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- Factorial Designs, Model Selection, and (Incorrect) Inference in
Randomized Experiments-
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Pages: 589 - 604 Abstract: AbstractFactorial designs are widely used to study multiple treatments in one experiment. Although t-tests using a fully saturated “long” model provide valid inferences, “short” model t-tests (that ignore interactions) yield higher power if interactions are zero, but incorrect inferences otherwise. Of 27 factorial experiments published in top-five journals (2007–2017), nineteen use the short model. After including interactions, more than half of their results lose significance. Based on recent econometric advances, we show that power improvements over the long model are possible. We provide practical guidance for the design of new experiments and the analysis of completed experiments. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01317 Issue No: Vol. 107, No. 3 (2025)
- Inaccurate Statistical Discrimination: An Identification Problem
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Pages: 605 - 620 Abstract: AbstractWe study inaccurate beliefs as a source of discrimination. Economists typically characterize discrimination as stemming from a taste-based (preference) or accurate statistical (belief-based) source. Although individuals may have inaccurate beliefs about how relevant characteristics (e.g., productivity, signals) are correlated with group identity, fewer than 7% of empirical discrimination papers in economics consider the possibility of such inaccurate statistical discrimination. Using theory and a labor market experiment, we show that failing to account for inaccurate beliefs leads to a misclassification of source. We outline three methods to identify source: varying observed signals, belief elicitation, and an intervention to target inaccurate beliefs. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01367 Issue No: Vol. 107, No. 3 (2025)
- Flight from Urban Blight: Lead Poisoning, Crime, and Suburbanization
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Pages: 621 - 638 Abstract: AbstractIn this paper we study the effect of violent crime on residential and firms location decisions and their implications for segregation in cities. We do so by proposing a new instrument to exogenously predict violent crime in city centers. We base our instrument on chemical and medical evidence that links local characteristics of the soil to lead poisoning and aggression. We show that the increase in violent crime between 1960 and 1990 due to lead poisoning moved almost 8 million people to the suburbs. Firms followed by leaving the city centers. We then show that the suburbanization process was characterized by “white flight.” PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01323 Issue No: Vol. 107, No. 3 (2025)
- Behavioral Food Subsidies
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Pages: 639 - 652 Abstract: AbstractWe conduct a field experiment with low-income shoppers to study how behavioral interventions can improve the effectiveness of healthy food subsidies. Our unique design enables us to deliver subsidies both before and during grocery shopping. We examine the effects of two nonrestrictive changes to the choice environment: giving shoppers agency over the subsidy they receive and introducing a waiting period before a subsidized shopping trip to prompt deliberation about upcoming purchases. These interventions increase healthy food spending by 61% more than a healthy food subsidy alone, resulting in 199% greater healthy spending than in our unsubsidized control group. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01287 Issue No: Vol. 107, No. 3 (2025)
- Stable Income, Stable Family
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Pages: 653 - 667 Abstract: AbstractWe document the effect of unemployment insurance generosity on divorce and fertility using an identification strategy that leverages state-level changes in maximum benefits over time and comparisons across workers who have been laid off and those that have not been laid off. The results indicate that higher maximum benefit levels mitigate the effects of layoffs. In particular, they mitigate increases in divorce associated with men’s layoffs; increases in separations associated with women’s layoffs; reductions in fertility associated with men’s layoffs; and increases in fertility associated with women’s layoffs. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01304 Issue No: Vol. 107, No. 3 (2025)
- What Matters for Electrification' Evidence from 70 Years of U.S. Home
Heating Choices-
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Pages: 668 - 684 Abstract: AbstractThe percentage of U.S. homes heated with electricity has increased steadily from 1% in 1950 to 40% in 2020. Energy prices, geography, climate, housing characteristics, and income are shown to explain 90% of the increase, with energy prices by far the most important factor. The paper then estimates the cost of an electrification mandate for new homes. Households in warm states tend to prefer electricity anyway, so would be made worse off by less than $350 annually on average. Households in cold states, however, tend to prefer natural gas so would be made worse off by more than $1,000 annually. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01292 Issue No: Vol. 107, No. 3 (2025)
- Influence-Seeking in U.S. Corporate Elites’ Campaign Contribution
Behavior-
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Pages: 685 - 696 Abstract: AbstractI leverage a new panel on the contributions to members of the U.S. Congress (MCs) from 401,557 corporate leaders of 14,807 U.S. corporations over 1999–2018 to show that U.S. corporate elites use contributions to political campaigns as a tool of political influence. Donations increase by 11% when a politician is assigned to a committee dealing with policy issues relevant to a corporate leader’s company. The effect is driven by donations to MCs with the greatest power in the committees. I estimate that, absent an influence motive, donations from corporate leaders during this period would have been lower by $20 million. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01321 Issue No: Vol. 107, No. 3 (2025)
