Publications

This paper estimates the causal effect of equalizing revenues across public school districts on students’ intergenerational mobility. I exploit differences in exposure to equalization across seven cohorts of students in 20 US states, generated by 13 state-level school finance reforms passed between 1980 and 2004. Since these reforms create incentives for households to sort across districts and this sorting affects property values, post-reform revenues are endogenous to an extent that varies across states. I address this issue with a simulated instruments approach, which uses newly collected data on states’ funding formulas to simulate revenues in the absence of sorting. I find that equalization has a large effect on mobility of low-income students, with no significant changes for high-income students. Reductions in the gaps in inputs (such as the number of teachers) and in college attendance between low-income and high-income districts are likely channels behind this effect.

Municipal bond markets began pricing sea-level rise (SLR) exposure risk in 2013, coinciding with upward revisions to worst-case SLR projections and accompanying uncertainty around these projections. The effect is larger for long-maturity bonds and not solely driven by near-term flood risk. We use a structural model of credit risk to quantify the implied economic impact and distinguish between the effects of underlying asset values and of uncertainty. The SLR exposure premium exhibits a trend different from house prices and is unaffected by house price controls. Together, our results highlight the importance of climate uncertainty in driving municipal bond prices.

Building on social psychological research on individual bias, this article uses the concept of “perceived blameworthiness” to investigate whether Black and Latino boys are perceived by teachers as being more culpable, or “blameworthy,” than White boys for objectively identical, routine classroom misbehavior at school. To isolate teacher bias from true differences in behavior, I use an original video experiment involving 1,339 teachers in 295 U.S. schools. Teachers in the experiment are randomly assigned to view and respond to a video of a White, Black, or Latino boy committing identical misbehavior. I find that Black boys experience teacher blaming bias, where they are perceived as being more “blameworthy” than White boys for identical misbehavior. Results for Latino boys are directionally similar to those for Black boys but do not reach statistical significance. Findings have implications for racialized assessments of behavior across a range of evaluative contexts.

Addressing public health externalities often requires community-level collective action. Due to social norms, each person’s sanitation investment decisions may depend on the decisions of neighbors. We report on a cluster randomized controlled trial conducted with 19,000 households in rural Bangladesh where we grouped neighboring households and introduced (either financial or social recognition) rewards with a joint liability component for the group, or asked each group member to make a private or public pledge to maintain a hygienic latrine. The group financial reward has the strongest impact in the short term (3 months), inducing a 7.5–12.5 percentage point increase in hygienic latrine ownership, but this effect dissipates in the medium term (15 months). In contrast, the public commitment induced a 4.2–6.3 percentage point increase in hygienic latrine ownership in the short term, but this effect persists in the medium term. Non-financial social recognition or a private pledge has no detectable effect on sanitation investments.

We examine an undercover Securities and Exchange Commission (SEC) investigation into the manipulation of financial news on social media. While fraudulent news had a direct positive impact on retail trading and prices, revelation of the fraud by the SEC announcement resulted in significantly lower retail trading volume on all news, including legitimate news, on these platforms. For small firms, volume declined by 23.5% and price volatility dropped by 1.3%. We find evidence consistent with concerns of fraud causing the decline in trading activity and price volatility, which we interpret through the lens of social capital, and attempt to rule out alternative explanations. The results highlight the indirect consequences of fraud and its spillover effects that reduce the social network’s impact on information dissemination, especially for small, opaque firms

