Title: The Value of Data Records (with Simone Galperti & Aleksandr Levkun)

Abstract: Many online platforms intermediate trade between sellers and buyers using data records of the buyers' personal characteristics. How much value do such intermediaries derive from each record? Is this value higher for specific buyers? What are its properties? We find that an important component of the value of a data record is a novel externality that arises when a platform pools records to withhold information from the sellers. Ignoring this externality can significantly bias our understanding of the value of data records. We then characterize a platform's willingness to pay for more data, thereby establishing a series of basic properties of the demand side of data markets. Our analysis combines modern information design with classic duality methods and applies to a large class of principal-agent problems.

Long-Run Agglomeration: Evidence from County Seat Wars

Urban areas are shaped by their size, perhaps particularly so over the long run. We study how historical shocks to the size of towns in the American West affected long-run economic outcomes, using elections which determined county seats (capitals) in the 1800s and a regression discontinuity (RD) design. High rates of mobility in the frontier period meant that these elections quintupled population density in winning locations, ultimately determining where 15% of a county resides today. Although the county seat provides relatively few government jobs, we show that the increased town size reshaped their modern local economies in several important ways. First, reported IRS income increases with an elasticity of 0.15 with respect to density. Second, these gains are distributed primarily to the upper end of the income distribution, leading to a 2.9pp increase in the top 5% income share. Finally, spillover effects onto nearby communities are minimal, cutting against notions of positive amenity provision and negative agglomeration shadows.

Joint with WBS

Title: Efficient Industrial Policy for Innovation: Standing on the shoulders of hidden grants

Title to be advised.

This workshop is taking place in Scarman House

Organiser: Bhaskar Dutta

This is an opportunity for our PhD student to practice job talk seminar.

Giulia will present paper: Worker Sorting And The Gender Wage Gap

Fields: Labour

Supervisors: Manuel Bagues, Roland Rathelot

This is an opportunity for our PhD student to practice job talk seminar

Eleonora will present paper: Bad Science

Fields: Political

Supervisors: Thiemo Fetzer, Sascha Becker, Andreas Stegmann

Chang Wang, a visiting student at WBS, presenting at the CAGE AMES Workshop. It will be a hybrid format workshop.

Title: The environmental benefits of electricity industry restructuring in China

Abstract: Ownership mixing vs. vertical unbundling Ownership mixing and vertical unbundling are the two pending electricity industry restructuring reforms in many developing countries, while few studies compared the two reforms, or explored the relative environmental effects of them. In this paper, we empirically examine the effects of ownership mixing and vertical unbundling on electricity generation firms’ SO2 emission intensity. We exploit both the ownership mixing and vertical unbundling reforms in China and use a difference-in-differences (DD) strategy to deal with identification. We rely on a unique firm-level dataset that contains comprehensive information on firms’ pollution records, production activities, and electricity generation. We document that ownership mixing, while achieving the main reform purpose of increased access to electricity and generation efficiency, also has unintended environmental benefits of significantly and substantially reducing firms’ air pollution intensity. The underlying channels are firms’ increased electricity generation and better enforcement of environmental regulations. Vertical unbundling, on the other hand, has no significant effects on firms’ air pollution. Our findings document an effective and environmentally friendly pathway for electricity industry restructuring in developing countries.

This is a hybrid format via MS Teams (https://teams.microsoft.com/l/meetup-join/19%3aeafd670486bc4ed6be08da79cf05d9ca%40thread.tacv2/1654765963206?context=%7b%22Tid%22%3a%2209bacfbd-47ef-4465-9265-3546f2eaf6bc%22%2c%22Oid%22%3a%22282d13eb-4c12-413a-b24a-e55af45e44c1%22%7d)

Title: Causality: a Decision-Theoretic Foundation

Abstract: We propose a decision-theoretic model akin to that of Savage that is useful for defining causal effects. Within this framework, we define what it means for a decision maker (DM) to act as if the relation between two variables is causal. Next, we provide axioms on preferences that are equivalent to the existence of a (unique) directed acyclic graph (DAG) that represents the DM's preferences. The notion of representation has two components: the graph factorizes the conditional independence properties of the DM's subjective beliefs, and arrows point from cause to effect. Finally, we explore the connection between our representation and models used in the statistical causality literature (for example, that of Pearl).

