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Is economics self‐correcting? Replications in the American Economic Review Economic Inquiry (IF 1.71) Pub Date : 2024-04-13 Jörg Ankel‐Peters, Nathan Fiala, Florian Neubauer
This paper reviews the impact of replications published as comments in the American Economic Review between 2010 and 2020. We examine their citations and influence on the original papers' (OPs) subsequent citations. Our results show that comments are barely cited, and they do not affect the OP's citations—even if the comment diagnoses substantive problems. Furthermore, we conduct an opinion survey
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A (dynamic) investigation of stereotypes, belief‐updating, and behavior Economic Inquiry (IF 1.71) Pub Date : 2024-04-10 Katherine Coffman, Maria Paola Ugalde Araya, Basit Zafar
Using a controlled experiment, we study the dynamic effects of feedback on decision‐making across verbal skills and math. Before feedback, men are more optimistic about their performance and more willing to compete than women, especially in math. While feedback shifts individuals' beliefs and behavior, we see substantial persistence of gender gaps 1 week later. This is particularly true among individuals
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The effects of patient cost‐sharing on adolescents' healthcare utilization and financial risk protection: Evidence from South Korea Economic Inquiry (IF 1.71) Pub Date : 2024-04-06 Seonghoon Kim, Kanghyock Koh, Wonjun Lyou
We examine the effects of patient cost‐sharing on adolescents' healthcare utilization and out‐of‐pocket medical expenditures by exploiting the healthcare reform in South Korea that lowered the coinsurance rate for inpatient care from 20% to 5% for children under 16. We apply a difference‐in‐regression‐discontinuities design using administrative claims data. We find that the reform increased adolescents'
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Reject or revise: Gender differences in persistence and publishing in economics Economic Inquiry (IF 1.71) Pub Date : 2024-04-03 Gauri Kartini Shastry, Olga Shurchkov
We design an experiment to study gender differences in reactions to editorial decisions on submissions to top economics journals. Respondents read a hypothetical editor's letter where the decision (e.g., revise and resubmit) is randomized across participants. Relative to an R&R, female assistant professors who receive a rejection perceive a significantly lower likelihood of subsequently publishing
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Whoever you want me to be: Personality and incentives Economic Inquiry (IF 1.71) Pub Date : 2024-03-30 Andrew McGee, Peter McGee
What can employers learn from personality tests when applicants have incentives to misrepresent themselves? Using a within‐subject, laboratory experiment, we compare personality measures with and without incentives for misrepresentation. Incentivized personality measures are weakly to moderately correlated with non‐incentivized measures in all treatments. When test‐takers are given a job ad indicating
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Market intelligence gathering, asymmetric information, and the instability of money demand Economic Inquiry (IF 1.71) Pub Date : 2024-03-28 Seon Tae Kim, Alessandro Marchesiani
The observed money demand in the U.S. had a stable negative relation with the interest rate up until the 1990s. After this period, this relation fell apart and has never been restored. We show that the central bank's ability to gather information, referred to as market intelligence (MI), matters to generate an upward‐sloping money demand curve. We calibrate the model to the U.S. data for the period
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Selective reporting of placebo tests in top economics journals Economic Inquiry (IF 1.71) Pub Date : 2024-03-26 Anna Dreber, Magnus Johannesson, Yifan Yang
Placebo tests provide incentives to underreport statistically significant tests, a form of reversed p‐hacking. We test for such underreporting in 11 top economics journals between 2009 and 2021 based on a pre‐registered analysis plan. If the null hypothesis is true in all tests, 2.5% of them should be significant at the 5% level with an effect in the same direction as the main test (and 5% in total)
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Sentiments and spending intentions: Evidence from Florida Economic Inquiry (IF 1.71) Pub Date : 2024-03-20 Hector H. Sandoval, Anita N. Walsh
Consumer sentiment is considered an important indicator of changes in household spending. However, the evidence of the causal relationship between sentiment and consumption is mixed and scarce. We address this gap using data from the monthly Florida Consumer Attitude Survey, which captures party affiliation, consumer sentiment, and spending intentions since 1991. We employ political partisanship as
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Three‐player contests with a potential inactive player: Endogenous timing of effort exertion Economic Inquiry (IF 1.71) Pub Date : 2024-03-16 Kyung Hwan Baik, Jong Hwa Lee
We study a contest where there are two active players in equilibrium when three players expend effort simultaneously to win a prize. We look at how endogenous timing of effort exertion affects the players' behavior. The players play the following game. First, they announce simultaneously whether they each will expend effort in period 1 or in period 2. Then, after knowing when they expend effort, each
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Issue Information Economic Inquiry (IF 1.71) Pub Date : 2024-03-13
No abstract is available for this article.