Cryptocurrencies are highly speculative assets with large price volatility. If one could forecast their behavior, this would make them more attractive to investors. In this work we study the problem of predicting the future performance of cryptocurrencies using social media data. We propose a new model to measure the engagement of users with topics discussed on social media based on interactions with social media posts. This model overcomes the limitations of previous volume and sentiment based approaches. We use this model to estimate engagement coefficients for 48 cryptocurrencies created between 2019 and 2021 using data from Twitter from the first month of the cryptocurrencies’ existence. We find that the future returns of the cryptocurrencies are dependent on the engagement coefficients. Cryptocurrencies whose engagement coefficients have extreme values have lower returns. Low engagement coefficients signal a lack of interest, while high engagement coefficients signal artificial activity which is likely from automated accounts known as bots. We measure the amount of bot posts for the cryptocurrencies and find that generally, cryptocurrencies with more bot posts have lower future returns. While future returns are dependent on both the bot activity and engagement coefficient, the dependence is strongest for the engagement coefficient, especially for short-term returns. We show that simple investment strategies which select cryptocurrencies with engagement coefficients exceeding a fixed threshold perform well for holding times of a few months.

Social progress through improved treatment of minority groups (e.g., forbidding racial or sexual harassment) may or may not spread to corporate cultures through competition. We provide a theory of corporate culture, and we show that emergent, progressive corporate cultures can displace existing, regressive ones when the prevailing wage gap is large between majority and minority groups. The model provides testable predictions on racial and gender wage gaps across firms.

Importance  Emergency department (ED) triage models are intended to queue patients for treatment. In the absence of higher acuity, patients of the same acuity should room in order of arrival.

Objective  To characterize disparities in ED care access as unexplained queue jumps (UQJ), or instances in which acuity and first come, first served principles are violated.

This paper proposes a theory of large-scale government bond purchases by central banks in an environment with endogenous information acquisition. Information acquisition by private investors lowers risk premia by reducing uncertainty, but also makes prices more sensitive to new information. This can drive the sovereign into costly roll-over crises. Asset purchases by the central bank discourage private information acquisition, impairing price informative- ness. This, however, points to a benefit of such large scale programs: by im- plementing purchases, the central bank can avoid the occurrence of roll-over crises in the event of bad news, generating large welfare gains. A key property of the model is that substantial purchases may be required, while small inter- ventions have ambiguous welfare consequences. When the sovereign expects the central bank to carry such programs, it leads to excessive indebtedness, forcing the central bank to run an inflated balance sheet to avoid roll-over crises

An archeologist discovers a 1,500-year-old Viking sword at the bottom of a lake. Would people be more drawn to the sword if they knew that the discovery was intentional, or unintentional? The current research examines this previously unexplored type of biographical narrative-the biography of the discovery of historical and natural resources. We propose that unintentionality in the discovery of a resource can shape choice and preference. We focus our investigation on resources because the event of discovery is an inherent component in the biography of all known historical and natural resources, and because these resources are either themselves already objects (like historical artifacts) or are the building blocks of virtually all objects. Eight laboratory studies and one field experiment indicate that the unintentional discovery of resources heightens the choice of and preference for the resources. We find that the unintentional discovery of a resource triggers counterfactual thoughts about how the discovery might not have occurred, increasing perceptions that the discovery was fated, consequently driving choice of and preference for the resource. Further, we identify the level of expertise of the discoverer as a theoretically relevant moderator of this effect, finding that the effect is eliminated in the case of novice discoverers. It arises for resources discovered by experts with the rationale that unintentional discovery by an expert is unexpected, and therefore prompts heightened counterfactual thoughts. However, resources discovered by novices for which discovery is unexpected whether it is intentional or unintentional are preferred at equally high rates.

This paper studies the dissemination of frontier knowledge through higher education. Apply- ing natural language processing (NLP) techniques to the text of 1.7M university course syllabi and 20M academic articles, we construct the “education-innovation gap,” a measure of a syl- labus’s distance from frontier knowledge. Using this measure, we document four new facts. First, courses differ greatly in their education-innovation gap, even after controlling for field, course-level, and time. Second, instructors play an important role in shaping course content. Research-active instructors teach more frontier knowledge, particularly when their research is close to the course topic. Third, access to frontier knowledge is unequal: Schools enrolling more socio-economically advantaged students offer courses with a lower gap. Lastly, students from lower-gap schools are more likely to complete a doctoral degree, produce more patents, and earn more after graduation

Using detailed transactions data across the United States, we find that single women earn 1.5 percentage points lower annualized returns on housing relative to single men. Forty-five percent of the gap is explained by transaction timing and location. The remaining gap arises from a 2% gender difference in execution prices at purchase and sale. Consistent with a negotiation channel, women list for less and experience worse negotiated discounts. The gender gap shrinks in tight markets, where negotiation is replaced by quasi-auctions. Overall, gender differences in housing explain 30% of the gender gap in wealth accumulation for the median household.

