Are more children better than one? Evidence from a lab experiment of decision making

This paper examines the impacts of siblings on people's social preference, risk attitude and time preference with a data set from a large-scale lab experiment. Employing the variation of fine rates under One-Child Policy for excess birth in different regions as instrument to address the endogeneity of whether having siblings, we find that sibling's role mainly focuses on shaping people's social preference that subjects with siblings demand less as responders in ultimatum game and behave more cooperatively in sequential prisoner's dilemma. This conclusion survives through several robustness checks. Our further result suggests that more sibling interactions and less parental expectations are two potential mechanisms through which siblings play a role in making people more prosocial. Our findings point to a positive externality along with Two-Child Policy which is widely neglected in both policy evaluation and relevant theory such as quantity-quality theory, and provide implications for the fertility policy such as the recent Three-Child Policy in China and beyond.     

Are female teachers more likely to practice grade inflation? Evidence from China

Grade inflation has become a global phenomenon that raises concerns in the academia and the public. This study examines whether high grades accompanying with the growth of female teachers arise from student improvement or grade inflation. We use randomly assigned samples from the China Education Panel Survey and obtain the following results. (1) Students taught by female teachers obtain 1.57 grades point higher compared with those taught by male teachers. High grades do not result from student progress but from grade inflation. (2) Female teachers practice grade inflation for different students, and the effect is more pronounced among female students, low-ability students, and students in senior grades. (3) Female teachers may adopt a high-grades practice due to potential pressures under discrimination and uncertainty rather than for the sake of course or students. (4) Last, high grades brought by female teachers lead to less effort for students in the second year. This paper not only provides data support for understanding the increasing grade inflation, but also offers clear implications for the improvement of evaluation systems.     

Better safe than sorry? Evidence from Lanzhou's driving restriction policy

Driving restriction policies (DRPs) have been adopted worldwide to curb traffic congestion and air pollution. However, the empirical evidence of the effectiveness of such policies in improving air quality remains mixed (e.g., Davis, 2008; Viard & Fu, 2015). Individuals may change their commute schedules/routes or hire/purchase additional vehicles to circumvent such restrictions. This paper addresses this possibility by utilizing hourly measurements of air pollutants from monitoring stations at Lanzhou, one of the most polluted cities in China. Utilizing a regression discontinuity design (RD) approach, we concluded that the driving restrictions in Lanzhou are ineffective in improving its air quality. Specific hour and location results suggest that drivers shift their travel schedules, take detours, and acquire alternative vehicles. The results are robust after considering alternative model specifications and sample restrictions.     

Good institutions,more FDI? Evidence from Indian firm-level data

International Economics and Economic Policy - The study examines the effect of institutional quality on the FDI of Indian firms at the intensive country margin. In the present study, the state...     

Are Online Samples Credible? Evidence from Risk Elicitation Tests

Atlantic Economic Journal -     

Are local governments maximizing land revenue? Evidence from China

This paper examines how political considerations affect local officials' revenue maximization behaviors in the context of urban land conveyance in China. Particularly, we analyze government intervention based on local officials' choice of two land auction types, namely, “English auction” and “two-stage auction”. The latter presumably serves as a tool of government intervention. We aim to address the research question: “Are local governments maximizing land revenue?” The major findings are threefold. First, for cities with higher housing prices, two-stage auctions are adopted more frequently than English auctions. In addition, land parcels in these “hot” cities adopt two-stage auctions more frequently during sensitive political events, suggesting that local officials respond positively to the real estate regulation policy from central government. Second, when city leaders are more incentivized to promote economic performance, they respond less positively to rises in housing prices. Third, such interventionist behavior results in a significantly depressed land price and housing price. Despite its intention of improving public welfare, this interventionism can susceptibly cause problems of misallocation and corruption.     

Are “Education Lotteries” Less Regressive? Evidence from Texas

With little exception, research has shown that state-sponsored lotteries are regressive in the aggregate, in that lottery sales do not increase proportionately with area income. We test whether the purpose of lottery revenues mitigates this spatial regressivity. In August of 1997, the statutory earmark for Texas Lottery proceeds moved from the General Fund to the Foundation School Fund, which supports K-12 education. Beginning in 2000, the lottery was increasingly marketed as a funding stream for public schools. Drawing on a content analysis of lottery commission press releases from 1993 to 2006, we find that Instant game sales were modestly responsive to education messaging, in that sales became noticeably less regressive in the wake of more intense reminders of the education component of the state lottery. It is likely that unobserved heterogeneity in local sales factors played a much bigger role than education marketing.     

Are stronger executive incentives associated with cross-listing? Evidence from China

This study examines whether firms incorporated in mainland China benefit from cross-listing in Hong Kong, China. The Hong Kong Stock Market has more stringent rules regarding corporate governance and a better system of investor protection than the mainland market. Hong Kong companies generally provide strong incentives to executives via equity-based compensation. Have cross-listed companies learned from Hong Kong firms about adopting these strong executive incentives? The evidence from this study suggests that changes in top executive compensation are more sensitive to sales growth in cross-listed firms than they are in mainland firms without cross-listing. However, compared to Hong Kong firms, cross-listed firms are less sensitive to stock returns. Further, this study shows that it is necessary to differentiate between state-owned companies and private companies, as cross-listing may have a greater impact on executive incentives in state-owned companies than it does in private companies.     