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Whistle‐blowing and the incentive to hire Economic Inquiry (IF 1.71) Pub Date : 2024-03-07 Jef De Mot, Murat C. Mungan
We consider a previously neglected cost of whistle‐blower awards: employers may base their hiring decisions, on the margin, not on the productivity of an employee but rather on the probability that the employee will become a whistle‐blower. We develop a three‐stage model to examine how productivity losses due to distortions at the hiring stage influence optimal whistle‐blower rewards. We characterize
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Macroprudential policies and Brexit: A welfare analysis Economic Inquiry (IF 1.71) Pub Date : 2024-03-07 Margarita Rubio
Brexit will have implications on financial stability and the implementation of macroprudential policies. The United Kingdom (UK) will no longer be subject to the jurisdiction of the European Systemic Risk Board. This paper studies the welfare implications of this change of regime. By means of a dynamic stochastic general equilibrium model, I compare the pre‐Brexit scenario with the new one, in which
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Privacy regulation and firm performance: Estimating the GDPR effect globally Economic Inquiry (IF 1.71) Pub Date : 2024-03-05 Carl Benedikt Frey, Giorgio Presidente
This paper examines how privacy regulation shaped firm performance. Controlling for firm and country‐industry‐year unobserved characteristics, we compare the outcomes of firms at different levels of exposure to EU markets, before and after the enforcement of the General Data Protection Regulation (GDPR) in 2018. We find that the GDPR had the unintended consequence of harming the profitability of companies
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Social learning about climate risks Economic Inquiry (IF 1.71) Pub Date : 2024-03-02 Yilan Xu, Sébastien Box‐Couillard
With a social network adjacency matrix constructed from the Facebook Social Connectedness Index (SCI), this paper examines whether social learning facilitates climate risk perception updates to inform climate adaptation. We find that Hurricanes Harvey and Irma‐induced regional flooding increased flood insurance policies nationwide to the extent of each county's social network proximity to the flooded
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Fasting and honesty: Experimental evidence from Egypt Economic Inquiry (IF 1.71) Pub Date : 2024-02-21 Dina Rabie, Mohamed Rashwan, Rania Miniesy
This paper examines the effect of religious fasting on truth‐telling using a laboratory experiment in Egypt. While fasting‐induced religiosity may promote truth‐telling, the physiological and psychological changes during fasting, due to alimentary abstention and self‐control exertion, may reduce honesty, especially when fasting is augmented with effort. We examine this question by tracing individual
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Capital controls, banking competition, and monetary policy Economic Inquiry (IF 1.71) Pub Date : 2024-02-13 Edgar A. Ghossoub, Andre Harrison, Robert R. Reed
How do capital controls and banking concentration affect economic development? This paper develops a general equilibrium model to study these important issues. To do so, we construct a framework with heterogeneous agents and imperfectly competitive financial intermediaries who help depositors manage liquidity risk. Importantly, higher levels of concentration raise the cost of domestic borrowing which
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Growth at risk from climate change Economic Inquiry (IF 1.71) Pub Date : 2024-02-13 Michael T. Kiley
How will climate change affect risks to economic activity? Research on climate impacts has tended to focus on effects on the average level of economic growth. I examine whether climate change may make severe contractions in economic activity more likely using quantile regressions linking growth to temperature. The effects of temperature on downside risks to economic growth are large and robust across
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Inflation surprises in a New Keynesian economy with a “true” consumption function Economic Inquiry (IF 1.71) Pub Date : 2024-02-08 Roberto Tamborini
The resurgence of inflation has been accompanied by a reversal of prospects of growth, with a prominent role assigned to the fall of households' purchasing power. Yet this real income effect of inflation surprises, independent of restrictive monetary policy, is not present in the standard New Keynesian models for monetary policy. The reason lies in the formulation of the consumption-based “IS equation”
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International comovements of public debt Economic Inquiry (IF 1.71) Pub Date : 2024-01-30 Hasan Isomitdinov, Vladimir Arčabić, Junsoo Lee, Youngjin Yun, James E. Payne
This study presents evidence of global and regional comovements in public debt and examines their trends and features. We employ a Bayesian dynamic factor model with time-varying parameters based on the debt-to-GDP ratio of 115 countries. We find the global factor accounts for 38 percent of the total variation in the debt ratio worldwide, but its share decreases over time. Countries with more financial
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Not so Black and White: Interracial marriage and wages Economic Inquiry (IF 1.71) Pub Date : 2024-01-24 Christina Houseworth, Jonathan Fisher
We examine wages of Black and White interracially married individuals compared to their intramarried counterparts in the United States. We find a raw interracial marriage wage penalty for White spouses and a raw interracial marriage wage premium for Black spouses. The differential disappears for females, but not for males, when controlling for selection on standard wage equation variables. Negative
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Do prosecutors induce the innocent to plead guilty? Economic Inquiry (IF 1.71) Pub Date : 2024-01-20 Alexander Lundberg
The implications of a strategic model of plea bargaining are threefold. First, plea bargaining unequivocally increases wrongful convictions. Next, partial bans on plea bargaining reduce the frequency of wrongful convictions, and the reduction rises with the strength of the ban. Lastly, police share an important role in minimizing wrongful convictions.