- Climate Risk and Preferences over the Size of Government: Evidence from
California Wildfires-
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Pages: 697 - 710 Abstract: AbstractHow does exposure to risk shape individual preferences for an expanded state' I examine this question in the context of climate change-related risk. Using variation in California wildfire activity, I show neighborhoods experiencing large fires increase support by 0.8 percentage points for ballot initiatives which expand the size of government and by 2.4 percentage points for ballot initiatives endorsed by pro-environment interest groups. The effect is stronger in Republican areas and is not driven by shifts in voter registration or turnout, suggesting the mechanism acts through changes in individual preferences rather than compositional changes in the electorate. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01286 Issue No: Vol. 107, No. 3 (2025)
- Technology Training, Buyer-Supplier Relationship, and Quality Upgrading in
an Agricultural Supply Chain-
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Pages: 711 - 727 Abstract: AbstractThis paper examines the impacts of technology training and buyer-supplier relationship on technology adoption and quality upgrading. We randomly varied subjects of each training group across farmer-exporter clusters—farmers, exporters, both, or none—and provided training on Good Agricultural Practices (GAP). We find that training farmers enhances technology adoption and quality upgrading. Yet, the effects are much stronger when farmers and exporters are trained together. We document a plausible mechanism to explain this finding: joint training improves buyer-supplier relationship, which facilitates contract trade between farmers and exporters. We find no effect of GAP certification eligibility on technology adoption. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01341 Issue No: Vol. 107, No. 3 (2025)
- Risk Perceptions and Private Protective Behaviors: Evidence from COVID-19
Pandemic-
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Pages: 728 - 740 Abstract: AbstractWe analyze data from a survey we administered during the COVID-19 pandemic to investigate the relationship between people’s subjective beliefs about risks and their private protective behaviors. On average, people substantially overestimate the absolute level of risk associated with economic activity, but have directionally correct signals about their relative risk based on their demographic characteristics. Subjective risk beliefs are predictive of changes in economic activities independent of government policies. Government mandates restricting economic behavior, in turn, attenuate the relationship between subjective risk beliefs and protective behaviors. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01309 Issue No: Vol. 107, No. 3 (2025)
- Testing for Salience Effects in Choices under Risk
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Pages: 741 - 754 Abstract: AbstractWe construct and run an experiment to test the most basic choice effect predicted by salience theory. Subjects allocate wealth between a risky and a safe investment. While we vary an apparent payoff ratio to influence salience, treatments have economically equivalent consequences. Most other theories of behavior then predict zero effect. Our experimental findings are strongly consistent with the behavioral implication of a continuous version of salience theory. We provide a novel structural estimate on the strength of salience. In our setting, increasing the relative payoff contrast by 1% is equivalent to an increased odds ratio by about 0.4%. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01307 Issue No: Vol. 107, No. 3 (2025)
- Bidding on Price and Quality: An Experiment on the Complexity of Scoring
Rule Auctions-
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Pages: 755 - 770 Abstract: AbstractWe experimentally study procurement auctions when both quality and price matter. We compare two treatments where sellers compete on one dimension only (price or quality), with three treatments where sellers submit a price-quality bid and the winner is determined by a scoring rule that combines the two offers. We find that, in the scoring rule treatments, efficiency and buyer’s utility are lower than predicted. Estimates from a Quantal Response Equilibrium model suggest that increasing the dimension of the strategy space imposes a complexity burden on sellers, so that a simpler mechanism like a quality-only auction may be preferable. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01288 Issue No: Vol. 107, No. 3 (2025)
- Too Lucky to Be True: Fairness Views under the Shadow of Cheating
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Pages: 771 - 785 Abstract: AbstractIncome inequalities within societies are often associated with evidence that the rich are more likely to behave unethically and evade more taxes. We study how fairness views and preferences for redistribution are affected when cheating may, but need not, be the cause of income inequalities. In our experiment, we let third parties redistribute income between a rich and a poor stakeholder. In one treatment, income inequality was due only to luck, whereas in two others rich stakeholders might have cheated. The mere suspicion of cheating changes third parties’ fairness views considerably and leads to a strong polarization that is even more pronounced when cheating generates negative externalities. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01394 Issue No: Vol. 107, No. 3 (2025)
- A More Robust t -Test
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Pages: 786 - 802 Abstract: AbstractThis paper combines extreme value theory for the smallest and largest k observations for some given k>1 with a normal approximation for the average of the remaining observations to construct a more robust alternative to the usual t-test. The new test is found to control size much more successfully in small samples compared to existing methods. This holds for the canonical inference for the mean problem based on an i.i.d. sample, but also when comparing two population means and when conducting inference about linear regression coefficients with clustered standard errors. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01291 Issue No: Vol. 107, No. 3 (2025)
