Papers - Natural

Fuhai Hong, Tanjim Hossain, John A List, Migiwa Tanaka

Cited by*: 6 Downloads*: 98

A well-recognized problem in the multitasking literature is that workers might substantially reduce their effort on tasks that produce unobservable outputs as they seek the salient rewards to observable outputs. Since the theory related to multitasking is decades ahead of the empirical evidence, the economic costs of standard incentive schemes under multitasking contexts remain largely unknown. This study provides empirical insights quantifying such effects using a field experiment in Chinese factories. Using more than 2200 data points across 126 workers, we find sharp evidence that workers do trade off the incented output (quantity) at the expense of the non-incented one (quality) as a result of a piece rate bonus scheme. Consistent with our theoretical model, treatment effects are much stronger for workers whose base salary structure is a flat wage compared to those under a piece rate base salary. While the incentives result in a large increase in quantity and a sharp decrease in quality for workers under a flat base salary, they result only in a small increase in quantity without affecting quality for workers under a piece rate base salary.

Gustavo J Bobonis, Edward Miguel, Charu P Sharma

Cited by*: 6 Downloads*: 22

Iron-deficiency anemia is among the world's most widespread health problems, especially for children, but it is rarely studied by economists. This paper evaluates the impact of a health intervention delivering iron supplementation and deworming drugs to 2-6 year old children through an existing pre-school network in the slums of Delhi, India. At baseline 69 percent of sample children were anemic and 30 percent had intestinal worm infections. Sample pre-schools were randomly divided into groups and gradually phased into treatment. Weight increased significantly among assisted children, and pre-school participation rates rose sharply by 5.8 percentage points - a reduction of one-fifth in school absenteeism - in the first five months of the program. Gains are largest in low socio-economic status areas. Year two estimates are similar, but two methodological problems--sample attrition, and the non-random sorting of new child cohorts into treatment groups--complicate interpretation of the later results.

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.

Sally Sadoff, Anya Samek, Charles Sprenger

Cited by*: 6 Downloads*: 40

We conduct a natural field experiment with over 200 customers at a grocery store to investigate dynamic inconsistency and the demand for commitment in food choice. Subjects are invited to allocate and re-allocate food items received as part of a grocery delivery program. We observe substantial dynamic inconsistency, as well as a demand for commitment among a non-negligible number of subjects. Interestingly, individuals who demand commitment are more likely to be dynamically consistent in their prior behavior. This work provides direct evidence of dynamic inconsistency in consumption choices in the field and points towards potential extensions to models of temptation.

Dean S Karlan, Jonathan Zinman

Cited by*: 5 Downloads*: 17

Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about "unproductive," "usurious" lending is fueled by research highlighting behavioral biases that may induce overborrowing. We estimate the impacts of expanding access to consumer credit at a 200% annual percentage rate (APR) using a field experiment and follow-up data collection. The randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes. There is also some evidence that the loans were profitable.

Pascaline Dupas

Cited by*: 5 Downloads*: 10

An information campaign that provided Kenyan teenagers in randomly selected schools with the information that HIV prevalence was much higher among adult men and their partners than among teenage boys led to a 65% decrease in the incidence of pregnancies by adult partners among teenage girls in the treatment group relative to the comparison. This suggests a large reduction in the incidence of unprotected cross-generational sex. The information campaign did not increase pregnancies among teenage couples. These results suggest that the behavioral choices of teenagers are responsive to information on the relative risks of different varieties of a risky activity. Policies that focus only on the elimination of a risky activity and do not address risk reduction strategies may be ignoring a margin on which they can have substantial impact.

Charles Bellemare

Cited by*: 5 Downloads*: 11

We present results from a field experiment testing the gift-exchange hypothesis inside a tree-planting firm paying its workforce incentive contracts. Firm managers told a crew of tree planters they would receive a pay raise for one day as a result of a surplus not attribuable to past planting productivity. We compare planter productivity - the number of trees planted per day - on the day the gift was handed out with productivity on previous and subsequent days of planting on the same block, and thus under similar planting conditions. We find direct evidence that the gift had a significant and positive effect on daily planter productivity, controlling for planter-fixed effects, weather conditions and other random daily shocks. Moreover, reciprocity is the strongest when the relationship between planters and the firm is long term.

Omar Al-Ubaydli, John A List

Cited by*: 5 Downloads*: 89

A commonly held view is that laboratory experiments provide researchers with more "control" than natural field experiments, and that this advantage is to be balanced against the disadvantage that laboratory experiments are less generalizable. This paper presents a simple model that explores circumstances under which natural field experiments provide researchers with more control than laboratory experiments afford. This stems from the covertness of natural field experiments: laboratory experiments provide researchers with a high degree of control in the environment which participants agree to be experimental subjects. When participants systematically opt out of laboratory experiments, the researcher's ability to manipulate certain variables is limited. In contrast, natural field experiments bypass the participation decision altogether and allow for a potentially more diverse participant pool within the market of interest. We show one particular case where such selection is invaluable: when treatment effects interact with participant characteristics.

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.

