| 1. |
- Dagsvik, John K., et al.
(författare)
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Compensating variation and Hicksian choice probabilities in random utility models that are nonlinear in income
- 2005
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Ingår i: The Review of Economic Studies. - : Oxford University Press (OUP). - 0034-6527 .- 1467-937X. ; 72:1, s. 57-76
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Tidskriftsartikel (refereegranskat)abstract
- In this paper we discuss Hicksian demand and compensating variation in the context of discrete choice. We first derive Hicksian choice probabilities and the distribution of the (random) expenditure function in the general case when the utilities are nonlinear in income. We subsequently derive exact and simple formulae for the expenditure and choice probabilities under price (policy) changes conditional on the initial utility level. This is of particular interest for welfare measurement because it enables the researcher to compute the distribution of compensating variation in a simple way. We also derive formulae for the joint distribution of expenditure, the choice before and after a policy change has been introduced.
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| 2. |
- Asplund, Marcus, et al.
(författare)
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Firm turnover in imperfectly competitive markets
- 2006
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Ingår i: The Review of Economic Studies. - 0034-6527 .- 1467-937X. ; 73:2, s. 295-327
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Tidskriftsartikel (refereegranskat)abstract
- This paper is motivated by the empirical regularity that industries differ greatly in the level of firm turnover and that entry and exit rates are positively correlated across industries. Our objective is to investigate the effect of fixed costs and, in particular. market size on entry and exit rates and hence on the age distribution of firms. We analyse a stochastic dynamic model of a monopolistically competitive industry. Each firm's efficiency is assumed to follow a Markov process. We show existence and uniqueness of a stationary equilibrium with simultaneous entry and exit: efficient firms survive, while inefficient ones leave the market and are replaced by new entrants. We perform comparative dynamics with respect to the level of fixed costs: entry costs are negatively related and fixed production costs positively related to entry and exit rates. A central empirical prediction of the model is that the level of firm turnover is increasing in market size. In larger markets, competition is endogenously more intense than in smaller markets, and so price-cost margins are smaller. This price competition effect implies that the marginal surviving firm has to be more efficient than in smaller markets. Hence, in larger markets, the expected lifespan of firms is shorter, and the age distribution of firms is first-order stochastically dominated by that in smaller markets. In the empirical part, the prediction on market size and firm turnover is tested on an industry where firms compete in well-defined geographical markets of different sizes. Using data on hair salons in Sweden, we show that an increase in market size or fixed costs shifts the a-e distribution of firms towards younger firms, as predicted by the model.
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| 3. |
- Besley, Timothy, et al.
(författare)
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Political Competition, Policy and Growth : Theory and Evidence from the US
- 2010
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Ingår i: The Review of Economic Studies. - 0034-6527 .- 1467-937X. ; 77:4, s. 1329-1352
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Tidskriftsartikel (refereegranskat)abstract
- This paper develops a simple model to analyse how a lack of political competition may lead to policies that hinder economic growth. We test the predictions of the model on panel data for the US states. In these data, we find robust evidence that lack of political competition in a state is associated with anti-growth policies: higher taxes, lower capital spending, and a reduced likelihood of using right-to-work laws. We also document a strong link between low political competition and low income growth.
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| 4. |
- Zenou, Yves, 1961-, et al.
(författare)
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Peer Effects and Social Networks in Education
- 2009
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Ingår i: The Review of Economic Studies. - 0034-6527 .- 1467-937X. ; 76:4, s. 1175-1204
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Tidskriftsartikel (refereegranskat)abstract
- We develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to his/her Katz-Bonacich centrality measure. This measure takes into account both direct and indirect friends of each individual, but puts less weight to his/her distant friends. We then bring the model to the data using a very detailed dataset of adolescent friendship networks. We show that, after controlling for observable individual characteristics and unobservable network specific factors, a standard deviation increase in the Katz-Bonacich centrality increases the pupil school performance by more than 7% of one standard deviation.
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| 5. |
- Aghion, Philippe, et al.
(författare)
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A Theory of Falling Growth and Rising Rents
- 2023
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Ingår i: The Review of Economic Studies. - : Oxford University Press (OUP). - 0034-6527 .- 1467-937X. ; 90:6, s. 2675-2702
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Tidskriftsartikel (refereegranskat)abstract
- Growth has fallen in the U.S. amid a rise in firm concentration. Market share has shifted to low labour share firms, while within-firm labour shares have actually risen. We propose a theory linking these trends in which the driving force is falling overhead costs of spanning multiple products or a rising efficiency advantage of large firms. In response, the most efficient firms (with higher markups) spread into new product lines, thereby increasing concentration and generating a temporary burst of growth. Eventually, due to greater competition from efficient firms, within-firm markups and incentives to innovate fall. Thus our simple model can generate qualitative patterns in line with the observed trends.
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| 6. |
- Andersson, Tommy, et al.
