Journal Cover
Quarterly Journal of Economics
Journal Prestige (SJR): 29.602
Citation Impact (citeScore): 11
Number of Followers: 344  
  Hybrid Journal Hybrid journal (It can contain Open Access articles)
ISSN (Print) 0033-5533 - ISSN (Online) 1531-4650
Published by Oxford University Press Homepage  [396 journals]
  • Global Evidence on Economic Preferences*
    • Authors: Falk A; Becker A, Dohmen T, et al.
      Pages: 1645 - 1692
      Abstract: This article studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey data set of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 people in 76 countries. The data reveal substantial heterogeneity in preferences across countries, but even larger within-country heterogeneity. Across individuals, preferences vary with age, gender, and cognitive ability, yet these relationships appear partly country specific. At the country level, the data reveal correlations between preferences and biogeographic and cultural variables, such as agricultural suitability, language structure, and religion. Variation in preferences is also correlated with economic outcomes and behaviors. Within countries and subnational regions, preferences are linked to individual savings decisions, labor market choices, and prosocial behaviors. Across countries, preferences vary with aggregate outcomes ranging from per capita income, to entrepreneurial activities, to the frequency of armed conflicts.
      PubDate: Wed, 30 May 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy013
      Issue No: Vol. 133, No. 4 (2018)
  • Excess Sensitivity of High-Income Consumers*
    • Authors: Kueng L.
      Pages: 1693 - 1751
      Abstract: Using new transaction data, I find considerable deviations from consumption smoothing in response to large, regular, predetermined, and salient payments from the Alaska Permanent Fund. On average, the marginal propensity to consume (MPC) is 25% for nondurables and services within one quarter of the payments. The MPC is heterogeneous, monotonically increasing with income, and the average is largely driven by high-income households with substantial amounts of liquid assets, who have MPCs above 50%. The account-level data and the properties of the payments rule out most previous explanations of excess sensitivity, including buffer stock models and rational inattention. How big are these “mistakes'” Using a sufficient statistics approach, I show that the welfare loss from excess sensitivity depends on the MPC and the relative payment size as a fraction of income. Since the lump-sum payments do not depend on income, the two statistics are negatively correlated such that the welfare losses are similar across households and small (less than 0.1% of wealth), despite the large MPCs.
      PubDate: Tue, 12 Jun 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy014
      Issue No: Vol. 133, No. 4 (2018)
  • What do Exporters Know'*
    • Authors: Dickstein M; Morales E.
      Pages: 1753 - 1801
      Abstract: Much of the variation in international trade volume is driven by firms’ extensive margin decisions of whether to participate in export markets. We evaluate how the information potential exporters possess influences their decisions. We estimate a model of export participation in which firms weigh the fixed costs of exporting against the forecasted profits from serving a foreign market. We adopt a moment inequality approach, placing weak assumptions on firms’ expectations. The framework allows us to test whether firms differ in the information they have about foreign markets. We find that larger firms possess better knowledge of market conditions in foreign countries, even when those firms have not exported in the past. Quantifying the value of information, we show that, in a typical destination, total exports rise while the number of exporters falls when firms have access to better information to forecast export revenues.
      PubDate: Thu, 05 Jul 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy015
      Issue No: Vol. 133, No. 4 (2018)
  • Marginal Tax Rates and Income: New Time Series Evidence*
    • Authors: Mertens K; Montiel Olea J.
      Pages: 1803 - 1884
      Abstract: Using new narrative measures of exogenous variation in marginal tax rates associated with postwar tax reforms in the United States, this study estimates short-run tax elasticities of reported income of around 1.2 based on time series from 1946 to 2012. Estimated elasticities are larger in the top 1% of the income distribution but are also positive and statistically significant for other income groups. Previous time series studies of tax returns data have found little evidence for income responses to taxes outside the top of the income distribution. The different results in this article arise because of additional efforts to account for dynamics, expectations, and especially the endogeneity of tax policy decisions. Marginal rate cuts lead to increases in real GDP and declines in unemployment. There is also evidence that the responses are to marginal tax rates rather than average tax rates. Counterfactual tax cuts targeting the top 1% alone are estimated to have short-run positive effects on economic activity and incomes outside of the top 1%, but to increase inequality in pretax incomes. Cuts for taxpayers outside of the top 1% also lead to increases in incomes and economic activity, but with a longer delay.
      PubDate: Tue, 20 Feb 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy008
      Issue No: Vol. 133, No. 4 (2018)
  • Racial Bias in Bail Decisions*
    • Authors: Arnold D; Dobbie W, Yang C.
      Pages: 1885 - 1932
      Abstract: This article develops a new test for identifying racial bias in the context of bail decisions—a high-stakes setting with large disparities between white and black defendants. We motivate our analysis using Becker’s model of racial bias, which predicts that rates of pretrial misconduct will be identical for marginal white and marginal black defendants if bail judges are racially unbiased. In contrast, marginal white defendants will have higher rates of misconduct than marginal black defendants if bail judges are racially biased, whether that bias is driven by racial animus, inaccurate racial stereotypes, or any other form of bias. To test the model, we use the release tendencies of quasi-randomly assigned bail judges to identify the relevant race-specific misconduct rates. Estimates from Miami and Philadelphia show that bail judges are racially biased against black defendants, with substantially more racial bias among both inexperienced and part-time judges. We find suggestive evidence that this racial bias is driven by bail judges relying on inaccurate stereotypes that exaggerate the relative danger of releasing black defendants.
      PubDate: Wed, 30 May 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy012
      Issue No: Vol. 133, No. 4 (2018)
  • The Elusive Costs of Inflation: Price Dispersion during the U.S. Great
    • Authors: Nakamura E; Steinsson J, Sun P, et al.
