the effects of reducing trade policy uncertainty (TPU) on firms’ production and pollution dynamics under different extents of environmental regulation stringency. We develop a trade model with heterogeneous firms subject to different regulatory pressures. Our calibration shows that reduced TPU boosts firm output by 6%, which persists even under stricter environmental regulations. Meanwhile, the emission cap control prominently reduces emissions and emission intensity. By constructing a firm-level TPU reduction shock following the U.S. granting of permanent normal trade relations to China, we empirically test our model’s predictions using Chinese data. Consistently, we find that while firms in both environmentally regulated and non-regulated zones increase output to similar extents, only those in Two-Control Zones with stringent sulfur dioxide (SO2) emission controls reduce their total emission intensity through decreased fossil fuel use, desulfurization, and increased investment in pollution abatement.
{"title":"Trade uncertainty, emission cap and firm pollution","authors":"Haichao Fan , Guangyuan Guo , Yu Liu , Huanhuan Wang","doi":"10.1016/j.jebo.2024.106814","DOIUrl":"10.1016/j.jebo.2024.106814","url":null,"abstract":"<div><div>This study investigates the effects of reducing trade policy uncertainty (TPU) on firms’ production and pollution dynamics under different extents of environmental regulation stringency. We develop a trade model with heterogeneous firms subject to different regulatory pressures. Our calibration shows that reduced TPU boosts firm output by 6%, which persists even under stricter environmental regulations. Meanwhile, the emission cap control prominently reduces emissions and emission intensity. By constructing a firm-level TPU reduction shock following the U.S. granting of permanent normal trade relations to China, we empirically test our model’s predictions using Chinese data. Consistently, we find that while firms in both environmentally regulated and non-regulated zones increase output to similar extents, only those in Two-Control Zones with stringent sulfur dioxide (SO2) emission controls reduce their total emission intensity through decreased fossil fuel use, desulfurization, and increased investment in pollution abatement.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106814"},"PeriodicalIF":2.3,"publicationDate":"2024-11-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703024","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-25DOI: 10.1016/j.jebo.2024.106826
Alycia Chin , Eric M. VanEpps , Brian Scholl , Steven Nash
Consumers’ expectations of stock market movements are important for understanding individual decisions about consequential financial outcomes and forming economic policy. Across three studies, we posit a new relationship underlying reported stock market expectations: that respondents lack confidence about their ability to forecast stock market movements and this lack of confidence biases reported probabilities toward 0 %. In Study 1, using 10 years of nationally representative survey data, we show that stock market expectations are more pessimistic than warranted when compared to actual stock market movements. In Study 2, we measure stock market expectations in several nationally representative survey experiments over 12 monthly waves (n = 4,613 participants providing 21,670 survey responses) where participants are randomly assigned to report the chances that the stock market will be “lower” or “higher” over the next month and year. Reported probabilities are biased toward 0 % in each question frame, yielding a “framing effect” gap of >10 percentage points each wave. In Study 3, we find that confidence moderates this framing effect: when we manipulate confidence regarding one's ability to forecast the stock market, there is a smaller gap between “lower” and “higher” frames for those participants who have greater confidence. To our knowledge, this is the first research showing that a lack of confidence biases reported stock market probabilities toward 0 %. It also uncovers a framing effect that is counter to psychological theory on “valence framing” and helps explain prior research showing that people are pessimistic about the stock market.
{"title":"How should I know? Lack of confidence biases stock market expectations toward zero","authors":"Alycia Chin , Eric M. VanEpps , Brian Scholl , Steven Nash","doi":"10.1016/j.jebo.2024.106826","DOIUrl":"10.1016/j.jebo.2024.106826","url":null,"abstract":"<div><div>Consumers’ expectations of stock market movements are important for understanding individual decisions about consequential financial outcomes and forming economic policy. Across three studies, we posit a new relationship underlying reported stock market expectations: that respondents lack confidence about their ability to forecast stock market movements and this lack of confidence biases reported probabilities toward 0 %. In Study 1, using 10 years of nationally representative survey data, we show that stock market expectations are more pessimistic than warranted when compared to actual stock market movements. In Study 2, we measure stock market expectations in several nationally representative survey experiments over 12 monthly waves (<em>n</em> = 4,613 participants providing 21,670 survey responses) where participants are randomly assigned to report the chances that the stock market will be “lower” or “higher” over the next month and year. Reported probabilities are biased toward 0 % in each question frame, yielding a “framing effect” gap of >10 percentage points each wave. In Study 3, we find that confidence moderates this framing effect: when we manipulate confidence regarding one's ability to forecast the stock market, there is a smaller gap between “lower” and “higher” frames for those participants who have greater confidence. To our knowledge, this is the first research showing that a lack of confidence biases reported stock market probabilities toward 0 %. It also uncovers a framing effect that is counter to psychological theory on “valence framing” and helps explain prior research showing that people are pessimistic about the stock market.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106826"},"PeriodicalIF":2.3,"publicationDate":"2024-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703027","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-24DOI: 10.1016/j.jebo.2024.106788
Pascal Flurin Meier, Raphael Flepp, Egon Franck
We test the influence of expectations as reference points in the belief formation of individuals using field data from financial analysts. We explore the premise that deviations from expectations can significantly alter people's perceptions of identical outcomes, thereby affecting their subsequent belief formation. We employ a regression discontinuity design to reveal that analysts whose forecasts were barely exceeded become discontinuously more optimistic than analysts whose forecasts were barely missed, despite having converging prior beliefs and observing the same performance signal about firm earnings. Furthermore, our analyses show that analysts whose forecasts were barely missed update their beliefs more strongly than do analysts whose forecasts were barely exceeded. We contribute to the literature by providing important field evidence indicating that expectations constitute a reference point that influences subsequent belief formation in an environment involving high stakes and expert decision-makers.