Are long-term return anomalies illusions?: Evidence from the spot Yen

This study investigates the sensitivity of the long-term return anomaly observed in the US$/Yen currency market to sample and method bias during the period from 11 October 1983 to 21 July 1999. Initially the CUSUM statistic is employed to identify subperiods of sign shifts in the mean returns. Then the dependence in these subperiods is investigated using the Hurst [Hurst, H.E., 1951. Trans. Am. Soc. Civil Eng. 116, 770–799] and the Lo [Lo, A.W., 1991. Econometrica 59 (5), 1279–1313] rescaled range statistics. The results suggest that rejection of the random null is conditional on both the procedure and the period being tested. The Hurst test may incorrectly lead to a rejection of the null hypothesis. However, the Lo test is a more appropriate approach to the data in this study. Thus previous research based on the Hurst test may have inadvertently introduced a method bias.     

What Are SEC Football Tickets Worth? Evidence from Secondary Market Transactions

Tickets to sporting events are highly differentiated—seat location, date and time of the game, and home‐team and opponent qualities make each ticket unique. Preferences also differ nontrivially across fans, all of which make the supplier's pricing problem complex. We examine strategies employed by Southeastern Conference (SEC) universities in pricing their football tickets and evaluate their effectiveness in extracting surplus from fans. We use hedonic analysis of data collected from online secondary market transactions to construct a synthetic season ticket, which we compare to prices actually charged by university athletic departments. We also compare quality premiums charged by universities for better seats with market evaluations of those quality differences.     

Are International Remittances Altruism or Insurance? Evidence from Guyana Using Multiple-Migrant Households

While international remittances provide significant disposable income for many households in less-developed countries, there is no consensus on migrants’ remittance motivation. Two principal competing explanations for remittances are altruism and risk sharing. This paper employs previously unanalyzed data to bring new evidence to the debate. We develop a simple theoretical model that yields distinct testable predictions for each motivation. Among the model’s testable predictions is differential remittance behavior by migrants from households with multiple versus single migrants under altruism and risk sharing. Our estimation finds significant differences in remittance behavior of multiple and single migrants and these differences support the altruistic incentive to remit.     

Are immigrants really attracted to the welfare state? Evidence from OECD countries

This paper examines the impact of fiscal policies on both the size and educational levels of immigrants in destination countries. We find that whether or not a country’s policies are attracting highly educated immigrants goes beyond the issue of the “welfare state”. Immigrants are making important distinctions between the different benefits provided by a receiving country’s government. Health and education spending are found to have a positive impact on the education levels of immigrants while the reverse is true for unemployment and retirement benefits. Welfare programs are found to be insignificant once other government programs/taxes and other factors are taken into account. These results imply that countries should be less concerned about whether they are a “big government” with regards to attracting immigrants, and more concerned with what types of benefits they offer.     

Are China's Exports Crowding Out or Being Crowded Out? Evidence from Japan's Imports

Previous studies have investigated whether Chinese exports have crowded out those from other countries. However, what has yet to be considered is the evidence based on different quality varieties. Using the most detailed Harmonized System 9‐digit product‐level data, the present paper provides evidence of crowding‐out and crowded‐out effects across different product quality segments and across manufacturing sectors by quality segments. The empirical evidence presented in this paper shows that the crowding‐out effects of Chinese exports have been greatest at the lower end of the quality spectrum but less significant at the higher quality spectrum. Moreover, since 2007, China's own exports of lower quality manufactured goods have been increasingly crowded out. The key policy implication is that China's export path is in line with that taken by other Asian economies in previous decades; the crowded‐out effect could achieve win–win outcomes for countries involved; and lower income countries would do well to be open to receive those relocated low value‐added industries from China. However, the relocation policy in China is best implemented gradually as climbing up the product quality ladder takes time.     

Are workers more vulnerable in tradable industries?

Reduced trade barriers and lower costs of transportation and information have meant that a growing part of the economy has been exposed to international trade. In particular, this is the case in the service sector. We divide the service sector into a tradable and a non-tradable part using an approach to identify tradable industries utilizing a measure of regional concentration of production. We examine whether the probability of displacement is higher and income losses after displacement greater for workers in tradable services and manufacturing (tradable) than in non-tradable services. We also analyze whether the probability of re-employment is higher for workers displaced from tradable services and manufacturing than from non-tradable services. We find that in the 2000s the probability of displacement is relatively high in tradable services in comparison to non-tradable services and manufacturing. On the other hand, the probability of re-employment is higher for those displaced from tradable services. The largest income losses are found for those who had been displaced from manufacturing. Interestingly, the income losses of those displaced from manufacturing seems mainly to be due to longer spells of non-employment, whereas for those displaced in tradable services lower wages in their new jobs compared to their pre-displacement jobs appears to play a larger role.     

Are China's trade interests overestimated? Evidence from firms’ importing behavior and pollution emissions

Importing is an important driving force for a country's economic growth. While importing promotes the expansion of economic scale, does it also lead the increase of pollution emissions in production? In this paper, we establish a micro theoretical model to analyze the impacts of importing on firms’ environmental performance, and then use the data of China's manufacturing firms for empirical tests. We show that the importing of intermediate goods or capital goods will lead to the increase of firms’ production scale, and thereby increasing their total emissions, which suggests that China's environment will be deteriorated by importing. On the other hand, importing also has some positive environmental effects that firms will increase their abatement investment after importing intermediate goods or capital goods, thus firms’ emission intensity can be effectively reduced. Altogether, this paper provides important evidence on the impacts of importing on pollution emissions at product-level. We suggest that when analyzing China's interests in trade, the environmental effects of trade should be taken into consideration, otherwise China's gains from trade will be overestimated. This paper also has important implications that while developing the economy through international trade, the government should strengthen environmental protection and advocate green trade.