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A variety of real-world situations take the form of repeated principal-agent problems with binary evaluation. I evaluate the principal's optimal evaluation effort and quality threshold for acceptance in the setting of dynamic agency with binary evaluation, focusing specifically on the evaluation by a top academic journal of papers submitted by economists. In the baseline model, the journal should statistically discriminate in favour of high-status economists, by setting an acceptance threshold that declines with their prior estimate of the economist's quality, while evaluation effort should likely increase with perceived author quality, as this provides incentives for authors to exert more effort, which is particularly valuable from the highest-quality authors. However, if a first good publication is more valuable than subsequent publications by the same economist, acceptance thresholds will tend to increase after publication success, relative to the threshold that would have followed a rejection. • Considers repeated principal-agent problem with binary evaluation. • Specifically, evaluation by a top academic journal of papers submitted by economists. • Journal should statistically discriminate in favour of high-status economists. • Acceptance threshold declines with prior estimate of economist's quality. • But threshold could increase after publication if first publication is most valuable. [ABSTRACT FROM AUTHOR]

Keywords Tax evasion; Socio-economic networks; Game theory Abstract This paper builds on recent insights from network theory and on the rich dataset made available by the Panama Papers in order to investigate the micro-economic dynamics of tax-evasion. We model offshore financial entities documented in the Panama Papers as links between jurisdictions in the global network of tax evasion. A quantitative analysis shows that the resulting network, far from being a random collection of bilateral links, has key features of complex networks such as a core-periphery structure and a fat-tail degree distribution. We argue that these structural features imply that policy must adopt a systemic perspective to mitigate tax evasion. We offer three sets of insights from this perspective. First, we identify through centrality measures tax havens that ought to be priority policy targets. Second, we show that efficient tax treaties must contain exchange information clauses and link tax-havens to non-haven jurisdictions. Third, we show that the optimal deterrence strategies for a social-planner facing a strategic tax-evader in a Stackelberg competition can be characterized using the notion of Bonacich centrality. Author Affiliation: (a) Ca Foscari University of Venice and Paris 1 Pantheon-Sorbonne, France (b) Paris School of Economics and Paris 1 Pantheon-Sorbonne, France * Corresponding author. Article History: Received 3 November 2020; Revised 10 January 2022; Accepted 26 March 2022 (footnote)[white star] This project has received funding from the ITN ExSIDE European Union's Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 721846 and from the ITN EPOC European Union's Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 956107. Byline: Garcia Alvarado Fernando [fernando.garcia@unive.it] (a), Mandel Antoine [antoine.mandel@univ-paris1.fr] (*,b)

This paper uses machine learning approaches to predict the association between traffic volume, air pollution, and meteorological conditions. A key focus is on the interaction between these factors. The paper does this using hourly traffic volume, N O x , P M 2.5 , and weather data for Oslo, Norway. I considered a total of six datasets of the 2019 whole-year data to verify the prediction accuracy of the models. I find that the autoregressive integrated moving average model with exogenous input variables, and the autoregressive moving average dynamic linear model outperform the machine learning models in predicting air pollution. At the same time, I also explored the effect of sampling weather subsets on prediction accuracy. Finally, my study makes optimal policy recommendations for reducing air pollution from traffic volume, after considering the interaction and lagged effects of meteorology, time variables, traffic, and air pollution. [ABSTRACT FROM AUTHOR]

We investigate the optimal design of incentives when agents exhibit reference dependence. The theoretical framework of this paper incorporates the most prominent accounts of reference-dependent preferences and the most frequently used reference point rules. Such a general treatment of preferences allows us to characterize sufficient conditions on preference for the optimality of bonuses. We find that the optimal contract must include a bonus when agents suffer from loss aversion or exhibit sufficiently strong diminishing sensitivity. Moreover, we show that such a result holds when the reference point is either exogenous or deterministic. This paper provides a rationale for incentive schemes including bonuses grounded in preference. [ABSTRACT FROM AUTHOR]

This paper brings novel insights into group coordination and price dynamics in complex environments. We implement an overlapping-generation model in the lab, where the output dynamics is given by the well-known chaotic quadratic map. This model structure allows us to study previously unexplored parameter regions where the perfect-foresight dynamics exhibits chaotic dynamics. This paper highlights three key findings. First, the price converges to the simplest equilibria, namely the monetary steady state or the two-cycle, in all markets. Second, we document a novel and intriguing finding: we observe a non-monotonicity of the behavior when complexity increases. Convergence to the two-cycle occurs for the intermediate parameter range, while both the extreme scenarios of a simple stable two-cycle and highly non-linear dynamics (with chaos) lead to coordination on the steady state in the lab. All indicators of coordination and convergence significantly exhibit this non-monotonic relationship in the learning-to-forecast experiments and this non-monotonicity persists in the learning-to-optimize design. Third, convergence in the learning-to-optimize experiment is more challenging to achieve: coordination on the two-cycle is never observed, although the two-cycle Pareto-dominates the steady state in our design. [ABSTRACT FROM AUTHOR]

This paper develops a theoretical framework to think about employees' effort choices, and applies this framework to assess the ability of existing experimental designs to identify the effect of pay inequality on worker effort. The analysis shows that failure to control for a number of confounds—such as reciprocity towards the employer in multi-lateral gift-exchange games (vertical fairness), or the incentive to increase effort when feeling underpaid under piece rates (income targeting)—may lead to inaccurate interpretation of evidence of treatment effects. In light of these findings, the paper provides a set of recommendations on how to improve identification in the design of controlled experiments in the future. • We develop a model to study employees' effort choices in experiments. • We formally assess the design of experiments on the effect of pay inequality on effort. • We find a number of confounds that may impair identification of treatment effects. • Confounds include vertical fairness, income targeting, repeated interactions, procedural fairness. • A set of recommendations to improve identification in experiments is provided. [ABSTRACT FROM AUTHOR]

