The relationship between market participation and moral values is the object of a long-lasting debate in economics, yet field evidence is mainly based on cross-cultural studies. We conduct rule-breaking experiments in 13 villages across Greenland (N=543), where stark contrasts in market participation within villages allow us to examine the relationship between market participation and moral decision-making holding village-level factors constant. First, we document a robust positive association between market participation and moral behaviour towards anonymous others. Second, market-integrated participants display universalism in moral decision-making, whereas non-market participants make more moral decisions towards co-villagers. A battery of robustness tests confirms that the behavioural differences between market and non-market participants are not driven by socioeconomic variables, childhood background, cultural identities, kinship structure, global connectedness, and exposure to religious and political institutions.
{"title":"Market Participation and Moral Decision-Making: Experimental Evidence from Greenland","authors":"Gustav Agneman, Esther Chevrot-Bianco","doi":"10.1093/ej/ueac069","DOIUrl":"https://doi.org/10.1093/ej/ueac069","url":null,"abstract":"\u0000 The relationship between market participation and moral values is the object of a long-lasting debate in economics, yet field evidence is mainly based on cross-cultural studies. We conduct rule-breaking experiments in 13 villages across Greenland (N=543), where stark contrasts in market participation within villages allow us to examine the relationship between market participation and moral decision-making holding village-level factors constant. First, we document a robust positive association between market participation and moral behaviour towards anonymous others. Second, market-integrated participants display universalism in moral decision-making, whereas non-market participants make more moral decisions towards co-villagers. A battery of robustness tests confirms that the behavioural differences between market and non-market participants are not driven by socioeconomic variables, childhood background, cultural identities, kinship structure, global connectedness, and exposure to religious and political institutions.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"58 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81447485","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}
Itai Ater, Yael Elster, David Genesove, Eran B. Hoffmann
We study residential lease payments during the COVID-19 pandemic. A survey of Israeli renters shows that nearly one-in-eight did not pay full rent during the first lockdown in March-April 2020. These households held back two-thirds of their contractually due rent on average. Financially fragile households with large income cuts withheld a greater share. Both formal and relational aspects of the landlord-tenant relationship affected payments: tenants paid more of their rent if their leases included formal provisions against non-payment, and less if they had strong relationships with their landlords. We use bargaining and relational contracts theories to explain our findings.
{"title":"Must Agreements Be Kept? Residential Leases During Covid-19","authors":"Itai Ater, Yael Elster, David Genesove, Eran B. Hoffmann","doi":"10.1093/ej/ueac065","DOIUrl":"https://doi.org/10.1093/ej/ueac065","url":null,"abstract":"\u0000 We study residential lease payments during the COVID-19 pandemic. A survey of Israeli renters shows that nearly one-in-eight did not pay full rent during the first lockdown in March-April 2020. These households held back two-thirds of their contractually due rent on average. Financially fragile households with large income cuts withheld a greater share. Both formal and relational aspects of the landlord-tenant relationship affected payments: tenants paid more of their rent if their leases included formal provisions against non-payment, and less if they had strong relationships with their landlords. We use bargaining and relational contracts theories to explain our findings.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"15 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86617391","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}
By matching data on land transactions in China’s primary land market with detailed curriculum-vitae of board directors in publicly listed firms, we identify a pattern of ‘revolving door’ exchanges between local officials and firms. The officials discounted the price of land which they sold to the said firms, and were subsequently rewarded with board appointments upon retirement. Specifically, these ‘client-officials’ are three times as likely to be recruited by the ‘patron-firms’ as board directors and enjoy a salary that is 23% higher and 81% more company shares by comparison with directors who did not help firms to secure cheap land deals. All of these, however, are conditional on patron-firms being able to receive a price discount, which averaged 19.4% when they purchased them in normal times. However, when client-officials were constrained from providing a price discount during a surprise audit, the likelihood of client-officials recruited as board directors was halved, with the price discount and extra compensation received by the patrons and clients respectively vanishing altogether. By providing evidence of the reciprocal benefits received by both parties, we demonstrate that the revolving door is used as a ‘payment’ rather than a ‘connection’ device in the Chinese context.