This is an opportunity for our PhD student to present job talk seminar.

Jian will present paper: Investment, Connections, And Innovation: Evidence From Chinese Artificial Intelligence Startups

Fields: Applied Microeconomics

Supervisors: Daniel Sgroi, James Fenske

This is an opportunity for our PhD student to practice job talk seminar.

Diego will present paper: Multiple Equilibria And Exchange Rate Volatility

Fields: Macroeconomics

Supervisors: Roger Farmer, Herakles Polemarchakis, Pablo Beker

Title: To leave or not to leave - extended maternity leave benefits and its effects over workers and firms (WIP).

Abstract: In this paper, I analyze the introduction of a voluntary maternity leave expansion that happened in Brazil. Firms were encouraged to sign up for a program that increased the provision of paid maternity leave (fully funded by the government) from 4 to 6 months. I find that only 16% of eligible firms joined the program 12 years after its introduction. These firms are typically bigger, have a higher share of white and more educated workers, and retain their workers for more time. From the worker’s perspective, only 40% of eligible mothers enjoy the 2 months maternity leave extension. I also document a considerable within-firm heterogeneity for those entitled to the extra benefit. Finally, I find evidence that firms tend to hire more low-skilled workers after joining the program and that these are the ones who tend to enjoy the benefit less.

Organisers: Bruno, Cora & Jinlin

Title: “AI, firms and wages: Evidence from India” (joint with Ashley Pople, Katherine Stapleton)

Zoom Link: https://monash.zoom.us/j/81977796148?pwd=QXpwZjlOOCtiTnBhUHNGZW03bk5VQT09

Title: Portfolio Choice in Dynamic Thin Markets: Merton meets Cournot.

This is an opportunity for our PhD student to practice job talk seminar.

Ozge will present paper: Can gender-blind algorithmic pricing eliminate gender gap?

Fields: Labour, Discrimination, Industrial Organization

Supervisors: Manuel Bages, Mirko Draca, Ludovica Gazze

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

This is an opportunity for our PhD student to practice job talk seminar.

Velichka will present paper: Returning From Africa. The Fertility Impact Of Mass Skilled Return Migration

Fields: Migration, Economic History, Labor

Supervisors: Manuel Bagues, James Fenske

Organisers: Bruno, Cora & Jinlin

This is an opportunity for our PhD student to practice job talk seminar.

Todor will present paper: Do Financial Incentives Improve Participation In Job Training Programmes For Job Seekers?

Fields: Labour

Supervisors: Clement Imbert, Dita Eckardt

Title: Investments And Innovation With Non-Rival Inputs: Evidence From Chinese Artificial Intelligence Startups

Fields: Innovation And Entrepreneurship

Supervisors: Daniel Sgroi, James Fenske

Title: Worldwide Child Stunting since the Nineteenth Century

Abstract: This paper conducts a meta-analysis of 877 historical child growth studies to reconstruct child stunting rates, the share of children who are too short for their age, for 121 countries from the earliest date possible to the present. This data complements and extends the modern Joint Malnutrition Estimates database of country-level stunting rates, which begins in the 1980s. We find that many European countries had stunting rates similar to current LMICs at the turn of the twenti- eth century, but child stunting fell in the early twentieth century reaching very low levels before World War II. Stunting rates were also very high in Japan and Korea. However, stunting rates were surprisingly low historically in the European settler colonies, Eastern Europe and the Caribbean. Historical comparisons of child stunting add a new dimension to the historical health transition and allow for more direct historical lessons for the fight against stunting today.