• The paper analyzes long-term impacts of electoral violence on health and education. • Areas exposed to violence in Kenya suffer inflation and fall in annual consumption. • Children and adolescents exposed to violence have stunted height as adults. • The sons of those exposed to violence during growing age also have stunted growth. • No long-term impact on education is found as violence peaks during school holidays. This paper examines whether prenatal, childhood, and teenage exposure to electoral violence has any long-term effects on height and human capital in Kenya. First, using the difference-in-difference estimator, we show that areas impacted by electoral violence see increases in local food prices and a decrease in annual nightlight, suggesting important local consumption shocks. We then identify people exposed to such violence using a nationally representative survey and take advantage of the temporal and spatial variation of electoral violence in Kenya between 1992 and 2013. Using coarsened exact matching, we find that exposure to electoral violence between prenatal and the age of sixteen reduces adult height. Previous research has demonstrated that protracted, large-scale armed conflicts can cause significant nutritional shocks and pass down stunting effects to descendants. In line with these studies, we find that the low-scale but recurrent electoral violence in Kenya has impacted the height-for-age of children whose parents were exposed to such violence while they were growing up. Only boys exhibit this intergenerational effect, possibly due to their increased susceptibility to malnutrition and stunting in Sub-Saharan Africa. The fact that most electoral violence in Kenya occurs over the school holidays may help explain why, in contrast to previous studies on large-scale conflicts, childhood exposure to electoral violence has no lasting impact on educational attainment. [ABSTRACT FROM AUTHOR]

This paper studies the effects of privatization on establishments/plants operating in Finland's manufacturing sector during 1988-2012, concentrating on operational efficiency (sales/ employment). Finland's privatizations allow considering a quasi-experimental design. Therefore, the paper utilizes standard and generalized event-study designs using a control group matched from similar private establishments. Additionally to the event where state ownership drops below 50 percent, the paper studies whether any reductions in state share affect productivity. The results suggest that privatization increases productivity due to a decrease in employment. • Privatization seems to have increased the productivity of manufacturing establishments in Finland. • The generalized event study approach suggests that clear reductions in state share raise productivity. • Productivity seems to rise because employment has decreased after privatization. [ABSTRACT FROM AUTHOR]

• The process of automation could hinder political trust in government. • The impact results from unemployment, higher down-side risk and lower group participation. • The performance-based legitimacy structure in a developmental state may hinder its political legitimacy when promoting development. • The government should focus more on citizens' trust when pursuing technological development. • Social security is crucial for governance faced with fast technological advancement. The side effects of automation on the economy have been discussed frequently, but little is known regarding its political consequences. This paper examines the causal effect that automation induces on political costs for the local government. By combining the national individual-level panel data of political trust with the prefecture-level robot exposure rate in China, we find that the development of automation would reduce individuals' political trust in the Chinese local government. Furthermore, we explore the channels through which the automation process could affect political trust, namely the risk of unemployment, intensified pessimism about local government, higher downside risk, and declining organization participation. This paper provides empirical evidence for the impact of automation and the source of political legitimacy, emphasizing the crucial role of governments in coping with technological progress and making good use of endogenous creative destruction. [Display omitted] [ABSTRACT FROM AUTHOR]

For papers to have scientific impact, they need to impress our peers in their role as referees, journal editors, and members of conference committees. Does better writing help our papers make it past these gatekeepers? In this study, we estimate the effect of writing quality by comparing how 30 economists judge the quality of papers written by PhD students in economics. Each economist judged five papers in their original version and five different papers that had been language edited. No economist saw both versions of the same paper. Our results show that writing matters. Compared to the original versions, economists judge edited versions as higher quality; they are more likely to accept edited versions for a conference; and they believe that edited versions have a better chance of being accepted at a good journal. [ABSTRACT FROM AUTHOR]

This paper examines how closely aggregate macroeconomic indices such as the Gross Domestic Product (GDP) and market price volatility indices are associated with social welfare when heterogeneous beliefs are present. While it is widely recognised that the GDP fails to capture distributional effects, volatility measures are often argued to supplement the GDP with this regard. Although heterogeneous beliefs are known to be capable of generating large economic and/or price fluctuations, it is not straightforward whether volatility is closely associated with welfare when heterogeneous beliefs are present. By constructing a simulation model of a financial economy with production and credit constraints that allows for heterogeneous beliefs, we show that major discrepancies between aggregate measures, including volatility measures, and ex post welfare are not the exception, but the rule. Also, the paper analyses the mechanism that causes the discrepancies. Our results strongly suggest welfare be measured by observing the distribution of realised consumption across agents and over time — in particular, its lower tail. In short, macroeconomic indices may well easily become a fool's gold. [ABSTRACT FROM AUTHOR]