{"title":"Expectational reference points and belief formation: Field evidence from financial analysts","authors":"Pascal Flurin Meier, Raphael Flepp, Egon Franck","doi":"10.1016/j.jebo.2024.106788","DOIUrl":"10.1016/j.jebo.2024.106788","url":null,"abstract":"<div><div>We test the influence of expectations as reference points in the belief formation of individuals using field data from financial analysts. We explore the premise that deviations from expectations can significantly alter people's perceptions of identical outcomes, thereby affecting their subsequent belief formation. We employ a regression discontinuity design to reveal that analysts whose forecasts were barely exceeded become discontinuously more optimistic than analysts whose forecasts were barely missed, despite having converging prior beliefs and observing the same performance signal about firm earnings. Furthermore, our analyses show that analysts whose forecasts were barely missed update their beliefs more strongly than do analysts whose forecasts were barely exceeded. We contribute to the literature by providing important field evidence indicating that expectations constitute a reference point that influences subsequent belief formation in an environment involving high stakes and expert decision-makers.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106788"},"PeriodicalIF":2.3,"publicationDate":"2024-11-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703026","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-22DOI: 10.1016/j.jebo.2024.106807
Aaron M. Gamino
Taking advantage of an Arizona children's health insurance program enrollment freeze, I study how the loss of children's public insurance affects children and parents. I confirm that the policy led to a decrease in public coverage among children and find partially offsetting gains in employer-sponsored insurance coverage. I find evidence that parents of affected children responded by enrolling in employer-sponsored plans rather than adjusting labor supply. Parents of slightly older children who were unaffected by the policy do not exhibit any responses to the freeze. These results can be informative of the ongoing Medicaid unwinding.
{"title":"The impact of an SCHIP freeze on children and parent's health insurance coverage","authors":"Aaron M. Gamino","doi":"10.1016/j.jebo.2024.106807","DOIUrl":"10.1016/j.jebo.2024.106807","url":null,"abstract":"<div><div>Taking advantage of an Arizona children's health insurance program enrollment freeze, I study how the loss of children's public insurance affects children and parents. I confirm that the policy led to a decrease in public coverage among children and find partially offsetting gains in employer-sponsored insurance coverage. I find evidence that parents of affected children responded by enrolling in employer-sponsored plans rather than adjusting labor supply. Parents of slightly older children who were unaffected by the policy do not exhibit any responses to the freeze. These results can be informative of the ongoing Medicaid unwinding.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106807"},"PeriodicalIF":2.3,"publicationDate":"2024-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703025","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-22DOI: 10.1016/j.jebo.2024.106820
Yannick Oswald , Keiran Suchak , Nick Malleson
The distribution of wealth is central to economic, social, and environmental dynamics. The release of high-frequency distributional data and the rapid pace of the complex global economy makes ‘real-time’ predictions about the distribution of wealth and income increasingly relevant. For instance, during the COVID-19 pandemic in spring 2020, the stock markets experienced a crash followed by a surge within a brief period, evidently reshaping the wealth distribution in the US. Yet economic data, when first released, can be uncertain and need to be readjusted — again specifically so during crisis moments like the pandemic when information about household consumption and business returns is patchy and drastically different from “business-as-usual”. Our motivation here is to develop one way of overcoming the problem of uncertain ‘real-time’ data and enable economic simulation methods, such as agent-based models, to accurately predict in ‘real-time’ when combined with newly released data. Therefore, we tested two distinct, parsimonious agent-based models of wealth distribution, calibrated with US data from 1990 to 2022, in conjunction with data assimilation. Data assimilation is essentially applied control theory — a set of algorithms aiming to improve model predictions by integrating ‘real-time’ observational data into a simulation. The algorithm we employed is the Ensemble Kalman Filter (EnKF), which performs well in the context of computationally expensive problems. Our findings reveal that while the base models already align well historically, the EnKF enables a superior fit to the data.
{"title":"Agent-based models of the United States wealth distribution with Ensemble Kalman Filter","authors":"Yannick Oswald , Keiran Suchak , Nick Malleson","doi":"10.1016/j.jebo.2024.106820","DOIUrl":"10.1016/j.jebo.2024.106820","url":null,"abstract":"<div><div>The distribution of wealth is central to economic, social, and environmental dynamics. The release of high-frequency distributional data and the rapid pace of the complex global economy makes ‘real-time’ predictions about the distribution of wealth and income increasingly relevant. For instance, during the COVID-19 pandemic in spring 2020, the stock markets experienced a crash followed by a surge within a brief period, evidently reshaping the wealth distribution in the US. Yet economic data, when first released, can be uncertain and need to be readjusted — again specifically so during crisis moments like the pandemic when information about household consumption and business returns is patchy and drastically different from “business-as-usual”. Our motivation here is to develop one way of overcoming the problem of uncertain ‘real-time’ data and enable economic simulation methods, such as agent-based models, to accurately predict in ‘real-time’ when combined with newly released data. Therefore, we tested two distinct, parsimonious agent-based models of wealth distribution, calibrated with US data from 1990 to 2022, in conjunction with data assimilation. Data assimilation is essentially applied control theory — a set of algorithms aiming to improve model predictions by integrating ‘real-time’ observational data into a simulation. The algorithm we employed is the Ensemble Kalman Filter (EnKF), which performs well in the context of computationally expensive problems. Our findings reveal that while the base models already align well historically, the EnKF enables a superior fit to the data.</div></div>","PeriodicalId":48409,"journal":{"name":"Journal of Economic Behavior & Organization","volume":"229 ","pages":"Article 106820"},"PeriodicalIF":2.3,"publicationDate":"2024-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142703028","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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