{"title":"Trading Favours through the Revolving Door: Evidence from China’s Primary Land Market","authors":"Ting Chen, Li-Jun Han, J. Kung, Jiaxin Xie","doi":"10.1093/ej/ueac060","DOIUrl":"https://doi.org/10.1093/ej/ueac060","url":null,"abstract":"\u0000 By matching data on land transactions in China’s primary land market with detailed curriculum-vitae of board directors in publicly listed firms, we identify a pattern of ‘revolving door’ exchanges between local officials and firms. The officials discounted the price of land which they sold to the said firms, and were subsequently rewarded with board appointments upon retirement. Specifically, these ‘client-officials’ are three times as likely to be recruited by the ‘patron-firms’ as board directors and enjoy a salary that is 23% higher and 81% more company shares by comparison with directors who did not help firms to secure cheap land deals. All of these, however, are conditional on patron-firms being able to receive a price discount, which averaged 19.4% when they purchased them in normal times. However, when client-officials were constrained from providing a price discount during a surprise audit, the likelihood of client-officials recruited as board directors was halved, with the price discount and extra compensation received by the patrons and clients respectively vanishing altogether. By providing evidence of the reciprocal benefits received by both parties, we demonstrate that the revolving door is used as a ‘payment’ rather than a ‘connection’ device in the Chinese context.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"76 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73015991","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 analyses the causal effect of changes in public pensions on household spending. The identification exploits the introduction of a new welfare system in Spain during the 1980s and 1990s and uses a novel narrative series of legislated pension changes as an instrument for pension income. Despite public pensions having a limited impact in the aggregate, I find a high, though less than unity, marginal propensity to consume (MPC) for pensioners due to permanent income shocks at the household level. Moreover, large spending responses for pensioners with the highest income and wealth mean that liquidity considerations can be disregarded as a key source of MPC heterogeneity. Instead, a strong precautionary savings motive can explain the excess smoothness of consumption, and costly adjustments explain the skewed spending response for durables.
{"title":"A Raise for Grandma: Pensions and Household Expenditure","authors":"Susana Párraga Rodríguez","doi":"10.1093/ej/ueac061","DOIUrl":"https://doi.org/10.1093/ej/ueac061","url":null,"abstract":"\u0000 This paper analyses the causal effect of changes in public pensions on household spending. The identification exploits the introduction of a new welfare system in Spain during the 1980s and 1990s and uses a novel narrative series of legislated pension changes as an instrument for pension income. Despite public pensions having a limited impact in the aggregate, I find a high, though less than unity, marginal propensity to consume (MPC) for pensioners due to permanent income shocks at the household level. Moreover, large spending responses for pensioners with the highest income and wealth mean that liquidity considerations can be disregarded as a key source of MPC heterogeneity. Instead, a strong precautionary savings motive can explain the excess smoothness of consumption, and costly adjustments explain the skewed spending response for durables.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"226 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77316364","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 studies how formal financial access affects network-based financial arrangements. We use a field experiment that granted access to a savings account to a random subset of households in 19 Nepalese villages. Exploiting a unique panel dataset that follows all bilateral informal financial transactions before and after the intervention, we show that households that were offered access to an account increased their loans and total transfers to others, independent of the treatment status of the receiver. The increase seemed to be driven by treatment households with more assets and greater financial inclusion at baseline.
