Publications

We analyze consumer surplus when a monopolist can adjust both prices and product qualities across segments, engaging in second and third-degree price discrimination simultaneously. We characterize the consumer-optimal segmentation and show that it has a striking structure: Consumers with the same value receive the same quality in every segment, though prices differ. Under mild conditions, any segmentation harms consumers if and only if demand is sufficiently more elastic than supply. Hence, potential benefits for consumers depend critically on demand and supply elasticities. These findings have implications for regulatory policy regarding price discrimination and market segmentation.

We investigate the efficiency of a market relative to a non-market institution—an auction relative to a quota—as allocation mechanisms in the presence of frictions. We use data from water markets in southeastern Spain and explore a specific change in the institutions to allocate water. On the one hand, frictions arose because poor farmers were liquidity constrained. On the other hand, farmers who were part of the wealthy elite were not liquidity constrained. We estimate a structural dynamic demand model by taking advantage of the fact that water demand for both types of farmers is determined by the technological constraint imposed by the crop’s production function. This approach allows us to differentiate liquidity constraints from unobserved heterogeneity. We show that the institutional change from an auction to a quota increased total efficiency for the farmers considered. Welfare increased by 23.4 real pesetas per farmer per tree, a 6 % increase in total production relative to the market.

We show how to use randomized participation incentives to test and account for nonresponse bias in surveys. We first use data from a survey about labour market conditions, linked to full-population administrative data, to provide evidence of large differences in labour market outcomes between survey participants and nonparticipants, differences which would not be observable to an analyst who only has access to the survey data. These differences persist even after correcting for observable characteristics. We then use the randomized incentives in our survey to directly test for nonresponse bias and find evidence of substantial bias. Next, we apply a range of existing methods that account for nonresponse bias and find they produce bounds (or point estimates) that are either wide or far from the ground truth. We investigate the failure of these methods by taking a closer look at the determinants of participation, finding that the composition of participants changes in opposite directions in response to incentives and reminder emails. We develop a model of participation that allows for two dimensions of unobserved heterogeneity in the participation decision. Applying the model to our data produces bounds (or point estimates) that are narrower and closer to the ground truth than the other methods. Our results highlight the benefits of including randomized participation incentives in surveys. Both the testing procedure and the methods for bias adjustment may be attractive tools for researchers who are able to embed randomized incentives into their survey.

We examine the intergenerational effect of education policy on crime. Using administrative data that link outcomes across generations with crime records, we show that the Swedish comprehensive school reform, gradually implemented between 1949 and 1962, reduced conviction rates both for the generation directly affected and for their sons. The reduction occurred across several types of crime. Mediation analysis suggests that the key channels include increased parental educational attainment and household income, as well as reduced criminal behavior among fathers.

We review recent evidence on longer-term effects of Medicaid coverage during the prenatal period and in childhood and ask whether the benefits of these investments outweigh their costs. Included studies were published since 2015, follow cohorts for at least 10 years, and estimate the impacts of prenatal or childhood Medicaid eligibility on adult health, mortality, education, income, crime, and/or intergenerational outcomes. Reported effects are standardized to percent changes per additional year of eligibility and are incorporated into a Marginal Value of Public Funds (MVPF) framework to compare benefits with government costs.

Greater Medicaid eligibility in utero and during childhood is consistently associated with lower rates of adult disability, chronic disease, hospitalizations, and mortality. Benefits extend beyond health to higher educational attainment, improved employment and earnings in adulthood, and reduced criminal involvement. Emerging evidence also points to intergenerational gains, with improved birth outcomes in the next generation. The longer-term reductions in public spending attributable to the effects of Medicaid on improved health and economic outcomes exceed the direct cost of expanded eligibility. Hence, prenatal and childhood Medicaid “pays for itself” by generating additional benefits for individuals and society.

Overall, early-life Medicaid coverage generates durable improvements in longevity, health, human capital, and economic productivity while reducing crime and intergenerational disadvantage. These findings underscore Medicaid’s role as both a public health investment and a fiscal bargain. Planned Medicaid cutbacks risk reversing decades of progress and will likely impose significant financial and social costs.

We study the problem of designing a dynamic reassignment mechanism when agents' preferences over objects change over time. In the context of Norway's system for (re)assigning patients to general practitioners (GPs), we provide direct evidence of misallocation under the current mechanism—patients waiting for each others' GPs, but who cannot trade—and estimate a structural model of GP-switching behavior to evaluate alternatives. Introducing top trading cycles (TTC) would, on average, reduce waiting times and increase patient welfare. However, patients endowed with less desirable GPs would be harmed. Prioritizing these patients can avoid these harms while preserving most of the gains from TTC.