      Pages: 1933 - 1980
      Abstract: A key policy question is: how high an inflation rate should central banks target' This depends crucially on the costs of inflation. An important concern is that high inflation will lead to inefficient price dispersion. Workhorse New Keynesian models imply that this cost of inflation is very large. An increase in steady-state inflation from 0% to 10% yields a welfare loss that is an order of magnitude greater than the welfare loss from business cycle fluctuations in output in these models. We assess this prediction empirically using a new data set on price behavior during the Great Inflation of the late 1970s and early 1980s in the United States. If price dispersion increases rapidly with inflation, we should see the absolute size of price changes increasing with inflation: price changes should become larger as prices drift further from their optimal level at higher inflation rates. We find no evidence that the absolute size of price changes rose during the Great Inflation. This suggests that the standard New Keynesian analysis of the welfare costs of inflation is wrong and its implications for the optimal inflation rate need to be reassessed. We also find that (nonsale) prices have not become more flexible over the past 40 years.
      PubDate: Mon, 06 Aug 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy017
      Issue No: Vol. 133, No. 4 (2018)
  • Political Advertising and Election Results*
    • Authors: Spenkuch J; Toniatti D.
      Pages: 1981 - 2036
      Abstract: We study the persuasive effects of political advertising. Our empirical strategy exploits FCC regulations that result in plausibly exogenous variation in the number of impressions across the borders of neighboring counties. Applying this approach to detailed data on television advertisement broadcasts and viewership patterns during the 2004–12 presidential campaigns, our results indicate that total political advertising has almost no impact on aggregate turnout. By contrast, we find a positive and economically meaningful effect of advertising on candidates’ vote shares. Taken at face value, our estimates imply that a one standard deviation increase in the partisan difference in advertising raises the partisan difference in vote shares by about 0.5 percentage points. Evidence from a regression discontinuity design suggests that advertising affects election results by altering the partisan composition of the electorate.
      PubDate: Sat, 05 May 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy010
      Issue No: Vol. 133, No. 4 (2018)
  • Religious Competition and Reallocation: the Political Economy of
           Secularization in the Protestant Reformation*
    • Authors: Cantoni D; Dittmar J, Yuchtman N.
      Pages: 2037 - 2096
      Abstract: Using novel microdata, we document an important, unintended consequence of the Protestant Reformation: a reallocation of resources from religious to secular purposes. To understand this process, we propose a conceptual framework in which the introduction of religious competition shifts political markets where religious authorities provide legitimacy to rulers in exchange for control over resources. Consistent with our framework, religious competition changed the balance of power between secular and religious elites: secular authorities acquired enormous amounts of wealth from monasteries closed during the Reformation, particularly in Protestant regions. This transfer of resources had significant consequences. First, it shifted the allocation of upper-tail human capital. Graduates of Protestant universities increasingly took secular, especially administrative, occupations. Protestant university students increasingly studied secular subjects, especially degrees that prepared students for public sector jobs, rather than church sector specific theology. Second, it affected the sectoral composition of fixed investment. Particularly in Protestant regions, new construction shifted from religious toward secular purposes, especially the building of palaces and administrative buildings, which reflected the increased wealth and power of secular lords. Reallocation was not driven by preexisting economic or cultural differences. Our findings indicate that the Reformation played an important causal role in the secularization of the West.
      PubDate: Wed, 06 Jun 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy011
      Issue No: Vol. 133, No. 4 (2018)
  • Missed Sales and the Pricing of Ancillary Goods*
    • Authors: Gomes R; Tirole J.
      Pages: 2097 - 2169
      Abstract: Firms often sell a basic good as well as ancillary ones. Hold-up concerns have led to ancillary good regulations, such as transparency and price caps. The hold-up narrative, however, runs counter to evidence in many retail settings where ancillary good prices are set below cost (e.g., free shipping or limited card surcharging in countries where the “no-surcharge rule” was lifted). We argue that the key to unifying these conflicting narratives is that the seller may absorb partly or fully the ancillary good’s cost so as not to miss sales on the basic good. A supplier with market power on the ancillary good market then takes advantage of cost absorption and jacks up its wholesale price. Hold-ups occur only when consumers are initially uninformed or naive about the drip price and shopping costs are high. The price of the basic good then acts as a signal of the drip price, since a high markup on the basic good makes the firm more wary of missed sales. Regardless of whether consumers are informed, uninformed but rational, or naive, mandating price transparency and banning loss-making on the ancillary good leads to (i) an efficient consumption of the ancillary good, and (ii) a reduction of its wholesale price, generating strict welfare gains.
      PubDate: Sat, 30 Jun 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy016
      Issue No: Vol. 133, No. 4 (2018)
  • Should Buyers or Sellers Organize Trade in a Frictional Market'*
    • Authors: Shi S; Delacroix A.
      Pages: 2171 - 2214
      Abstract: To answer the question in the title, this article characterizes the socially efficient organization of the market with search frictions. The efficient organization depends on the relative elasticity in the supply between the two sides of the market, the costs of participating in the market and organizing trade, and the (a)symmetry in matching. We also show that the social optimum can be implemented by a realistic market equilibrium where the organizers set up trading sites to direct the other side’s search. The results provide a unified explanation for why trade has often been organized by sellers in the goods market, by buyers (firms) in the labor market, and by both sides in the asset market. The analysis also sheds light on how the efficient market organization can change with innovations such as e-commerce and just-in-time production.
      PubDate: Sat, 14 Apr 2018 00:00:00 GMT
      DOI: 10.1093/qje/qjy009
      Issue No: Vol. 133, No. 4 (2018)
School of Mathematical and Computer Sciences
Heriot-Watt University
Edinburgh, EH14 4AS, UK
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Fax: +00 44 (0)131 4513327
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