Brodeur, Cook, and Heyes (2020) study hypothesis tests from economic articles and find evidence for p-hacking and publication bias, in particular for instrumental variable and difference-in-difference studies. When adjusting for rounding errors (introducing a novel method), statistical evidence for p-hacking from randomization tests and caliper tests at the 5 percent significance threshold vanishes for difference-in-differnce studies but remains for instrumental variable studies. Results at the 1 percent and 10 percent significance thresholds remain largely similar. In addition, Brodeur, Cook, and Heyes derive latent distributions of z-statistics absent publication bias using two different approaches. We establish for each approach a result that challenges its applicability. (JEL A14, C12, C52)
{"title":"Methods Matter: p-Hacking and Publication Bias in Causal Analysis in Economics: Comment","authors":"Sebastian Kranz, Peter Pütz","doi":"10.1257/aer.20210121","DOIUrl":"https://doi.org/10.1257/aer.20210121","url":null,"abstract":"Brodeur, Cook, and Heyes (2020) study hypothesis tests from economic articles and find evidence for p-hacking and publication bias, in particular for instrumental variable and difference-in-difference studies. When adjusting for rounding errors (introducing a novel method), statistical evidence for p-hacking from randomization tests and caliper tests at the 5 percent significance threshold vanishes for difference-in-differnce studies but remains for instrumental variable studies. Results at the 1 percent and 10 percent significance thresholds remain largely similar. In addition, Brodeur, Cook, and Heyes derive latent distributions of z-statistics absent publication bias using two different approaches. We establish for each approach a result that challenges its applicability. (JEL A14, C12, C52)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"59 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81921900","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
David Nils Danz, L. Vesterlund, Alistair J. Wilson
Subjective beliefs are crucial for economic inference, yet behavior can challenge the elicitation. We propose that belief elicitation should be incentive compatible not only theoretically but also in a de facto behavioral sense. To demonstrate, we show that the binarized scoring rule, a state-of-the-art elicitation, violates two weak conditions for behavioral incentive compatibility: (i) within the elicitation, information on the incentives increases deviations from truthful reporting; and (ii) in a pure choice over the set of incentives, most deviate from the theorized maximizer. Moreover, we document that deviations are systematic and center-biased, and that the elicited beliefs substantially distort inference. (JEL D83, D91)
{"title":"Belief Elicitation and Behavioral Incentive Compatibility","authors":"David Nils Danz, L. Vesterlund, Alistair J. Wilson","doi":"10.1257/aer.20201248","DOIUrl":"https://doi.org/10.1257/aer.20201248","url":null,"abstract":"Subjective beliefs are crucial for economic inference, yet behavior can challenge the elicitation. We propose that belief elicitation should be incentive compatible not only theoretically but also in a de facto behavioral sense. To demonstrate, we show that the binarized scoring rule, a state-of-the-art elicitation, violates two weak conditions for behavioral incentive compatibility: (i) within the elicitation, information on the incentives increases deviations from truthful reporting; and (ii) in a pure choice over the set of incentives, most deviate from the theorized maximizer. Moreover, we document that deviations are systematic and center-biased, and that the elicited beliefs substantially distort inference. (JEL D83, D91)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"52 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89917082","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper identifies an upside of the separation of ownership and control, typically the source of inefficiencies in the theory of the firm. Because insiders obtain private information by exercising control, the separation of ownership and control leads to a separation of ownership and information. We show that this separation is necessary for efficient trade in the market for corporate control. The analysis reveals how strategic communication between inside and outside shareholders facilitates takeovers by eliciting external bidders’ private information. Our results call into question mandatory disclosure requirements during takeovers. (JEL D21, D82, G32, G34)
{"title":"Separating Ownership and Information","authors":"P. Voss, Marius Kulms","doi":"10.1257/aer.20211069","DOIUrl":"https://doi.org/10.1257/aer.20211069","url":null,"abstract":"This paper identifies an upside of the separation of ownership and control, typically the source of inefficiencies in the theory of the firm. Because insiders obtain private information by exercising control, the separation of ownership and control leads to a separation of ownership and information. We show that this separation is necessary for efficient trade in the market for corporate control. The analysis reveals how strategic communication between inside and outside shareholders facilitates takeovers by eliciting external bidders’ private information. Our results call into question mandatory disclosure requirements during takeovers. (JEL D21, D82, G32, G34)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"11 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88714114","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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.