We study rainmaking as an instrumental religious belief. We present a model in which a religious leader tries to persuade people to believe. Praying for rain can persuade only where the hazard of rainfall during a dry spell is increasing over time, so that prayer is most likely to succeed when people most want rain. We present evidence from prayers for rain in Murcia, Spain, where the hazard rate is increasing, that the church’s prayers for rain predict rainfall over two centuries. To generalize this finding, we gather an original data set of whether ethnic groups around the world traditionally prayed for rain. We find that ethnic groups facing an increasing rainfall hazard are 47% more likely to pray for rain, consistent with our model’s prediction that societies are more likely to pray for rain where prayer is persuasive.

Customs data reveal the heterogeneity and granularity of relationships among buyers and sellers, showing how more exports to a destination break down into more firms selling there and more buyers per exporter. We develop a quantitative general equilibrium model of firm-to-firm matching that builds on this insight to separate the roles of iceberg costs and matching frictions in gravity. In the cross section, we find matching frictions as important as iceberg costs in impeding trade, and more sensitive to distance. Because domestic and imported intermediates compete directly with labor in performing production tasks, our model also fits the heterogeneity of labor shares across French producers. Applying the framework to the 2004 expansion of the European Union, reduced iceberg costs and reduced matching frictions contributed equally to the increase in French exports to the new members. While workers benefited overall, those competing most directly with imports gained less, even losing in some countries entering the EU.

This paper studies the implications of central bank credibility for long-run inflation and inflation dynamics. We introduce central bank lack of commitment into a standard nonlinear New Keynesian economy with sticky-price monopolistically competitive firms. Inflation is driven by the interaction of lack of commitment and the economic environment. We show that long-run inflation increases following an unanticipated permanent increase in the labor wedge or decrease in the elasticity of substitution across varieties. In the transition, inflation overshoots and then gradually declines. Quantitatively, inflation overshooting is persistent, and the welfare loss from lack of commitment relative to inflation targeting is large.

We state conditions under which choice data suffice to identify preferences when consumers may not be fully informed about attributes of goods. Our approach can be used to test for full information, forecast how consumers will respond to information, and conduct welfare analysis when consumers are imperfectly informed. In a lab experiment, we successfully forecast the average response to new information when consumers engage in costly search. In data from Expedia, our method identifies which attribute was not immediately visible to consumers in search results and allows us to compute the value of additional information.

We examine the impact of firearm violence on newborn health in the U.S. using two approaches. First, we analyze the “beltway sniper” attacks in 2002, leveraging both temporal and spatial variation to compare birth outcomes of exposed children to those unexposed. Second, we investigate in-utero exposure to mass shootings using national data. We find that exposure to these incidents during pregnancy increases the likelihood of very low-birthweight and very premature birth. These events carry a significant economic burden, with the beltway sniper attacks costing at least $155 million and mass shootings resulting in annual costs exceeding $75 million.

We examine child mental health treatment surrounding three school milestones in Taiwan: Middle school entry, high stakes testing for high school entrance, and college entrance exams. Using age cutoffs for school entry, we compare August-born to September-born children since the August-born reach each milestone one year earlier. Comparing adjacent cohorts of children born in the same month yields similar estimates. We find that entry into middle school increases mental health prescribing of antidepressant, anti-anxiety, and antipsychotic medications. Use of psychiatric medications falls sharply following high-stakes tests. Effects are stronger in counties where parents and children have higher educational aspirations.

Language skill gaps between advantaged and disadvantaged children emerge well before formal schooling, in part due to disparities in parent–child shared reading practices. This paper reports results from an 11-month randomized controlled trial. The study evaluates the impact of providing low-income families with an electronic tablet loaded with a digital library on the language skills of children aged three to five. The digital library included over 200 children’s books and, for a randomly assigned subset of families, incorporated behaviorally informed goal-setting and reminder messages. All tablet functions other than the reading application were disabled. Access to the digital library alone led to a significant improvement of 0.29 standard deviations in children’s language skills relative to families who did not receive it. We find no statistically significant evidence that behavioral messages improve outcomes beyond access to the digital library on average. Subgroup analysis suggests that the benefits of digital library access are concentrated among children with lower baseline language skills: children below the median improved by approximately 0.6 standard deviations, significantly more than their higher-skilled peers, closing about 15 percent of the baseline language gap. Overall, these findings demonstrate that educational technology designed for home use can meaningfully support early language development and may help reduce disparities in children’s learning outcomes.

Do elite colleges help talented students join the social elite or help incumbent elites retain their positions? We combine intergenerationally linked data from Chile with a regression discontinuity design to show that, looking across generations, elite colleges do both. Lower-status individuals who gain admission to elite college programs transform their children's social environment. Children become more likely to attend high-status private schools and colleges and to live near and befriend high-status peers. In contrast, academic achievement is unaffected. Simulations combining descriptive and quasi-experimental findings show that elite colleges tighten the link between social and human capital while decreasing intergenerational social mobility.