We examine the impact of Brazil's "Mother-Friendly Care" accreditation program on hospital choice. Using administrative data on births in the Brazilian public health system from 2008-2019, we estimate a nested logit demand model that allows for differential substitution patterns based on existing Baby-Friendly Hospital Initiative (IHAC) accreditation. We find that "Mother-Friendly Care" accreditation significantly increases hospital utility, raising the aggregate market share of accredited hospitals by an average of 4.1 percentage points (p.p.) across municipalities. Counterfactual analysis reveals that restricting accreditation to IHAC hospitals substantially limited the program's impact on hospital choice: distributing accreditation across both IHAC and non-IHAC hospitals would have resulted in aggregate market share gains of 10.2 p.p., demonstrating how existing IHAC certification shapes substitution patterns and limits policy reach.
ABSTRACT The Allais Paradox is often attributed to the strong attraction of a certain option that avoids a downside risk, i.e., a small chance of a low payoff. In contrast, there is clear evidence from laboratory and field data that people are attracted to the upside risk of obtaining a relatively high payoff. Examples of upside risk include investments in risky tech stocks, participation in rent‐seeking contests, or savings in lottery‐based retirement accounts. The experiment reported in this paper shows a tendency for the same people to exhibit both downside risk aversion and upside risk preference. The analysis uses nonlinear probability weighting to connect the upside/downside risk preference distinction with the standard behavior observed in an Allais paradox. The results are illustrated by Chernoff faces with features that are pulled down by risk aversion and up by risk preference.
We create a new dataset that characterizes studies of product market reforms implemented from 1932 to 2011. We examine the size and origins of differences in estimated impacts based on an OECD classification scheme for potentially competitive restrictions of regulation. The median impact from switching to a pro-competitive environment is a 19% price decline. Competition-restricting regulations that are directed at specific societal objectives, such as health, safety, education, the environment, and financial stability, have lower price increases than the price declines from regulatory changes creating greater competition. The findings support the view that special interests obtain large benefits from favorable regulation. These findings can help policymakers when balancing the effects of competition-enhancing regulatory reform against other societal objectives.
The Coase Conjecture predicts that a durable-goods monopolist without commitment will rapidly cut price toward marginal cost. We test this prediction in the electronic-book market using release-day prices. To proxy for marginal cost, we use competitive prices of public-domain electronic books on the same platforms. Release-day prices for copyrighted electronic books are far above this cost benchmark-typically more than 30 times higher-and prices remain largely flat over the first month. Sales also persist well beyond release, contradicting immediate market clearing. These patterns are hard to reconcile with standard no-commitment models but are consistent with models featuring commitment to future prices and with outside-option models.
Nondisclosure agreements are common in the settlement of legal disputes but are controversial as they suppress information that could prevent harm to others. But until the 2017 #MeToo movement, there had been little legislative effort to prohibit the practice in any context, and consequently no evidence on whether public disclosure of harms would be effective as a deterrent to wrongdoing. Following the #MeToo movement, more than 10 states enacted bans on NDAs in the settlement of employment discrimination claims. In addition to reputational harm to the employer, public airing of misconduct was expected to encourage other victims to come forward, which would have direct financial costs to the employer through litigation costs as well as in possible damages payments. We leverage variation in state legislation in timing and coverage to test the effects of these bans on employment discrimination court filings and outcomes in federal court, the most public forum for exposing acts as illegal. Supporting the prediction that bans could have a deterrent effect in the long term, we find an initial increase in filings, a decrease in settlement after filing, and an increase in the probability that the plaintiff prevails for cases without harassment allegations.
This study investigates how sales bans influence young adults' perceptions and their interest in using combustible and non-combustible nicotine products in T & uuml;rkiye. Using a scenario-based, between-subjects experimental design, participants aged 18-30 were randomly assigned to one of four conditions: cigarettes or e-cigarettes, framed as either legally available or sold illegally (under-the-counter). Participants evaluated these products based on perceived addictiveness, health risks, social acceptability, and personal willingness to use them. Our findings indicate that participants are significantly less interested in using illegal cigarettes and illegal e-cigarettes compared to legally sanctioned cigarettes (p < 0.01). Further analysis suggests that these effects are primarily driven by the legal status of the product (legal vs. under-the-counter) rather than the product type (cigarette vs. e-cigarette). Consequently, the results suggest that the illegality of a nicotine product directly reduces consumer interest. Conversely, we find no significant evidence that legal status affects perceived attributes, such as addictiveness, social acceptability, health risks, or physical discomfort during use. Beyond the direct deterrent effect, the data provides no evidence for the expressive function of law in this context.
