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2019 Economics Seminars

2019 Seminar Speakers

Friday, December 6, 2019 (Hosted by: Wong)

Thomas Holmes

University of Minnesota

  • Scale Economies in Import Distribution
  • Abstract: This paper develops and estimates a model of indivisibilities in shipping and economies of scale
    in consolidation. It uses highly detailed data on imports for which it is possible to observe the
    contents of individual containers. In the model, a firm is able to adapt to indivisibility constraints
    by using consolidation strategies, and by determining how dense to make its distribution network
    in both space and time. Indivisibilities are found to create significant scale economies in
    distribution.
Friday, November 22, 2019 (Hosted by: Miller)

Alan Sorensen

University of Wisconsin

  • Estimating Students’ Heterogeneous Preferences for College Characteristics
  • Abstract: We develop and estimate a model of students’ preferences for college characteristics using NCES survey data on the application and enrollment decisions of over 7,000 high school students.  Our model explicitly allows for heterogeneous preferences—students differ in how much they value different college attributes—and identifies the distribution of preferences by exploiting data on the sets of colleges each individual student applied to.  The strength of a student’s preferences for a given attribute is reflected in how similar in that attribute are the colleges she applied to.  We use our estimated model to (a) simulate how enrollments would differ in the absence of tuition subsidies for public universities, and (b) evaluate geographic differences in college access.
Friday, November 15, 2019 (Hosted by: Rubin)

Abhay Aneja

University of California, Berkeley

  • The Effect of Political Power on Labor Market Inequality: Evidence from the 1965 Voting Rights Act
  • Abstract: A central concern for racial and ethnic minorities is having an equal opportunity to advance group interests via the political process. There remains limited empirical evidence, however, whether democratic policies designed to foster political equality are connected causally to social and economic equality. In this paper, we examine whether and how the expansion of minority voting rights contributes to advances in minorities’ economic interests. Specifically, we consider how the political re-enfranchisement stemming from the passage of the 1965 Voting Rights Act (VRA) contributed to improvements in the relative economic status of black men during the 1960s and 1970s. Using spatial and temporal variation in federal enforcement of the VRA, we document that counties where voting rights were more strongly protected experienced larger reductions in the black-white wage gap between 1950 and 1980. Our analysis of mechanisms suggests that minority political influence improved blacks’ relative position through increased public employment, fiscal redistribution, as well as through implementation and enforcement of group-favoring labor market policies, such as affirmative action and anti-discrimination laws.
Thursday, November 14, 2019 (Hosted by: Colas)

Rafael Dix Carneiro

Duke University

  • Trade and Informality in the Presence of Labor Market Frictions and Regulations
  • Abstract: Motivated by recent work on the labor market effects of trade, we build a model of trade with labor market frictions and regulations that are not perfectly enforced by the government. Heterogeneous firms decide whether to operate formally or informally, allowing for a link between globalization, informality and unemployment. We estimate the model using several data sources from Brazil, including matched employer-employee data from formal and informal firms and workers. We perform counterfactual analyses to understand how increasing trade openness affects informality, unemployment and welfare under different scenarios of labor market regulations and levels of enforcement. Our results suggest that domestic policies leading to a reduction in informality have the potential to strongly increase aggregate productivity and welfare, at the expense of modest increases in unemployment. These policies have a much larger effect on welfare relative to policies aiming to reduce international trade costs. The informal sector works as a buffer in the event of negative economic shocks. However, the welfare gains from eradicating informality are so significant that it is hard to justify lenience toward the informal sector on the basis that it works as a buffer following negative economic shocks.
Friday, November 8, 2019 (Hosted by: Colas)

Daniele Coen-Pirani

University of Pittsburgh

  • Geographic Mobility and Redistribution
  • Abstract: I study the effect of progressive taxation on internal migration and welfare using a quantitative dynamic Roy model. The model features an arbitrary number of labor markets and finitely-lived agents, yet is analytically tractable. It predicts that a more progressive tax-transfer scheme reduces internal migration rates. The magnitude of this relationship is consistent with evidence from OECD countries. The optimal time-varying sequence of tax progressivity features a relatively high degree of tax progressivity early on, and lower tax progressivity at later dates. There are substantial welfare gains from optimizing the degree of tax progressivity on a period-by-period basis over the transition.
Friday, November 1, 2019 (Hosted by: Hansen)