{"title":"Measuring Racial Discrimination in Bail Decisions.","authors":"David Arnold, Will Dobbie, Peter Hull","doi":"10.1257/aer.20201653","DOIUrl":"https://doi.org/10.1257/aer.20201653","url":null,"abstract":"<p><p>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.</p>","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"112 9","pages":"2992-3038"},"PeriodicalIF":10.7,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10289801/pdf/nihms-1855624.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"9717732","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We relate two main representations of the cost of acquiring information: a cost that depends on the experiment performed, as in statistical decision theory, and a cost that depends on the distribution of posterior beliefs, as in applications of rational inattention. We show that in many cases of interest, posterior-based costs are inconsistent with a primitive model of costly experimentation. The inconsistency is at the core of known limits to the application of rational inattention in games and, more broadly, in equilibrium analyses where beliefs are endogenous; we show that an experiment-based approach helps to understand and overcome these difficulties. (JEL D82, D83)
{"title":"Experimental Cost of Information","authors":"Tommaso Denti, M. Marinacci, A. Rustichini","doi":"10.1257/aer.20210879","DOIUrl":"https://doi.org/10.1257/aer.20210879","url":null,"abstract":"We relate two main representations of the cost of acquiring information: a cost that depends on the experiment performed, as in statistical decision theory, and a cost that depends on the distribution of posterior beliefs, as in applications of rational inattention. We show that in many cases of interest, posterior-based costs are inconsistent with a primitive model of costly experimentation. The inconsistency is at the core of known limits to the application of rational inattention in games and, more broadly, in equilibrium analyses where beliefs are endogenous; we show that an experiment-based approach helps to understand and overcome these difficulties. (JEL D82, D83)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"14 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79211096","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Y. Algan, Elizabeth Beasley, S. Côté, Jungwee Park, R. Tremblay, F. Vitaro
A childhood intervention to improve the social skills and self-control of at-risk kindergarten boys in the 1980s had positive impacts over the life course: higher trust and self-control as adolescents; increased social group membership, education, and reduced criminality as young adults; and increased marriage and employment as adults. Using administrative data, we find this intervention increased average yearly employment income by about 20 percent and decreased average yearly social transfers by almost 40 percent. We estimate that $1 invested in this program around age 8 yields about $11 in benefits by age 39, with an internal rate of return of around 17 percent. (JEL I21, I26, I28, J13, J24, J31, Z13)
{"title":"The Impact of Childhood Social Skills and Self-Control Training on Economic and Noneconomic Outcomes: Evidence from a Randomized Experiment Using Administrative Data","authors":"Y. Algan, Elizabeth Beasley, S. Côté, Jungwee Park, R. Tremblay, F. Vitaro","doi":"10.1257/aer.20200224","DOIUrl":"https://doi.org/10.1257/aer.20200224","url":null,"abstract":"A childhood intervention to improve the social skills and self-control of at-risk kindergarten boys in the 1980s had positive impacts over the life course: higher trust and self-control as adolescents; increased social group membership, education, and reduced criminality as young adults; and increased marriage and employment as adults. Using administrative data, we find this intervention increased average yearly employment income by about 20 percent and decreased average yearly social transfers by almost 40 percent. We estimate that $1 invested in this program around age 8 yields about $11 in benefits by age 39, with an internal rate of return of around 17 percent. (JEL I21, I26, I28, J13, J24, J31, Z13)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"31 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91198082","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper assesses the effects of capital gains taxes on investment in the Republic of Korea (hereafter, Korea), where capital gains tax rates vary at the firm level by firm size. Following a reform in 2014, firms with a tax cut increased investment by 34 log points and issued more equity by 9 cents per dollar of lagged revenue, relative to unaffected firms. Additionally, the effects were larger for firms that appeared more cash constrained or went public after the reform. Taken together, these findings are consistent with the “traditional view” predicting that lower payout taxes spur equity-financed investment by increasing marginal returns on investment. (JEL D25, G31, G32, H25, H32, L25)
{"title":"Capital Gains Taxes and Real Corporate Investment: Evidence from Korea","authors":"Terry S. Moon","doi":"10.1257/aer.20201272","DOIUrl":"https://doi.org/10.1257/aer.20201272","url":null,"abstract":"This paper assesses the effects of capital gains taxes on investment in the Republic of Korea (hereafter, Korea), where capital gains tax rates vary at the firm level by firm size. Following a reform in 2014, firms with a tax cut increased investment by 34 log points and issued more equity by 9 cents per dollar of lagged revenue, relative to unaffected firms. Additionally, the effects were larger for firms that appeared more cash constrained or went public after the reform. Taken together, these findings are consistent with the “traditional view” predicting that lower payout taxes spur equity-financed investment by increasing marginal returns on investment. (JEL D25, G31, G32, H25, H32, L25)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"24 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81347373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Tessa Bold, Selene Ghisolfi, F. Nsonzi, J. Svensson
