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Volume 128, Issue 7, July 2020
1. Title: Why Are Older Women Missing in India? The Age Profile of Bargaining Power and Poverty.
Authors: Calvi, Rossella.
Abstract: Almost half of missing women in India are of postreproductive ages. Can intrahousehold gender inequality and asymmetry in poverty explain a portion of these missing women? Using a natural experiment, I link women's intrahousehold bargaining power to their mortality risk. Using a structural household model, I estimate the age profile of women's bargaining power and construct women's relative poverty rates. I find that women's bargaining power declines with age, with older women's poverty rates closely matching their mortality rates by age. This suggests that many missing women might be accounted for by measuring poverty at the individual rather than the household level.
2. Title: Quantifying the Life-Cycle Benefits of an Influential Early-Childhood Program.
Authors: García, Jorge Luis; Heckman, James J.; Leaf, Duncan Ermini; Prados, María José.
Abstract: This paper quantifies and aggregates the multiple lifetime benefits of an influential high-quality early-childhood program with outcomes measured through midlife. Guided by economic theory, we supplement experimental data with nonexperimental data to forecast the life-cycle benefits and costs of the program. Our point estimate of the internal rate of return is 13.7%, with an associated benefit/cost ratio of 7.3. We account for model estimation and forecasting error and present estimates from extensive sensitivity analyses. This paper is a template for synthesizing experimental and nonexperimental data using economic theory to estimate the long-run life-cycle benefits of social programs.
3. Title: Persuading the Principal to Wait.
Authors: Orlov, Dmitry; Skrzypacz, Andrzej; Zryumov, Pavel.
Abstract: A principal decides when to exercise a real option. A biased agent influences this decision by strategically disclosing information. Committing to disclose all information with a delay is the optimal way to persuade the principal to wait. Without dynamic commitment, this promise is credible only if the agent's bias is small; otherwise, he pipets information, probabilistically delaying the principal's action. When the agent is biased toward early exercise, his lack of commitment to remain quiet leads to immediate disclosure, hurting him. Our model applies to pharmaceutical companies conducting clinical trials to influence the Food and Drug Administration or equipment manufacturers testing their products.
4. Title: Queens.
Authors: Dube, Oeindrila; Harish, S. P.
Abstract: Do states experience more peace under female leadership? We examine this question in the context of Europe over the fifteenth to twentieth centuries. We use gender of the firstborn and presence of a sister among previous monarchs as instruments for queenly rule. We find that polities led by queens engaged in war more than polities led by kings. While single queens were more likely to be attacked than single kings, married queens were more likely to attack than married kings. These results suggest asymmetries in the division of labor: married queens were more inclined to enlist their spouses in helping them rule, which enabled them ultimately to pursue more aggressive war policies.
5. Title: Technology and Time Inconsistency.
Authors: Harstad, Bård.
Abstract: Policy makers have time-inconsistent preferences if they fear losing power or are endowed with hyperbolic discount factors. Politicians may thus seek to influence future policy choices, for example, by investing in green technologies that motivate later politicians to act sustainably. I show that optimal investment subsidies are larger for technologies that are strategic complements to future investments, that are further upstream in the supply chain, or that are characterized by longer maturity. Time inconsistency can rationalize subsidies at similar levels as market failures such as externalities can. Furthermore, the two are superadditive: time inconsistency and strategic investments are especially important for long-term policies associated with externalities.
6. Title: Domestic Trade Frictions and Agriculture.
Authors: Sotelo, Sebastian.
Abstract: I develop a model of agriculture on heterogeneous land to study the relation between trade, productivity, and welfare in Peru, where farmers face high internal and external trade costs. I quantify the model with new data on crop prices, yields, and land allocations. I then measure the effects of changes to trade opportunities. A policy of paving roads raises aggregate productivity (4.9%) and the median farmer's welfare (2.7%), but increased competition from remote suppliers harms 20% of farmers. An increase in international grain prices spreads unevenly across regions, benefiting farmers but hurting urban consumers close to ports.
7. Title: The Effect of Early-Childhood Education on Social Preferences.
Authors: Cappelen, Alexander; List, John; Samek, Anya; Tungodden, Bertil.
Abstract: We present results from the first study to examine the causal impact of early-childhood education on the social preferences of children. We compare children who, at 3–4 years old, were randomized into either a full-time preschool, a parenting program, or a control group. We returned to the children when they reached 6–8 years of age and conducted a series of incentivized experiments to elicit their social preferences. We find that early-childhood education has a strong causal impact on social preferences. Our findings highlight the importance of taking a broad perspective when designing and evaluating early-childhood educational programs.
8. Title: Revealed-Preference Analysis with Framing Effects.
Authors: Goldin, Jacob; Reck, Daniel.
Abstract: In many settings, decision makers' behavior is observed to vary on the basis of seemingly arbitrary factors. Such framing effects cast doubt on the welfare conclusions drawn from revealed-preference analysis. We relax the assumptions underlying that approach to accommodate settings in which framing effects are present. Plausible restrictions of varying strength permit either partial or point identification of preferences for the decision makers who choose consistently across frames. Recovering population preferences requires understanding the empirical relationship between decision makers' preferences and their sensitivity to the frame. We develop tools for studying this relationship and illustrate them with data on automatic enrollment into pension plans.
9. Title: A Random Attention Model
Authors: Cattaneo, Matias D.; Ma, Xinwei; Masatlioglu, Yusufcan; Suleymanov, Elchin.
Abstract: This paper illustrates how one can deduce preference from observed choices when attention is both limited and random. We introduce a random attention model where we abstain from any particular attention formation and instead consider a large class of nonparametric random attention rules. Our intuitive condition, monotonic attention, captures the idea that each consideration set competes for the decision maker's attention. We then develop a revealed preference theory and obtain testable implications. We propose econometric methods for identification, estimation, and inference for the revealed preferences. Finally, we provide a general-purpose software implementation of our estimation and inference results and simulation evidence.
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