Two important risks faced by many smallholder farmers in Sub-Saharan Africa are erratic weather patterns and insecure land tenure. It is likely these risks will increasingly interact as projections of more erratic weather make small-scale farming more difficult and demand for rural land grows. This paper asks how farmers in Western Tanzania view these compound risks and the influence this has on levels of investment in adaptive agricultural technologies and the demand for land certification in a lab-in-the-field setting. Presenting novel data from a series of framed decision tasks linked to a household survey, this paper explores the relationship between individual risk preferences, adaptive investment and the demand for land certification from a group of 645 rural households in Kigoma, Tanzania. While adaptive investment increases with weather related risk, we find it responds negatively to land tenure risk. Individual risk preferences and past experiences of land disputes play significant roles in adaptive investment. Demand for land certification is high, investment increases significantly after certification, especially for risk-averse individuals. • In a lab-in-the-field setting, adaptive investment responds strongly to land tenure and weather risk. • Investment in adaptive technologies is much lower than under expected income maximization. • Participants show high demand for land certification, but levels of willingness to pay are lower than current costs. • Risk-averse individuals show larger increases in investment after obtaining land certification. [ABSTRACT FROM AUTHOR]

The Rentier State Hypothesis states that taxation promotes government accountability. The argument is that citizens demand more accountability for spending of tax revenue than for spending of windfall revenue (e.g., natural resource revenue and aid). This paper presents causal evidence from a between-subject experiment that tests the effect of taxation on demand for accountability. To investigate the underlying mechanisms of the effect, the design focuses on two main features that distinguish tax from windfall revenue: Tax revenue is produced by citizens' work and has been in their possession before it is collected as tax. The main finding is that taxation causes a higher demand for accountability when both features of taxation are present, consistent with the Rentier State Hypothesis. The paper sheds light on the political economy of government revenues, and contributes to our understanding of how features of the tax system shape behavior. [ABSTRACT FROM AUTHOR]

This paper examines monetary and fiscal policies to prevent consumers' present bias by implementing a benchmark exponential discounting allocation in a hyperbolic discounting economy. We analyze classical money-in-the-utility-function models and establish that a monetary policy alone cannot curb behavioral mistakes. Instead, it needs to be combined with either a consumption tax or capital tax. If the government uses consumption (capital) tax, the monetary policy should be more expansionary (contractionary) compared to the benchmark exponential discounting economy. In the calibration, we confirm that a paternalistic policy intervention generates significant welfare gains based on both true (long-run) and choice (short-run) utility. • This paper examines monetary and fiscal policies to correct consumers' present bias. • Paternalistic policies aim to achieve an exponential discounting allocation. • Coordination of monetary and fiscal policies is crucial to curb behavioral mistakes. • When employing consumption (capital) tax, an expansionary (contractionary) monetary policy is required. • Policy interventions lead to substantial welfare gains by addressing undersaving concerns. [ABSTRACT FROM AUTHOR]

This paper shows the advantages of an individual-level approach when estimating undeclared work using the labor input method. It shows the shortcomings of an aggregated approach, namely assuming that all workers with missing administrative data are working fully undeclared, being unable to adequately account for overtime, extreme values and not being able to detect and correct for errors in the administrative data. The paper illustrates how these shortcomings can be overcome to a large extent by using an individual-level linked dataset and yield results that are useful both for researchers and for tax authorities. It shows that the method can estimate undeclared work for the self-employed, as well as show seasonal and industry differences in undeclared labor. Denmark is used as a case study, and unlike other papers utilizing individual-level data, this paper provides detailed instruction for how a similar approach can be applied in other countries with Labor Force Survey data. The paper shows how an individual-level approach can yield results that are useful for example for tax administrations' monitoring of undeclared work across sectors. The study uses Danish Labor Force Survey data linked with individual-level tax data, yielding estimates of undeclared work that are in line with past Danish studies of related aspects of undeclared work, namely that approximately 29% of workers have undeclared hours, 25% of wage earners and 37–39% of non-wage earners, and that the value of these hours is close to 2% of the Danish GDP. [ABSTRACT FROM AUTHOR]

• This paper investigates the predictive ability of oil shocks for international stock market volatility based on a data-rich environment. • We further investigate the predictive ability of the best-performing oil shock by comparing its performance with that of traditional macroeconomic variables and uncertainty. • The LASSO method and regime-switching model can jointly deliver incremental improvement in forecasting accuracy. • This paper tries to provide new evidence for international stock market volatility prediction. This paper investigates the predictive ability of oil shocks for international stock market volatility based on a data-rich environment. Our empirical analysis shows that multiple oil shock measures contain valuable information for predicting stock market volatility, in addition to traditional economic variables and uncertainty indices. Moreover, based on the group 7 countries, the least absolute shrinkage and selection operator method and regime-switching model jointly deliver incremental improvement in forecasting accuracy from both statistical and economic perspectives. These results are confirmed by robustness checks under different business cycles and market conditions, including the COVID-19 pandemic. [ABSTRACT FROM AUTHOR]

I examine whether investors revise their beliefs about a stock's risk due to an increase in the stock's volatility. This revision makes loss-averse investors more willing to sell a riskier stock with a paper gain as the likelihood of having to sell it at a loss later increases. An analysis of a large Finnish dataset on the holdings and trades of individual investors yields empirical support for this prediction: a one standard deviation increase in volatility is associated with an 11% increase in the disposition effect. The effect primarily emerges from investors' increased propensity to sell stocks with small paper gains. [ABSTRACT FROM AUTHOR]

This paper reconsiders the flattening of the Phillips curve that has taken place over the last twenty-five years, together with the recent claim that a wage-price spiral could ignite an inflationary process. The two aspects are interrelated. The time-variation nature of the parameters plays a fundamental role in feeding a process of instability that may affect the reappearance of inflationary episodes. This paper first examines the extent of the U.S. Phillips curve flattening and nonlinearity by comparing the results of different econometric specifications and models. Based on these findings, the use of a regime-switching device, particularly studied by Richard Day, is proposed and applied to a Harrod–Minsky macro model. Three results are worth mentioning. The detection of nonlinearities in the U.S. Phillips curve leading to breaks in the curve; the ability of the model to generate robust bounded fluctuations, in which both Phillips curve loops and distributive loops can arise; the presence of both wage-led and profit-led distributive loops in the same model with different combinations of real and monetary parameters that can generate complex dynamics. [ABSTRACT FROM AUTHOR]

