This paper uses world records by age in running, swimming, and rowing to estimate a biological frontier of decline rates for both men and women. Decline rates are assumed to be linear in percent terms up to a certain age and then quadratic after that, where the transition age is estimated. The use of world records avoids the possible problem of survivor bias in a sample.
The decline rates are smallest for rowing, followed by swimming and then running. Decline rates for women are roughly the same as those for men for the swimming events. They are slightly larger for the rowing events. They are largest for running. The age at which there is a 50 percent decline from age 30 ranges from 69 to 89, an optimistic result for humans. Ten year decline rates from age 40 to about the mid 60’s are about 10 percent for running and 5 percent for swimming and rowing.
We analyze representativeness in a COVID-19 serological study with randomized participation incentives. We find large participation gaps by race and income when incentives are lower. High incentives increase participation rates for all groups but increase them more among under-represented groups. High incentives restore representativeness on race and income and also on health variables likely to be correlated with seropositivity, such as the uninsured rate, hospitalization rates, and an aggregate COVID-19 risk index.
Poor entrepreneurs must frequently choose between business investment and children's education. To examine this trade-off, we exploit experimental variation in short-run microenterprise growth among a sample of Indian households and track schooling and business out-comes over eleven years. Treated households, who experience higher initial microenterprise growth, are on average one-third more likely to send children to college. However, educational investment and schooling gains are concentrated among literate-parent households, whose enterprises eventually stagnate. In contrast, illiterate-parent households experience long-run business gains but declines in children's education. Our findings suggest that microenterprise growth has the potential to reduce relative intergenerational educational mobility.
This paper shows that it is possible to define an unambiguous notion of the direct effect of a parameter perturbation on the value of an optimization problem’s objective away from an optimum for problems with linearly homogeneous constraints. This notion of the direct effect relies on reformulating the optimization problem using shares as choice variables, and has the interpretation of holding choice variables — when formulated as shares — fixed. This short paper contains one formal “non-envelope” theorem and four applications to i) consumer demand, ii) cost minimization, iii) planning in exchange economies, and iv) planning in production economies.
This paper makes three main contributions. First, inflation expectation equations are estimated using quarterly time series data. Second, a price equation in level form is estimated that is consistent with the data, unlike Phillips-curve equations. Third, the case is considered in which an expectation variable in an inflation or price equation is not causal.
The results suggest that household inflation expectations are mostly affected by current and past inflation. The Fed through interest rates has a modest effect. In the estimated price equation a measure of the expected future price level is significant, although it may not be causal. Whether it is or not, the results show that the Fed’s ability to affect inflation is modest since its effect on expectations is modest.
A monotone function interval is the set of monotone functions that lie pointwise between two fixed monotone functions. We characterize the set of extreme points of monotone function intervals and apply this to a number of economic settings. First, we leverage the main result to characterize the set of distributions of posterior quantiles that can be induced by a signal, with applications to political economy, Bayesian persuasion, and the psychology of judgment. Second, we combine our characterization with properties of convex optimization problems to unify and generalize seminal results in the literature on security design under adverse selection and moral hazard.
We study noisy aggregation of dispersed information in financial markets without imposing parametric restrictions on preferences, information, and return distributions. We provide a general characterization of asset returns by means of a risk-neutral probability measure that features excess weight on tail risks. Moreover, we link excess weight on tail risks to observable moments such as forecast dispersion and accuracy, and argue that it provides a unified explanation for several prominent cross-sectional return anomalies. Simple calibrations suggest the model can account for a significant fraction of empirical returns to skewness, returns to disagreement, and interaction effects between the two.
A monopolist platform uses data to match heterogeneous consumers with multiproduct sellers. The consumers can purchase the products on the platform or search off the platform. The platform sells targeted ads to sellers that recommend their products to consumers and reveals information to consumers about their match values. The revenue- optimal mechanism is a managed advertising campaign that matches products and preferences efficiently. In equilibrium, sellers offer higher qualities at lower unit prices on than off platform. The platform exploits its information advantage to increase its bargaining power vis-à-vis the sellers. Finally, privacy-respecting data-governance rules can lead to welfare gains for consumers.
Analyzing the universe of federal environmental regulations in the U.S., we construct a measure of regulations—direct taxes on pollution. Analyzing the universe of firms’ investor disclosures, we construct a measure of material environmental concerns—indirect taxes on pollution. These two empirical measures are new to the environmental regulations literature. Thirdly, we document an important new fact that the cross-sectional distribution of pollution changes is lumpy. We build a dynamic heterogeneous firm model with non-convex adjustment costs that fits the cross-sectional pollution evidence. The model explains half of the pollution decline in U.S. manufacturing over the last two decades due to direct and indirect taxes. We show that the dynamics of direct taxes (environmental regulations) and indirect taxes (environmental concerns), non-convex adjustment costs, and idiosyncratic productivity shocks are key determinants of pollution dynamics in U.S. manufacturing.
The European Union Emission Trading System is a prominent market-based mechanism to reduce emissions. While the theory is well-understood, we are the first to study the whole cap-and-trade mechanism as a financial market. Analyzing the universe of transactions in 2005-2020 (more than one million records of granular transaction data), we show that this market features significant inefficiencies undermining its goals. First, about 40% of firms never trade in a given year. Second, many firms only trade during surrendering months, when compliance is immediate and prices are predictably high. Third, a number of operators engage in speculative trading, exploiting private information.