Economic Inquiry

We present a natural field experiment to examine if priming can influence behavior in a market for credence goods. 40 testers took 600 taxi journeys in Vienna, Austria, and using a between-subject design we vary the script they spoke, each designed to prime either honesty, dishonesty, or a competitor. We find that the honesty prime increases taxi fares by 5.5% relative to a baseline, the result of overcharging rather than overtreatment. Priming dishonesty and a competitor have no impact on fares. We find that the effects of priming on behavior are likely to be small compared to information asymmetries...

Over the early twentieth century, urban centers adopted full-time public health departments. We show that opening full-time administration had little observable impact on mortality. We then attempt to determine why health departments were ineffective. Our results suggest that achievements in public health occurred regardless of health department status. Further, we find that cities with and without a full-time health department allocated similar per capita expenditures towards health administration. This health department funding also better predicts infant mortality declines...

This study examines the productivity of working from home (WFH) practices during the COVID-19 pandemic. The results reveal that the mean WFH productivity relative to working at the usual workplace was about 60%-70%, and it was lower for employees and firms that started WFH practice only after the spread of the COVID-19 pandemic. However, there was a large dispersion of WFH productivity, both by individual and firm characteristics. Highly educated and high-wage employees tended to exhibit a small reduction in WFH productivity...

In response to the novel coronavirus outbreak, the Japanese government requested the temporary closure of businesses. Consequently, complying with restrictions came to be recognized as the social norm, and stores that continued with business as usual were seen as norm-breakers. This study empirically investigates costly punishment behavior for stores' violation of restrictions and how this behavior changes when a decision-maker receives information pertaining to contrasting norms, implicitly requiring the opposite response...

From mid-January to March 2020, 3M masks sold on Amazon by third party sellers were priced 2.4 times higher than Amazon's 2019 price. However, this price increase was not uniform across sellers. We estimate that when Amazon is stocked out (one of our measures of scarcity) new (entrant) sellers increase price by 178%, whereas the continuing sellers' increase is limited to 56.7%. This is consistent with the idea that seller reputation limits the extent of profitable price gouging. Similar results are obtained for Purell hand sanitizer and for other measures of scarcity...

Before President Johnson's Executive Order 11241 in August 1965, married men received lower draft priority for military service. As the Vietnam War escalated in the summer of 1965, anecdotal evidence suggests draft-eligible men sought marriage to lower their likelihood of serving. This paper quantifies the effects of these Vietnam-era policies on marriage and finds that they significantly reduced the age at first marriage and altered the choice of spouse. However, younger marriages induced by the war were less likely to result in divorce 15 years later...

This study investigates effects of welfare reform in the United States on the next generation. Most previous studies of effects of welfare reform on adolescents focused on high-school dropout of girls or fertility; little is known about how welfare reform has affected other teenage behaviors or boys. We use a difference-in-difference-in-differences framework to identify gender-specific effects of welfare reform on skipping school, fighting, damaging property, stealing, hurting others, smoking, alcohol, marijuana, and other illicit drugs...

Shelter in place orders (SIPOs) require residents to remain home for all but essential activities. Between March 19 and April 20, 2020, 40 states and the District of Columbia adopted SIPOs. This study explores the impact of SIPOs on health, with particular attention to heterogeneity in their impacts. First, using daily state-level social distancing data from SafeGraph and a difference-in-differences approach, we document that adoption of a SIPO was associated with a 9 to 10 percent increase in the rate at which state residents remained in their homes full-time...

We investigate state-dependent effects of fiscal multipliers and allow for endogenous sample splitting to determine whether the U.S. economy is in a slack state. When the endogenized slack state is estimated as the period of the unemployment rate higher than about 12%, the estimated cumulative multipliers are significantly larger during slack periods than nonslack periods and are above unity. We also examine the possibility of time-varying regimes of slackness and find that our empirical results are robust under a more flexible framework...

We study the effect of public insurance on smoking cessation medication prescriptions and financing. We leverage variation in insurance coverage generated by recent Affordable Care Act expansions to Medicaid. We estimate differences-in-differences models using administrative data on the universe of Medicaid-financed prescriptions sold in retail and online pharmacies 2011-2017. Our findings suggest that these expansions increased Medicaid-financed smoking cessation prescriptions by 34%. This increase reflects new medication use and a shift in payment from private insurers and self-paying patients to Medicaid...

