Mohamed Coulibaly, Yu-Chin Hsu, Ismael Mourifi'e, Yuanyuan Wan
We propose a new specification test to assess the validity of the judge leniency design. We characterize a set of sharp testable implications, which exploit all the relevant information in the observed data distribution to detect violations of the judge leniency design assumptions. The proposed sharp test is asymptotically valid and consistent and will not make discordant recommendations. When the judge's leniency design assumptions are rejected, we propose a way to salvage the model using partial monotonicity and exclusion assumptions, under which a variant of the Local Instrumental Variable (LIV) estimand can recover the Marginal Treatment Effect. Simulation studies show our test outperforms existing non-sharp tests by significant margins. We apply our test to assess the validity of the judge leniency design using data from Stevenson (2018), and it rejects the validity for three crime categories: robbery, drug selling, and drug possession.
{"title":"A Sharp Test for the Judge Leniency Design","authors":"Mohamed Coulibaly, Yu-Chin Hsu, Ismael Mourifi'e, Yuanyuan Wan","doi":"10.3386/w32456","DOIUrl":"https://doi.org/10.3386/w32456","url":null,"abstract":"We propose a new specification test to assess the validity of the judge leniency design. We characterize a set of sharp testable implications, which exploit all the relevant information in the observed data distribution to detect violations of the judge leniency design assumptions. The proposed sharp test is asymptotically valid and consistent and will not make discordant recommendations. When the judge's leniency design assumptions are rejected, we propose a way to salvage the model using partial monotonicity and exclusion assumptions, under which a variant of the Local Instrumental Variable (LIV) estimand can recover the Marginal Treatment Effect. Simulation studies show our test outperforms existing non-sharp tests by significant margins. We apply our test to assess the validity of the judge leniency design using data from Stevenson (2018), and it rejects the validity for three crime categories: robbery, drug selling, and drug possession.","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141131589","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}
Inflation has risen sharply in many countries since the COVID-19 outbreak, and economists have debated the underlying causes. In this paper, we examine the drivers of the global import price inflation, which peaked at approximately 11 percent a year. We find that a common global component closely tracks movements in aggregate US import prices until late 2022. Afterward, idiosyncratic US demand shocks started to dominate.
{"title":"What Drives U.S. Import Price Inflation?","authors":"M. Amiti, Oleg Itskhoki, David E. Weinstein","doi":"10.2139/ssrn.4722974","DOIUrl":"https://doi.org/10.2139/ssrn.4722974","url":null,"abstract":"Inflation has risen sharply in many countries since the COVID-19 outbreak, and economists have debated the underlying causes. In this paper, we examine the drivers of the global import price inflation, which peaked at approximately 11 percent a year. We find that a common global component closely tracks movements in aggregate US import prices until late 2022. Afterward, idiosyncratic US demand shocks started to dominate.","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141142162","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}
David Altig, Alan Auerbach, Erin Eidschun, Laurence Kotlikoff, V. Ye
{"title":"Inflation's Impact on American Households","authors":"David Altig, Alan Auerbach, Erin Eidschun, Laurence Kotlikoff, V. Ye","doi":"10.3386/w32482","DOIUrl":"https://doi.org/10.3386/w32482","url":null,"abstract":"","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141137198","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}
Brantly Callaway, Andrew Goodman-Bacon, Pedro Sant'Anna
This paper builds on the identification results and estimation tools for continuous difference-in-difference designs in Callaway, Goodman-Bacon, and Sant'Anna (2024) to discuss aggregation strategies for event studies with continuous treatments. Estimates from continuous designs are functions of the treatment dosage/intensity variable. Nonparametric plots of these functions show heterogeneity across doses but not heterogeneity over time. Event-study-type plots of aggregated parameters achieve the opposite. We describe how partially aggregating across treatment doses and event time can lead to readable yet nuanced figures that reflect how causal effects evolve over time, potentially in different parts of the treatment dose distribution.
{"title":"Event-Studies with a Continuous Treatment","authors":"Brantly Callaway, Andrew Goodman-Bacon, Pedro Sant'Anna","doi":"10.2139/ssrn.4716683","DOIUrl":"https://doi.org/10.2139/ssrn.4716683","url":null,"abstract":"This paper builds on the identification results and estimation tools for continuous difference-in-difference designs in Callaway, Goodman-Bacon, and Sant'Anna (2024) to discuss aggregation strategies for event studies with continuous treatments. Estimates from continuous designs are functions of the treatment dosage/intensity variable. Nonparametric plots of these functions show heterogeneity across doses but not heterogeneity over time. Event-study-type plots of aggregated parameters achieve the opposite. We describe how partially aggregating across treatment doses and event time can lead to readable yet nuanced figures that reflect how causal effects evolve over time, potentially in different parts of the treatment dose distribution.","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141134376","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}
{"title":"Designing Dynamic Reassignment Mechanisms: Evidence from GP Allocation","authors":"Ingrid Huitfeldt, Victoria Marone, D. Waldinger","doi":"10.3386/w32458","DOIUrl":"https://doi.org/10.3386/w32458","url":null,"abstract":"","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141139920","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}
Oludamilare Aboaba, Aaron Chalfin, Michael LaForest Tucker, Lucie Parker, Patrick Sharkey
{"title":"Can Gun Violence Be Deterred at Low Cost? Evidence from a Randomized Experiment in New York City","authors":"Oludamilare Aboaba, Aaron Chalfin, Michael LaForest Tucker, Lucie Parker, Patrick Sharkey","doi":"10.2139/ssrn.4833931","DOIUrl":"https://doi.org/10.2139/ssrn.4833931","url":null,"abstract":"","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141133793","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}
Jordan Berne, Brian A. Jacob, Tareena Musaddiq, Anna Shapiro, Christina Weiland
Transitional kindergarten (TK) is a relatively recent entrant into the US early education landscape, combining features of public pre-K and regular kindergarten. We provide the first estimates of the impact of Michigan's TK program on third-grade test scores. Using an augmented regression discontinuity design, we find that TK improves third-grade test scores by 0.29 (math) and 0.19 (English language arts) standard deviations relative to a counterfactual that includes other formal and informal early learning options. These impacts are notably large relative to the prior pre-K literature.
