Papers - All

Sujoy Chakravarty, Carine Sebi, E Somanathan, Emmanuel Theophilus

Cited by*: 0 Downloads*: 7

The public goods problem (Hardin, 1968) either viewed as a problem of extraction or that of contribution has had a long history in the Social Sciences.Our experimental design uses a standard Voluntary Contributions Mechanism (VCM) game with a moderately large group of ten and face-to-face communication. The subjects, who are villagers in the Gori-Ganga Basin of the Central Himalayas, are not re-matched every period.Our results are somewhat different from laboratory experiments using a similar design such as Isaac and Walker (1988a, 1988b). A noteworthy general observation is that even with a relatively low Marginal Per Capita Return (MPCR = 0.2) and a large group we find a steady contribution rate around 55 percent, which diminishes slightly at the end of the session to around 45 percent. We also delve into the demographic characteristics of our subject pool and find that individual contribution to the common pool is determined by gender, age, caste, literacy and history of cooperation in the experiment. However, face-to-face communication is not seen to increase average individual contribution to the common pool.

Andreas Lange, John A List, Michael K Price

Cited by*: 3 Downloads*: 7

The tontine, which is an interesting mixture of group annuity, group life insurance, and lottery, has a peculiar place in economic history. In the seventeenth and eighteenth centuries it played a major role in raising funds to finance public goods in Europe, but today it is rarely encountered outside of a dusty footnote in actuarial course notes or as a means to thicken the plot of a murder mystery. This study provides a formal model of individual contribution decisions under a modern variant of the historical tontine mechanism that is easily implemented by private charities. Our model incorporates desirable properties of the historical tontine to develop a mechanism to fund the private provision of a public good. The tontine-like mechanism we derive is predicted to outperform not only the voluntary contribution mechanism but also another widely used mechanism: charitable lotteries. Our experimental test of the instrument provides some evidence of the beneficial effects associated with implementing tontine-like schemes. We find that the mechanism has particular power in cases where agents are risk-averse or in situations where substantial asymmetries characterize individual preferences for the public good.

Esther Duflo, William Gale, Jeffrey Liebman, Peter Orszag, Emmanuel Saez

Cited by*: 7 Downloads*: 7

This paper analyzes the effects of a large randomized field experiment carried out with H&R Block, offering matching incentives for IRA contributions at the time of tax preparation. About 14,000 H&R Block clients, across 60 offices in predominantly low- and middle-income neighborhoods in St. Louis, were randomly offered a 20 percent match on IRA contributions, a 50 percent match, or no match (the control group). The evaluation generates two main findings. First, higher match rates significantly raise IRA participation and contributions. Take-up rates were 3 percent for the control group, 8 percent in the 20 percent match group, and 14 percent in the 50 percent match group. Average IRA contributions (including non-contributors, excluding the match) for the 20 percent and 50 percent match groups were 4 and 7 times higher than in the control group, respectively. Second, several additional findings are inconsistent with the full information, rational-saver model. In particular, we find much more modest effects on take-up and amounts contributed from the existing Saver's Credit, which provides an effective match for retirement saving contributions through the tax code; we suspect that the differences may reflect the complexity of the Saver's Credit as enacted, and the way in which its effective match is presented. Taken together, our results suggest that the combination of a clear and understandable match for saving, easily accessible savings vehicles, the opportunity to use part of an income tax refund to save, and professional assistance could generate a significant increase in contributions to retirement accounts, including among middle- and low-income households.

John A List, Daniel Rondeau

Cited by*: 8 Downloads*: 7

Evidence suggests that contributions to capital campaigns increase with the value of leadership gifts. We examine the response of subjects to the announcement of leadership gifts and its implied change in the campaign's target. The two effects are partitioned.

Sera Linardi, Tomomi Tanaka

Cited by*: 3 Downloads*: 7

This paper describes a randomized field experiment testing the impact of a savings competition on the behavior of working homeless individuals at a transitional shelter. When monetary prizes were offered for achieving the highest saving rates within a particular month, average savings increased by $80 (a 30% increase) while income and attendance at case management meetings remained unchanged. However, repeating the competition in the following month had no effect because responsive savers selected out of the shelter after the first month. In summary, while competition can increase savings in the short run, its effect may be limited to the intensive margin and may diminish with repetition. Combined with our findings that the strongest determinant of savings is income, it appear that for transitional populations on the economic margin, policies that provide opportunities to increase income may be a more effective first step than saving incentives.

James Andreoni, Michael Callen, Karrar Hussain, Muhammad Yasir Khan, Charles Sprenger

Cited by*: 3 Downloads*: 7

We use structural estimates of time preferences to customize incentives for a sample of polio vaccinators during a series of door-to-door vaccination drives in Pakistan. Our investigation proceeds in three stages. First, we measure time preferences using intertemporal allocations of vaccinations. Second, we derive the mapping between these structural estimates and individually optimal incentives given a specific policy objective. Third, we experimentally evaluate the effect of matching contract terms to individual discounting patterns in a subsequent experiment with the same vaccinators. This exercise provides a test of the specific point predictions given by structural estimates of time preference. We document present bias among vaccinators and find that tailored contracts achieve the intended policy objective of smoothing intertemporal allocations of effort.