Emily Weisburst

University of California LA, Luskin School of Public Affairs

  • Whose help is on the way? The importance of individual police officers in law enforcement outcomes
  • Abstract: Police discretion has large potential consequences for civilian trust and safety; however, little is known about the extent and implications of this discretion. In this paper, I show that arrest outcomes critically depend on the identity of the police officer that responds to a 911 call. High and low arrest officers face similar crimes; however, high arrest officers are more likely to use force and make low-level arrests. Additionally, I find mixed evidence of racial bias, as high arrest officers are more likely to arrest civilians of any race, while they also arrest non-White civilians at higher rates.
Friday, October 25, 2019 (Hosted by: Davis)

Muriel Niederle

Stanford University

  • The Positive Effects of Affirmative Action: A Case Study in France
  • Abstract: (Abstract not available)
Saturday, October 19, 2019 (Hosted by: Cameron)

Noelwah Netusil

Reed College

  • Q&A for graduate students: Academic careers at Liberal Arts Colleges
  • Abstract: The Department of Economics at the University of Oregon has had a comparative advantage, over the years, in placing its Ph.D. students in academic jobs at liberal arts colleges. Professor Netusil was kind enough to preside over a question-and-answer session for interested Ph.D. students, concerning what to expect when seeking an assistant professor position at a liberal arts college. Our students also had an opportunity to learn more about the differences between research, teaching, advising and service responsibilities at an R1 state university like UO versus liberal arts colleges.
Friday, October 18, 2019 (Hosted by: Cameron)

Noelwah Netusil

Reed College

  • The Willingness to Pay for Flood Insurance
  • Abstract: Flooding is the natural disaster that causes the most damage in the United States. Post-flood, many families do not have sufficient savings for rebuilding and governmental aid can be limited. We undertake, using a stated preference survey, the first willingness-to-pay (WTP) elicitation for flood insurance in the U.S. WTP increases with modeled flood risk and flood risk perceptions. WTP for those in our study area’s 100-year floodplain is 47% to 59% of the median flood insurance premium, which suggests the need for financial assistance to help families that are at risk of flood damage and are unable to afford risk-based premiums.
Friday, October 11, 2019 (Hosted by: Rubin)

Kelly Bishop

Arizona State University

  • Hazed and Confused: The Effect of Air Pollution on Dementia
  • Abstract: We find that long-term exposure to fine-particulate air pollution (PM2.5) degrades health and human capital among older adults by increasing their risk of developing Alzheimer’s disease and related dementias. We track U.S. Medicare beneficiaries’ cumulative residential exposures to PM2.5 and their health from 2004 through 2013, leveraging within- and between-county quasi-random variation in PM2.5 resulting from the expansion of Clean Air Act regulations. We find that a 1 µg/m3 increase in decadal PM2.5 increases the probability of a dementia diagnosis by 1.68 percentage points. The effects are as large or larger when we adjust for mortality-based sample selection and additional Tiebout-sorting dynamics. We do not find relationships between decadal PM2.5 and placebo outcomes. Our estimates suggest that the federal regulation led to nearly 182,000 fewer people with dementia in 2013, yielding $214 billion in benefits. Further, PM2.5’s effect on dementia persists below the current regulatory thresholds.
Friday, October 4, 2019 (Hosted by: Davis)

