Papers - All

Michael Kremer, Edward Miguel

Cited by*: 16 Downloads*: 19

We examine social learning using data from a program that promoted use of deworming medicine in Kenyan schools. These drugs kill worms in the body; although people are soon reinfected, treatment interferes with the cycle of transmission, generating positive externalities. Individuals randomly exposed to more information about deworming drugs through their social network were significantly less likely to take the drugs and more likely to believe the drugs are "not effective." This finding is consistent with the hypothesis that those exposed to the program had overly optimistic prior beliefs about net private drug benefits. The combination of strong social effects and extensive social networks among teenagers implies that a "child-to-child" public health approach focused on teenagers will speed social learning. There are large differences between social effect estimates relying on experimental variation (negative estimates) and nonexperimental methods (positive estimates).

Tanjim Hossain, John A List

Cited by*: 9 Downloads*: 19

Recent discoveries in behavioral economics have led to important new insights concerning what can happen in markets. Such gains in knowledge have come primarily via laboratory experiments--a missing piece of the puzzle in many cases is parallel evidence drawn from naturally-occurring field counterparts. We provide a small movement in this direction by taking advantage of a unique opportunity to work with a Chinese high-tech manufacturing facility. Our study revolves around using insights gained from one of the most influential lines of behavioral research--framing manipulations--in an attempt to increase worker productivity in the facility. Using a natural field experiment, we report several insights. For example, conditional incentives framed as both "losses" and "gains" increase productivity for both individuals and teams. In addition, teams more acutely respond to bonuses posed as losses than as comparable bonuses posed as gains. The magnitude of the effect is roughly 1%: that is, total team productivity is enhanced by 1% purely due to the framing manipulation. Importantly, we find that neither the framing nor the incentive effect lose their importance over time; rather the effects are observed over the entire sample period. Moreover, we learn that worker reputation and conditionality of the bonus contract are substitutes for sustenance of incentive effects in the long-run production function.

Alison Booth, Andrew Leigh

Cited by*: 23 Downloads*: 19

We test for gender discrimination by sending fake CVs to apply for entry-level jobs. Female candidates are more likely to receive a callback, with the difference being largest in occupations that are more female-dominated.

John A List, Warren McHone , Daniel L Millimet

Cited by*: 11 Downloads*: 19

Whether environmental regulations alter capital flows remains a hotly debated issue. This paper uses county-level data to examine the location decisions of domestic and foreign firms in a single empirical model and tests for asymmetries by firm origin in the degree to which capital flows are influenced by environmental standards. We find that while domestic firms are influenced by environmental regulations, foreign firms are not. Since the benefits of foreign investment are well-documented-foreign plants typically provide more jobs and increase local wages by more than domestic plants-this result suggests a double-dividend is available: foreign plants provide an economic stimulus and are not unduly influenced by environmental protections.

John A List

Cited by*: 16 Downloads*: 19

Public policy decision making often requires balancing the benefits of a policy with the costs. While regulators in the United States and abroad rely heavily on benefit-cost analysis, critics contend that hypothetical bias precludes one of the most popular benefit estimation techniques--contingent surveys--from providing reliable economic values for nonmarket goods and services. This paper explores a new methodology to obtain the total value of nonmarket goods and services--random nth price auctions. The empirical work revolves around examining behavior of 360 participants in a competitive marketplace, where subjects naturally buy, sell, and trade commodities. The field experiment provides some preliminary evidence that hypothetical random nth price auctions can, in certain situations, reveal demand truthfully.

Orana Bandiera, Iwan Barankay, Imran Rasul

Cited by*: 0 Downloads*: 19

We present evidence from a firm level experiment in which we engineered an exogenous change in managerial compensation from fixed wages to performance pay based on the average productivity of lower-tier workers. Theory suggests that managerial incentives affect both the mean and dispersion of workers' productivity through two channels. First, managers respond to incentives by targeting their efforts towards more able workers, implying that both the mean and the dispersion increase. Second, managers select out the least able workers, implying that the mean increases but the dispersion may decrease. In our field experiment we find that the introduction of managerial performance pay raises both the mean and dispersion of worker productivity. Analysis of individual level productivity data shows that managers target their effort towards high ability workers, and the least able workers are less likely to be selected into employment. These results highlight the interplay between the provision of managerial incentives and earnings inequality among lower-tier workers.

