Knowledge that Transforms

Preschool-aged children get sick frequently and spread disease to other family members. Despite the universality of this experience, there is limited causal evidence on the magnitudes and consequences of these externalities, especially for infant siblings with developing immune systems and brains. We show in Danish administrative data that during infancy, younger siblings have two to three times higher hospitalization rates for respiratory conditions than older siblings. We combine birth order and within-municipality variation in respiratory disease prevalence among young children, finding lasting differential impacts of early-life respiratory disease exposure on younger siblings' earnings, educational attainment, chronic respiratory health, and mental health-related outcomes. (JEL D13, D62, I12, J12, J13, J24, J31)

The implementation of evidence-based policies hinges on the dissemination of evidence to policymakers, a process influenced by the attributes of the sender. We conduct a country-wide RCT in which two ideologically opposite prominent think tanks, two major newspapers, and a research institution with nonsalient ideology communicate identical information about a low-cost, non-ideological, and effective policy based on published research findings to a large sample of Spanish local policymakers. We measure the impact of information directly on policy adoption and find heterogeneous effects. When the informing institution aligns ideologically with policymakers, communicating research results leads to a more than 65% increase in policy adoption compared to an uninformed control group, while informing from an opposite ideology does not lead to policy adoption. Our design also allows us to compare the impact of knowledge brokers, such as think tanks, and coverage in leading newspapers in adopting public policies. We find that, when ideologically aligned with policymakers, both are equally effective in increasing policy adoption. We propose a three-stage conceptual framework of policy adoption processes - selective exposure to information, belief updating, and policy implementation- and show that ideological alignment does not influence selective exposure to information. However, evidence from a post-intervention online experiment shows that ideological alignment affects belief updating regarding a recommended policy's effectiveness. Finally, we discuss the trade-offs between effectiveness and outreach when using ideologically aligned and nonsalient institutions to disseminate research evidence and comment on the economic impact of ideological alignment for policy implementation.

Do elite colleges help talented students join the social elite or help incumbent elites retain their positions? We combine intergenerationally linked data from Chile with a regression discontinuity design to show that, looking across generations, elite colleges do both. Lower-status individuals who gain admission to elite college programs transform their children’s social environment. Children become more likely to attend high-status private schools and colleges and to live near and befriend high-status peers. In contrast, academic achievement is unaffected. Simulations combining descriptive and quasi-experimental findings show that elite colleges tighten the link between social and human capital while decreasing intergenerational social mobility. (JEL I23, I26, J24, J62, O15, Z13)

The influence of on-the-job training and supervisors, especially in high-stakes settings like policing, is poorly understood. Examining a central behavior in the debate surrounding police reform, we investigate the impact of a field training officer (FTO) on a recruit’s use of force. Leveraging a setting with conditional as-good-as-random assignment, we demonstrate a causal link between FTO and recruit use of force. A 1 standard deviation increase in FTO force propensity leads to a 14 to 18 percent rise in recruit force, persisting for at least two years. This underscores field training’s impact and reveals a promising avenue for reform. (JEL D91, J24, J45, K42, M53)

Why do health facilities in developing countries do so poorly? This paper examines the role of financial constraints. I describe an experiment in which we surprised health workers in randomly selected public health clinics in Nigeria with a N600,000 grant paid out in installments over one year. Its administration was left entirely to health workers. I show that the award led to large productivity gains. Using expenditure data combined with novel textual data I provide an explanation for these effects. I show that the award increased investments in physical and human capital, led to lower prices for patients and inspired health workers to do better.

We propose an extensive-form solution concept, with players who neglect information from hypothetical events but make inferences from observed events. Our concept modifies cursed equilibrium (Eyster and Rabin 2005) and allows that players can be cursed about endogenous information. (JEL C73, D44, D71, D81, D83, D91)

This paper studies the efficiency of self-enforced relational agreements, a common solution to contracting frictions, when sellers have market power and contracts cannot be externally enforced. To this end, I develop a dynamic contracting model with limited enforcement in which buyers can default on their trade credit debt and estimate it using a novel dataset from the Ecuadorian manufacturing supply chain. The key empirical finding is that bilateral trade is inefficiently low in early periods of the relationship, but converges toward efficiency over time, despite sellers’ market power. Counterfactual simulations imply that both market power and enforcement contribute to inefficiencies in trade. (JEL D86, G32, K12, L14, L60, O14)

This paper investigates a sequential social learning problem in which individuals face ambiguity about others’ signal structures and have max-min expected utility preferences, thereby exhibiting ambiguity aversion. Unlike previous findings, which suggest that learning outcomes depend on the specifics of the learning environment, this study establishes information cascades as a robust outcome under ambiguity. With sufficient ambiguity, cascades arise almost surely, regardless of the statistical properties of signal structures. Moreover, standard results predicting the absence of cascades can easily break down: Even minimal ambiguity can trigger cascades when signals are bounded and lead to incorrect herding when signals are unbounded. (JEL D81, D82, D83)

Judge IV designs rely on monotonicity—each judge being weakly stricter than more lenient judges in all cases. I measure monotonicity in judicial panels in five different settings and find that it is violated in up to 50 percent of nonunanimous cases. The monotonicity violations are not detected by conventional tests, but they would typically induce little bias in judge IV estimates. (JEL C26, K41, K42, O17)

Using new methods, we measure the intensities of higher-order risk preferences (prudence and temperance) in an incentivized experiment with 658 adolescents. Aligned with theory, we find that higher-order risk preferences are strongly related to field behavior, including prevention, health, addictive behavior, and financial decision-making. Most importantly, we show that ignoring prudence and temperance can yield misleading conclusions about the relation of risk preferences to field behavior, and that survey measures of risk tolerance often relate to field behavior because they capture higher-order risk preferences. (JEL C83, D81, D91, J13)