Barbara Biasi

Yale School of Management

  • Higher Salaries or Higher Pensions? Inferring Preferences from Teachers’ Retirement Behavior
  • Abstract: Many US workers receive a large portion of their lifetime compensation in the form of retirement pensions. How do changes in pensions vis `a vis salaries affect labor supply and retirement? This paper examines the retirement responses to a reform that changed salaries and pensions of public school teachers in a staggered fashion. On one hand, the reform lowered older teachers’ gross salaries and, in turn, their future pension benefits; on the other it increased employees’ contributions to the pension fund, lowering net salaries but leaving pensions unchanged. I use the staggered timing of implementation of these two provisions to estimate bounds to the income and substitution effects of salaries and pensions. These estimates suggest large substitution effects and more moderate income effects. They also indicate that workers are more responsive to changes in salaries than to equally sized changes in pensions. I find support for three possible explanations for this finding: a) a lack of salience/information on pensions, and b) credit constraints. I use the estimated elasticities to evaluate the effect of an alternative budget-saving policy that reduces pensions instead of net salaries. This alternative policy would lead to fewer, older, and lower-quality teachers retiring compared with the actual reform.
Friday, June 7, 2019 (Hosted by: Waddell)

Tyler Ransom

University of Oklahoma

  • Understanding Migration Aversion Using Elicited Counterfactual Choice Probabilities
  • Abstract: Residential mobility rates in the U.S. have fallen considerably over the past three decades. The cause of the long-term decline remains largely unexplained. In this paper we investigate the relative importance of alternative drivers of residential mobility, including job opportunities, neighborhood and housing amenities, social networks and housing and moving costs, using data from two waves of the NY Fed’s Survey of Consumer Expectations. Our hypothetical choice methodology elicits choice probabilities from which we recover the distribution of preferences for location and mobility attributes without concerns about omitted variables and selection biases that hamper analyses based on observed mobility choices alone. We estimate substantial heterogeneity in the willingness- to-pay (WTP) for location and housing amenities across different demographic groups, with income considerations, proximity to friends and family, neighbors’ shared norms and social values, and monetary and psychological costs of moving being key drivers of migration and residential location choices. The estimates point to potentially important amplifying roles played by family, friends, and shared norms and values in the decline of residential mobility rates.
Tuesday, May 28, 2019 (Hosted by: Rubin)

Becca Taylor

University of Sydney (Australia)

  • Unemployment Insurance as a Worker Indiscipline Device? Evidence from Scanner Data
  • Abstract: We provide causal evidence of an ex-ante moral hazard effect of Unemployment Insurance (UI) by matching plausibly exogenous changes in UI benefit duration across state-weeks during the Great Recession to high-frequency productivity measures from individual supermarket cashiers. Estimating models with day and cashier-register fixed effects, we identify a modest but statistically significant negative relationship between UI benefits and worker productivity. This effect is strongest for more experienced and less productive cashiers, for whom UI expansions are especially relevant. Additional analyses from the American Time Use Survey reveal a similar increase in shirking during periods with increased UI benefit durations.
Friday, May 24, 2019 (Hosted by: Hansen)

Jason Cook

University of Pittsburgh

  • Race-blind admissions, school segregation, and student outcomes: Evidence from race-blind magnet school lotteries
  • Abstract: In 2007, the Supreme Court declared race-conscious school admissions unconstitutional. This paper provides the first evaluation of a related federal mandate where a school district was forced to adopt a race-blind lottery system for its magnet schools. Lottery-estimated magnet school returns fell substantially under race-blind admissions. I explore a plausible mechanism: the dramatic increase in racial segregation following the mandate. More segregated schools spent less per-pupil, enrolled lower achieving students, employed lower value-added teachers, and perpetuated “white flight” out of the district. Ultimately, segregation arising from mandated race-blind admissions caused student achievement and four-year college attendance rates to decline.
Friday, May 17, 2019 (Hosted by: Burlando)

Rachel Heath

University of Washington

  • Migrants, Information, and Working Conditions in Bangladeshi Garment Factories
  • Abstract: A significant portion of the labor force in many large factories in developing countries consists of internal migrants from rural areas, who may have little information about the industry upon beginning work. We examine the relationship between workers’ migration status and the working conditions they face in the garment industry in Bangladesh. We use a retrospective panel of the wages and working conditions of 991 garment workers (matched to the factories they work in) collected in 2009. We document that migrants are in firms with higher wages but worse working conditions, but as their careers progress, they have higher mobility than locals as they move towards firms with better conditions. These facts are consistent with a model in which migrants are poorly informed about working conditions upon beginning work but learn more as they gain experience in the industry.
Friday, May 3, 2019 (Hosted by: Chakraborty)