Ludwig von Mises produced an impossibility theorem indicating that economic calculation in the absence of market prices was impossible. This gave rise to the 'socialist calculation debate' in the first half of the twentieth century. This paper makes use of the insights of that debate to shed light on other situations where decision makers are required to allocate resources in areas where there are no market prices. A pertinent example would be most corporate social responsibility programs. In the absence of market prices local information cannot be communicated to decision makers. The paper further argues that blockchain technology can create the institutional environment for markets to emerge and consequently overcome the problem of missing prices. [ABSTRACT FROM AUTHOR]

• The study focuses on the nexus between bilingual education and child labor. • Relationship between bilingual education and child labor is conceptually ambiguous. • Study exploits an education program for indigenous children in Peru. • It uses a difference-in-difference approach. • Bilingual education lowers child labor. This paper investigates the effect of bilingual education reform in Peru on child labor. The reform aimed to improve access to schooling for indigenous children in rural areas with greater integration of education providers and the delivery of lessons and material in vernacular indigenous languages. The core specifications use child-level panel data from the Young Lives Study and a two-way fixed effects difference-in-difference approach to test the causal effect of the program on child labor. The results show evidence to suggest that access to bilingual education has a negative and statistically significant effect on the extensive margin of child labor, with some specifications showing consistent results for its intensive margin counterpart. The preferred estimates are sizeable, with some specifications showing a decrease in the likelihood that an indigenous child enters child labor by between 12 and 18 percentage points. The findings are robust to several specifications including randomized inference techniques, synthetic difference-in-difference, and placebo tests. The paper also shows that concurrent policies, including Peru's conditional cash transfer program, are unlikely drivers of the core results. The paper's findings also suggest that the program resulted in greater inputs (i.e., time) into schooling and improved outcomes of education for indigenous children. [ABSTRACT FROM AUTHOR]

• The EEMPW significantly curbs firms' hypocritical greenwashing behaviors. • Firms in cleaner production industries, highly-developed green finance regions are more restrained in greenwashing. • Firms in highly environmentally regulated areas, and state-owned firms are more restrained in greenwashing. • Financially constrained firms reduce their likelihood of greenwashing behavior by compressing costs, and facilitating green innovation behaviors. To address ecological, climate and environmental issues in sustainable growth, local ecological environmental monitoring power withdrawal (EEMPW) by the Chinese State Council has been implemented since 2015. This paper aims to comprehensively investigate how the centralization of national environmental quality monitoring policy via the EEMPW affects corporate greenwashing behavior, and evaluate the reacting mechanisms. The empirical findings derived by the continuous difference-in-differences models show that the EEMPW significantly curbs firms' hypocritical greenwashing behaviors, and by increasing financial constraint level, the greenwashing behaviors can be significantly reduced. This paper finds that firms in cleaner production industries, firms in regions with highly developed green finance, firms in highly environmentally regulated areas, and state-owned enterprises are more restrained in greenwashing. Furthermore, our mechanism analyses show that financially constrained firms reduce their likelihood of greenwashing behavior by compressing management and financial costs, and facilitating green innovation efficiency behaviors. Our findings provide suggestions for curbing greenwashing behaviors and for improving the efficiency of the government regulation of ecological, climate and environmental targets in economic growth. [ABSTRACT FROM AUTHOR]

Reanalyses of empirical studies and replications in new contexts are important for scientific progress. Journals in economics increasingly require authors to provide data and code alongside published papers, but how much does the economics profession actually replicate? This paper summarizes existing replication definitions and reviews how much economists replicate other scholars' work. We argue that in order to counter incentive problems potentially leading to a replication crisis, replications in the spirit of Merton's 'organized skepticism' are needed – what we call 'policing replications'. We review leading economics journals to show that policing replications are rare and conclude that more incentives to replicate are needed to reap the fruits of rising transparency standards. [ABSTRACT FROM AUTHOR]

This paper examines whether a forced displacement of an ethnic group can lead to long-run changes to their spatial distribution and whether this shock can also lead to changes in where new migrants settle. I use the Canadian government's internment of Japanese Canadians during World War II, as well as their post-war forced resettlement, as a natural experiment. I find that the policy led to dramatic resettlement patterns; areas where Japanese Canadians were removed from had far fewer Japanese Canadians after World War II, with this effect persisting for decades. Despite these displacement patterns, I find that both the pre-war and post-war settlement patterns drive where new Japanese migrants settle within Canada, suggesting that the disruption of the connections and networks formed by Japanese migrants before World War II were not fully dismantled by the Canadian government's wartime policies. Reinforcing this mechanism, I show using Facebook's social connectedness data that Japanese population shares from both 1931 and 1951 predict whether a Canadian Census Division is more socially connected with Japan today. The results from this paper show that, despite Canada's forced dispersal of its Japanese population across the country, networks and forces that connect Census Divisions to Japan and draw in new migrants continued to persist. [ABSTRACT FROM AUTHOR]

