The Economic Journal

Agranov, Marina; Healy, Paul J; Nielsen, Kirby

doi: 10.1093/ej/uead039pmid: N/A

We design a laboratory experiment to identify whether a preference for randomisation defines a stable type across different choice environments. In games and individual decisions, subjects face 20 simultaneous repetitions of the same choice. Subjects can randomise by making different choices across the repetitions. We find that randomisation does define a type that is predictable across domains. A sizeable fraction of individuals randomise in all domains, even in questions that offer a stochastically dominant option. For some mixers, dominated randomisation is responsive to intervention. We explore theoretical foundations for mixing, and find that most preference-based models are unable to accommodate our results.

Bütikofer, Aline; Ginja, Rita; Løken, Katrine V; Landaud, Fanny

doi: 10.1093/ej/uead048pmid: N/A

Although many students suffer from anxiety and depression, and often identify school pressure and concerns about their futures as the main reasons for their worries, little is known about the consequences of the schooling environment on students’ mental health. Using a regression discontinuity analysis in the largest Norwegian cities, we show that eligibility to enrol in a higher-achievement high school increases the probability of enrolment in higher education and decreases the probability of diagnosis or treatment of psychological conditions. We provide suggestive evidence that changes in both teacher and peer characteristics are likely drivers of these effects.

Chen, Zhiqi

doi: 10.1093/ej/uead044pmid: N/A

Partitioned pricing is a pricing practice that divides the price of a product into a base price and one or more mandatory surcharges. This paper develops a theory of partitioned pricing using a duopoly model where the owner of each firm determines the surcharge, but delegates the setting of the base price to a manager. In equilibrium, both firms choose partitioned pricing over the conventional all-inclusive pricing. Moreover, partitioned pricing leads to higher full prices and larger profits than all-inclusive pricing. Most surprisingly, collusion on surcharges without any coordination on base prices is as profitable as collusion on all-inclusive prices.

Disney, Richard; Gathergood, John; Machin, Stephen; Sandi, Matteo

doi: 10.1093/ej/uead040pmid: N/A

‘Right to Buy’, a large-scale natural experiment whereby incumbent tenants in public housing could buy properties at heavily subsidised prices, increased the United Kingdom homeownership rate by over 10 percentage points between its 1980 introduction and the 1990s. This paper studies the impact of this reform on crime by leveraging exogenous variation in eligibility for the policy. Results show that Right to Buy generated significant property crime reductions. Behavioural changes of incumbent tenants and renovation of public properties were the main drivers of this crime reduction. This is evidence of a novel means by which subsidised homeownership and housing policy can reduce criminality.

Eberhardt, Markus; Facchini, Giovanni; Rueda, Valeria

doi: 10.1093/ej/uead045pmid: N/A

Academia, and economics in particular, faces increased scrutiny because of gender imbalance. This paper studies the job market for entry-level faculty positions. We employ machine learning methods to analyse gendered patterns in the text of 12,000 reference letters written in support of over 3,700 candidates. Using both supervised and unsupervised techniques, we document widespread differences in the attributes emphasised. Women are systematically more likely to be described using ‘grindstone’ terms and at times less likely to be praised for their ability. Using information on initial placement, we highlight the implications of these gendered descriptors for the quality of academic placement.

Fabregas, Raissa

doi: 10.1093/ej/uead042pmid: N/A

This paper estimates the impacts of attending better middle schools on the test scores, on-time graduation, self-reported socio-emotional skills, aspirations and high school track choices of marginally admitted students. A regression discontinuity design comparing students just above and below the admission threshold to higher-achieving middle schools in Mexico shows some modest gains on externally graded tests, but adverse effects on grade point average and on-time graduation. By the end of middle school, marginally admitted students feel academically inferior to their peers, obtain worse scores on measures of conscientiousness, and are more likely to shift their aspirations and subsequent schooling choices from academic to vocational programmes. The results are consistent with the hypothesis that unfavourable peer comparisons, stemming from direct observation or subjective teacher assessments, can be sufficiently important to affect students’ educational trajectories.

Lavy, Victor; Rachkovski, Genia; Boiko, Adi

doi: 10.1093/ej/uead026pmid: N/A

‘CEOs’ of public schools in many countries have authority and responsibilities that can greatly affect the quality of schooling. This paper estimates the impact of CEOs on student outcomes in Israeli elementary schools. We estimate CEO quality in two ways—once using schools that do not switch CEOs and once using schools that do. We show that switches are exogenous and are not correlated with potential outcomes. CEO quality positively affects students’ test scores and behavioural outcomes, with pronounced effects for disadvantaged schools. Potential mechanisms show that high-quality CEOs lead to improvements in school priorities, working procedures and violence reduction.

Parker, Susan W; Vogl, Tom

doi: 10.1093/ej/uead049pmid: N/A

Conditional cash transfer programmes have spread to over 60 countries in the past two decades, but little is known about their long-term effects. We estimate the lasting impact of childhood exposure to the Mexico’s flagship programme Progresa by leveraging the age structure of benefits and geographic variation in early programme penetration nationwide. Childhood exposure improves women’s outcomes in early adulthood with increases in educational attainment, geographic mobility, labour market performance and household living standards. For men, effects are smaller and more difficult to distinguish from spatial convergence.

Rebeyrol, Vincent

doi: 10.1093/ej/uead046pmid: N/A

This paper shows that non-tariff measures may fully respect the non-discrimination principle of the World Trade Organisation and still act as a protectionist device. Non-tariff measures that raise costs of all firms induce some exit, reallocating market shares towards the most efficient firms. The paper analyses when this mechanism generates protectionism. With political economy motives, trade liberalisation increases the use of non-tariff measures in the non-cooperative equilibrium and a trade agreement may be welfare reducing if governments care about the most efficient firms only. Moreover, a Pareto improving agreement may require an income redistribution between countries if firm average productivity differs across countries.

Hübert, Ryan; Little, Andrew T

doi: 10.1093/ej/uead043pmid: N/A

A large economic literature studies whether racial disparities in policing are explained by animus or by beliefs about group crime rates. But what if these beliefs are incorrect? We analyse a model where officers form beliefs using crime statistics, but do not properly account for the fact that they will detect more crime in more heavily policed communities. This creates a feedback loop where officers over-police groups that they (incorrectly) believe exhibit high crime rates. This inferential mistake can exacerbate discrimination even among officers with no animus and who sincerely believe that disparities are driven by real differences in crime rates.