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Broadband and rural development: Impacts of the U.S. Department of Agriculture Broadband Initiatives Program on saving and creating jobs Economic Inquiry (IF 1.71) Pub Date : 2024-01-16 Anil Rupasingha, John Pender, Ryan Williams
This study analyzed the impact of the USDA's Broadband Initiatives Program on employment and business survival. While average employment declined in both program and non-program areas, the decline was less severe in program areas, suggesting a positive impact. This impact was primarily observed in metro counties, the service sector, and employer establishments. Businesses in program areas were also
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The volatility of survey measures of culture and its consequences Economic Inquiry (IF 1.71) Pub Date : 2024-01-02 Giulio Zanella, Marina M. Bellani
Measures of cultural attitudes derived from the World Values Survey are often used in economics to investigate the relation between individual culture and aggregate output. We show (i) that these measures are constructed from underlying variables that exhibit within-country volatility and time trends; and (ii) that such lack of persistence implies fragile correlations between cultural measures and
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Equity-efficiency tradeoffs in international bargaining Economic Inquiry (IF 1.71) Pub Date : 2024-01-01 Adib Bagh, Josh Ederington
This paper analyzes the welfare impact of expanding the negotiation agenda of an international agreement between asymmetric countries (e.g., including specific negotiations over environmental regulations or labor standards in a conventional trade agreement) and demonstrates why such proposed expansions are contentious. A main result is that agenda expansions that provide more bargaining flexibility
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Dynamic preferential trade agreement formation and the role of political economy Economic Inquiry (IF 1.71) Pub Date : 2024-01-01 Eric Conglin Chi, Halis Murat Yildiz
Using a dynamic preferential trade agreement (PTA) formation model, we show that political biases in exporting and import-competing sectors substantially impact the extent of PTA formation. While both exclusion and free riding incentives constrain the expansion to global free trade in a free trade agreement (FTA) game, only the former incentive arises in a customs union (CU) game. When we endogenize
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The effect of observing multiple private information outcomes on the inclination to cheat Economic Inquiry (IF 1.71) Pub Date : 2023-12-26 Sandro Casal, Antonio Filippin
We investigate how the inclination to cheat changes when agents report the result of multiple realizations of a (private information) stochastic event rather than a single outcome. Multiple realizations render extreme outcomes unlikely, facilitating the identification of opportunistic behaviors and exposing to reputation concerns the individuals who report them. Consequently, multiple realizations
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Issue Information Economic Inquiry (IF 1.71) Pub Date : 2023-12-17
No abstract is available for this article.