{"title":"The Interplay Among Savings Accounts and Network-Based Financial Arrangements: Evidence from a Field Experiment","authors":"Margherita Comola, S. Prina","doi":"10.1093/ej/ueac053","DOIUrl":"https://doi.org/10.1093/ej/ueac053","url":null,"abstract":"\u0000 This paper studies how formal financial access affects network-based financial arrangements. We use a field experiment that granted access to a savings account to a random subset of households in 19 Nepalese villages. Exploiting a unique panel dataset that follows all bilateral informal financial transactions before and after the intervention, we show that households that were offered access to an account increased their loans and total transfers to others, independent of the treatment status of the receiver. The increase seemed to be driven by treatment households with more assets and greater financial inclusion at baseline.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"161 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91298948","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 evaluates large-scale hydroelectric dams built in the United States during the twentieth century. Combining panel event-study designs and synthetic control methods, two results stand out: First, dams constructed pre-1950 spurred short-run local growth, in large part thanks to a “cheap-local-power advantage,” and resulted in remarkable long-run growth, more than doubling local population density after 50 years. Second, dams constructed post-1950 had only modest effects on growth. The first result indicates agglomerative impacts on local economic activity. The second result suggests the cheap-local-power advantage created by hydropower attenuated after 1950, probably because of such innovations as high-tension transmission lines.
{"title":"The Power of Hydroelectric Dams: Historical Evidence from the United States over the 20th Century","authors":"Edson Severnini","doi":"10.1093/ej/ueac059","DOIUrl":"https://doi.org/10.1093/ej/ueac059","url":null,"abstract":"\u0000 This paper evaluates large-scale hydroelectric dams built in the United States during the twentieth century. Combining panel event-study designs and synthetic control methods, two results stand out: First, dams constructed pre-1950 spurred short-run local growth, in large part thanks to a “cheap-local-power advantage,” and resulted in remarkable long-run growth, more than doubling local population density after 50 years. Second, dams constructed post-1950 had only modest effects on growth. The first result indicates agglomerative impacts on local economic activity. The second result suggests the cheap-local-power advantage created by hydropower attenuated after 1950, probably because of such innovations as high-tension transmission lines.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87360963","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 considers a two-sector RBC model augmented with firm heterogeneity and firm dynamics and studies the steady state and dynamic properties of the model in response to a decline in the relative price of investment. It shows that both firm heterogeneity and entry play a crucial role in the decline in the labour share and the increase in capital intensity observed in the US economy. Using ORBIS firm-level data of the US economy, the paper finds robust evidence consistent with the mechanisms described in the model.
{"title":"Firm Ex-Ante Heterogeneity, Entry, and the Labour Share","authors":"J. Grazzini, L. Rossi","doi":"10.1093/ej/ueac054","DOIUrl":"https://doi.org/10.1093/ej/ueac054","url":null,"abstract":"\u0000 This paper considers a two-sector RBC model augmented with firm heterogeneity and firm dynamics and studies the steady state and dynamic properties of the model in response to a decline in the relative price of investment. It shows that both firm heterogeneity and entry play a crucial role in the decline in the labour share and the increase in capital intensity observed in the US economy. Using ORBIS firm-level data of the US economy, the paper finds robust evidence consistent with the mechanisms described in the model.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"19 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83240752","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 examines the effect of campaign appearances in the context of the one-sided nationwide tour by William J. Bryan, the Democratic US Presidential candidate in 1896. During this electoral campaign, Bryan undertook an unprecedented whistle-stop train tour, while the Republican candidate followed a front-porch campaign. To identify the causal effect of campaign speeches, we exploit several estimation strategies, including a within-county difference-in-differences design and a neighbour-pair fixed effect estimator. We find that campaign visits by Bryan increased his vote share by about one percentage point on average. This increase likely stems from the persuasion of previously non-aligned industrial workers.