The paper studies the effect of politicians' education levels on government efficiency. Using data on Norwegian local government, the paper measures efficiency by DEA-productivity indicators and comprehensive indicators of service production. The identification of causal effects exploits close (within-list) elections to design an instrumental variable for council shares with higher education. Consistent with survey data, the estimates show that better-educated politicians induce higher levels of efficiency, particularly for old-age care services. A similar empirical strategy indicates that political experience has small efficiency effects. Educational misrepresentation has modest effects on fiscal allocations and is mostly canceled out by the efficiency gains. [ABSTRACT FROM AUTHOR]

This paper studies the effect of trust on bank lending using a sample of commercial banks in 34 countries around the world. We distinguish between two forms of trust: In-group trust, which we define as the trust in people we know, and Out-group trust, which we define as the trust in people we meet for the first time. We find that Out-group trust is positively and significantly associated with bank lending. A closer look shows that this effect only holds in countries with relatively lower levels of formal institutional and judicial development. As for In-group trust, we find that its influence on bank lending is dependent on the level of informal lending available in each country. Overall, this paper provides novel evidence on the importance of trust and the different mechanisms by which it influences bank lending around the world. [ABSTRACT FROM AUTHOR]

This paper reveals that male-dominant social networks through alcohol drinking is an important determinant that hinders women ascending onto corporate boards. Specifically, exploiting China's anti-corruption campaign launched in 2012 as an exogenous shock to the business drinking interactions, we find that the policy-induced reduction in alcohol drinking significantly promotes board gender diversity in Chinese listed firms. Further evidence shows that the effect of reduced alcohol drinking on board gender diversity is more pronounced in cities with a higher intensity of anti-corruption investigations and cities with less severe gender discrimination. Our empirical findings support the "old boys' club" hypothesis, suggesting that male-dominant social networks hamper the access of qualified women to higher positions in the workplace. [ABSTRACT FROM AUTHOR]

This paper estimates the effect of religious labor market concentration on clergy wages. Using data on the state-level Herfindahl-Hirschman Index (HHI) from the Association of Religion Data Archives (ARDA), and data on individual clergy wages from the Census/American Community Survey (ACS), I estimate the effect of monopsony in the market for religion on clergy wages for the years 1980 to 2020. Ordinary least squares (OLS) estimates suggest the elasticity of individual clergy wages to the state-level HHI ranges between -0.05 and -0.17. These results are robust to the inclusion of controls for individual clergy characteristics, state-level religious tradition adherent shares, state-level labor market concentration, state- and year-fixed effects, and religious group-specific time trends. Application of the Oster (2019) test for selection on unobservables suggests that OLS understates the negative effect of concentration on clergy wages. The OLS results are supported by an instrumental variables (IV) specification exploiting a Bartik-style instrument interacting historic concentration with national concentration growth. The IV estimates suggest elasticities between -0.11 and -0.19. [ABSTRACT FROM AUTHOR]

This paper empirically investigates the impact of technology adoption on farmers' subjective well-being, as measured by happiness and life satisfaction. A theoretical framework is constructed to link farmers' subjective well-being to technology adoption, with a particular emphasis on mechanization services in agricultural production. By fitting a nationally representative panel dataset – China Family Panel Studies – into an endogenous switching regression model that addresses potential selection bias, we find that technology adoption leads to a 0.194 standard deviation increase in happiness and a 0.065 standard deviation increase in life satisfaction. Further analysis reveals that the effect is more pronounced for individuals engaged in off-farm employment and varies across farm sizes. To underpin the causal effect, we test three plausible mechanisms – absolute income, relative income, and leisure – which are well-documented in the literature for their correlations with happiness and life satisfaction. Our empirical analysis indicates that the adoption of agricultural mechanization services indeed increases the absolute income of farmers and allows them to allocate more time to leisure activities. [ABSTRACT FROM AUTHOR]

Although firms' expectations on future price dynamics are key for monetary policy, we still lack information on the expected effect of the transition to a net-zero economy on future prices. This paper fills this gap in the literature using survey data collected in the first quarter of 2022 on Italian firms' expectations of the impact of the Fit-for-55 - the package established by the EU to achieve its climate targets - on the prices of the goods and services they purchase. First, it documents that almost half of the sample expects that the Fit-for-55 plan will increase their input costs over the short and medium term, while the rest foresee no effect on prices. Then, it shows that firms extrapolate their private experience of high energy prices and shortages in raw materials when forming their expectations. These are salient events that are likely to be recalled relative to the others stored in memory when forming expectatons. In contrast, aggregate information such as energy, oil, and gas prices do not enter the expectations formation process. Finally, a propensity score analysis shows that the expected price impact of the green transition shapes firms' pricing and investment choices such that firms expecting the transition to raise the prices of the inputs they will purchase in the medium term increase (or intend to increase) their selling prices more than the others and are more likely to invest in improving their energy efficiency. [ABSTRACT FROM AUTHOR]

This paper looks into the crucial macroeconomic feedback mechanisms emerging from the interplay among the goods market, the labor market, the financial sector, and monetary policy, particularly in the context of transitioning towards a climate-neutral economy. The investment decisions of firms, pivotal in this interaction, can trigger feedback loops with potentially destabilizing effects, underscoring the critical role of investment within the complex interplay of market and sector dynamics in the macroeconomy. Governmental intervention is highlighted as a key factor in steering the green transition while preserving economic stability. A carbon tax on fossil fuel consumption is proposed as a primary tool for facilitating this green transition. Our investigation employs a disequilibrium model of monetary growth, a la Keynes-Metzler-Goodwin (KMG), incorporating a portfolio perspective across three asset markets - money, bonds, and stocks. This framework allows for an in-depth analysis of how a carbon tax influences real production, inflation, and inequality during the transition. Our findings indicate that imposing a carbon tax on production does not markedly disrupt economic stability, as long as the carbon pricing and its growth rate remain within low bounds. [ABSTRACT FROM AUTHOR]