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Do markets Trump politics? Fossil and renewable market reactions to major political events Economic Inquiry (IF 1.71) Pub Date : 2023-12-08 Samson Mukanjari, Thomas Sterner
We investigate the effects of three events with major importance for climate policy on energy sector stocks: the Paris Agreement, the Trump election and presidency, and the Biden election. By combining event studies with impulse-indicator saturation methods, we show that the Paris Agreement and the election of Mr. Biden benefited renewable industries, while the election of Mr. Trump had negative effects
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“Long GFC”? The global financial crisis, health care, and COVID-19 deaths Economic Inquiry (IF 1.71) Pub Date : 2023-12-02 Antonio Moreno, Steven Ongena, Alexia Ventula Veghazy, Alexander F. Wagner
Do financial crises affect long-term public health? To answer this question, we examined the relationship between the 2007–2009 Global Financial Crisis (GFC) and the 2020–2022 COVID-19 pandemic. Specifically, we examined the relationship between the financial losses derived from the GFC, and the health outcomes associated with the first wave of the pandemic. European countries that were more affected
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Designing school choice mechanisms: A structural model and demand estimation Economic Inquiry (IF 1.71) Pub Date : 2023-12-01 Zhiyi Xu, Robert G. Hammond
Designing the markets that allocate public school seats is a crucial policy consideration. This paper compares the design of school choice mechanisms in terms of economic efficiency, stability, and strategic behavior. We estimate demand for schools using data from a large US public school system with novel indicators of students' levels of strategic sophistication. We find important benefits of reserving
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Outcomes or participation? Experimentally testing competing sources of legitimacy for taxation Economic Inquiry (IF 1.71) Pub Date : 2023-11-23 Christoph Engel, Luigi Mittone, Azzurra Morreale
Legitimacy may result from support for projects that a government implements. However, legitimacy may also result from the opportunity to participate in the selection process of projects. We tested the strength of these competing sources of legitimacy experimentally and their relationship. We find a straightforward effect of the former: the more projects a participant supports, the higher their taxes
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The age-wage-productivity puzzle: Evidence from the careers of top earners Economic Inquiry (IF 1.71) Pub Date : 2023-11-22 Rachel Scarfe, Carl Singleton, Adesola Sunmoni, Paul Telemo
There is an inverted u-shaped relationship between age and wages in most labor markets, but the effects of age on productivity are often unclear. We use panel data in a market of high earners, professional footballers (soccer players) in North America, to estimate age-productivity and age-wage profiles. We find stark differences; wages increase for several years after productivity has peaked, before
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The increasing penalty to occupation-education mismatch Economic Inquiry (IF 1.71) Pub Date : 2023-11-20 Hugh Cassidy, Amanda Gaulke
College-educated workers in jobs unrelated to their degree generally receive lower wages compared to well-matched workers. Our analysis of data from the National Survey of College Graduates shows that although the rate of this mismatch declined only slightly (18%–17%), the wage penalty increased by 56% between 1993 and 2019. Changes in the composition of field of study over time, as well as declining
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Pandemic containment and inequality in a developing economy Economic Inquiry (IF 1.71) Pub Date : 2023-11-15 Kunal Dasgupta, Srinivasan Murali
Using individual-level panel data from India, we show that income inequality between high-skilled and low-skilled workers increased following COVID-19 lockdown. Integrating a susceptible, infected, recovered, dead epidemiological model into a general equilibrium framework with high-skilled and low-skilled workers, working either from their offices (onsite) or from their homes (remote), we can explain
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New evidence on crude oil market efficiency Economic Inquiry (IF 1.71) Pub Date : 2023-11-05 Liang Hu, Yoon-Jin Lee
This paper examines the Efficient Market Hypothesis (EMH) in crude oil amid the “financialization of commodity markets” and the “fracking revolution”. It applies the generalized spectral derivative test (Hong and Lee 2005) on both West Texas Intermediate and Brent spot and futures markets, alongside a stochastic dominance test (Linton et al., 2005) to investigate arbitrage opportunities across markets
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Dynare replication of “A Model of Secular Stagnation: Theory and Quantitative Evaluation” by Eggertsson et al. (2019) Economic Inquiry (IF 1.71) Pub Date : 2023-11-01 Alex Crescentini, Federico Giri
This paper replicates the study “A Model of Secular Stagnation: Theory and Quantitative Evaluation” by Eggertsson et al. using the Dynare toolkit. Replication is important as it confirms the results of the original article, provides a user-friendly version using Dynare, and shows how to deal with large-scale models with occasionally binding constraints. The results show that the original Matlab code
