This paper studies school choice and information frictions in Haiti. Through a randomized control trial, we assess the impact of disclosing school-level test score information on learning outcomes, prices, and market shares. We find evidence that in markets where information was disclosed, students attending private schools increased test scores. The results also suggest private schools with higher baseline test scores increased their market share as well as their fees when the disclosure policy is implemented. While prices and test scores were not significantly correlated in the baseline survey, they exhibited a significant and positive correlation in treatment markets after information disclosure. These results underscore the potential of information provision to enhance market efficiency and improve children’s welfare in context such as Haiti.
Globally, preschool enrollment has surged, but its quality is often poor. We evaluate strategies to improve quality of public preschools in Colombia. The first, designed by the government and rolled out nationwide, provided extra funding, mainly earmarked for hiring teaching assistants. The second also offered low-cost training for existing teachers. The first intervention had no effect on child development, while the second improved children’s cognitive development, especially for more disadvantaged children. This pattern can be explained by the interventions affecting teachers' behavior differently. The first led teachers to reduce their classroom time, including learning activities, while additional training offset the adverse effect on learning activities and improved teaching quality.
We study the welfare and human capital impacts of colleges’ (non)participation in Chile’s centralized higher-education platform, leveraging administrative data and two policy changes: the introduction of a large scholarship program and the inclusion of additional institutions, which raised the number of on-platform slots by approximately 40%. We first show that the expansion of the platform raised on-time graduation rates. We then develop and estimate a model of college applications, offers, wait lists, matriculation, and graduation. When the platform expands, welfare increases, and welfare, enrollment, and graduation rates are less sensitive to off-platform frictions. Gains are larger for students from lower-socioeconomic-status backgrounds.
We study personalized pricing in a general oligopoly model. The impact of personalized pricing relative to uniform pricing hinges on the degree of market coverage. If market conditions are such that coverage is high (e.g., the production cost is low or the number of firms is high), personalized pricing harms firms and benefits consumers, whereas the opposite is true if coverage is low. When only some firms have data to personalize prices, consumers can be worse off compared to when either all or no firms personalize prices.
We derive a small open economy (SOE) as the limit of an economy as the number or size of its trading partners goes to infinity and trade costs also go to infinity. We obtain this limit in the Armington, Eaton–Kortum, Krugman, and Melitz models. In all cases, the trade of the SOE with the foreign countries approaches a finite limit, and the domestic expenditure share for the SOE approaches a limit that is not zero or unity. The foreign countries can be either infinitely many SOEs, or alternatively, one or many large countries with domestic expenditure shares that approach unity. We illustrate the usefulness of this framework by obtaining a formula for the optimal tariff in the SOE – depending on the elasticity of domestic wages with respect to the tariff – that is consistent with all models.
Two years prior to elections, two-thirds of Delhi municipal councillors learned they had been randomly chosen for a preelection newspaper report card. Treated councillors in high-slum areas increased pro-poor spending, relative both to control counterparts and treated counterparts from low-slum areas. Treated incumbents ineligible to rerun in home wards because of randomly assigned gender quotas were substantially likelier to run elsewhere only if their report card showed a strong pro-poor spending record. Parties also benefited electorally from councillors' high pro-poor spending. In contrast, in a cross-cut experiment, councillors did not react to actionable information that was not publicly disclosed.
We revisit measurement of employer-to-employer (EE) transitions in the monthly Current Population Survey. The incidence of missing answers to the question on change of employer sharply increases starting with the introduction of a new software instrument to conduct interviews in January 2007 and of the Respondent Identification Policy in 2008–2009. We document nonrandom nonresponse selection by observable and unobservable worker characteristics that correlate with EE mobility. We propose a selection model and a procedure to impute missing answers. Our imputed EE aggregate series no longer trends down after 2000 and restores a close congruence with the business cycle after 2007.
This paper studies the social value of closing price differentials in financial markets. We show that arbitrage gaps exactly correspond to the marginal social value of executing an arbitrage trade. Moreover, arbitrage gaps and price impact measures are sufficient to compute the total social value from closing an arbitrage gap, which may emerge for different reasons, including nonpecuniary benefits of holding particular assets. Theoretically, we show that, for a given arbitrage gap, the total social value of arbitrage is higher in more liquid markets. We compute the welfare gains from closing arbitrage gaps for covered interest parity violations.
We study robust welfare comparisons of learning biases (misspecified Bayesian and some forms of non-Bayesian updating). Given a true signal distribution, we deem one bias more harmful than another if it yields lower objective expected payoffs in all decision problems. We characterize this ranking in static and dynamic settings. While the static characterization compares posteriors signal by signal, the dynamic characterization employs an "efficiency index" measuring how fast beliefs converge. We quantify and compare the severity of several well-documented biases. We also highlight disagreements between the static and dynamic rankings, and that some "large" biases dynamically outperform other "vanishingly small" biases.
The US-China trade war created net export opportunities rather than simply shifting trade across destinations. Many "bystander" countries grew their exports of taxed products into the rest of the world (excluding the United States and China). Country-specific components of tariff elasticities, rather than specialization patterns, drove large cross-country variation in export growth of tariff-exposed products. The elasticities of exports to US-Chinese tariffs identify whether a country's exports complement or substitute the United States or China and its supply curve's slope. Countries that operate along downward-sloping supplies whose exports substitute (complement) the United States and China are among the larger (smaller) beneficiaries of the trade war.