Conventional wisdom and evidence from democracies suggest that more education should increase voter turnout. This paper revisits this issue by analyzing turnout in China's rural elections. Employing an instrumental variable strategy, I find that more education reduces turnout in rural elections. I provide suggestive evidence that more educated people may face higher opportunity costs of voting, which explain about a quarter of cross-province variation in education-turnout links. I also discuss the role of other factors, including Confucian culture and election stakes. [ABSTRACT FROM AUTHOR]

• Children sleep less on days with longer daylight duration. • Sleeping longer improves selected general developmental, behavioural and health outcomes in children and adolescents. • Sleeping more increases children's BMI scores, mainly by increasing the risk of being overweight. • The results indicate a null or relatively small positive impact of sleeping longer on cognitive skills. Children and adolescents spend more than one-third of their time sleeping. Yet, we know little about the causal impact of sleeping on their development. This paper is the first to exploit variation in local daily daylight duration measured on pre-determined diary dates across the same individuals through time as an instrument in an individual fixed effects regression model to draw causal estimates of sleep duration on a comprehensive set of child development indicators. Applying this model to about 50 thousand time use diaries from two cohorts of Australian children spanning over 16 years, we first document that children sleep substantially less on days with longer daylight duration. Our results show that sleeping longer improves selected general developmental, behavioural and health outcomes in children and adolescents. By contrast, sleeping more statistically significantly increases the BMI scores, mainly by increasing the risk of being overweight. Moreover, while the impact of sleep duration on general and behavioural outcomes is more pronounced for females or older individuals, the effect on BMI is largely driven by males. The results indicate a null or relatively small positive impact of sleeping longer on cognitive skills. [ABSTRACT FROM AUTHOR]

This paper examines how the perceived importance of family background affects distributional preferences using two large-scale survey experiments. In the first experiment, we randomly inform respondents about the relationship between parental income and economic success later in life, making their social mobility perceptions more pessimistic. However, this changes neither revealed distributional preferences nor pro-social behavior toward the rich and poor. The second experiment shows that respondents do not account for parental influence on economic success when making (re-)distribution decisions, suggesting that people view parental influence as a legitimate reason to justify some inequality. This can explain why distributional preferences are immune to changes in perceptions of social mobility. [ABSTRACT FROM AUTHOR]

The impact of culture on non-kin cooperation has been singled out as critical for economic activity. However, causal evidence of culture's influence on cooperation remains scant. In this paper we provide such evidence, focusing on two key components of culture: preferences and beliefs. Adopting the view that culture is one aspect of an individual's multi-faceted self-concept (identity) we conduct a Prisoner's Dilemma experiment with first- and second-generation Chinese immigrants at a large US public university. In a two-by-two design, we exogenously vary: i) the salience of participants' American or Chinese cultural identities; and ii) the capacity for culture to affect beliefs by randomly providing previous-session cooperation-rate information. Comparing behavior across cultures and information conditions, our results suggest a prominent role for both preferences and beliefs. [ABSTRACT FROM AUTHOR]

This paper experimentally investigates risk taking in contest schemes by implementing a stopping task based on Seel and Strack (2013). In this stylized setting, managers with contest payoffs have an incentive to delay halting projects with a negative expectation, with the induced inefficiency being highest for a moderately negative drift. The experiment systematically varies the negative drift (between-subjects) and the payoff incentives (within-subject). We find evidence for risk taking in all our treatment conditions, with the non-monotonicity at least as pronounced as predicted. Contrary to the theoretical predictions, a similar pattern of behaviour persists even without contest incentives, suggesting contest incentives are not the only driver of risk-taking behaviour. Instead, observed behaviour violates expected utility maximization and is consistent with some intrinsic motivation for taking risk and myopic reasoning about the opponent. We explore the interplay between intrinsic incentives and the payment scheme and find that contest incentives might crowd out an intrinsic inclination to risk-taking. [ABSTRACT FROM AUTHOR]

This paper contributes to the growing debate about the role of board-level sustainability committees, focusing on whether they leverage sustainability expertise for impactful environmental initiatives or purely serve as symbolic actions aimed at greenwashing. Using a large set of firms from 35 countries over the 2010–2017 period, we find that the presence of a sustainability committee is positively associated with higher-quality GHG emissions disclosure. This finding is robust to endogeneity and sample selection bias concerns. The sustainability committee effect is more pronounced when external environmental institutions are too weak to properly monitor corporate environmental disclosure. Our findings suggest that sustainability committees are not a symbolic management tool, but play a crucial role in enhancing corporate environmental disclosure. [ABSTRACT FROM AUTHOR]

In this paper, we study whether a firm's carbon risk exposure plays a role in the relationship between dividend announcements and stock returns. Our results show that when investors hold disproportionately high carbon emitters with associated increased carbon risk, a positive relationship exists between a firm's carbon emissions and the association between the stock returns and dividend payment. If investors hold disproportionately high carbon emitters with the associated increased carbon risk stocks, the stock market reacts less positively (more negatively) to dividend increase (decrease) announcements. At the same time, if firms under-price their carbon risk, the stock market reacts less positively (more negatively) to dividend increase (decrease) announcements. [ABSTRACT FROM AUTHOR]

