Title: What are the likely macroeconomic effects of the EU Recovery Plan?

The title of talk is "Treatment effect estimation with noisy conditioning variables" and the abstract can be found below.

 In this paper, I develop a new identification strategy for treatment effects when proxy variables for unobserved confounding factors are available. I use proxy variables to construct a random variable conditional on which treatment variables become exogenous. The key idea is that, under appropriate conditions, there exists a one-to-one mapping between the distribution of unobserved confounding factors and the distribution of proxies. To ensure sufficient variation in the constructed control variable, I use an additional variable, termed excluded variable, which satisfies certain exclusion restrictions and relevance conditions. I establish asymptotic distributional results for flexible parametric and nonparametric estimators of the average structural function. I illustrate empirical relevance and usefulness of my results by extending the identification strategy of Dale and Krueger (2002, QJE).

This is an opportunity for our PhD students to practice job talks.

Raghav will present paper: Price Changes And Welfare Analysis: Measurement Under Individual Heterogeneity

Fields: Microeconomic Theory, Labor Theory, Public Finance Theory

Supervisors: Herakles Polemarchakis, Costas Cavounidis, Robert Akerlof

Title: The Intertemporal Effects of Seeing Prices: Evidence from Garbled Offers in Malawi (with Maite Deambrosi and Jiajing Feng)

ABSTRACT: Preventive health care products are often sold at heavily discounted prices in developing countries. Does that hurt future demand for these products, by inducing subjects to anchor on low prices? Previous research on discounts for anti-malaria bed nets (Dupas, Ecma 2014) documents that experience and learning effects brought about by discounts dominate anchoring effects (if any). Bed nets are, however, an experience good sold at low frequency. Many essential preventive health care products – such as chlorine – are credence goods and have to be purchased at much higher frequency. Moreover, if discounts were perceived as a bargain by study participants, higher future demand might not generalize outside of the experiment. In a field experiment in Malawi, we investigate whether discounts generate anchoring and transaction utility effects across different types of preventive health care products. We do so by cross-randomizing actual discounts and implicit deals. Concretely, we decompose transaction prices into a sticker price and a randomly assigned delivery fee – revealed regardless of the purchasing decision. We find that demand decreases with discounts but increases with the size of the implicit deal. Such intertemporal effects of seeing prices are consistent with anchoring and transaction utility effects. Anchoring decays with time, but lasts up to 2 months after seeing prices. Using impulse-response functions, we simulate counterfactual demand under different pricing policies, showing that universal discounts are dominated by targeted (garbled) offers to those most responsive to each instrument.