Jean-Paul Carvalho

University of California, Irvine

  • Identity and Underrepresentation
  • Abstract: Economic underrepresentation is modeled as the product of identity-dependent norms. The larger a group’s representation in an economic activity (e.g. education, high-status occupation), the more the activity is deemed ‘appropriate’ for its members. The dynamic feedback between a group’s representation and its norms of economic participation produces more severe and robust inequality than previously found. Equality of opportunity almost never results in equal outcomes, even when groups have the same productivity. Minorities and historically discriminated groups tend to be underrepresented. Glass ceilings emerge endogenously, as identity concerns cause underrepresentation to escalate at senior levels. These problems are not easily solved using standard policy tools. Identity-based quotas can reduce economic output and temporary interventions are insufficient. When identities are multidimensional (e.g. race and gender), reducing underrepresentation along one identity dimension can increase underrepresentation along another. Hence the common reductionist approach of addressing inequality dimension by dimension often fails. Our results suggest that underrepresentation may be an intractable outcome of group identity.
Friday, April 26, 2019 (Hosted by: Miller)

Jeff Thurk

University of Notre Dame

  • Outsourcing, Firm Innovation, and Industry Dynamics in the Production of Semiconductors
  • Abstract: I build a dynamic oligopoly model to identify the factors which explain the increase in factoryless production in the global semiconductor industry. Firms enter the industry each period and choose whether to invest in developing proprietary fabrication facilities or instead outsource production to a competitive third-party fabrication industry. The estimated model demonstrates that factoryless production enables firms to significantly reduce upfront capital expenditure thereby lowering the costs of entry. The increasing availability of venture capital investment also played an important role, while the possibility of growth through future R&D investment and the benefits of lower production costs, due to sourcing either domestically or globally, had little impact on equilibrium entry. Factoryless and integrated firms co-exist in the long run equilibrium since the latter firms are able to vertically differentiate their products, enabling them to maintain significant market share despite significant entry of factoryless firms.
Friday, April 19, 2019 (Hosted by: Wong)

Brian McCaig

Wilfred Laurier University

  • Export markets and microenterprise performance: Evidence from Vietnam
  • Abstract: Most workers in low-income countries are self-employed and work for a household-owned business or a farm. We examine how export opportunities induced by the 2001 U.S.-Vietnam Bilateral Trade Agreement affect the performance of non-farm microenterprises in Vietnam. On average, microenterprises in industries with greater declines in U.S. tariffs on Vietnamese exports are more likely to exit and surviving microenterprises expand revenue, while other outcomes are not affected. However, the responses to tariff cuts differ with the initial size of the microenterprise and the gender of the manager. Female-run microenterprises are less likely to exit if they are small and become more likely to exit with size. In contrast, male-run businesses are more likely to exit if small and exit becomes less likely as size increases. Initially small microenterprises experience a contraction of revenue, while initially larger businesses account for the observed expansion of revenue within an industry in response to tariff cuts. We also find evidence of adjustment in the prevalence of operating the business as the individual’s primary job and the incidence of hiring workers from outside the family that varies by gender and initial size.
Friday, April 12, 2019 (Hosted by: Colas)

Peter Arcidiacono

Duke University

  • Equilibrium Grade Inflation with Implications for Female Interest in STEM Majors
  • Abstract: We estimate an equilibrium model of grading policies where professors set grading policies and students register and study for classes, in part, based on these policies. Professors value enrollment, learning, and student study time, and set policies taking into account how other professors grade. Male and female students value course types, the benefits associated with higher grades, and effort costs differently. We calculate how much of the differences in grading policies across fields is driven by differences in demand for courses in those fields and how much is due to differences in professor preferences across fields. We also decompose differences in female/male course taking across fields driven by differences in i) cognitive skills, ii) valuation of grades, iii) cost of studying, and iv) field preferences. We then run counterfactual simulations to evaluate changes to grading policies. Restrictions on grading policies that equalize grade distributions across classes result in higher (lower) grades in science (non-science) fields but more (less) work being required. As women are willing to study more than men, this restriction on grading policies results in more women pursuing the sciences and more men pursuing the non-sciences.
Friday, April 5, 2019 (Hosted by: Burlando)

