Center for Economic and Social Research
University of Southern California
635 Downey Way
Los Angeles, CA 90089
Institutional Affiliation: University of Southern California
NBER Working Papers and Publications
|September 2019||Misfortune and Mistake: The Financial Conditions and Decision-making Ability of High-cost Loan Borrowers|
with Arna Olafsson, Dan Silverman: w26328
The appropriateness of many high-cost loan regulations depends on whether demand is driven by financial conditions (“misfortunes”) or imperfect decisions (“mistakes”). Bank records from Iceland show borrowers are especially illiquid just before getting a loan, but that some spend the loans disproportionately on inessential items. Borrowers exhibit lower decision-making ability (DMA) in linked choice experiments: 53% of loan dollars go to the bottom 20% of the DMA distribution. Standard determinants of demand do not explain this relationship, which is also mirrored by the relationship between DMA and an unambiguous “mistake.” Both misfortune and mistake thus appear to drive demand.
|July 2019||Complexity and Sophistication|
with Dan Silverman: w26036
Many financial situations present individuals with simple alternatives to solving complex problems. Are individuals sophisticated; do they know when they are better off opting out of complexity? We tested complexity's effects and evaluated sophistication in a large and diverse sample. We randomly assigned both complexity to portfolio problems and the offer of a simple alternative to portfolio choice. The less skilled opt out more often under complexity and thus earn lower returns, often from dominated choices. Estimated with a novel identification strategy, the structural parameters of a rational inattention model are, nevertheless, consistent with substantial sophistication. Substantial fractions of the money lost by opting out can be justified by attention cost savings.
|May 2019||Distributional Effects of Education on Health|
with Silvia H. Barcellos, Patrick Turley: w25898
This paper studies distributional effects of education on health. In 1972, England, Scotland, and Wales raised their minimum school-leaving age from 15 to 16 for students born after 9/1/1957. Using a regression discontinuity design and objective health measures for 0.27 million individuals, we find that education reduced body size and increased blood pressure in middle age. The reduction in body size was concentrated at the upper tail of the distribution with a 7.5 percentage point reduction in obesity. The increase in blood pressure was concentrated at the lower tail of the distribution with no effect on stage 2 hypertension.
|January 2012||Child Gender And Parental Investments In India: Are Boys And Girls Treated Differently?|
with Silvia H. Barcellos, Adriana Lleras-Muney: w17781
Although previous research has not always found that boys and girls are treated differently in rural India, son-biased stopping rules imply that estimates of the effect of gender on parental investments are likely to be biased because girls systematically end up in larger families. We propose a novel identification strategy for overcoming this bias. We document that boys receive significantly more childcare time than girls. In addition boys are more likely to be breastfed longer, and to be given vaccinations and vitamin supplementation. We then present suggestive evidence that the differential treatment of boys is neither due to their greater needs nor to the effect of anticipated family size.
“Child gender and Parental Investments in India: Are boys and Girls Treated Differently?” forthcoming, American Economic Journal: Applied Economics. (joint with Silvia H. Barcellos and Leandro Carvalho) citation courtesy of