Christopher Mann

Cited by*: 1 Downloads*: 7

Survey researchers have long been concerned with the question of whether participation in preelection surveys increases voter turnout. This article presents findings from three large-scale field experiments conducted during the 2002 general election in Maryland, New York, and Pennsylvania. Unlike early studies, which found that participation in preelection surveys increased voter turnout, this study finds no significant effect. The author argues that the rigorous experimental methodology and large sample size in these three experiments should allay concern that survey participation affects turnout.

Tanjim Hossain, John Morgan

Cited by*: 0 Downloads*: 7

We use field and natural experiments in online auctions to study the revenue effect of varying the level and disclosure of shipping charges. Our main findings are (1) disclosure affects revenues-for low shipping charges, a seller is better off disclosing; and (2) increasing shipping charges boosts revenues when these charges are hidden. These results are not explained by changes in the number of bidders.

Mary Kay Gugerty, Michael Kremer

Cited by*: 1 Downloads*: 7

Many argue that organizations of the disadvantaged create positive externalities, and in particular strengthen the position of these groups in society. A natural inference is that these organizations should be subsidized. We argue that the benefits of expanding the operations of these groups must be set against the potential costs of weakening the role of the disadvantaged in these organizations. A prospective, randomized evaluation of a development program targeted at strengthening rural women's groups in western Kenya suggests that the program did not improve group strength or functioning as measured by participation rates, assistance to members, and assistance to other community projects. The funding did, however, change the very characteristics of the groups that made them attractive to funders in the first place. Younger, more educated women and women employed in the formal sector joined the groups, and men and better-educated and wealthier women moved into key leadership positions.

Herrmann Benedikt, Simon Gachter

Cited by*: 15 Downloads*: 7

We report evidence from public goods experiments with and without punishment which we conducted in Russia with 566 urban and rural participants of young and mature age cohorts. Russia is interesting for studying voluntary cooperation because of its long history of collectivism, and a huge urban-rural gap. In contrast to previous experiments we find no cooperation-enhancing effect of punishment. An important reason is that there is substantial spiteful punishment of high contributors in all four subject pools. Thus, spite undermines the scope for self-governance in the sense of high levels of voluntary cooperation that are sustained by sanctioning free riders only.

Paul Dolan, Robert D Metcalfe

Cited by*: 8 Downloads*: 6

There is increasing research on the exogenous impact of descriptive social norms on economic behavior. The research to date has a number of limitations: 1) it has not de-coupled the impact of the norm and the knowledge required to understand how to change behavior based upon it; 2) it has exclusively used offline but not online (i.e. emails) methods; and 3) it has not understood the impact of financial incentives in conjunction with norms. We address these three limitations using two natural field experiments. We find, firstly, that norms change energy behavior over a 15 month treatment period irrespective of whether information is provided or not. We find that social norms reduce consumption by around 6% (0.2 standard deviations). Norms have has their largest impact on the day that information on the social norm is received, and then decreases over time. Secondly, we do not find that social norms work online (even with experienced consumers who are used to online billing) - social norms de- livered online may have very little beneficial effects on reducing energy use. Thirdly, we find that large financial rewards work very well online in reducing consumption, with a 0.35 change in energy consumption over a four month period. Perhaps most interestingly, we find that the large effect of financial incentives is completely removed when information on social norms is added online.

Pieter A Gautier, Bas van der Klaauw

Cited by*: 0 Downloads*: 6

We use data from a promotion campaign of NH-Hoteles to study self-selection of participants in a gift-exchange experiment. The promotion campaign allowed guests to pay any non negative amount of money for a stay in one of 36 hotels in Belgium and the Netherlands. The data allow us to distinguish between `regular guests', who booked prior to the announcement of the promotion campaign and guests who booked after the campaign was announced. During the promotion campaign we varied the posted price of a room that was communicated to the guests. Only the regular guests respond to the exogenous variation in the posted price and they pay substantially more on average. This different behavior cannot be explained by differences in satisfaction or observed compositional differences between both groups. We argue that the promotion campaign mainly attracted individuals who find it relatively unimportant to be viewed of as prosocial.

Justin Krieg, Anya Samek

Cited by*: 1 Downloads*: 6

What happens when charities compete? We begin to answer this question through a laboratory experiment in which subjects play two public goods games simultaneously. We systematically vary the incentives for contributing in one of the games - investigating the effects of recognition, a bonus conditional on contributing, and non-monetary sanctions - and measure the effect on contributions in both games. Monetary incentives in the form of conditional bonuses increase contributions, even when two games are played simultaneously. However, non-monetary incentives such as recognition and sanctions are less effective than in related literature on games played in isolation. Moreover, we find mixed evidence of the spillover effect of treatment on the un-treated games - bonuses increase contributions initially, recognition decreases contributions, and sanctions have no effect.