(författare)
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Pairwise Kidney Exchange over the Blood Group Barrier
- 2020
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Ingår i: Review of Economic Studies. - : Oxford University Press (OUP). - 0034-6527 .- 1467-937X. ; 87:3, s. 1091-1133
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Tidskriftsartikel (refereegranskat)abstract
- Advances in medical technology have made kidney transplants over the blood group barrier feasible. This article investigates how such technology should be implemented when designing pairwise kidney exchange programs. The possibility to receive a kidney transplant from a blood group incompatible donor motivates an extension of the preference domain, allowing patients to distinguish between compatible donors and half-compatible donors (i.e. blood group incompatible donors that only become compatible after undergoing an immunosuppressive treatment). It is demonstrated that the number of transplants can be substantially increased by providing an incentive for patients with half-compatible donors to participate in kidney exchange programs. The results also suggest that the technology is beneficial for patient groups that are traditionally disadvantaged in kidney exchange programs (e.g. blood group O patients). The positive effect of allowing transplants over the blood group barrier is larger than the corresponding effects of including altruistic patient–donor pairs or of allowing three-way exchanges in addition to pairwise exchanges.
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| 7. |
- Battaglia, Marianna, et al.
(författare)
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Repayment Flexibility and Risk Taking : Experimental Evidence from Credit Contracts
- 2023
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Ingår i: The Review of Economic Studies. - 0034-6527 .- 1467-937X.
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Tidskriftsartikel (refereegranskat)abstract
- A widely held view is that small firms in developing countries are prevented from making profitable investments by lack of access to credit and insurance markets. One solution is to provide repayment flexibility in credit contracts. Repayment flexibility eases both the credit constraint, as it allows for increased spending during the start-up phase, and offers insurance, in case of fluctuations in income. In a field experiment among traditional microfinance clients and larger collateralized borrowers in Bangladesh, we randomly assign the option to delay up to 2 monthly repayments at any point during a 12-month loan cycle. The flexible contract leads to substantial improvements in the traditional microfinance clients’ business outcomes, driven by borrowers in the upper tail of the distribution. In addition, we find a significant impact on socio-economic status, combined with lower default rates. We show theoretically and empirically that these effects are induced by an increase in entrepreneurial risk taking, implying that the primary mechanism is insurance provision. Repayment flexibility also attracts less risk-averse borrowers interested in business expansion. At the same time, the effects for the larger loan are much more modest. Our findings suggest that lack of insurance is an important constraint for small firms but that a simple financial product that increases repayment flexibility can be an effective tool for enabling enterprise growth.
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| 8. |
- Belot, M., et al.
(författare)
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Providing Advice to Jobseekers at Low Cost: An Experimental Study on Online Advice
- 2019
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Ingår i: Review of Economic Studies. - : Oxford University Press (OUP). - 0034-6527 .- 1467-937X. ; 86:4, s. 1411-1447
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Tidskriftsartikel (refereegranskat)abstract
- We develop and evaluate experimentally a novel tool that redesigns the job search process by providing tailored advice at lowcost. We invited jobseekers to our computer facilities for twelve consecutive weekly sessions to search for real jobs on our web interface. For one-half, instead of relying on their own search criteria, we use readily available labour market data to display relevant alternative occupations and associated jobs. The data indicate that this broadens the set of jobs they consider and increases their job interviews especially for participants who otherwise search narrowly and have been unemployed for a few months.
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| 9. |
- Beuermann, Diether W., et al.
(författare)
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What is a Good School, and Can Parents Tell? Evidence on the Multidimensionality of School Output
- 2022
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Ingår i: The Review of Economic Studies. - : Oxford University Press (OUP). - 0034-6527 .- 1467-937X. ; 90:1, s. 65-101
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Tidskriftsartikel (refereegranskat)abstract
- To explore whether schools' causal impacts on test scores measure their overall impact on students, we exploit plausibly exogenous school assignments and data from Trinidad and Tobago to estimate the causal impacts of individual schools on several outcomes. Schools' impacts on high-stakes tests are weakly related to impacts on important outcomes such as arrests, dropout, teen motherhood, and formal labour market participation. To examine if parents' school preferences are related to these causal impacts, we link them to parents' ranked lists of schools and employ discrete-choice models to infer preferences for schools. Parents choose schools that improve high-stakes tests even conditional on peer quality and average outcomes. Parents also choose schools that reduce criminality and teen motherhood and increase labour market participation. School choices among parents of low-achieving students are relatively more strongly related to schools' impacts on non-test-score outcomes, while the opposite is true for parents of high-achieving students. These results suggest that evaluations based solely on test scores may be misleading about the benefits of school choice (particularly for low-achieving students), and education interventions more broadly.
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| 10. |
- Black, Sandra E., et al.
(författare)
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Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviours
- 2020
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Ingår i: Review of Economic Studies. - : Oxford University Press (OUP). - 0034-6527 .- 1467-937X. ; 87:4, s. 1683-1725
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Tidskriftsartikel (refereegranskat)abstract
- Wealth is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use administrative data on the net wealth of a large sample of Swedish adoptees merged with similar information for their biological and adoptive parents. Comparing the relationship between the wealth of adopted and biological parents and that of the adopted child, we find that, even prior to any inheritance, there is a substantial role for environment and a much smaller role for pre-birth factors and we find little evidence that nature/nurture interactions are important. When bequests are taken into account, the role of adoptive parental wealth becomes much stronger. Our findings suggest that wealth transmission is not primarily because children from wealthier families are inherently more talented or more able but that, even in relatively egalitarian Sweden, wealth begets wealth. We further build on the existing literature by providing a more comprehensive view of the role of nature and nurture on intergenerational mobility, looking at a wide range of different outcomes using a common sample and method. We find that environmental influences are relatively more important for wealth-related variables such as savings and investment decisions than for human capital. We conclude by studying consumption as an overall measure of welfare and find that, like wealth, it is more determined by environment than by biology.
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