本文以1896年美国民主党总统候选人威廉·j·布莱恩(William J. Bryan)片面的全国巡回竞选为背景，考察了竞选露面的影响。在这次竞选活动中，布莱恩进行了一次前所未有的火车巡回演出，而共和党候选人则进行了一场前廊式的竞选活动。为了确定竞选演讲的因果效应，我们利用了几种估计策略，包括县内差异设计和邻居对固定效应估计器。我们发现，布莱恩的竞选访问使他的得票率平均提高了约一个百分点。这种增长可能源于以前不结盟的产业工人的说服。
{"title":"Populist Persuasion in Electoral Campaigns: Evidence from Bryan’s Unique Whistle-Stop Tour","authors":"Johannes C. Buggle, Stephanos Vlachos","doi":"10.1093/ej/ueac056","DOIUrl":"https://doi.org/10.1093/ej/ueac056","url":null,"abstract":"\u0000 This paper examines the effect of campaign appearances in the context of the one-sided nationwide tour by William J. Bryan, the Democratic US Presidential candidate in 1896. During this electoral campaign, Bryan undertook an unprecedented whistle-stop train tour, while the Republican candidate followed a front-porch campaign. To identify the causal effect of campaign speeches, we exploit several estimation strategies, including a within-county difference-in-differences design and a neighbour-pair fixed effect estimator. We find that campaign visits by Bryan increased his vote share by about one percentage point on average. This increase likely stems from the persuasion of previously non-aligned industrial workers.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"8 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84160809","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}
Marriage matching markets typically involve heterogenous agents participating in a dynamic, non-stationary environment. These features pose a considerable modeling challenge. In this paper, we develop a new parametric model of dynamic marriage that allows for market non-stationarity using a system of transitionary equilibria. We propose a method to identify and parametrically estimate the model by representing the model equilibrium with a fixed-point mapping. We apply our model to investigate how China’s One-Child Policy has affected the marriage distribution through its effect on the population and sex ratios.
{"title":"Identification and Parametric Estimation of Empirical Dynamic Marriage Matching Models","authors":"L. Chen, Eugene Choo","doi":"10.1093/ej/ueac052","DOIUrl":"https://doi.org/10.1093/ej/ueac052","url":null,"abstract":"\u0000 Marriage matching markets typically involve heterogenous agents participating in a dynamic, non-stationary environment. These features pose a considerable modeling challenge. In this paper, we develop a new parametric model of dynamic marriage that allows for market non-stationarity using a system of transitionary equilibria. We propose a method to identify and parametrically estimate the model by representing the model equilibrium with a fixed-point mapping. We apply our model to investigate how China’s One-Child Policy has affected the marriage distribution through its effect on the population and sex ratios.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"77 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84008053","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 develop a model of the market for knowledge workers in which talent is discovered on the job. In the model, asymmetric information and firm-specific human capital combine to generate several predictions relating firm heterogeneity to talent discovery and poaching. We show that high-quality (i.e., large and high-productivity) firms are more likely to become talent poachers, while lower quality firms are more likely to invest in talent discovery. Job-to-job flows are adversely selected, which implies that internally promoted managers are more productive than those who are externally promoted. The model generates several additional predictions linking firm heterogeneity to the distribution of managerial talent, productivity, compensation, and promotions.
{"title":"Talent Discovery and Poaching Under Asymmetric Information","authors":"Daniel Ferreira, Radoslawa Nikolowa","doi":"10.1093/ej/ueac048","DOIUrl":"https://doi.org/10.1093/ej/ueac048","url":null,"abstract":"We develop a model of the market for knowledge workers in which talent is discovered on the job. In the model, asymmetric information and firm-specific human capital combine to generate several predictions relating firm heterogeneity to talent discovery and poaching. We show that high-quality (i.e., large and high-productivity) firms are more likely to become talent poachers, while lower quality firms are more likely to invest in talent discovery. Job-to-job flows are adversely selected, which implies that internally promoted managers are more productive than those who are externally promoted. The model generates several additional predictions linking firm heterogeneity to the distribution of managerial talent, productivity, compensation, and promotions.","PeriodicalId":85686,"journal":{"name":"The Economic journal of Nepal","volume":"32 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80246729","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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