Wage gaps across demographic groups in the U.S. labor market are well documented. A key question is the degree to which group-based sorting into high- versus low-paying occupations reflects underlying preferences, versus structural barriers or prior educational experiences. High school Career and Technical Education (CTE) programs offer insight into the preference side of this question, since CTE pathways are largely open-access and allow students to explore a career field without committing to it. We study CTE enrollment patterns across four states and one large metro area to assess if potential pay in students' CTE fields foreshadows longstanding inequities in the labor market. The dominant theme that emerges from parallel multi-state analyses is that women concentrate in fields linked to jobs with 7%-20% lower pay, a range that includes the actual U.S. gender pay gap. We also find disparities in potential pay by race, ethnicity, family income, and disability identification, although these are much smaller and less consistent across locations than the gender gap.
We use a new data set measuring Lockdown Regulatory Freedom to examine the pre-pandemic factors associated with how severely governments locked down their economy in 2020 across a large cross-section of countries. We find that pre-pandemic levels of other economic freedoms and hospital bed capacity relative to population were both associated with less severe lockdown regulations. These associations were both statistically significant and economically meaningful in magnitude. The positive association between other economic freedoms and less severe lockdowns grew in size and significance over the course of the pandemic in 2020. However, despite the statistical and economic significance of our findings, most of the variation in the stringency of international lockdowns remains unexplained and a topic for future research.
This paper finds that exchange rate shocks cause stock market fluctuations, as evidenced by the fact that Swiss franc appreciations drove the Swiss stock market plunge in 2015 and currency devaluations against gold led to global stock market recoveries in the 1930s. The empirical estimates in both episodes quantitatively support the uncovered equity parity: an appreciation of the foreign currency against the domestic currency of results in the foreign equity return being lower than the domestic equity return of . In addition to confirming the portfolio rebalancing mechanism proposed in the literature, this paper finds that a change in future cash flows is an alternative mechanism through which the exchange rate shock is transmitted to the stock market. The cash flow mechanism explains why the effects are more pronounced for multinational corporations with high foreign income.
How discretionary gifts affect the informativeness of online reputation systems and market efficiency remains unclear, as theory provides limited insight. To address this issue, I conduct a laboratory experiment based on an infinitely repeated game in a market for an experience good with a reputation system, with two treatments differing in whether gifts are allowed. The results show that allowing gifts neither compromises the informativeness of the reputation system nor affects market efficiency or the distribution of surplus between buyers and sellers. Ratings remain predictive of product quality, even when gifts are present. At the same time, sellers persistently provide substantial and costly gifts, despite the fact that doing so reduces their payoffs. Further analysis suggests that gifting is a less cost-effective strategy for building reputation than improving product quality. The observed gifting behavior appears broadly consistent with strategic responses to market competition, though alternative interpretations remain possible.
On September 1, 2016, Colin Kaepernick first took a knee during the San Francisco 49ers' final preseason game. The protest quickly became league-wide, and inspired similar actions by players in the WNBA, NWSL, NBA, college football and other professional sports. The National Football League (NFL) player protests ended in 2018 following an agreement between league owners and the Players Association on a new anthem policy. This study estimated the effect of players' anthem protests on NFL game-day attendance. We specify a demand function using measures of contest quality from betting markets and estimate a two-way fixed-effects model to account for unobserved time-invariant heterogeneity. The results indicate that player anthem protests are associated with statistically significant reductions in game-day attendance, consistent with boycott behavior among some fans. These reductions were partially offset by attendance from MAGA-aligned fans engaging in in-person counter-protest behavior and BLM-aligned fans attending games to support player protests.
Drilled but uncompleted wells (DUCs) are a key operational component for oil and natural gas exploration and production (E&P) companies in managing market-related uncertainties. We analyze the behavior of drilling rigs along with DUCs and the role of climate policy uncertainty across four major U.S. oil and natural gas producing regions using structural vector autoregressive models. Our results reveal that an orthogonalized oil price shock increases the number of drilling rigs and reduces the number of DUCs in each region, while an oil price volatility shock reduces the number of drilling rigs and increases the number of DUCs in each region. We find that a climate policy uncertainty shock has no significant impact on DUCs in oil producing regions. However, for the natural gas producing regions, Haynesville and Appalachia, we show that a climate policy uncertainty shock increases the number of drilling rigs. The results are robust across the three remaining energy producing regions in the U.S. as well as alternative measures of energy prices and identification restrictions. Our findings demonstrate the responsiveness of natural gas production to climate policy uncertainty and align with the industry view that natural gas serves as a bridge fuel in the energy transition.