We use panel data on a complete inventory of household spending and assets to estimate the spending response to the sharp and largely unexpected declines in house values that occurred in the Great Recession. Our study complements the existing literature on this topic by relying exclusively on longitudinal micro data on both household wealth and expenditure. Our data span the period 2002-2012, allowing us to separate trends in spending from innovations in response to unexpected wealth changes. We find the marginal propensity to consume out of an unexpected housing wealth change to be six cents per dollar among older American households...

A growing share of the United States population uses e-cigarettes but the optimal regulation of these controversial products remains an open question. We conduct a discrete choice experiment to investigate how adult tobacco cigarette smokers' demand for e-cigarettes and tobacco cigarettes varies by four attributes: (i) whether e-cigarettes are considered healthier than tobacco cigarettes, (ii) the effectiveness of e-cigarettes as a cessation device, (iii) bans on use in public places, and (iv) price. We find that adult smokers' demand for e-cigarettes is motivated more by health concerns than by the desire to avoid smoking bans or higher prices...

We present a vision for improving household financial surveys by integrating responses from questionnaires more completely with financial statements and combining them with payments data from diaries. Integrated household financial accounts-balance sheet, income statement, and statement of cash flows-are used to assess the degree of integration in leading U.S. household surveys, focusing on inconsistencies in measures of the change in cash. Diaries of consumer payment choice can improve dynamic integration...

There is a large literature suggesting that "WIC works" to improve birth outcomes. However, methodological limitations related to selection into the WIC program have left room for doubt about this conclusion. This paper uses birth records from New York City to address some limitations of the previous literature. We estimate models with mother fixed effects to control for fixed characteristics of mothers and we directly investigate the way that time-varying characteristics of mothers affect selection into the WIC program...

This paper exploits a combination of policy variation from multiple pension reforms in Austria and administrative data from the Austrian Social Security Database. Using the policy changes for identification, we estimate social security wealth and accrual elasticities in individuals' retirement decisions. Next, we use these elasticities to estimate a dynamic programming model of retirement decisions. Finally, we use the estimated model to examine the labor supply and welfare consequences of potential social security reforms...

According to the literature, video game playing can improve such cognitive skills as problem solving, abstract reasoning, and spatial logic. I test this hypothesis using The Child Development Supplement to the Panel Study of Income Dynamics. The endogeneity of video game playing is addressed by using panel data methods and controlling for an extensive list of child and family characteristics. To address the measurement error in video game playing, I instrument children's weekday time use with their weekend time use...

Exploiting changes in welfare policy across states and over time and comparing relevant population subgroups within an econometric difference-in-differences framework, we estimate the effects of welfare reform on adult women's illicit drug use from 1992 to 2002, the period during which welfare reform unfolded in the U.S. The analyses are based on all available and appropriate national datasets, each offering unique strengths and measuring a different drug-related outcome. We investigate self-reported illicit drug use (from the National Household Surveys on Drug Abuse and National Surveys on Drug Use and Health), drug-related prison admissions (from the National Corrections Reporting Program), drug-related arrests (from Federal Bureau of Investigation Uniform Crime Reports), and drug-related emergency department episodes (from the Drug Abuse Warning Network)...

In this paper, we develop a signaling model of rational lovemaking. In the act of lovemaking, a man and a woman send each other possibly deceptive signals about their true state of ecstasy. For example, if one of the partners is not in ecstasy, then he or she may decide to fake it. The model predicts that (1) a higher cost of faking lowers the probability of faking; (2) middle-aged and old men are more likely to fake than young men; (3) young and old women are more likely to fake than middle-aged women; and (4) love, formally defined as a mixture of altruism and demand for togetherness, increases the likelihood of faking...

I consider the alcohol consumption of opposite-gender peers as explanatory to adolescent sexual intercourse and demonstrate that female sexual activity is higher where there is higher alcohol consumption among male peers. This relationship is robust to school fixed effects, cannot be explained by broader cohort effects or general antisocial behaviors in male peer groups, and is distinctly different from any influence of the alcohol consumption of female peers which is shown to have no influence on female sexual activity...

This paper uses national longitudinal data and several new empirical strategies to examine the consequences of teenage fatherhood. The key contribution is to compare economic outcomes of young fathers to young men whose partners experienced a miscarriage rather than a live birth. The results suggest that teenage fatherhood decreases years of schooling and the likelihood of receiving a high school diploma and increases general educational development receipt. Teenage fatherhood also appears to increase early marriage and cohabitation, and has mixed short-term effects on several labor market outcomes...