EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA22811
Ingvild Almås, Orazio Attanasio, Pamela Jervis
{"title":"Reply to: Comment on “Presidential Address: Economics and Measurement: New Measures to Model Decision Making”","authors":"Ingvild Almås, Orazio Attanasio, Pamela Jervis","doi":"10.3982/ECTA22811","DOIUrl":"https://doi.org/10.3982/ECTA22811","url":null,"abstract":"","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"991-993"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141968373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA18554
Sumit Agarwal, John Grigsby, Ali Hortaçsu, Gregor Matvos, Amit Seru, Vincent Yao
{"title":"Searching for Approval","authors":"Sumit Agarwal, John Grigsby, Ali Hortaçsu, Gregor Matvos, Amit Seru, Vincent Yao","doi":"10.3982/ECTA18554","DOIUrl":"10.3982/ECTA18554","url":null,"abstract":"<div>\u0000 <p>This paper theoretically and empirically studies the interaction of search and application approval in credit markets. Risky borrowers internalize the probability that their application is rejected and behave as if they had high search costs. Thus, “overpayment” may be a poor proxy for consumer sophistication since it partly represents rational search in response to rejections. Contrary to standard search models, our model implies (1) endogenous adverse selection through the search and application approval process, (2) a possibly non-monotone or non-decreasing relationship between search and realized interest, default, and application approval rates, and (3) search costs estimated from transaction prices alone are biased. We find support for the model's predictions using a unique data set detailing search behavior of mortgage borrowers. Estimating the model, we find that screening is informative and search is costly. Counterfactual analyses reveal that tightening lending standards and discrimination through application rejection both increase equilibrium interest rates. This increase in realized interest rates is in part due to strategic complementarity in bank rate setting.</p>\u0000 </div>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"1195-1231"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.3982/ECTA18554","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141863687","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA20731
Steven T. Berry, Philip A. Haile
{"title":"Nonparametric Identification of Differentiated Products Demand Using Micro Data","authors":"Steven T. Berry, Philip A. Haile","doi":"10.3982/ECTA20731","DOIUrl":"10.3982/ECTA20731","url":null,"abstract":"<p>We examine identification of differentiated products demand when one has “micro data” linking the characteristics and choices of individual consumers. Our model nests standard specifications featuring rich observed and unobserved consumer heterogeneity as well as product/market-level unobservables that introduce the problem of econometric endogeneity. Previous work establishes identification of such models using market-level data and instruments for all prices and quantities. Micro data provides a panel structure that facilitates richer demand specifications and reduces requirements on both the number and types of instrumental variables. We address identification of demand in the standard case in which nonprice product characteristics are assumed exogenous, but also cover identification of demand elasticities and other key features when these product characteristics are endogenous and not instrumented. We discuss implications of these results for applied work.</p>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"1135-1162"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141863683","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA19959
Augustin Bergeron, Gabriel Tourek, Jonathan L. Weigel
{"title":"The State Capacity Ceiling on Tax Rates: Evidence From Randomized Tax Abatements in the DRC","authors":"Augustin Bergeron, Gabriel Tourek, Jonathan L. Weigel","doi":"10.3982/ECTA19959","DOIUrl":"https://doi.org/10.3982/ECTA19959","url":null,"abstract":"<div>\u0000 <p>This paper investigates how tax rates and tax enforcement jointly impact fiscal capacity in low-income countries. We study a policy experiment in the D.R. Congo that randomly assigned 38,028 property owners to the status quo tax rate or to a rate reduction. This variation in tax liabilities reveals that the status quo rate lies <i>above</i> the revenue-maximizing tax rate (RMTR). Reducing rates by about one-third would maximize government revenue by increasing tax compliance. We then exploit two sources of variation in enforcement—randomized enforcement letters and random assignment of tax collectors—to show that the RMTR increases with enforcement. Including an enforcement message on tax letters or replacing tax collectors in the bottom quartile of enforcement capacity with average collectors would raise the RMTR by about 40%. Tax rates and enforcement are thus complementary levers. Jointly optimizing tax rates and enforcement would lead to 10% higher revenue gains than optimizing them independently. These findings provide experimental evidence that low government enforcement capacity sets a binding ceiling on the revenue-maximizing tax rate in some developing countries, thereby demonstrating the value of increasing tax rates in tandem with enforcement to expand fiscal capacity.