Macartan Humphreys, William Masters, Martin Sandbu

Cited by*: 6 Downloads*: 6

Despite a widespread trend towards the adoption of increasingly participatory approaches to political decision-making in developing countries there is little or no evidence that these practices in fact return the benefits attributed to them. We present an empirical investigation into one specific worry-that participatory decision processes may be vulnerable to manipulation by elites. We report on a field experiment on the effects of leaders, drawing on a unique nationwide experiment in democratic deliberation in Sao Tome and Principe. In these deliberations, meetings were moderated by discussion leaders who were randomly assigned to run meetings around the country. The randomization procedure provides a rare opportunity to identify the impact of leaders on the outcomes of group deliberations. We find that leadership effects were extremely large, in many cases accounting for over one third of all variation in the outcomes of the national discussions. These results have important implications for the design of such deliberative practices. While the total effect of leadership cannot be assessed, it is possible to observe leadership effects and to correct for variation in outcomes of meetings.

John A List

Cited by*: 4 Downloads*: 6

Walrasian tatonnement has been a fundamental assumption in economics ever since Walras' general equilibrium theory was introduced in 1874. Nearly a century after its introduction, Vernon Smith relaxed the Walrasian tatonnement assumption by showing that neoclassical competitive market theory explains the equilibrating forces in ""double- auction"" markets. I make a next step in this evolution by exploring the predictive power of neoclassical theory in decentralized naturally occurring markets. Using data gathered from two distinct markets--the sports card and collector pin markets--I find a tendency for exchange prices to approach the neoclassical competitive model prediction after a few market periods.

Tim Jeppesen, John A List, Daan van Soest

Cited by*: 5 Downloads*: 6

Empirical tests of the relationship between international competitiveness and the severity of environmental regulations are hampered by the lack of pollution abatement cost data for non-U.S. countries. The theory of the firm suggests that environmental stringency can be measured by the difference between a polluting input's shadow price and its market price. We make a first attempt at quantifying such a measure for two industries located in nine European OECD countries. Overall, we provide (i) a new approach to measure cross-country regulatory differences in that we use a theoretically attractive measure of industry-specific private compliance cost, and (ii) empirical estimates that are an attractive tool for researchers and policymakers who are interested in examining how economic activity is influenced by compliance costs.

John A List, Michael K Price

Cited by*: 3 Downloads*: 6

This study showcases the usefulness of field experiments to the study of environmental and resource economics. Our focus pertains to work related to field experiments in the area of 'behavioral' environmental and resource economics. Within this rubric, we discuss research in two areas: those that inform i) benefit cost analysis and ii) conservation of resources. Within each realm, we show how field experiments have been able to test the relevant theories, provide important parameters to construct new theories, and guide policymakers. We conclude with thoughts on how field experiments can be used to deepen our understanding of important areas within environmental and resource economics.

John A List, Michael Margolis, Jason F Shogren

Cited by*: 8 Downloads*: 6

Evidence suggests the calibration of hypothetical and actual behavior is good-specific. We examine whether clustering commodities into mutual categories can reduce the burden. While we reject a common calibration across sets of commodities, a sport-specific calibration function cannot be rejected.

Amanda Kowalski

Cited by*: 4 Downloads*: 6

I examine treatment effect heterogeneity within an experiment to inform external validity. The local average treatment effect (LATE) gives an average treatment effect for compliers. I bound and estimate average treatment effects for always takers and never takers by extending marginal treatment effect methods. I use these methods to separate selection from treatment effect heterogeneity, generalizing the comparison of OLS to LATE. Applying these methods to the Oregon Health Insurance Experiment, I find that the treatment effect of insurance on emergency room utilization decreases from always takers to compliers to never takers. Previous utilization explains a large share of the treatment effect heterogeneity. Extrapolations show that other expansions could increase or decrease utilization.

Roland Fryer , Steven D Levitt, John A List

Cited by*: 9 Downloads*: 6

This article describes a randomized field experiment in which parents were provided financial incentives to engage in behaviors designed to increase early childhood cognitive and executive function skills through a parent academy. Parents were rewarded for attendance at early childhood sessions, completing homework assignments with their children, and for their child's demonstration of mastery on interim assessments. This intervention had large and statistically significant positive impacts on both cognitive and non-cognitive test scores of Hispanics and Whites, but no impact on Blacks. These differential outcomes across races are not attributable to differences in observable characteristics (e.g. family size, mother's age, mother's education) or to the intensity of engagement with the program. Children with above median (pre-treatment) non cognitive scores accrue the most benefits from treatment.