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The lasting impact of external shocks on political opinions and populist voting Economic Inquiry (IF 1.71) Pub Date : 2023-10-28 Eugenio Levi, Isabelle Sin, Steven Stillman
We use electoral survey data linked to disaggregated geographical data to examine the impact that two external shocks had on the initial development and long-term success of New Zealand First (NZF), one of the oldest populist parties in the Organisation for Economic Co-operation and Development, as well as their short and long-run impact on voting and political opinions. We find that people exposed
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Why do older scholars slow down? Economic Inquiry (IF 1.71) Pub Date : 2023-10-27 Daniel S. Hamermesh, Lea-Rachel Kosnik
Using data describing all “Top 5” economics journal publications from 1969 to 2018, we examine what determines which authors produce less as they age and which retire earlier. Sub-field has no impact on the rate of production, but interacts with it to alter retirement probabilities. A positive, tentative, and contemporary writing style increases persistence in publishing. Authors whose previous work
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Do unconditional cash transfers increase fertility? Lessons from a large-scale program Economic Inquiry (IF 1.71) Pub Date : 2023-10-23 Sefa Awaworyi Churchill, Nasir Iqbal, Saima Nawaz, Siew Ling Yew
We examine the impact of unconditional cash transfers (UCTs) on fertility. We develop a theoretical model that demonstrates how UCTs affect fertility decisions, time allocations for leisure, labor and childrearing, and child health through health spending. We then empirically examine the impact of UCTs on fertility in Pakistan. Our theoretical model suggests that under certain conditions, UCTs are
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Locked down in distress: A quasi-experimental estimation of the mental-health fallout from the COVID-19 pandemic Economic Inquiry (IF 1.71) Pub Date : 2023-10-18 Lina Anaya, Peter Howley, Muhammad Waqas, Gaston Yalonetzky
We use a large-scale longitudinal survey with a differences-in-differences research design to estimate the impact of the COVID-19 pandemic on mental health in the United Kingdom. We report substantial increases in psychological distress for the population overall during the first wave. These impacts were not uniformly distributed, with the mental health costs being more pronounced for females, younger
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Race and the Income-Achievement Gap Economic Inquiry (IF 1.71) Pub Date : 2023-10-16 Ryan Bacic, Angela Zheng
A large literature documents a positive correlation between parental income and child test scores. In this paper, we study whether this relationship, the dependence of the cognitive skills of children on the socioeconomic resources of their parents, varies across race. Using education data linked to tax records, we find that the income-achievement gap is small for East Asian children while significantly
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Measurement errors in popular night lights data may bias estimated impacts of economic sanctions: Evidence from closing the Kaesong Industrial Zone Economic Inquiry (IF 1.71) Pub Date : 2023-10-11 Bonggeun Kim, John Gibson, Geua Boe-Gibson
Satellite-detected night lights data are widely used to evaluate economic impacts of sanctions. Such data should be free from political manipulation. However, measurement errors in these data, from blurring and bottom-coding, are rarely considered. To study such errors, we use a difference-in-differences analysis of impacts of closing the Kaesong Industrial Zone in North Korea—a sanction South Korea
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Did pandemic unemployment benefits increase unemployment? Evidence from early state-level expirations Economic Inquiry (IF 1.71) Pub Date : 2023-09-23 Harry J. Holzer, Glenn Hubbard, Michael R. Strain
During the 2021 pandemic year, the generosity of Unemployment Insurance benefits was expanded (Federal Pandemic Unemployment Compensation [FPUC]) and eligibility for benefits was broadened (Pandemic Unemployment Assistance [PUA]). These two programs were set to expire in September 2021. In June 2021, 18 states exited both FPUC and PUA and three states exited FPUC (but not PUA). Using Current Population
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Pre-play promises, threats and commitments under partial credibility Economic Inquiry (IF 1.71) Pub Date : 2023-09-04 Tigran Melkonyan, Surajeet Chakravarty
The paper examines how pre-play communication between players with partial credibility affects the ensuing strategic interaction. We consider an environment where players are uncertain about the economic and psychological costs of reneging on promises but learn these at the time of their implementation. We demonstrate that in the equilibrium both players make promises. The latter are partially effective
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Issue Information Economic Inquiry (IF 1.71) Pub Date : 2023-08-31
No abstract is available for this article.