Rossella Calvi

Rice University

  • Sharing the Pie: Undernutrition, Intra-household Allocation, and Poverty
  • Abstract: Anti-poverty policies often aim to reach poor individuals by targeting poor households. However, intra-household inequality may mean many poor individuals reside in non-poor households. Using Bangladeshi data, we first show that undernourished individuals are spread across the household per-capita expenditure distribution. We then quantify the extent of food and total consumption inequality within families. Based on a collective model, we develop a new methodology to compute individual-level poverty rates that account for intra-household inequality. We show that women, children, and the elderly face significant probabilities of living in poverty even in households with per-capita expenditure above the poverty threshold.
Friday, March 15, 2019 (Hosted by: van den Nouweland)

Rajiv Vohra

Brown University

  • Games of Love and Hate
  • Abstract: A strategic situation with payoff-based externalities is one in which a player’s payoff depends on her own action and (continuously) on the payoffs of other players. Every action profile therefore induces an interdependent utility system. If each utility system is bounded, with a unique payoff solution for every action profile, we call the strategic situation coherent, and if the same condition also applies to every subset of players, we call the situation sub-coherent. A coherent and sub-coherent situation generates a standard normal form, referred to as a game of love and hate. Our central theorem states that every equilibrium of a game of love and hate is Pareto optimal, in sharp contrast to the general prevalence of inefficient equilibria in the presence of externalities. While externalities are restricted to flow only through payoffs there are no other constraints: they could be positive or negative, or of varying sign. We further show that our coherence, sub-coherence and continuity requirements are tight.
Friday, March 8, 2019 (Hosted by: Davis)

Thomas Lemieux

University of British Columbia (Canada)

  • Labor Market Institutions and the Distribution of Wages: The Role of Spillover Effects
  • Abstract: This paper extends the DiNardo, Fortin, and Lemieux (1996) study of the links between labor market institutions and wage inequality in the United States and updates the analysis to the 1979 to 2017 period. A notable extension quantifies the magnitude and shape of spillover effects from minimum wages and unions, providing multiple sources of evidence for the latter. A distribution regression framework is used to estimate both types of spillover effects separately and jointly. Accounting for spillover effects doubles the contribution of de-unionization to the increase in male wage inequality, and raises the explanatory power of declining minimum wages to two thirds of the increase in inequality at the bottom end of the female wage distribution.
Friday, March 1, 2019 (Hosted by: Hansen)

Maya Rossin-Slater

Stanford University

  • The Effects of U.S. School Shootings on Youth Antidepressant Use
  • Abstract: More than 220,000 American youth have experienced a school shooting in the last two decades, and these events may impact their mental health. We combined data on 44 school shootings between January 2008 and April 2013 with data on antidepressant prescriptions filled at retail pharmacies between January 2006 and March 2015. We compared the number of antidepressant prescriptions written to individuals under age 20 by providers located within five miles of a school that experienced a shooting (shooting-exposed area) to the number of antidepressant prescriptions written to individuals under age 20 by providers located 10 to 15 miles away (reference group), both in the two years before and the two years after a shooting. The covariate-adjusted average monthly number of antidepressant prescriptions for individuals under age 20 was 21.3% higher (95% confidence interval, 8.7 to 33.9) in shooting-exposed relative to reference group areas in the two years after a fatal shooting versus the two years before. The effect persisted when extending the post-shooting observation window to three years and was similar when using an alternative reference group of providers within five miles of observationally similar schools without a shooting. We found no significant effects on youth antidepressant use following non-fatal shootings or on adult antidepressant use. Our results suggest that local exposure to fatal school shootings increased antidepressant use among youth, a previously unmeasured cost of these events.
Friday, February 22, 2019 (Hosted by: Blonigen)

