Economic Inquiry最新文献

Scarcity and growth analyses about energy include forecasting extraction rates of non-renewable resources while taking into account technological progression. One mechanism, Moore's (1965) Law of technological improvement, encompasses experience enhanced steady cost reductions. Alternatively, synthesis technological change refers to unforeseen innovative breakthroughs. These trends relate to the Hubbert (1956, 1962) Curve of U.S shale oil extraction in the U.S. Lower 48 contiguous states. Price effects, drilling rigs and the price-to-drilling rig relationship are analyzed. Results show we are at peak U.S. shale oil, and could experience comprehensive decline. This implies Catton's (1982) “Age of Exuberance,” and “Carrying Capacity” drawdown.

We examine the growth and welfare effects of parental leave subsidization in a life-cycle dynastic model with human capital externality. Such externality causes higher fertility, less parental time and expenditure on child human capital, and lower growth and welfare than the efficient levels. Efficient policies require subsidizing work leave, which includes parental leave, and labor income financed by a lump-sum tax. Calibration based on the U.S. data implies that a fully-covered leave duration of 7.8 weeks per parent financed by an increase in labor income tax would increase the annual growth rate by 0.06 percentage points and welfare by 0.027%.

This paper examines the impacts of a government-led e-commerce expansion project on household income. We find that the project has led to increases in rural household income. The positive impacts are more prominent for lower-income rural households. The income-increasing effects are driven by the reduction in information search costs and transportation costs. The provision of complementary interventions for e-commerce, such as promoting the internet-related skills of farmers and the expansion of formal financial credit support is also important for the program's success. The results provide policy implications for the design and implementation of government-led e-commerce policies in developing economies.

We conducted an experiment with 204 youth inmates to study how the intrinsic psychological cost of cheating that was shaped by peers changed inmates' cheating behavior. We find that innately dishonest inmates who naively revealed their higher willingness to cheat indeed cheated more in the actual game. When given the chance to observe an imperfect signal of whether a peer cheated, only innately dishonest inmates followed this signal and cheated more. This positive treatment effect increases with the saliency of the signal, and becomes more pronounced when the cheating signal is from an influential peer.

While causes and consequences of uncertainty in the US economy have attracted viable interest, the literature still lacks a consensus on several aspects. To name two matters of debate, it remains unclear whether uncertainty shocks are a source or the result of recessions and whether uncertainty shocks have adverse (or even stimulating) effects on the economy. We find that ambiguous results in these regards can be traced back to the selection of an appropriate identification strategy in structural vector autoregressive models. We find that both macroeconomic and financial uncertainty are exogenous to business cycle fluctuations and cause economic slowdowns.

This paper analyzes how individuals resolve an exploration versus exploitation trade-off in a laboratory experiment. The experiment implements the single-agent exponential bandit model. We analyze how subjects respond to changes in the prior belief, safe action, and discount factor. We find that subjects respond in the predicted direction to these changes. However, we find that subjects under-respond to the prior belief, under-respond to the safe action, and typically explore less than predicted. Our results suggest that neither risk aversion nor the random termination probability are driving under-experimentation. Our results are consistent with subjects having incorrect beliefs about exploration.

We study whether outcome bias persists in markets with actors who are financially incentivized to make optimal decisions. We test whether inherently noisy match outcomes from European football are correctly incorporated into prices from a betting exchange market. We find that market prices overestimate (underestimate) the winning probability of teams that previously overperformed (underperformed) in terms of match outcomes compared to their performance based on “expected goals.” This pattern is mirrored in negative (positive) betting returns on overperforming (underperforming) teams. These results suggest that even competitive market mechanisms fail to completely erase outcome bias.

The employer-sponsored life insurance (ESLI) market is susceptible to adverse selection due to community-rated premiums, guaranteed issue coverage, and the existence of an individual market. Using payroll and healthcare claims data from a large university, we find that employees with worse health are more likely to elect coverage causing adverse selection in supplemental ESLI. Nonetheless, we find employees typically do not increase coverage following a severe illness even when they can without providing evidence of insurability. Furthermore, demand estimation shows employees are not price-sensitive and estimated increases in premiums from adverse selection are unlikely to cause significant welfare loss.

Reducing greenhouse gas emissions is necessary to meet climate goals, but these emissions are not the only harmful bi-products of fossil-fuel combustion. This paper shows how a regional cap-and-trade program designed to regulate CO₂ emissions affects the release of federally-regulated toxins in the Toxics Release Inventory. We find that the program reduces toxic releases from coal-fired electric plants by 78%, and that harmful metal releases (e.g., lead, mercury) have fallen by 54%. There is no evidence of spillovers into non-adopting areas. This unintended beneficial effect of the carbon dioxide cap-and-trade policy provides compelling evidence of the co-abatement of harmful compounds alongside greenhouse gas emissions.

This paper contributes to the literature evaluating the performance of local governments by analyzing the effect of local public expenditures on sports facilities on sports participation in Germany. To this end, we use a new data base containing public expenditures at the municipality level and link this information with individual level data. We form locally weighted averages of expenditures based on geographic distances and analyze how effects of sports facility expenditures change with different expenditures levels (“dose-response relationship”). We find no effect of sports facility expenditures on individual sports participation. These findings are robust across age groups and municipality sizes.