This paper examines how natural disasters affect local public finances and their interplay with intergovernmental transfers and external resources. Exploiting the randomized nature of the 2013 Typhoon Haiyan, one of the most devastating natural disasters in recent history, we document its causal effect on the local government fiscal dynamics. Combining data on local government finance with reports on the level of damages and using difference-in-differences with instrumental variable to analyze the data, we show that local public revenue and expenditures remain largely unaffected, except for debt payments. However, we find important heterogeneity in local revenue responses: poorer municipalities raised comparatively lower revenue in the aftermath of the Typhoon. We also provide evidence that external funding did not lead to lower tax collection efforts, but instead leads to higher local expenditures, suggesting that disaster aid does not cause a moral hazard problem in local governments' spending decisions. [ABSTRACT FROM AUTHOR]

Online health information seeking behavior (e-HISB) is becoming increasingly common and the trend has accelerated as a result of the COVID-19 pandemic when individuals strongly relied upon the Internet to stay informed by becoming exposed to a wider array of health information. Despite e-HISB having become a global trend, very few empirical investigations have analyzed its potential influence on healthcare access and individuals' health status. In this paper, we try to fill this gap. We use data from the second SHARE Corona Survey, supplemented with data from the previous 8th wave of SHARE, and estimate a recursive model of e-HISB, healthcare access, and individuals' health status that accounts for individuals' unobserved heterogeneity. Our findings suggest that e-HISB can empower individuals to better understand health concerns, facilitating improved health condition management. However, e-HISB can also trigger a chain reaction, as navigating vast amonts of online health information can heighten fear and anxiety. This increased anxiety may lead to higher utilization of medical services, adversely affecting individuals' perceptions of their health. [ABSTRACT FROM AUTHOR]

Cognitive skills affect individual choices. Researchers commonly use Raven's Progressive Matrices (RPM) tests and the Cognitive Reflection Test (CRT) to assess the relationship between cognitive abilities and economic decision making. In this paper, we study the relationship between these measures, and investigate the extent to which they are correlated and whether they are best described as substitutes or complements. Combining a sample of 686 children and a sample of 2,332 adults, we compare individual performances in the RPM test and CRT test. First, we report a significant positive correlation between the two measures of 0.3. Second, we document that performance in both the RPM test and CRT are significant predictors of behavioral inconsistency observed in incentivized time and risk preference elicitation tasks for children and risk preference elicitation task for adults. [ABSTRACT FROM AUTHOR]

This paper proposes an integrated framing approach to investigate the disposition effect by linking it to regret and prospect theory. We build upon the wide framing hypothesis and extend prior research by including metrics of perceived risk and the number of days stocks are at a gain. Using a sample of 24 million trading operations conducted by nearly 4,000 Italian investors from 2010 to 2018, we demonstrate that investment decisions are influenced not only by portfolio aggregate performance but also by asset trading history and perceived volatility. Our results align with several theoretical frameworks that could explain the disposition effect, such as mental accounting, prospect theory and regret aversion. Furthermore, by incorporating both narrow and wide framing factors, along with their interactions, our approach provides a more comprehensive understanding of the disposition effect. • We link the disposition effect to perceived risk and portfolio performance. • We leverage a new dataset of 24 million trading operations. • Disposition effect diminishes as the proportion of gains in the portfolio rises. • The perceived risk of an asset is positively related to the willingness to sell it. • Past performance reduces the asymmetry in the willingness to sell at a loss or gain. [ABSTRACT FROM AUTHOR]

This paper analyses how terrorism has shaped global bilateral migration in the past decades. Previous research demonstrates a wide range of psychological and economic effects from terrorism which might serve as a push and/or counter-pull factor for migration and location choice. Yet, the role of terrorism has so far received relatively limited attention in the migration literature. Combining data on yearly bilateral migration rates with data on terrorist activity in 154 countries of origin and destination over the period 1975-2017, we find that terrorism acts both as a push factor for migration and as a repulsive factor for location choice. These results are robust across different specifications, samples and estimation techniques. Our evidence indicates that migration rates respond primarily to variations in the intensity rather than the mere occurrence or frequency of attacks. We find that terrorism induces international emigration only at extreme levels, while modest levels of terrorism are already enough to reduce a countries' attractiveness to potential migrants. Moreover, the effect of terrorist attacks varies across migration corridors. • The impact of terrorism on migration is a largely understudied phenomenon. • Terrorism acts as a push factor for migration worldwide. • Terrorism reduces countries' attractiveness for potential migrants. • Migration responds more to the intensity than the occurrence or frequency of attacks. • The effect of terrorist attacks varies across migration corridors. [ABSTRACT FROM AUTHOR]

The aim of this paper is to study whether politicians manipulate tax policy to extract private rents. We focus on the local personal income tax in the setting of Italian cities, which is a progressive instrument that allows mayors to set different rates to distinct wage groups. We exploit discontinuities in mayors' salaries, that are based on population thresholds, to study whether mayors apply lower rates to their own tax bracket, thereby distorting tax policy. The main results document large rent-seeking activity in tax policy. First, we show that when mayors's salary is exogenously located in the following tax bracket it receives a significantly lower tax rate than the previous one, compared to the control group. Second, we show that this rent-seeking activity is highly detrimental for the public treasury, with a considerable reduction in fiscal revenues. And finally, we document that the individual gain for rent-seeker politicians is rather limited and that there is no evidence of voters' punishment in the next elections. These results suggest that when tax policy is prone to be manipulated politicians do not hesitate to engage in rent-seeking activities even in case of little returns. [ABSTRACT FROM AUTHOR]

