25 January 2013

Carbon Taxes and Technological Innovation

Using data from the European Patent Office's World Patent Statistical database, Philippe Aghion, Antoine Dechezleprêtre, David Hemous, Ralf Martin, and John Van Reenen examine the nature of patents in the auto industry across 80 countries over several decades. They find that higher tax-inclusive fuel prices induce firms to redirect technical change towards “clean” innovation (such as perfecting hybrid vehicle engines) and away from “dirty” innovation (such as producing better internal combustion engines). They also find that a firm's propensity to innovate in a particular technology is increased by its past exposure to that technology.

24 January 2013

The Gorbachev Anti-Alcohol Campaign and Russia's Mortality Crisis

Jay Bhattacharya, Christina Gathmann, and Grant Miller use archival sources to create a new dataset covering 77 Russian oblasts during the period 1970 to 2000. They find that the end of 1985-1988 Gorbachev Anti-Alcohol Campaign explains a large share of the 40 percent surge in deaths in Russia between 1990 and 1994. Because the increases in mortality occurred primarily among alcohol-related causes and among working-age men (the heaviest drinkers), these researchers suggest that it was this policy change, rather than Russia’s transition to capitalism and democracy, that was a central cause of the Russian mortality crisis.

23 January 2013

Where are the High-Achieving, Low Income Students?

Caroline Hoxby and Chris Avery analyze data from the ACT and the College Board on everyone in the high school graduating class of 2008 who took either the ACT or the SAT I. They find that most of the very high-achieving, low income students do not apply to any selective college or university, even though these institutions might cost them less, net of financial aid, than many two-year and non-selective four-year institutions. When the researchers look more closely at this group of students, they find that they tend to come from school districts that are too small to support selective public high schools, that they are not surrounded by a critical mass of fellow high achievers, and that they are unlikely to have a teacher or an older schoolmate who attended a selective college.

22 January 2013

Removing Financial Barriers to Organ and Bone Marrow Donation

Several U. S. states passed legislation at different times between 1989 and 2009 that provided leave from work to organ and bone marrow donors and/or tax benefits for organ and bone marrow donations (to the donors and their employers). Nicola Lacetera, Mario Macis, and Sarah Stith find that this legislation did not have a significant impact on the quantity of organs donated. However, they find that the leave legislation did increase bone marrow donations. This suggests that such legislation may work to encourage moderately invasive procedures, such as bone marrow donation, but not for riskier and more burdensome procedures, such as organ donation.

18 January 2013

Gasoline Prices, Fuel Economy, and the Energy Paradox

Using data from 86 million transactions at auto dealerships and wholesale auctions between 1999 and 2008, Hunt Allcott and Nathan Wozny find that vehicle prices move as if consumers were indifferent between one dollar in discounted future gas costs and 76 cents in the purchase price of the vehicle. They also find that vehicle markets respond slowly, and with up to a six-month delay, to changes in gasoline prices

17 January 2013

Incentives, Commitments, and Habit Formation in Exercise

Heather Royer, Mark Stehr, and Justin Sydnor report on an experiment conducted with 1,000 employees at the headquarters of a Fortune 500 company. These employees were randomly selected to receive a one-month financial incentive to attend the company’s onsite exercise facility ($10 per visit for up to 3 visits each week). After the initial incentive period, half the group was randomly selected for the opportunity to create a self-funded “commitment contract” -- they could pledge to continue to use the gym over the next 2 months, put as much of their money at stake as they wished, and the money was refunded if they kept the commitment, otherwise it was donated to the United Way. The researchers found that the workers doubled their rate of use of the company gym during the incentive period. The availability of a commitment contract substantially improved the long-run effects of the incentive program, both during the commitment period and beyond.

16 January 2013

Output Spillovers from Fiscal Policy

Alan Auerbach and Yuriy Gorodnichenko document that for a large number of OECD countries, fiscal spillovers -- the effect of one country's fiscal policy on output in another -- are significant in both statistical and economic terms. However, their effect varies tremendously over the business cycle: the spillovers are particularly high in recessions and quite modest in expansions. Fiscal spillovers are increased further when both the recipient and source countries are in recession.

15 January 2013

Gender, Competitiveness, and Career Choices

At the age of 15, secondary school students in the Netherlands must choose one of four study profiles, which vary in how prestigious they are, for their remaining school years. Thomas Buser, Muriel Niederle, and Hessel Oosterbeek find that although boys and girls have similar levels of academic ability, the boys are substantially more likely than girls to choose more prestigious profiles. Competitiveness is as important a predictor of profile choice as gender: up to 23 percent of the gender difference in profile choice can be attributed to gender differences in competitiveness, they find.

14 January 2013

What Makes Annuitization More Appealing?

John Beshears, James Choi, David Laibson, Brigitte Madrian, and Stephen Zeldes analyzed the results of surveys of individuals aged 50 to 75 regarding their views on receiving retirement payouts as annuities versus a lump sum. They found that individuals were more willing to annuitize a fraction of their wealth if they did not have to make an “all or nothing” decision. Given the choice of an annuity, most people chose flat or increasing real payout streams. When the survey highlighted the effects of inflation, the demand for cost-of-living adjustments increased. When questions focused on flexibility, control, and investment risk, the choice of an annuity declined significantly.

11 January 2013

Macroeconomic Performance During Commodity Price Booms and Busts

Luis Felipe Céspedes and Andrés Velasco investigate how major commodity price shocks affect the economies of a large group of commodity-producing nations. They show that commodity price shocks have a significant impact on both output and investment. There is less of an effect on output in economies with more flexible exchange rate regimes. There is more of an impact on investment in economies with less developed financial markets. International reserve accumulation, more stable political systems, and less open capital accounts tend to reduce real exchange rate appreciation in periods of commodity price booms.
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