Jeronimo Carballo

University of Colorado, Boulder

  • Border processing, trade costs and new trade policy
  • Abstract: Borders impose high costs on trade flows. Research and policy focus on tariffs, quotas and all encompassing border effects to explain and quantify these costs. We highlight random processing times due to administrative and physical handling of shipments as a source of friction. Highly detailed Peruvian import-processing data from 2007-2013 show that firms absorb longer processing times with shorter storage times. Endogenizing this time management of shipment flow, our theory delivers a log-linear estimation equation, and, based on conventional measures of border time, provides quantifiable border-time-cost functions that generalize existing time cost estimates. We identify the effect of border-processing time on import values. Applying these estimates, border-processing costs range between 17 and 35 ad-valorem equivalent. For comparison, applied world wide WTO tariffs are about 9 percent. We find that eliminating physical document inspection would reduce border-processing costs between 6 and 12 percent. Results show that border-processing costs are especially high for new trade relationships and vary in firm size. Therefore, contrary to product specific trade policy such as tariffs, border processing costs are high in magnitude and relate to standard sources of firm heterogeneity.
Friday, February 15, 2019 (Hosted by: Kuhn)

Catherine Eckel

Texas A&M University

  • Asymmetric Information Undermines Coasian Bargaining in Common (Oil) Pool Resources
  • Abstract: This paper provides an experimental analysis of bargaining under imperfect information, molded by the circumstances found in oil field unitization. The purpose of the study is to provide a more in-depth analysis of how information affects negotiated shares and contractual failure in unitization. The results suggest a new interpretation of how imperfect information molds sharing rules and undermines unitization contracting. The analysis then reexamines the field data and shows how the analysis sheds new light on field evidence.
Friday, February 8, 2019 (Hosted by: Davis)

Scott Carrell

University of California, Davis

  • My Professor Cares: Experimental Evidence on the Role of Faculty Engagement
  • Abstract: This project aims to address the low persistence and graduation rates seen at broad-access public four-year universities. The project explores one of the least understood aspects of college success—the role of faculty feedback. To test the effect of professor feedback on student success, we conducted randomized interventions across forty different courses at a state university who serves a diverse student population. The “light-touch” intervention consisted of three strategically-timed e-mails to students from the professor indicating the professor’s knowledge of the students’ current standing in the course, keys to success in the class, and a reminder of when the professor is available.
Tuesday, February 5, 2019 (Hosted by: African Studies)

Jennifer Alix-Garcia

Oregon State University

  • Benefit or Beggar Thy Neighbor? The Impacts of Forced Migration on Hosts in North and Eastern Africa
  • Abstract: The most recent statistics show over 60 million people displaced by violence across the globe. 85% of these are hosted in low or very low income countries. What is the impact of hosting refugees on local populations? This talk will discuss the mechanisms by which refugee lives are intertwined with hosts, and show evidence of impacts from Darfur, Kenya, and Tanzania. The cases use a combination of satellite and household survey data to show that displaced populations can bestow substantial benefits on hosts by stimulating demand for local products, but that there may be negative effects for vulnerable groups.
Friday, February 1, 2019 (Hosted by: Chakraborty)

Dan Bennett

University of Southern California

  • Stigma and the Economic Impact of Mental Health Care in India
  • Abstract: Poor mental health is a persistent public health and development challenge in poor countries, where widespread stigma interferes with the provision of mental health services. Around 20 percent of adults in developing countries experience depression, and most never receive treatment. This study evaluates the separate and joint impacts of psychiatric care and employment support for adults with depression in Karnataka, India. With around 45 percent compliance and significant mental health impacts, the interventions succeeded in improving mental health in the community. However these gains did not translate into substantial socioeconomic benefits. We find that depression treatment reduced labor supply, earnings, and food consumption. Evidence suggests that mental health stigma may have contributed to this unintended response. Receiving mental health care worsened the marriage market prospects of participants’ households. According to a heterogeneity analysis, participants with marriage-eligible family members curtailed non-home activities, including labor supply. We also consider the roles of labor market discrimination and “self-stigma” in these patterns. Our findings demonstrate a novel way in which stigma may interfere with the provision of mental health care.
Monday, January 28, 2019 (Hosted by: Hansen)

