Papers - All

Abhijit Banerjee, Shawn Cole, Esther Duflo, Leigh Linden

Cited by*: 25 Downloads*: 14

This paper presents the results of two randomized experiments conducted in schools in urban India. A remedial education program hired young women to teach students lagging behind in basic literacy and numeracy skills. It increased average test scores of all children in treatment schools by 0.28 standard deviation, mostly due to large gains experienced by children at the bottom of the test-score distribution. A computer-assisted learning program focusing on math increased math scores by 0.47 standard deviation. One year after the programs were over, initial gains remained significant for targeted children, but they faded to about 0.10 standard deviation.

John A Fox, Jayson L Lusk

Cited by*: 6 Downloads*: 13

An increasing number of studies have begun conducting economic experiments in field, rather than laboratory settings. We directly compare results from laboratory and field valuation experiments. After controlling for unengaged bidders, results indicate field valuations were greater than laboratory valuations. Results are discussed in the context of recent literature on commitment costs.

David J Cooper

Cited by*: 6 Downloads*: 13

This paper studies experiments set in a corporate environment where a manager attempts to overcome a history of coordination failure by employees using either financial incentives or communication. I compare the choices of subject managers drawn from a standard undergraduate population with subject managers drawn from the executive MBA (EMBA) program at Case?s Weatherhead School of Management. The EMBA subjects are a group of experienced, successful managers; all of the EMBA subjects have at least ten years of work experience, including at least five years in a supervisory role, and have average annual earnings in excess of $120,000. The EMBA subject managers are able to overcome a history of coordination failure significantly faster than the undergraduate subject managers. This superior performance is driven neither by differences in the financial incentives offered to the employees nor by use of an inherently different communications strategy. Instead, EMBA subject managers are significantly more likely to use the same "good" communication strategy as is identified for undergraduate subject managers through systematic coding of managers messages to employees.

William T Harbaugh, Kate Krause, Lise Vesterlund

Cited by*: 77 Downloads*: 13

In this paper we examine how risk attitudes change with age. We present participants from age 5 to 65 with choices between simple gambles and the expected value of the gambles. The gambles are over both gains and losses, and vary in the probability of the non-zero payoff. Surprisingly, we find that many participants are risk seeking when faced with high-probability prospects over gains and risk averse when faced with small-probability prospects. Over losses we find the exact opposite. Children's choices are consistent with the underweighting of low-probability events and the overweighting of high-probability ones. This tendency diminishes with age, and on average adults appear to use the objective probability when evaluating risky prospects.

Alessandra Cassar, Lucas Crowley, Bruce Wydick

Cited by*: 1 Downloads*: 13

An important question to microfinance is the relevance of existing social capital in target communities to the performance of group lending. This research presents evidence from field experiments in South Africa and Armenia, in which subjects participate in trust games and a microfinance game. We present moderately strong evidence that personal trust between group members and peer homogeneity are more important to group loan repayment than general societal trust or mere acquaintanceship between members. We also find some evidence of reciprocity in groups: those who have been helped by other members are more likely to contribute themselves.

Michael Kremer, Edward Miguel

Cited by*: 7 Downloads*: 13

The history of foreign development assistance is one of movement away from addressing immediate needs and toward focusing on the underlying causes of poverty. A recent manifestation is the move towards sustainability,' which stresses community mobilization, education, and cost-recovery. This stands in contrast to the traditional economic analysis of development projects, with its focus on providing public goods and correcting externalities. We examine evidence from randomized evaluations on strategies for combating intestinal worms, which affect one in four people worldwide. Providing medicine to treat worms was extremely cost effective, although medicine must be provided twice per year indefinitely to keep children worm-free. An effort to promote sustainability by educating Kenyan schoolchildren on worm prevention was ineffective, and a mobilization' intervention from psychology failed to boost deworming drug take-up. Take-up was highly sensitive to drug cost: a small increase in cost led to an 80 percent reduction in take-up (relative to free treatment). The results suggest that, in the context we examine, the pursuit of sustainability may be an illusion, and that in the short-run, at least, external subsidies will remain necessary.

Michael Kremer, Edward Miguel, Rebecca Thornton

Cited by*: 16 Downloads*: 13

We report results from a randomized evaluation of a merit scholarship program for adolescent girls in Kenya. Girls who scored well on academic exams had their school fees paid and received a cash grant for school supplies. Girls eligible for the scholarship showed significant gains in academic exam scores (average gain 0.12-0.19 standard deviations) and these gains persisted following the competition. There is also evidence of positive program externalities on learning: boys, who were ineligible for the awards, also showed sizeable average test gains, as did girls with low pretest scores, who were unlikely to win. Both student and teacher school attendance increased in the program schools. We discuss implications both for understanding the nature of educational production functions and for the policy debate surrounding merit scholarships.

John A List

Cited by*: 0 Downloads*: 13

No abstract available

John A List, Anya Samek

Cited by*: 4 Downloads*: 13

Childhood obesity has reached epidemic proportions in the U.S., with now almost a third of children ages 2-19 deemed overweight or obese. In this study, we leverage recent findings from behavioral economics to explore new approaches to tackling one aspect of childhood obesity: food choice and consumption. Using a field experiment where we include more than 1,500 children, we report several key insights. First, we find that individual incentives can have large influences: in the control, only 17% of children prefer the healthy snack, whereas the introduction of small incentives increases take-up of the healthy snack to roughly 75%, more than a four-fold increase. There is some evidence that the effects continue after the treatment period, consistent with a model of habit formation. Second, we find little evidence that the framing of incentives (loss versus gain) matters. While incentives work, we find that educational messaging alone has little influence on food choice. Yet, we do observe an important interaction effect between messaging and incentives: together they provide an important influence on food choice. For policymakers, our findings show the power of using incentives to combat childhood obesity. For academics, our approach opens up an interesting combination of theory and experiment that can lead to a better understanding of theories that explain healthy decisions and what incentives can influence them.

