Knowledge that Transforms

We study career concerns in italian academia. We mold our empirical analysis on the standard model of contests, formalized in the multiunit all-pay auction. The number of posts, the number of applicants, and the relative importance of the criteria for promotion determine academics' effort and output. In Italian universities, incentives operate only through promotion, and all appointment panels are drawn from strictly separated and relatively narrow scientific sectors. Thus, the parameters affecting payoffs can be measured quite precisely, and we take the model to a newly constructed data set that collects the journal publications of all Italian university professors. Our identification strategy is based on a reform introduced in 1999, parts of which affected different academics differently. We find that individual researchers respond to incentives in the manner described by the theoretical model: roughly, more capable researchers respond to increases in the importance of the publications for promotion and in the competitiveness of the scientific sector by exerting more effort; less able researchers are discouraged by competition and do the opposite.

Many countries are reallocating tasks and powers to more central levels of government. To identify centralization's welfare effects, I use a difference-in-differences design that relies on time and cross-cantonal variation in the implementation of centralization reforms in Switzerland. I find that centralization provokes significant decreases in residents' life satisfaction. I identify one mechanism driving the effect: the procedural disutility that individuals experience from having less influence over the formulation of political decisions. This effect is largest among individuals with higher expected benefits from being involved in the political decision process, with detrimental effects on local political participation.

This paper examines the impact of manufacturing employment decline on the socioeconomic outcomes within and between black and white americans since 1960. The analysis shows that manufacturing decline had a negative impact on blacks in terms of their wages, employment, marriage rates, house values, poverty rates, death rates, single parenthood, teen motherhood, child poverty, and child mortality. In addition, the decline in manufacturing increased inequality within the black community for wages and other outcomes. Similar patterns are found for whites, but to a lesser degree—leading to larger gaps between whites and blacks in wages, marriage patterns, poverty, single-parenthood, and death rates.

We consider whether hospital acquisitions of physicians lead to improved clinical outcomes for medicare patients aged 65 and older. The analysis combines 2005–2012 Medicare fee-for-service and enrollment data with merger and physician affiliation information from the Levin Reports and SK&A, respectively. We determine the effect of acquisitions on several health outcomes: mortality, acute myocardial infarctions, acute circulatory conditions, ischemic heart disease, glaucoma, symptomatic diabetes complications, and asymptomatic diabetes complications. These outcomes represent the progression of hypertension and diabetes into worse health states. Our results indicate that hospital acquisitions of existing physician practices have little effect on the health outcomes we consider.

We study the impact of targeted price controls on supermarket products in Argentina. Using daily prices for controlled and noncontrolled goods, we examine the effects on inflation, product availability, entry and exit, and price dispersion. First, price controls have only a small and temporary effect on inflation that reverses soon after the controls are lifted. Second, contrary to common belief, controlled goods are consistently available for sale. Third, firms respond by introducing new varieties at higher prices. Overall, our results show that targeted price controls are just as ineffective as more traditional policies of price controls in reducing aggregate inflation.

Combining click data from a swedish newspaper and administrative data on asylum seekers in sweden, i examine whether a larger presence of refugees in a municipality induces people to avoid news that may encourage welcoming the newcomers. Exploiting the unexpected inflow of refugees to Sweden during 2015 and their exogenous allocation across Swedish municipalities, I find that people living in municipalities where the relative number of refugees is larger read fewer articles about asylum seekers. The decrease in clicks is 36% larger for more empathic articles and is correlated with less engagement in activities aimed at welcoming refugees.

Innovative firms with good ideas may still struggle to fine-tune them to the stage where they can attract outside funding. We conduct a five-country randomized experiment that tests the impact of an investment readiness program. Firms then pitched their ideas to independent judges. The program resulted in a 0.3 standard deviation increase in the investment readiness score. Two years later, the average impacts on firm investment outcomes are positive but small in magnitude and not statistically significant. Larger and statistically significant impacts on receiving outside funding occur for smaller firms and for firms with lower likelihoods of otherwise being funded.

We exploit the principles of choice architecture to evaluate interventions in the market for reloadable prepaid cards. Participants are randomized into three card menu presentation treatments—the market status quo, a regulation-inspired reform, or an enhanced reform designed to minimize attribute overload—and offered choices based on prior structural estimation of individual preferences. Consumers routinely choose incorrectly under the status quo, with tentative evidence that the regulation-inspired presentation may increase best card choice and clear evidence that the enhanced reform reduces worst card choice. Welfare analysis suggests the regulation-inspired presentation offers modest gains, while the enhanced policy generates substantial benefits.

This study assesses a new mechanism, the deposit channel, in the transmission of interest rate shock to household consumption using an administrative panel data set of financial transactions for Turkey. Our empirical strategy exploits variation in consumers' adherence to the Islamic laws that forbid earning interest and employs a standard difference-in-difference design. Following an unanticipated announcement of interest rate hike, rate-sensitive consumers significantly reduce their overall spending, and the response persists throughout the post-announcement period. The response of debt payment, disparate exposure to inflation, exchange rate, and the demographic difference can hardly fully account for the documented consumption response heterogeneity.

We provide one of the first systematic assessments of the development and determinants of economic anxiety at the onset of the coronavirus pandemic. Using a global data set on internet searches and two representative surveys from the United States, we document a substantial increase in economic anxiety during and after the arrival of the coronavirus. We also document a large dispersion in beliefs about the pandemic risk factors of the coronavirus and demonstrate that these beliefs causally affect individuals' economic anxieties. Finally, we show that individuals' mental models of infectious disease spread understate nonlinear growth and shape the extent of economic anxiety.