Colin F Camerer

Cited by*: 23 Downloads*: 19

To test whether naturally occurring markets can be strategically manipulated, $500 and $1,000 bets were made, then cancelled, at horse racing tracks. The net effects of these costless temporary bets give clues about how market participants react to information large bets might contain. The bets moved odds on horses visibly (compared to matched-pair control horses with similar prebet odds) and had a slight tendency to draw money toward the horse that was temporarily bet, but the net effect was close to zero and statistically insignificant. The results suggest that some bettors inferred information from bets and others did not, and their actions roughtly cancelled out.

Steven Blader, Claudine Gartenberg, Andrea Prat

Cited by*: 0 Downloads*: 19

This paper investigates how the success of a management practice depends on the nature of the long-term relationship between the firm and its employees. A large US transportation company is in the process of fitting its trucks with an electronic on-board recorder (EOBR), which provide drivers with information on their driving performance. In this setting, a natural question is whether the optimal managerial practice consists of: (1) Letting each driver know his or her individual performance only; or (2) Also providing drivers with information about their ranking with respect to other drivers. The company is also in the first phase of a multi-year initiative to remake its internal operations. This first phase corresponds to an overhaul of the relational contract with its employees, focusing exclusively on changing values toward a greater emphasis on teamwork and empowerment. The main result of our randomized experiment is that (2) leads to better performance than (1) in a particular site if and only if the site has not yet received the values intervention, and worse performance if it has. The result is consistent with the presence of a conflict between competition-based managerial practices and a cooperation-based relational contract. More broadly, it highlights the role of intangible relational factors in determining the optimal set of managerial practices.

John A List

Cited by*: 0 Downloads*: 19

No abstract available

Paul Glewwe, Albert Park, Meng Zhao

Cited by*: 2 Downloads*: 19

About 10% of primary school students in developing countries have poor vision, yet in virtually all of these countries very few children wear glasses. There has been almost no research on the impact of poor vision on school performance in developing countries, and simple OLS estimates are likely to be biased because students who study more often are likely to develop poor vision faster. This paper presents results from a randomized trial in Western China that began in the summer of 2004. The trial involves over 19,000 students in 165 schools in two counties of Gansu province. The schools were randomly divided (at the township level) into 103 schools that received eyeglasses (for students in grades 4-6) and 62 schools that served as controls. The results indicate that, after one year, making eyeglasses available increased average test scores by 0.11 to 0.15 standard deviations (of the distribution of the test scores). For those students who accepted the glasses, average test scores increased by 0.15 to 0.22 standard deviations.

Carina Cavalcanti, Andreas Leibbrandt

Cited by*: 0 Downloads*: 18

This paper investigates the role of dry promotions for community participation in eight Brazilian fishing villages. We randomly promoted some fishermen to assistants before the start of an environmental program, increasing their responsibilities but not providing any monetary compensation. Thereafter, we study whether they engage more in conservation behavior during this program. The data shows that promoted fishermen provide substantially more effort, which suggests that such promotions my be a cost-effective tool to stimulate cooperation and community participation.

Jay R Corrigan, Matthew C Rousu

Cited by*: 3 Downloads*: 18

Policymakers are considering including stricter standards in international trade agreements. Using auctions to assess preferences, we find that the median consumer places no premium on fair trade foods produced under more stringent labor and environmental standards. This indicates that current trade policies may be preferable to U.S. consumers.

Anya Samek, Roman Sheremeta

Cited by*: 0 Downloads*: 18

Recognizing donors by revealing their identities is important for increasing charitable giving. We conducted a field experiment to examine how different recognition methods impact giving, and found that all forms of recognition that we examined had a positive impact on increasing donations, whereby recognizing only highest donors (positive recognition) and recognizing only lowest donors (negative recognition) had the most pronounced effect. We argue that selective recognition (both positive and negative) creates tournament-like incentives. Recognizing the highest donors activates the desire to seek a positive prize of prestige, thus increasing the proportion of donors who contribute large amounts. Recognizing the lowest donors activates the desire to avoid a negative prize of shame, thus decreasing the proportion of donors who do not contribute or contribute very little. Therefore, selective recognition is an effective tool that can be used in the field by charities to increase donations.

Laura Derksen, Adamson Muula, Joep van Oosterhout

Cited by*: 0 Downloads*: 18

The HIV epidemic in southern Africa has important consequences for economic development. The epidemic could be stopped by a universal test and treat policy, as antiretroviral drugs block the spread of the virus. However, demand for HIV testing and treatment are surprisingly low. This paper develops a model in which the decision to seek an HIV test is a signal of infection, and those who seek a test are subject to statistical discrimination from potential sexual partners. We evaluate an information experiment designed to test the theory, and find evidence that this form of discrimination is a significant barrier to HIV testing. In particular, we provide information at the community level on the public benefit of antiretroviral therapy: because the drugs prevent HIV transmission, a person who is tested and treated for HIV is a relatively safe sexual partner. This information reduces discrimination and increases HIV testing, with the strongest effects in communities where the new information becomes common knowledge. The results demonstrate that discrimination towards HIV positive individuals can be due to rational behavior by a misinformed public, and that providing new information can be an effective way to mitigate its effects.