Smallholder farming in many developing countries is characterized by low productivity and low-quality output. Low quality limits the price farmers can command and their potential income. We conduct a series of experiments among maize farmers in Uganda to shed light on the barriers to quality upgrading and to study its potential. We find that the causal return to quality is zero. Providing access to a market where quality is paid a market premium led to an increase in farm productivity and income from farming. Our findings reveal the importance of demand-side constraints in limiting rural income and productivity growth. (JEL C93, L14, L15, L22, O13, Q12, Q13)
{"title":"Market Access and Quality Upgrading: Evidence from Four Field Experiments","authors":"Tessa Bold, Selene Ghisolfi, F. Nsonzi, J. Svensson","doi":"10.1257/aer.20210122","DOIUrl":"https://doi.org/10.1257/aer.20210122","url":null,"abstract":"Smallholder farming in many developing countries is characterized by low productivity and low-quality output. Low quality limits the price farmers can command and their potential income. We conduct a series of experiments among maize farmers in Uganda to shed light on the barriers to quality upgrading and to study its potential. We find that the causal return to quality is zero. Providing access to a market where quality is paid a market premium led to an increase in farm productivity and income from farming. Our findings reveal the importance of demand-side constraints in limiting rural income and productivity growth. (JEL C93, L14, L15, L22, O13, Q12, Q13)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"137 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89500410","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Can information and communication technologies help citizens monitor their elections? We analyze a large-scale field experiment designed to answer this question in Colombia. We leveraged Facebook advertisements sent to over 4 million potential voters to encourage citizen reporting of electoral irregularities. We also cross-randomized whether candidates were informed about the campaign in a subset of municipalities. Total reports, and evidence-backed ones, experienced a large increase. Across a wide array of measures, electoral irregularities decreased. Finally, the reporting campaign reduced the vote share of candidates dependent on irregularities. This light-touch intervention is more cost-effective than monitoring efforts traditionally used by policymakers. (JEL C93, D12, D72, D83, O17)
{"title":"All Eyes on Them: A Field Experiment on Citizen Oversight and Electoral Integrity","authors":"Natalia Garbiras-Díaz, Mateo Montenegro","doi":"10.1257/aer.20210778","DOIUrl":"https://doi.org/10.1257/aer.20210778","url":null,"abstract":"Can information and communication technologies help citizens monitor their elections? We analyze a large-scale field experiment designed to answer this question in Colombia. We leveraged Facebook advertisements sent to over 4 million potential voters to encourage citizen reporting of electoral irregularities. We also cross-randomized whether candidates were informed about the campaign in a subset of municipalities. Total reports, and evidence-backed ones, experienced a large increase. Across a wide array of measures, electoral irregularities decreased. Finally, the reporting campaign reduced the vote share of candidates dependent on irregularities. This light-touch intervention is more cost-effective than monitoring efforts traditionally used by policymakers. (JEL C93, D12, D72, D83, O17)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"31 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79628353","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We analyze the effects of Mafia infiltration in the legal economy. Combining information from investigative records with panel data on firms’ governance and balance sheets, we build an indicator of infiltration in firms located in an area with no tradition of Mafia. We show that Mafia targets young and less efficient firms and that infiltration generates a significant rise in firms’ revenues, with no proportionate growth in production inputs and a deterioration of the firm’s financial situation leading to market exit. These findings are consistent with a story of predatory behavior in which infiltration is used for money laundering or rent extraction. (JEL D22, G32, G34, K42, L25)
{"title":"The Economic Effects of Mafia: Firm Level Evidence","authors":"Litterio Mirenda, S. Mocetti, L. Rizzica","doi":"10.1257/aer.20201015","DOIUrl":"https://doi.org/10.1257/aer.20201015","url":null,"abstract":"We analyze the effects of Mafia infiltration in the legal economy. Combining information from investigative records with panel data on firms’ governance and balance sheets, we build an indicator of infiltration in firms located in an area with no tradition of Mafia. We show that Mafia targets young and less efficient firms and that infiltration generates a significant rise in firms’ revenues, with no proportionate growth in production inputs and a deterioration of the firm’s financial situation leading to market exit. These findings are consistent with a story of predatory behavior in which infiltration is used for money laundering or rent extraction. (JEL D22, G32, G34, K42, L25)","PeriodicalId":48472,"journal":{"name":"American Economic Review","volume":"30 1","pages":""},"PeriodicalIF":10.7,"publicationDate":"2022-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81180196","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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