</p>\u0000 </div>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"1163-1193"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.3982/ECTA19959","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141968374","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA21470
Navin Kartik, SangMok Lee, Tianhao Liu, Daniel Rappoport
{"title":"Beyond Unbounded Beliefs: How Preferences and Information Interplay in Social Learning","authors":"Navin Kartik, SangMok Lee, Tianhao Liu, Daniel Rappoport","doi":"10.3982/ECTA21470","DOIUrl":"10.3982/ECTA21470","url":null,"abstract":"<p>When does society eventually learn the truth, or take the correct action, via observational learning? In a general model of sequential learning over social networks, we identify a simple condition for learning dubbed <i>excludability</i>. Excludability is a joint property of agents' preferences and their information. We develop two classes of preferences and information that jointly satisfy excludability: (i) for a one-dimensional state, preferences with single-crossing differences and a new informational condition, directionally unbounded beliefs; and (ii) for a multi-dimensional state, intermediate preferences and subexponential location-shift information. These applications exemplify that with multiple states, “unbounded beliefs” is not only unnecessary for learning, but incompatible with familiar informational structures like normal information. Unbounded beliefs demands that a single agent can identify the correct action. Excludability, on the other hand, only requires that a single agent must be able to displace any wrong action, even if she cannot take the correct action.</p>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"1033-1062"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141863682","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA20484
Bridget Hoffmann, Juan Pablo Rud
{"title":"The Unequal Effects of Pollution on Labor Supply","authors":"Bridget Hoffmann, Juan Pablo Rud","doi":"10.3982/ECTA20484","DOIUrl":"10.3982/ECTA20484","url":null,"abstract":"<div>\u0000 <p>We use high-frequency data on fine particulate matter air pollution (PM 2.5) at the locality level to study the effects of high pollution on daily labor supply decisions in the metropolitan area of Mexico City. We document a negative, non-linear relationship between PM 2.5 and same-day labor supply, with strong effects on days with extremely high pollution levels. On these days, the average worker experiences a reduction of around 7.5% of working hours. Workers partially compensate for lost hours by increasing their labor supply on days that follow high-pollution days. We find that low-income workers reduce their labor supply significantly less than high-income workers. Unequal responses to high pollution along other dimensions (job quality, flexibility, gender) matter, but less than income. We provide suggestive evidence that reductions in labor supply due to high pollution are consistent with avoidance behavior.</p>\u0000 </div>","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"1063-1096"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.3982/ECTA20484","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141863684","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA22780
Andrew Caplin
{"title":"A Comment on: “Presidential Address: Economics and Measurement: New Measures to Model Decision Making” by Ingvild Almås, Orazio Attanasio, and Pamela Jervis","authors":"Andrew Caplin","doi":"10.3982/ECTA22780","DOIUrl":"https://doi.org/10.3982/ECTA22780","url":null,"abstract":"","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"979-985"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141967699","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
EconometricaPub Date : 2024-07-30DOI: 10.3982/ECTA22781
Jesse M. Shapiro
{"title":"A Comment on: “Presidential Address: Economics and Measurement: New Measures to Model Decision Making” by Ingvild Almås, Orazio Attanasio, and Pamela Jervis","authors":"Jesse M. Shapiro","doi":"10.3982/ECTA22781","DOIUrl":"https://doi.org/10.3982/ECTA22781","url":null,"abstract":"","PeriodicalId":50556,"journal":{"name":"Econometrica","volume":"92 4","pages":"987-990"},"PeriodicalIF":6.6,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141967700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}