Jennifer Doleac

Texas A&M University

  • Algorithmic Risk Assessment Tools in the Hands of Humans
  • Abstract: Algorithmic prediction tools have proliferated in modern society, promising improved decision-making but threatening to entrench past biases. We evaluate how adopting risk assessment tools (algorithmic predictions of future offending) affects sentencing, recidivism and racial disparities for felony offenders. We find that scoring right above the “low-risk” cutoff increases the likelihood of incarceration by 7-8 percentage points and increases the sentence length by approximately 30-50%, depending on the crime of conviction. Using a difference-in-difference framework, with defendants who were ineligible for risk assessment as a control, we find no evidence that risk assessment affected average incarceration rates or sentence lengths for nonviolent offenders. This suggests that any increase in leniency for those rated low risk was offset by a decrease in leniency for those rated high risk. Despite hopes that risk assessment would lead to a more effective allocation of criminal justice resources, we find no evidence that recidivism rates declined. Our results on racial disparities in sentencing are mixed and tentative. Statewide, we find no evidence that risk assessment affected racial disparities. However, racial disparities increased after the adoption of risk assessment in the subset of judicial circuits that appear to use risk assessment most.
Friday, January 25, 2019 (Hosted by: van den Nouweland)

Nathan Chan

University of Massachusetts, Amherst

  • What is the value of conformity? Evidence from home landscaping and water conservation
  • Abstract: In this article, we estimate how consumers value conformity using housing market data. We examine homeowners’ landscaping choices—which have extensive consequences for water consumption—for housing parcels throughout Phoenix, Arizona. Because of their visibility and salience, we suspect that landscaping decisions may trigger conformity norms. Using machine learning techniques to process extremely high-resolution remote sensing imagery, we generate precise classifications of landscape cover on each parcel, allowing us to estimate the hedonic value of conformity. We find that a one standard deviation departure from the peer group norm (defined by nearby neighbors) decreases property value by roughly $2250 for an average home. We then develop a theoretical model to characterize how conformity motives can be incorporated into the design of water conservation policies. Combining our model with empirical estimates of hedonic demand, we find that Pigouvian pricing adjustments need to be nearly twice as large to achieve a given outcome in the presence of conformity motives. Prior work has used controlled experiments to study conformity, but our work is unique as the first to study this behavioral phenomenon using rich observational data from a real-world market.
Friday, January 18, 2019 (Hosted by: Waddell)

Richard Patterson

United States Military Academy, West Point

  • Timing is Everything: Evidence from College Major Decisions
  • Abstract: People rely on their experiences when making important decisions. In making these decisions, individuals may be significantly influenced by the timing of their experiences. Using administrative data, we study whether the order in which students are assigned courses affects the choice of college major. We use a natural experiment at the United States Military Academy in which students are randomly assigned to certain courses either during or after the semester in which they are required to select their college major. We find that when students are assigned to a course in the same semester as they select a major, they are over 100 percent more likely to choose a major that corresponds to that course. Despite low switching costs, approximately half of the effect persists through graduation. Our results demonstrate that the timing of when students are assigned courses has a large and persistent effect on college major choice. We explore several potential mechanisms for these results and find that students’ initial major choice best fits a framework we develop that incorporates salience and availability. Furthermore, our results suggest that once students select a major, they are less likely to switch majors than the standard model of economic choice predicts. Instead, students’ decision to remain in a major is more consistent with status quo bias.
Friday, January 11, 2019 (Hosted by: Kuhn)

Sally Sadoff

University of California, San Diego

  • Improving College Instruction through Incentives
  • Abstract: This paper experimentally tests the impact of performance-based incentives for community college instructors. We estimate that instructor incentives improve student exam performance by 0.16 – 0.2 standard deviations (SD), increase course grades by 0.1 SD, reduce course dropout by 17 percent, and increase total credits by 18 percent. The effects are largest among part-time adjunct instructors. We also find that instructor incentives have large positive spillovers to students’ non-incentivized courses, significantly increasing completion rates and grades in courses outside our program. To test for potential complementarities, we examine the impact of instructor incentives in conjunction with student incentives and find no evidence that the incentives are more effective in combination. Finally, we elicit contract preferences for the loss-framed incentives we offer. At baseline, instructors prefer gain-framed incentives. However, after experiencing loss-framed incentives, instructors significantly increase their preferences for them.


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