Ginger Z Jin, Andrew Kato

Cited by*: 2 Downloads*: 18

Every new method of trade offers an opportunity for economic agents to compare its costs and benefits relative to the status quo. Such comparison motivates sorting across market segments and reshapes the whole marketplace. The Internet provides an excellent example: it introduces substantial search cost savings over brick and mortar retail stores but imposes new obstacles for sellers to convey quality. Using sports card trading as a case study, we provide empirical evidence on (1) the sorting of product quality between the online and offline segments, (2) the changes for retail outlets after the Internet came into place, and (3) how supporting industries such as professional grading and card manufacturing adapted to take advantage of the new market.

Per Fredriksson , John A List, Daniel L Millimet

Cited by*: 33 Downloads*: 18

Previous studies have proposed that equilibrium capital flows are affected by environmental regulations-the commonly coined 'pollution haven' hypothesis. We revisit this issue by treating environmental policies as endogenous and allowing governmental corruption to influence foreign direct investment patterns. Via these two simple extensions, we are able to provide a much richer model of international capital flows. The theoretical model presumes that the effect of corruption on FDI operates via two channels: corruption affects capital flows through its impact on environmental policy stringency and due to greater theft of public funds earmarked for public spending. We empirically examine the implications of the model using US state-level panel data from four industrial sectors over the period 1977-1987. Empirical results suggest environmental policy and corruption both play a significant role in determining the spatial allocation of inbound US FDI. In addition, the estimated effect of environmental policy is found to depend critically on exogeneity assumptions.

Mirco Tonin, Michael Vlassopoulos

Cited by*: 3 Downloads*: 18

This paper presents evidence from a field experiment, which aims to identify the two sources of workers' pro-social motivation that have been considered in the literature: action-oriented altruism and output-oriented altruism. To this end we employ an experimental design that first measures the level of effort exerted by student workers on a data entry task in an environment that elicits purely selfish behavior and we compare it to effort exerted in an environment that also induces action-oriented altruism. We then compare the latter to effort exerted in an environment where both types of altruistic preferences are elicited. We find that action-oriented altruism accounts for a significant increase in effort, while there is no additional impact due to output-oriented altruism. We also find significant gender-related differences in the treatment effect: women are very responsive to the treatment condition eliciting action-oriented altruism, while men's behavior is not affected by any of the treatments.

Craig E Landry, John A List

Cited by*: 35 Downloads*: 17

While contingent valuation remains the only option available for measurement of total economic value of nonmarketed goods, the method has been criticized due to its hypothetical nature. We analyze field experimental data to evaluate two ex ante approaches to attenuating hypothetical bias, directly comparing value statements across four distinct referenda: hypothetical, "cheap talk," "consequential," and real. Our empirical evidence suggests two major findings: hypothetical responses are significantly different from real responses; and responses in the consequential and cheap talk treatments are statistically indistinguishable from real responses. We review the potential for each method to produce reliable results in the field.

Werner Guth, Carsten Schmidt, Matthias Sutter

Cited by*: 1 Downloads*: 17

5,132 readers of the German weekly, Die Zeit, participated in a three-person bargaining experiment. In our data analysis we focus on (1) the influence of age, gender, profession and medium chosen for participation and (2) the external validity of student behaviour (inside and outside the lab). We find that older participants and women care more about equal distributions and that Internet users are more self-regarding than those using mail or fax. Decisions made by students in the lab are rather similar to those made by participants in the newspaper experiment, indicating a high degree of external validity of student data.

Craig E Landry, Andreas Lange, John A List, Michael K Price, Nicholas G Rupp

Cited by*: 18 Downloads*: 17

This study develops theory and conducts an experiment to provide an understanding of why people initially give to charities, why they remain committed to the cause, and what factors attenuate these influences. Using an experimental design that links donations across distinct treatments separated in time, we present several insights. For example, we find that previous donors are more likely to give, and contribute more, than donors asked to contribute for the first time. Yet, how these previous donors were acquired is critical: agents who are initially attracted by signals of charitable quality transmitted via an economic mechanism are much more likely to continue giving than agents who were initially attracted by non-mechanism factors.