Alan S Gerber, Donald P Green

Cited by*: 5 Downloads*: 30

No abstract available

John A List

Cited by*: 5 Downloads*: 0

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.

David H Reiley, Anya Samek

Cited by*: 5 Downloads*: 47

Direct mail fundraisers commonly provide a set of suggested donation amounts to potential donors, in addition to the option of writing in an amount. Yet little systematic evidence exists about the causal effects of suggested donation amounts on giving behavior. To this end, we conducted a field experiment on a direct mail solicitation to nearly 15,000 members of three public broadcasting stations. We varied (1) the vector of suggested amounts, and (2) whether the suggested amounts were fixed or varied as a proportion of the individual's previous donation. We find that increasing the vector of suggested amounts by about 20 percent statistically significantly reduces the overall probability of giving by about 15 percent. The overall impact on revenue is less clear, but appears to be somewhat negative. Higher suggested amounts also lead to write in amounts representing a greater proportion of donations. We attribute our result to the apparent cognitive cost of writing in a preferred amount that differs from a suggested amount. A second field experiment, in which we alter only one of the suggested amounts, gives evidence consistent with that theory and with the idea that donors prefer to give round numbers, as we see donors significantly more likely to give amounts of $90 or higher when suggested $100 versus $95.

Dean S Karlan, Jonathan Zinman

Cited by*: 4 Downloads*: 16

The price elasticity of demand for credit has major implications for macroeconomics, finance, and development. We present estimates of this parameter derived from a randomized trial. The experiment was implemented by a consumer microfinance lender in South Africa and identifies demand curves that, while downward-sloping with respect to price, are flatter than recent estimates in both developing and developed countries throughout most of a wide price range. However, demand becomes highly price sensitive at higher-than-normal rates. We discuss several interpretations of this kink and present some related evidence. We also find that loan size is far more responsive to changes in loan maturity than to changes in interest rate. This pattern is more pronounced among lower income individuals, a comparative static that has been observed in the United States as well and is consistent with liquidity constraints that decrease with income.

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

Cited by*: 4 Downloads*: 0

Several recent laboratory experiments have shown that the use of explicit incentives--such as conditional rewards and punishment--entail considerable "hidden" costs. The costs are hidden in the sense that they escape our attention if our reasoning is based on the assumption that people are exclusively self-interested. This study represents a first attempt to explore whether, and to what extent, such considerations affect equilibrium outcomes in the field. Using data gathered from nearly 3000 households, we find little support for the negative consequences of control in naturally-occurring labor markets. In fact, even though we find evidence that workers are reciprocal, we find that worker effort is maximized when we use conditional--not unconditional--rewards to incent workers.

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.

John A List

Cited by*: 4 Downloads*: 3

This study examines data drawn from the game show Friend or Foe?, which is similar to the classic prisoner's dilemma tale: partnerships are endogenously determined, players work together to earn money, after which, they play a one-shot prisoner's dilemma game over large stakes: varying from $200 to (potentially) more than $22,000. If one were to conduct such an experiment in the laboratory, the cost to gather the data would be well over $350,000. The data reveal several interesting insights; perhaps most provocatively, they suggest that even though the game is played in front of an audience of millions of viewers, there is some evidence consistent with a model of discrimination. The observed patterns of social discrimination are unanticipated, however. For example, there is evidence consistent with the notion that certain populations have a general "distaste" for older participants.

Alan S Gerber, Donald P Green

Cited by*: 4 Downloads*: 60

Prior to the November 7, 2000 election, randomized voter mobilization experiments were conducted in the vicinity of college campuses in New York State, Colorado, and Oregon. Lists of registered people under the age of 30 were randomly assigned to treatment and control groups. A few days before Election Day, the treatment group received a phone call or face-to-face contact from Youth Vote 2000, a nonpartisan coalition of student and community organizations, encouraging them to vote.

Il-Horn Hann, Kai-Lung Hui, Yee-Lin Lai, S.Y.T. Lee, I.P.L. PNG

Cited by*: 4 Downloads*: 4

Using a field experiment, we investigate whether, and if so, how spam is targeted. By comparing the spam rates among a set of synthetic email accounts, we find that spam is targeted to clients of particular email providers, users who declared interest in particular products or services, and consumer segments that are relatively more likely to make online purchases.

Orana Bandiera, Iwan Barankay, Imran Rasul

Cited by*: 4 Downloads*: 14

We document the establishment and evolution of a cooperative norm among workers using evidence from a natural field experiment on a leading UK farm. Workers are paid according to a relative incentive scheme under which increasing individual effort raises a worker's own pay but imposes a negative externality on the pay of all co-workers, thus creating a rationale for cooperation. As a counterfactual, we analyze worker behavior when workers are paid piece rates and thus have no incentive to cooperate. We find that workers cooperate more as their exposure to the relative incentive scheme increases. We also find that individual and group exposure are substitutes, namely workers who work alongside colleagues with higher exposure cooperate more. Shocks to the workforce in the form of new worker arrivals disrupt cooperation in the short term but are then quickly integrated into the norm. Individual exposure, group exposure, and the arrival of new workers have no effect on productivity when workers and paid piece rates and there is no incentive to cooperate.

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.