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Sports injuries and game stakes: Concussions in the National Football League Economic Inquiry (IF 1.71) Pub Date : 2023-08-31 Pascal Courty, Jeffrey Cisyk
The National Football League's regular-season games are not of equal importance: some games loom larger than others for determining a team's chance to qualify for the playoffs. We develop an incentive-based measure of the impact of winning a game on a team's qualification probability to study the relationship between stakes and injuries. We find teams are 24 percentage points more likely to suffer
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Pandemic exposure and long-run psychological well-being Economic Inquiry (IF 1.71) Pub Date : 2023-08-31 Chao Ma, Yiwei Li, Wenxin Jiang, Xing Zhang
Using individuals' life history information from a large-scale national survey (N = 13,044), we causally evaluate how exposure to SARS-Cov-1, the first global pandemic in the 21st century, affects long-term psychological well-being. We find that exposure to local pandemic risk, that is, local deaths due to the pandemic, significantly reduced people's mental health 12 years later. Consistent with the
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A tale of two cities: Communication, innovation, and divergence Economic Inquiry (IF 1.71) Pub Date : 2023-08-29 Stefano Magrini, Alessandro Spiganti
We present a two-area endogenous growth model where abstract knowledge flows at no cost across space but tacit knowledge arises from the interaction among researchers and is hampered by distance. Digital communication reduces this “cost of distance” and reinforces productive specialization, leading to an increase in the system-wide growth rate but at the cost of more inequality within and across areas
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A simple nudge increases socioeconomic diversity in undergraduate Economics Economic Inquiry (IF 1.71) Pub Date : 2023-08-18 Todd Pugatch, Elizabeth Schroeder
We assess whether a light-touch intervention can increase socioeconomic and racial diversity in undergraduate Economics. We randomly assigned over 2200 students a message with basic information about the Economics major; the basic message combined with an emphasis on the rewarding careers or financial returns associated with the major; or no message. Messages increased the proportion of first generation
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Minimum eligibility age for social pensions and household poverty: Evidence from Mexico Economic Inquiry (IF 1.71) Pub Date : 2023-08-03 Clemente Ávila-Parra, David Escamilla-Guerrero, Oscar Gálvez-Soriano
This paper examines the impact of social pensions on old-age poverty. To achieve causal identification, we leverage the reduction in the minimum eligibility age of Mexico's flagship non-means-tested social pension program. We find that the program's expansion significantly reduced extreme poverty, mainly among indigenous seniors and in rural areas. However, it had negligible effects on labor force
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Dishonesty as a collective-risk social dilemma Economic Inquiry (IF 1.71) Pub Date : 2023-07-31 Shuguang Jiang, Marie Claire Villeval
We investigated lying as a collective-risk social dilemma. Misreporting resulted in increased individual earnings but when total claims reached a certain threshold, all group members were at risk of collective sanction, regardless of their individual behavior. Due to selfishness and miscoordination, most individuals earned less than the reservation payoff from honest reporting in the group. However
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U.S. shale oil production and trend estimation: Forecasting a Hubbert model Economic Inquiry (IF 1.71) Pub Date : 2023-07-13 Douglas B. Reynolds
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
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Optimal parental leave subsidization with endogenous fertility and growth Economic Inquiry (IF 1.71) Pub Date : 2023-07-06 Siew Ling Yew, Shuyun May Li, Solmaz Moslehi
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
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Government-led e-commerce expansion project and rural household income: Evidence and mechanisms Economic Inquiry (IF 1.71) Pub Date : 2023-07-04 Shiyi Chen, Wanlin Liu, Hong Song, Qing Zhang
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
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Cheating amongst youth offenders: How peers and their social status influence cheating Economic Inquiry (IF 1.71) Pub Date : 2023-07-03 Kaiwen Leong, Huailu Li, Sharon Xuejing Zuo
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
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How certain are we about the role of uncertainty in the economy? Economic Inquiry (IF 1.71) Pub Date : 2023-06-26 Helmut Herwartz, Alexander Lange
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
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Exploration versus exploitation: A laboratory test of the single-agent exponential bandit model Economic Inquiry (IF 1.71) Pub Date : 2023-06-21 Stanton Hudja, Daniel Woods
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
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When the league table lies: Does outcome bias lead to informationally inefficient markets? Economic Inquiry (IF 1.71) Pub Date : 2023-06-20 Raphael Flepp, Oliver Merz, Egon Franck
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
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Adverse selection in the group life insurance market Economic Inquiry (IF 1.71) Pub Date : 2023-06-18 Timothy F. Harris, Aaron Yelowitz, Jeffery Talbert, Alison Davis
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
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Spillover benefits of carbon dioxide cap and trade: Evidence from the Toxics Release Inventory Economic Inquiry (IF 1.71) Pub Date : 2023-06-13 Linh Pham, Travis Roach
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