Non-cognitive skills play important roles in education and careers, but less is known about peers influences on these skills. The National Outdoor Leadership School conditionally randomly assigns students to wilderness class sections which allows us to estimate causal effects of peers on non-cognitive skills. Being assigned to peers with higher non-cognitive ability reduces ratings in communication and leadership, particularly for females. This work suggests relying on strong peers may not be an effective way to bolster non-cognitive ability for college-aged individuals and may contribute to fewer women in leadership positions.
We provide evidence of a political lending cycle in U.S. presidential elections characterized by an increase in credit supply by large banks in swing states. The credit expansion is independent of the incumbent's party, revealing a non-partisan preference for political continuity. Growth in mortgage and small business loans is substantial, but does not affect credit quality.
Central bank digital currencies (CBDCs) are a digital form of a nation's money, issued by its central bank. As opposed to other forms of digital money, such as electronic bank balances or cryptocurrencies, they are centrally managed legal tender. A prominent reason for adopting CBDCs is to foster greater financial inclusion for those who currently lack access to transaction services. Focusing on retail CBDCs, which a central bank issues directly to the public, we argue that CBDCs are not defensible means to the end of greater financial inclusion. CBDCs would lead to reduced financial privacy and would unjustifiably extend the power of unelected central bankers. We argue that banking subsidies and regulatory reform offer the normative upside of greater financial inclusion, without the normative downsides that CBDCs present. This gives prima facie reason for rejecting CBDCs as a policy option.
The World Bank's Doing Business (DB) project had measured the regulatory burden facing private businesses around the world since 2004. After the cancellation of the DB project in 2021, the World Bank announced that they would be creating a new project called Business Ready (B-READY) to replace the DB project. The purpose of this study is to compare and contrast the two sets of data. Our preliminary conclusion is that while B-READY is likely to be a valuable dataset, it is not going to be a seamless replacement for DB.
This paper examines the causal impact of federal homeless-assistance grants on reported homelessness and shelter capacity across 370 Continuums of Care in 2019. We exploit cross-sectional variation in pre-1940 housing shares, used in Community Development Block Grant formula allocations, as an instrument for combined CoC and Emergency Solutions Grant funding in a two-stage least-squares design. We find that federal funding produces significant increases in sheltered homelessness-driven primarily by emergency and transitional bed expansions-while having no detectable effect on unsheltered counts. Heterogeneous effects reveal that working-age adults, men, and Black individuals account for most of the shelter response. Notably, racial disparities emerge in unsheltered outcomes: white individuals experience decreases while Black individuals experience increases in unsheltered homelessness when funding rises. These findings suggest federal grants primarily attract certain groups into formal shelters without directly reducing street homelessness in larger metro areas. The results highlight the need for targeted interventions addressing barriers to shelter access and the persistent challenge of unsheltered homelessness, with policy implications for balancing immediate shelter capacity expansion with long-term permanent supportive housing investments.
I provide evidence that decreased efficiency in the appointment process to the Board of Governors of the Federal Reserve has resulted in an increase in the number of average vacancies. I then estimate whether this increase in vacancies is costly for the economy. I find little evidence to suggest that this is the case: monetary policy, uncertainty about the future path of interest rates, and the Board of Governor's ability to supervise and communicate have been largely unaffected by the number of absences.
This study examines how digital transformation (DT) affects firms' internal incentive structures in China from 2010 to 2019. Unlike prior research, we assess firms' DT progress through participation in a nationwide DT certification program. Using a variety of empirical methods, we analyze how DT affects the compensation of both executives and workers, controlling for labor productivity, financial performance, and other firm characteristics. Our results indicate that: (i) DT significantly increases average worker compensation; (ii) this increase stems from compositional shifts toward hiring more skilled workers and creating additional non-routine jobs; (iii) contrary to skill-biased or routine-biased technological change predictions, DT raises worker compensation without uniformly reducing low-wage jobs in absolute terms; (iv) DT realigns incentive structures by linking corporate growth to executives' future compensation rather than current pay; and (v) DT reduces both the absolute and relative compensation gaps between executives and workers.
The connection between increased survival rates and individuals' schooling, labor, and retirement decisions has been widely studied in the existing literature. While the directional impact of this theoretical mechanism is well known, additional work is needed to better understand its strength. To this end, we use a perfect foresight lifecycle model with endogenous schooling and retirement decisions to determine the extent to which the empirically observed increases in survival rates can capture the labor force participation rate patterns observed in recent U.S. data, both on average and at the two extremes of the age distribution. While our preferred specification works well in capturing the observed patterns, an alternative scenario that does not allow agents to alter their schooling and retirement decisions following a change in survival rates is found to contradict the observed trends.