Catherine Co , John A List

Cited by*: 47 Downloads*: 13

This paper employs a conditional logit model to estimate the effects of state environmental regulations on foreign multinational corporations' new plant location decisions from 1986 to 1993. The relationship between site choice and state environmental regulations is explored, using four measures of regulatory stringency. We find evidence that heterogeneous environmental policies across states do matter.

Rama Katkar, David Lucking-Reiley

Cited by*: 7 Downloads*: 13

Sellers in eBay auctions have the opportunity to choose both a public minimum bid amount and a secret reserve price. We ask, empirically, whether the seller is made better or worse off by setting a secret reserve above a low minimum bid, versus the option of making the reserve public by using it as the minimum bid level. In a field experiment, we auction 50 matched pairs of Pokemon cards on eBay, half with secret reserves and half with equivalently high public minimum bids. We find that secret reserve prices make us worse off as sellers, by reducing the probability of the auction resulting in a sale, deterring serious bidders from entering the auction, and lowering the expected transaction price of the auction. We also present evidence that some sellers choose to use secret reserve prices for reasons other than increasing their expected auction prices.

Bradley J Ruffle, Richard Sosis

Cited by*: 24 Downloads*: 13

No abstract available

Alan S Gerber, Donald P Green

Cited by*: 12 Downloads*: 13

No abstract available

Peter Bohm

Cited by*: 1 Downloads*: 13

No abstract available

John Gibson, David McKenzie, Steven Stillman

Cited by*: 3 Downloads*: 13

People migrate to improve their well-being, whether through an expansion of economic and social opportunities or a reduction in persecution. Yet a large literature suggests that migration can be a very stressful process, with potentially negative impacts on mental health reducing the net benefits of migration. However, to truly understand the effect of migration on mental health one must compare the mental health of migrants to what their mental health would have been had they stayed in their home country. The existing literature is not able to do this and typically settles for comparing the mental health of migrants to that of natives in the destination country, which takes no account of any pre-existing differences between these groups. This paper overcomes the selection problems affecting previous studies of the effect of migration on mental health by examining a migrant lottery program. New Zealand allows a quota of Tongans to immigrate each year with a lottery used to choose amongst the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the mental health effects of migration to be obtained by comparing the mental health of migrants who were successful applicants in the lottery to the mental health of those who applied to migrate under the quota, but whose names were not drawn in the lottery. Migration is found to lead to improvements in mental health, particularly for women and those with poor mental health in their home country.

Jan Hansen, Carsten Schmidt, Martin Strobel

Cited by*: 6 Downloads*: 13

Political stock markets (PSM) are sometimes seen as substitutes for opinion polls. On the bases of a behavioural model, specific preconditions were drawn out under which manipulation in PSM can weaken this argument. Evidence for manipulation is reported from the data of two separate PSM during the Berlin 1999 state elections.

David J Cooper, John H Kagel, Qing Liang Gu, Wei Lo

Cited by*: 41 Downloads*: 13

We examine strategic interactions between firms and planners in China, comparing behavior between: (i) students and managers with field experience with this situation, (ii) standard versus increased monetary incentives, and (iii) sessions conducted "in context", making explicit reference to interactions between planners and managers, and those without any such references. The dynamics of play are similar across treatments with play only gradually, and incompletely, converging on a pooling equilibrium. A fivefold increase in incentives significantly increases initial levels of strategic play. Games played in context generated greater levels of strategic play for managers, with minimal impact on students.

Juan-Camilo Cardenas, Jeff P Carpenter

Cited by*: 1 Downloads*: 13

No abstract available

Juan-Camilo Cardenas

Cited by*: 0 Downloads*: 13

The internalization of external costs arising from a group dilemma between the individual and social interests require the design of institutions through the market, the state or self-governance that are able to induce in the agents a change in their pecuniary and non-material incentives so that their choices are socially desirable. The conventional approach in the economic analysis of the enforcement of the law based mostly on the work of Becker is based on the postulate that those not complying with the law are rationally perceiving a greater benefit from doing so if compared to the expected cost of the sanction by the state, that is the value of the sanction for the law violator multiplied by the probability of detection. Through a series of economic experiments we explore this hypothesis for the case of a typical public good or resource extraction where there is a group externality, and an external regulation that is partially enforced. The results suggest that the strategic response by the agents to the different expected costs of the sanction confirm only partially the hypothesis in the sense that the differences are less than proportional to the differences to the expected costs for the regulated agents. Further, when the results here are compared to exact replications of the experiments with people in the field that face these kinds of dilemmas, the differences in individual behavior across levels of expected costs virtually vanish. It is suggested here that along with the material costs for violators, the individuals may incorporate additional elements in their cognitive process which are consistent with findings from experimental and behavioral economics studies.

Daron Acemoglu, David Laibson , John A List

Cited by*: 4 Downloads*: 13

Internet-based educational resources are proliferating rapidly. One concern associated with these (potentially transformative) technological changes is that they will be disequalizing - as many technologies of the last several decades have been - creating superstar teachers and a winner-take-all education system. These important concerns notwithstanding, we contend that a major impact of web-based educational technologies will be the democratization of education: educational resources will be more equally distributed, and lower-skilled teachers will benefit. At the root of our results is the observation that skilled lecturers can only exploit their comparative advantage if other teachers complement those lectures with face-to-face instruction. This complementarity will increase the quantity and quality of face-to-face teaching services, potentially increasing the marginal product and wages of lower-skill teachers.