We examine the demand-side implications of Amazon's distribution and logistics investments. Our results indicate that online demand—transactions at Amazon and its competitors—does not respond to the consumer's proximity to Amazon's upstream fulfillment distribution facilities, suggesting that their densification did not differentially improve local shipping times and on-time delivery. Instead, we find that investments in last-mile delivery facilities and services allow the company to improve shipping times more directly in the urban markets served by these facilities, simultaneously increasing demand through the rollout of same-day service options and reducing the visits to traditional brick-and-mortar retail.

This paper seeks to demonstrate the impact of the gig economy on product qual- ity in seemingly unrelated local industries through the labor market. Our empirical context is the quality of service for restaurants in the city of Austin, and we examine how they were impacted by the exogenous exit and reentry of rideshare platforms, Uber and Lyft, because of regulatory changes. We leverage these exogenous shocks and combine them with sentiment-analyzed data from Yelp reviews that capture how customers assess the quality of service at each restaurant. We show that, compared with control cities, customers in Austin become more negative about service quality when Uber and Lyft are present in the city. Additionally, we use rich data on employee turnover and wages to demonstrate that service staff turnover increases in Austin when Uber and Lyft are present compared with the control cities. We also conduct several additional studies and robustness checks that are all congruent with our hypothesis that Uber and Lyft lower the quality of service in Austin restaurants by raising their staff turnover. Together, these results suggest signifi- cant ramifications of the gig economy on the broader industries through the labor market.

Environmental, Social, and Governance (ESG) has been a headline in financial circles for well over a decade.Footnote1 From private equity and publicly listed companies to bonds and loans, the interest in “ESG Investing” has expanded exponentially over the last 10 years, powered by empirical studies that, for the most part, suggest a correlation with improved financial performance.Footnote2 By some estimates, roughly a third of all assets under management now consider some aspects of ESG information in their investment strategy.Footnote3 However, in the first part of 2023, ESG has exploded from investor research onto the front pages of major media outlets such as the New York Times,Footnote4 the Wall Street Journal,Footnote5 and even USA Today.Footnote6 The sudden mass interest has been driven, in large part, from backlash to the idea of ESG investing.

The Sustainable Corporation is a guide for lawyers to effectively represent and advise their clients on the risks, opportunities, and rewards facing companies on important issues such as environmental impact, social responsibility, and corporate governance. This guide defines, explains, and provides strategies for a "business centric" approach to ESG for the corporation.

This paper studies the welfare effects of encouraging rural-urban migration in the develop-
ing world. To do so, we build a dynamic incomplete-markets model of migration in which
heterogeneous agents face seasonal income fluctuations, stochastic income shocks, and disu-
tility of migration that depends on past migration experience. We calibrate the model to
replicate a field experiment that subsidized migration in rural Bangladesh, leading to signif-
icant increases in both migration rates and consumption for induced migrants. The model’s
welfare predictions for migration subsidies are driven by two main features of the model and
data: first, induced migrants tend to be negatively selected on income and assets; second, the
model’s non-monetary disutility of migration is substantial, which we validate using newly
collected survey data from this same experimental sample. The average welfare gains are
similar in magnitude to those obtained from an unconditional cash transfer, and greater than
from policies that discourage migration, though migration subsidies lead to larger gains for
the poorest households, which have the greatest propensity to migrate.