- Evaluating Policies Early in a Pandemic: Bounding Policy Effects with
Nonrandomly Missing Data-
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Pages: 803 - 819 Abstract: AbstractDuring the early part of the COVID-19 pandemic, national and local governments introduced a number of policies to combat the spread of COVID-19. In this paper, we propose a new approach to bound the effects of such early-pandemic policies on COVID-19 cases and other outcomes while dealing with complications arising from (i) limited availability of COVID-19 tests, (ii) differential availability of COVID-19 tests across locations, and (iii) eligibility requirements for individuals to be tested. We use our approach study the effects of Tennessee’s expansion of COVID-19 testing early in the pandemic and find that the policy decreased COVID-19 cases. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01306 Issue No: Vol. 107, No. 3 (2025)
- Short and Simple Confidence Intervals When the Directions of Some Effects
Are Known-
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Pages: 820 - 834 Abstract: AbstractWe introduce adaptive confidence intervals on a parameter of interest in the presence of nuisance parameters, such as coefficients on control variables, with known signs. Our confidence intervals are trivial to compute and can provide significant length reductions relative to standard ones when the nuisance parameters are small. At the same time, they entail minimal length increases at any parameter values. We apply our confidence intervals to the linear regression model, prove their uniform validity, and illustrate their length properties in an empirical application to a factorial design field experiment and a Monte Carlo study calibrated to the empirical application. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01297 Issue No: Vol. 107, No. 3 (2025)
- Is Mobile Money Changing Rural Africa' Evidence from a Field
Experiment-
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Pages: 835 - 844 Abstract: AbstractRural areas in sub-Saharan Africa are typically underserved by financial services. Mobile money brings a substantial reduction in the transaction costs of remittances. We follow the introduction of mobile money for the first time in rural villages of Mozambique using a randomized field experiment. We find that mobile money increased migration out of these villages, where we observe lower agricultural activity and investment. At the same time, remittances received and welfare of rural households increased, particularly when facing georeferenced village-level floods and household-level idiosyncratic shocks. Our work suggests that mobile money can accelerate urbanization and structural change in sub-Saharan Africa. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01333 Issue No: Vol. 107, No. 3 (2025)
- Low-Quality Seeds, Labor Supply, and Economic Returns: Experimental
Evidence from Tanzania-
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Pages: 845 - 852 Abstract: AbstractLow productivity in agriculture is a major cause of poverty and food insecurity in Africa. One explanation for low productivity is the widespread presence of low-quality inputs on local markets (“lemon technologies”), which causes uncertainty among farmers and erodes incentives for adoption. We report the results from a field experiment in Tanzania to study the impact of improved maize seeds in a context where we exogenously vary seed quality and uncertainty about seed type. The analysis is at the level of experimental plots owned and managed by farmers (not the entire farm). While improved seed positively affects harvests and reduces the probability of crop failure among fully informed farmers, these benefits are attenuated significantly when farmers are uncertain about the seed type they receive. The main channel linking uncertainty to lower harvest levels is the reallocation of labor—a complementary input. The presence of lemon inputs on the market for modern inputs impedes learning about the profitability of these inputs and increases the yield gap by slowing adoption in subsequent periods. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01285 Issue No: Vol. 107, No. 3 (2025)
- Lockdowns and Innovation: Evidence from the 1918 Flu Pandemic
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Pages: 853 - 863 Abstract: AbstractDoes social distancing harm innovation' We estimate the effect of nonpharmaceutical interventions (NPIs)—policies that restrict interactions in an attempt to slow the spread of disease—on local invention. We construct a panel of issued patents and NPIs adopted by 50 large U.S. cities during the 1918 flu pandemic. Difference-in-differences estimates show that cities adopting longer NPIs did not experience a decline in patenting during the pandemic relative to short-NPI cities, and they recorded higher patenting afterward. Rather than reduce local invention by restricting localized knowledge spillovers, NPIs adopted during the pandemic may have preserved other inventive factors. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01289 Issue No: Vol. 107, No. 3 (2025)
- Revisiting the Origins of Business Cycles With the Size-Variance
Relationship-
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Pages: 864 - 871 Abstract: AbstractThis paper quantifies the importance of the granular channel for the U.S. economy by taking into account that large firms are less volatile than small firms, a feature also known as the size-variance relationship. Intuitively, the largest firms, whose shocks drive granularity, are the least volatile; thus, their influence on aggregates is mitigated. By imposing estimates from the universe of employers for the size-variance relationship in a simple, quantitative framework, I find that the granular hypothesis can rationalize 15% of U.S. aggregate fluctuations, establishing a lower bound for the role of granularity in the U.S. economy. PubDate: Wed, 21 May 2025 00:00:00 GMT DOI: 10.1162/rest_a_01374 Issue No: Vol. 107, No. 3 (2025)
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