Title: Solving the Forecasting Combination Puzzle (with Ryan Zischke, Gael M. Martin and Donald Poskitt)

Abstract: We demonstrate that the so-called forecasting combination puzzle is a consequence of the methodology commonly used to produce forecast combinations. By the combination puzzle, we refer to the empirical finding that predictions formed by combining multiple forecasts in ways that seek to optimize forecast performance often do not out-perform more naive, e.g. equally-weighted, approaches. In particular, we demonstrate that, due to the manner in which such forecasts are typically produced, tests that aim to discriminate between the predictive accuracy of such competing combinations can have low power, and can lack size control, leading to an outcome that favors the simpler approach. In short, we show that this counter-intuitive result can be completely avoided by the adoption of more efficient estimation strategies in the production of the combinations, when feasible. We illustrate these findings both in the context of forecasting a functional of interest and in terms of predictive densities.

Title: When Nation Building Goes South: Draft Evasion, Government Repression, And The Origins Of The Sicilian Mafia

Fields: Economic History, Political Economy

Supervisors: James Fenske, Sharun Mukand

THE ALLOCATION OF INCENTIVES IN MULTI-LAYERED ORGANISATIONS.Link opens in a new window

with Erika Deserranno, Gianmarco Leon-Ciliotta, Philipp Kastrau

Title: School Capital Expenditure Rules, Student Outcomes, and Real Estate Capitalization (joint work with Barbara Biasi and Julien Lafortune)

Abstract: School capital expenditures are a major component of public spending in the US, but there is substantial disagreement among economists and policymakers under what conditions these expenditures are a good use of funds. We use new data on school bond elections from dozens of states to estimate (a) the effects of capital expenditures on student achievement and house prices, (b) how they vary with bond and district characteristics, and (c) how they are shaped by the institutional environment. On average, we find positive effects on test scores and house prices, but with meaningful heterogeneity across bond characteristics, districts, and state institutions. We interpret these findings in a probabilistic voter model with budget-maximizing school districts. The model provides a foundation for quantitative evaluation of counterfactual political and fiscal institutions governing school capital finance.

Title: When Nation Building Goes South: Draft Evasion, Government Repression, And The Origins Of The Sicilian Mafia

Fields: Economic History, Political Economy

Supervisors: James Fenske, Sharun Mukand

Title: Adaptable Economics Education - What, Why and How (joint with Cloda Jenkins, Imperial College)

Abstract: In this presentation, we provide guidance for instructors looking to move to an adaptable learning design for their economics courses, as well as preliminary evidence of its evaluation at UCL. We use the term “adaptable” as it embraces both online and face-to-face elements and is designed to make moving in between the two delivery methods relatively easy. This is of course particularly relevant in light of the pandemic disruption but may also be considered to be a helpful direction of travel in an uncertain world in order to make the higher education system more resilient to shocks. In this context, “adaptable” is not equivalent to hybrid, that is, teaching online and in-person students simultaneously. The two main reasons for this are that we aim to include multiple models of adaptable education here, which could include a hybrid option, and that in general hybrid models are the most difficult to deliver successfully and should be avoided where possible. 

Organised by Subhasish Dey

Title: Dynamic Contracting with Multiple Agents under Limited Commitment

We consider an environment of dynamic contracting with multiple agents and lack of commitment. A principal with no commitment power would like to screen efficient workers over time and assign harder tasks to them. After efficiency is revealed, the principal becomes tempted to change the terms of trade. . Breaches of contracts are observable and, hence, whenever past promises are not honored future information revelation stops. We provide necessary and sufficient conditions under which the principal is able to foster information revelation. Optimal contracts that lead to information revelation entail extreme high-powered incentives after information is revealed, and rewards for information revelation disappear in the long run. Information revelation becomes easier when workers are stochastically replaced by new ones.

Title: Worker Sorting And The Gender Wage Gap

Fields: Labour

Supervisors: Roland Rathelot, Manuel Bagues