{"title":"The Effect of Early Childhood Programs on Third-Grade Test Scores: Evidence from Transitional Kindergarten in Michigan","authors":"Jordan Berne, Brian A. Jacob, Tareena Musaddiq, Anna Shapiro, Christina Weiland","doi":"10.2139/ssrn.4762942","DOIUrl":"https://doi.org/10.2139/ssrn.4762942","url":null,"abstract":"Transitional kindergarten (TK) is a relatively recent entrant into the US early education landscape, combining features of public pre-K and regular kindergarten. We provide the first estimates of the impact of Michigan's TK program on third-grade test scores. Using an augmented regression discontinuity design, we find that TK improves third-grade test scores by 0.29 (math) and 0.19 (English language arts) standard deviations relative to a counterfactual that includes other formal and informal early learning options. These impacts are notably large relative to the prior pre-K literature.","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141136449","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}
We calculate the social return on algorithmic interventions (specifically, their marginal value of public funds (MVPF)) across multiple domains of interest to economists—regulation, criminal justice, medicine, and education. Though these algorithms are different, the results are similar and striking. Each one has an MVPF of infinity: not only does it produce large benefits, it provides a “free lunch.” We do not take these numbers to mean these interventions ought to be necessarily scaled but rather that much more research and development should be devoted to developing and carefully evaluating algorithmic solutions to policy problems.
{"title":"The Unreasonable Effectiveness of Algorithms","authors":"Jens O. Ludwig, S. Mullainathan, Ashesh Rambachan","doi":"10.2139/ssrn.4716690","DOIUrl":"https://doi.org/10.2139/ssrn.4716690","url":null,"abstract":"We calculate the social return on algorithmic interventions (specifically, their marginal value of public funds (MVPF)) across multiple domains of interest to economists—regulation, criminal justice, medicine, and education. Though these algorithms are different, the results are similar and striking. Each one has an MVPF of infinity: not only does it produce large benefits, it provides a “free lunch.” We do not take these numbers to mean these interventions ought to be necessarily scaled but rather that much more research and development should be devoted to developing and carefully evaluating algorithmic solutions to policy problems.","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141130719","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}
We study racial disparities in the US mortgage market. Using new data from Hurtado and Sakong (2024), we present three findings. First, we document access disparities between minority and otherwise-identical White borrowers even within the same bank and with the same loan officer. In contrast, cost disparities are nearly zero. Second, the use of automated underwriting algorithms is associated with smaller access disparities but slightly larger cost disparities. Third, individual factors such as loan officers' race and whether borrowers' race is observed at application do not seem to matter much.
{"title":"Racial Disparities in the U.S. Mortgage Market","authors":"Agustin Hurtado, Sakong Jung","doi":"10.2139/ssrn.4754146","DOIUrl":"https://doi.org/10.2139/ssrn.4754146","url":null,"abstract":"We study racial disparities in the US mortgage market. Using new data from Hurtado and Sakong (2024), we present three findings. First, we document access disparities between minority and otherwise-identical White borrowers even within the same bank and with the same loan officer. In contrast, cost disparities are nearly zero. Second, the use of automated underwriting algorithms is associated with smaller access disparities but slightly larger cost disparities. Third, individual factors such as loan officers' race and whether borrowers' race is observed at application do not seem to matter much.","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141131238","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 descriptive study examines the nature and rationalization of deception by client management when communicating with the external auditor. We placed experienced financial reporting professionals in the role of a CFO responding to an auditor inquiry. Participants chose one of four responses: the complete truth, clear mistruth, or one of two “fractional truths” (i.e., a response that is technically true but omits or is vague about relevant information). More than half of the participants chose a deceptive response, with the most common type of deceptive response chosen being a fractional truth. Many participants rationalized their deceptive responses as strictly responding to the question asked and not speculating about the unknown. Most participants who responded deceptively preferred email for communication, whereas those who responded truthfully preferred in-person communication. We discuss the implications of client deception for audit firms and offer suggestions for future research. Data Availability: Data are available from the authors upon request. JEL Classifications: M4.
{"title":"Misleading the Auditor with Fractional Truths","authors":"Mary P. Durkin, S. J. Jollineau, Sarah C Lyon","doi":"10.2139/ssrn.4729283","DOIUrl":"https://doi.org/10.2139/ssrn.4729283","url":null,"abstract":"\u0000 This descriptive study examines the nature and rationalization of deception by client management when communicating with the external auditor. We placed experienced financial reporting professionals in the role of a CFO responding to an auditor inquiry. Participants chose one of four responses: the complete truth, clear mistruth, or one of two “fractional truths” (i.e., a response that is technically true but omits or is vague about relevant information). More than half of the participants chose a deceptive response, with the most common type of deceptive response chosen being a fractional truth. Many participants rationalized their deceptive responses as strictly responding to the question asked and not speculating about the unknown. Most participants who responded deceptively preferred email for communication, whereas those who responded truthfully preferred in-person communication. We discuss the implications of client deception for audit firms and offer suggestions for future research.\u0000 Data Availability: Data are available from the authors upon request.\u0000 JEL Classifications: M4.","PeriodicalId":507782,"journal":{"name":"SSRN Electronic Journal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141137178","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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