Seminar Series – Spring 2024

Horacio Larreguy, Instituto Tecnológico Autónomo de México

February 8, 2024

Accountability under polarization

Political polarization can negatively impact electoral accountability by influencing how citizens perceive and process objective information regarding the performance of incumbent governments. We study how information about government performance affects voting behavior in a polarized environment, and how this varies when additionally treating citizens with an anti-polarization nudge to incorporate counter-attitudinal information. In particular, we experimentally evaluate the electoral effects of a local CSO’s Facebook ad campaign providing citizens with benchmarked information about COVID-19 cases and deaths in 500 Mexican municipalities in the run-up to the 2021 elections.

On its own, the information had a backfiring effect, increasing (reducing) the vote share received by the local incumbent party with relatively high (low) levels of COVID-19 cases and deaths. These effects are driven by areas with high past vote share for the incumbent, higher shares of citizens with communal values, and behavior indicative of more-stressed citizens. The randomly assigned anti-polarization nudge, however, reversed the backfiring: voters electorally rewarded (punished) incumbents with relatively low (high) levels of COVID-19 cases and deaths. Our findings demonstrate how biases in information processing can undermine electoral accountability in polarized contexts, and document the potential for nudges to restore electoral accountability.

Gabriel Kreindler, Harvard University

February 15, 2024

“Optimal Public Transportation Networks: Evidence from the World’s Largest Bus Rapid Transit System in Jakarta” (with Arya Gaduh, Tilman Graff, Rema Hanna, and Ben Olken).

Designing public transport networks involves tradeoffs between coverage, service frequency, and direct service. We use the expansion of the bus system in Jakarta, Indonesia, to study these tradeoffs. We analyze how new direct connections, changes in bus travel time, and wait time reductions affect bus ridership and aggregate flows, and estimate a transit network demand model by matching the route launch events. Commuters in Jakarta are 2-4 times more sensitive to wait time than bus time, and inattentive to long routes. We develop a flexible framework to characterize optimal networks. A less concentrated network would increase ridership and commuter welfare.

Eliana La Ferrara, Harvard University

February 22, 2024

“Changing Harmful Norms through Information and Coordination: Experimental Evidence from Somalia”
(with P. de Souza Ferreira, S. Gulesci, D. Smerdon and M. Sulaiman)

Female Genital Cutting (FGC) is a harmful practice affecting millions of women around the world. In Somalia, the prevalence of FGC is nearly universal (99 percent). We experimentally evaluate two interventions to decrease the prevalence of the most harmful type of FGC (infibulation) in Somalia: (1)
correcting misperceptions about the support for the practice, and (2) public declarations of community members to abandon FGC. We find that on average community members overestimate the community support for infibulation. Correcting this misperception is effective in reducing infibulation. In the short-
term, this leads to an increase in the intermediate type of FGC (Sunna), but it also increases the likelihood that parents report they plan not to cut their younger, uncut daughters. The public declaration treatment does not significantly affect infibulation, except in communities where participants had high priors about community support for abandoning the practice.

Jonah M. Rexer, The World Bank

February 29, 2024

Pricing Conflict Risk: Evidence from Sovereign Bonds

We investigate how sovereign bond markets price violent conflict. Using daily bond trading prices and information on armed conflicts over the past two decades, event-studies show that bond prices fall by 1.2% two weeks after the onset of state-involved conflict, due to increased credit risk. A bond pricing model reveals underreaction and investor learning; the share of the shock priced in rises from 14% to 75% after 15 days. Bondholders respond more to severe violence near the capital city and conflicts targeting the state, implying accurate pricing of information about conflict costs. International news media drives Bayesian learning about conflict.

Michael Kremer, The University of Chicago

March 14, 2024

Can Education Be Standardized: Evidence from Kenya

Imran Rasul, University College London

March 21, 2024

The Returns to Skills During the Pandemic: Experimental Evidence from Uganda joint with Livia Alfonsi (HBS), Vittorio Bassi (USC) and Elena Spadini (USC)

The Covid-19 pandemic represents one of the most significant labor market shocks to the world economy in recent times. We present evidence from a field experiment to understand whether and how high and low skilled workers were differentially impacted by the shock, in terms of their initial exposure and subsequent resilience to it. We study the issue in the context of a developing economy, Uganda. Our analysis leverages a panel of workers and firms, tracked from 2012 to 2022, including multiple high frequency surveys over the pandemic. In 2013, workers were randomly assigned to receive six months of sector-specific vocational training, in one of eight high productivity sectors. We document that over the course of the pandemic, employment and earnings margins respectively follow V-shaped dynamics, whereby complier treated (skilled) workers are more severely impacted by lockdowns, they recover more quickly between lockdowns, and remain resilient to the shock as the economy recovers from the pandemic. Cumulatively over the pandemic, skilled workers spend 58% more time than controls employed in one of our study sectors, and their total earnings are 18% higher, largely driven by earnings from wage/self-employment. We explore supply- and demand-side mechanisms through which the returns to skills are maintained through the crisis. These show that sectoral allocations of skilled workers drive their exposure to the shock, and although they are more likely to be laid off during the first lockdown as the SMEs they are employed in struggle to remain afloat, the certifiability of their skills enables them to recover by switching firms in the same sector during the crisis. We find more limited evidence that differences in saving accumulated pre-pandemic or search behaviors explain the returns to skills over the crisis. Our findings have implications for understanding the returns to skills in good economic times and times of crisis.

Jacob Moscona, Harvard University

April 4, 2024

Appropriate Entrepreneurship? The Rise of China and the Developing World

Francis Annan, University of California Berkeley

April 11, 2024

Equilibrium Effects of Entry in Digital Financial Markets

We study the direct and indirect effects of randomized entry into local service industries. We implement a three-step design, randomizing the entry of new retail mobile money vendors — drawn from existing microenterprises retailing other services across independent, distinct low-income localities in Ghana. We report preliminary evidence of (i) mixed business stealing and market expansion in sector A: mobile money, and (ii) market expansion in sector B: microenterprises. Yet, local industry revenues and profits increased overall, suggesting positive externalities on microenterprises and producer surplus. Randomized entry increases both firm conduct and service quality and decreases prices, suggesting positive consumer surplus. These effects are not only important for welfare and policy but are key ingredients for advancing basic and applied knowledge on firm entry in industry equilibrium.

Michael Carlos Best, Columbia University

April 18, 2024

Vittorio Bassi, University of Southern California

April 25, 2024

Lauren Bergquist, Yale University

May 2, 2024