Knowledge that Transforms

Exploiting county-level variation in oil-producing areas from shocks to world oil and gas prices, we study how local labor market conditions affect disability take-up. We extend well-known previous work using a similar research design by analyzing a different price shock; a larger, more representative set of labor markets; and a more recent period marked by skyrocketing disability payments. Our estimated elasticity for SSDI payments with respect to earnings of −0.29 is surprisingly similar to earlier findings. Our preferred SSI elasticity estimate of −0.16 is smaller than previous findings, but we show that SSI programmatic changes explain most of the difference.

Political agency models suggest that elected public officials choose different policies than appointed officials do. This paper is the first (a) to apply a clean empirical design to study whether the selection rule has a causal effect on public officials’ policy choices and (b) to investigate transmission channels. I exploit a unique setting in Germany, where a reform has created quasi-experimental variation in the selection rule for mayors. As the outcome variable, I use data on grant receipts for highly visible investment projects for which mayors must apply to the state government. Elected mayors attract 7% to 7.4% more grants in election years; for appointed mayors, there is no cycle. Using hand-collected data on mayor characteristics, I find suggestive evidence that although the selection of mayors changes following the reform studied, a likely reason for the observed cycle is that elected mayors have stronger electoral incentives.

This paper quantifies the effects of Russia’s 1981 expansion in maternity benefits on completed childbearing. The program provided one year of partially paid parental leave and a small cash transfer upon a child’s birth. I exploit the program’s two-stage implementation and find evidence that women had more children as a result of the program. Fertility rates rose immediately by 8.2% over twelve months. The increase in fertility rates not only persisted for the ten-year duration of the program, but it reflected large increases in higher-order births to older women who already had children before the program started.

Local opinion leaders may play a key role in easing information frictions associated with technology adoption. This paper analyzes the influence of physician investigators who lead clinical trials for new cancer drugs. By comparing diffusion patterns across 21 new cancer drugs, we separate correlated regional demand for new technology from information spillovers. Patients in the lead investigator's region are initially 36% more likely to receive the new drug, but utilization converges within four years. We also find that superstar physician authors, measured by trial role or citation history, have broader influence than less prominent authors.

We estimate the first cross-sectional index of transaction-based land values for every U.S. metropolitan area. The index accounts for geographic selection and incorporates novel shrinkage methods using a prior belief based on urban economic theory. Land values at the city center increase with city size, as do land-value gradients; both are highly variable across cities. Urban land values are estimated at more than two times GDP in 2006. These estimates are higher and less volatile than estimates from residual (total - structure) methods. Five urban agglomerations account for 48% of all urban land value in the United States.

This paper studies the role of job displacement in the household bankruptcy decision. Using an event-study methodology, I find that NLSY respondents are over three times more likely to file for bankruptcy immediately following a job loss. Using county-level data, I find similar magnitudes in the aggregate, with significant effects lasting two to three years. The results suggest that unemployment spells can have significant long-term consequences on households’ credit market outcomes.

This paper studies the effects of violent crime on market prices and size using plant-level panel data in Colombia. To estimate causal effects, I exploit reductions in violence driven by increases in security expenditures during Álvaro Uribe’s presidency; these resulted in greater violence reductions in municipalities that voted for him in the 2002 elections as he was looking for reelection. I find that firms that face higher violence also face lower output and input prices. Output prices fall more than the prices of inputs, which drives firms to reduce production, and some firms exit the market. Workers see reductions in their real income.

We document how imperfect information generates heterogeneous effects in information treatments with personalized high-frequency feedback and peer comparisons. In our field experiment in retail electricity, we find that high- and low-energy users symmetrically underestimate and overestimate their relative energy use pretreatment. Responses to personalized feedback, however, are asymmetric. Households that overestimate their relative use and low users both respond by consuming more. These boomerang effects provide evidence that peer-comparison information programs, even those coupled with normative comparisons, are not guaranteed to lead to increases in prosocial behavior.

In models with potentially weak identification, researchers often decide whether to report a robust confidence set based on an initial assessment of model identification. Two-step procedures of this sort can generate large coverage distortions for reported confidence sets, and existing procedures for controlling these distortions are quite limited. This paper introduces a generally applicable approach to detecting weak identification and constructing two-step confidence sets in GMM. This approach controls coverage distortions under weak identification and indicates strong identification, with probability tending to 1 when the model is well identified.

We investigate determinants of driving speed in large U.S. cities. We first estimate city-level supply functions for travel in an econometric framework where the supply and demand for travel are explicit. These estimations allow us to calculate an index of driving speed and to rank cities by driving speed. Our data suggest that a congestion tax of about 3.5 cents per kilometer yields welfare gains of about $30 billion per year, that centralized cities are slower, that cities with ring roads are faster, and that the provision of automobile travel in cities is subject to decreasing returns to scale.