• We study if endogenous language use correlates with patience. • We develop a sentence-completion task to elicit endogenous language use. • We use four samples to test if a relationship exists. • We find no association in any of the samples. The linguistic-savings hypothesis posits that the grammatical marking of future events in languages is linked to future-oriented behavior. Recent experimental studies have suggested patience as a possible mechanism connecting language use and future-oriented behavior by exogenously manipulating what language is used. Our paper explores the association between patience and the language that people naturally use, thereby building on endogenous (as opposed to exogenously manipulated) language use. To capture natural language usage, we utilized a novel sentence-completion task designed for native speakers of the Hungarian language. This language allows for referencing future events through both present and future tenses. We hypothesized a positive correlation between being patient and using the present tense to refer to future events. We conducted incentivized and non-incentivized experiments with four independent samples of high school and university students, involving nearly 3,500 students in total. We find no consistent evidence that patience is correlated with endogenous future-time reference. Our null finding is further supported by a robustness check that leverages specific randomness in our data. [ABSTRACT FROM AUTHOR]

A fundamental governance challenge facing central authorities is how to mitigate the prevalent local protection against non-local firms. We document that judicial fiscal centralization—transferring local courts' budgetary power from local governments to provincial finance departments—significantly increases the winning probability of non-local plaintiffs (defendants) against local defendants (plaintiffs) if lawsuits are tried in the defendant's (plaintiff's) jurisdiction. However, such centralization exhausts local governments' information advantage in keeping local courts accountable. Specifically, the reform shifts local courts' expenditures from public affairs to private welfare and breeds judge corruption. Interestingly, as gifts in the form of pro-local rulings from courts to governments disappear, governments' day-to-day support to courts also weakens, deteriorating the courts' performance. Overall, our paper highlights the depth of the judiciary's political embeddedness and the complexity of fighting against local protection. [ABSTRACT FROM AUTHOR]

Freedom of Information (FOI) is considered a crown jewel of reforms fostering public administration transparency and accountability. However, FOI's symbolic power alone cannot overcome the organizational barriers and obstacles to its effective implementation. This paper presents the results of a field experiment performed in Italy, a late FOI adopter, where an FOI request was sent to the 307 municipalities with more than 30k inhabitants. The experimental design exploits marginal wording variation in the requests to test whether municipalities discriminate between ordinary citizens and high-profile requesters. The experimental evidence suggests that most Italian municipalities reply to FOI requests. The results show two opposite types of discretionary bias: Northern municipalities tend to favor high-profile requesters, whereas Southern municipalities tend to respond to them with a higher degree of attrition. The study investigates the determinants of this difference. [ABSTRACT FROM AUTHOR]

This paper studies the effect of power asymmetry on resolution of social dilemmas in repeated play of linear public good games. The experiment uses a 2 × 2 design that crosses power symmetry or asymmetry in payoff-equivalent provision and appropriation games with positive (provision) or negative (appropriation) externalities. Power asymmetry combines privileged access to information with extended opportunity sets that allow for taking a public good provided or not-appropriated by others. Our data suggest that power asymmetry has a detrimental effect on efficiency, with the effect being more pronounced in the asymmetric-power appropriation game. Individual allocations to the public good increase in others' allocations, suggesting that individual allocations are not strategic substitutes. With power asymmetry, first movers earn less than the second mover in the appropriation game but not in the provision game. [ABSTRACT FROM AUTHOR]

• We propose a new estimator of the Democracy Effect that overcomes selection effects. • It weighs the behavior of each type of voter by its prevalence in the whole population. • We derive the distribution of this new weights-based estimator of the democracy effect. • Applications to two experiments find a significant effect in one but not the other. Dal Bó et al. (2010) show experimentally that the effect of a policy may be greater when it is democratically selected than when it is exogenously imposed. In this paper we propose a new and simpler estimation strategy that does not require information on the vote of subjects in the exogenous treatment. The new estimation strategy is based on calculating the average behavior under democracy by weighting the behavior of each type of voter by its prevalence in the whole population (and not conditional on the vote outcome). We derive the distribution of this new weights-based estimator of the democracy effect and show it eliminates selection effects under certain conditions. We apply the new estimation strategy to the data in Dal Bó et al. (2010) and to the data from a new experiment for which we cannot use the previous estimation strategy as we do not have information on how subjects would have voted in the exogenous treatment. We find a significant democracy effect in the former but not on the latter application. [ABSTRACT FROM AUTHOR]

This paper presents evidence of gender peer effects in high schools in India using new administrative data. Identification of gender peer effects is achieved by exploiting variation induced by idiosyncratic changes in gender composition across cohorts within schools, in addition to controlling for past scores. The proportion of female classmates in a student's cohort has a sizeable positive effect on the test scores of both male and female students. We find that peer effects vary non-linearly with the proportion of female students. Finally, we provide suggestive evidence on plausible mechanisms. We show that achievement spillovers are not the main driver of positive gender peer effects. Using a supplemental dataset, we show that a greater proportion of female students leads to an improved classroom environment in the context of Indian schools. [ABSTRACT FROM AUTHOR]

This paper delves into the role of political rights in shaping financial inclusion. Despite the acknowledged significance of political institutions in influencing financial systems, there remains limited understanding of the economic origins of the impact of political institutions on financial inclusion. Utilizing data from the 2021 Global Findex database, the study finds that weak political rights significantly reduce the likelihood of individuals possessing financial accounts and using digital financial services. Robustness tests employing an instrumental variable and the difference-in-differences framework confirm that inadequate political rights have a detrimental effect on financial inclusion. By exploring the reasons for financial exclusion and moderating factors, this study provides supportive evidence for the mechanisms of eroded social trust and political rent-seeking as the key constraints that hinder inclusiveness in providing mainstream financial products and services. [ABSTRACT FROM AUTHOR]