RISK PREFERENCES AND EXPECTED UTILITY: EVIDENCE FROM LABOR SUPPLY DATA

This paper adds to the growing body of evidence that observed risk preferences are not consistent with expected‐utility theory. Using the link between labor supply decisions and utility as outlined by Chetty (“A Bound on Risk Aversion Using Labor Supply Elasticities.” The American Economic Review, 96(5), 2006, 1821–34), I compute the curvature of utility over wealth for 3,900 individuals in the 1996 Panel Study of Income Dynamics. I then compare this estimate to a measure of relative risk aversion based on the respondents' answers to hypothetical gambling questions and find virtually zero correlation. Finally, I investigate how the two measures and their correlations change by demographic groups and risky behavior. (JEL C81, D80, J22)     

Making Sense of Community Action and Voluntary Participation—A Multilevel Test of Multilevel Hypotheses: Do Communities Act?

To what extent does community context influence individuals’ proclivity to participate in community‐oriented activities and projects? In this article we utilize survey data from residents of 99 Iowa communities to conduct a multilevel analysis of voluntary participation and community action, simultaneously addressing voluntary participation at the individual level and “community action” at the community level. Additionally, we test the suggestion that community attachment may constitute a unique form of social capital. The robustness of these data allows us to overcome the obstacles that have led to the conflation of individual‐ and community‐level attributes in many community studies. We show that community attachment and community‐oriented action are determined almost entirely by individuals’ characteristics rather than by the characteristics of communities, and thus do not constitute community‐level phenomena, calling into question the assumptions on which certain theoretical approaches to community are based.     

DOES BEAUTY MATTER IN UNDERGRADUATE EDUCATION?

Physically attractive individuals achieve greater success in terms of earnings and status than those who are less attractive. However, whether this “beauty premium” arises primarily because of differences in ability or confidence, bias, or sorting remains unknown. We use a rich dataset from a women's college to evaluate each of these three mechanisms at the college level. We find that students judged to be more attractive perform significantly worse on standardized tests but, conditional on test scores, are not evaluated more favorably at the point of admission, suggesting that more attractive people do not possess greater abilities at the beginning of college. Controlling for test scores, more attractive students receive only marginally better grades in some specifications, and the magnitudes of the differences are very small. Finally, there is substantial beauty‐based sorting into areas of study and occupations. (JEL J16, I21, I23)     

WHAT’S IN A NAME?

This article analyzes two broad questions: Does your first name matter? And how did you get your first name anyway? Using data from the National Opinion Research Centers General Social Survey, we find evidence that, even after controlling for a myriad of exogenous background factors, first name features are predictors of many lifetime economic outcomes that are related to labor productivity such as education, happiness, and early fertility. However, we also find evidence, based on the differential impacts of gender and race on the “blackness” of a name, that identity could be an important channel for linking first name to lifetime economic outcomes. (JEL D1, J1, J7)     

Checkbooks in the Heartland: Change over Time in Voluntary Association Membership

Numerous scholars documented declines in America's social capital through the mid‐1990s but we do not know whether the trend has continued. Further, despite warnings by Robert Putnam and Theda Skocpol that the quality of Americans' voluntary association memberships has also deteriorated—moving from active, “face‐to‐face” memberships to passive, “checkbook” memberships—data have not been available to test this claim. In this article, we use both the Iowa Community Survey and the General Social Survey to explore the changing nature of voluntary association membership between 1994 and 2004. We demonstrate that not only are declines in voluntary association memberships continuing in the new century but there has been a shift in the intensity of voluntary association participation over time. We observe a decline in active membership over time and an increase in checkbook membership over time. These findings provide support for Putnam's claim that checkbook membership is increasing at the expense of more active types of memberships.     

The scars of youth: Effects of early‐career unemployment on future unemployment experience

Does early‐career unemployment cause future unemployment? The authors approach this question using German administrative matched employer–employee data that track almost 700,000 individuals over 24 years. Instrumenting early‐career unemployment with firm‐specific labour demand shocks, they find significant and long‐lasting “scarring effects”. In the mean, each additional day of unemployment during the first eight years on the labour market increases unemployment in the following 16 years by half a day. However, quantile regressions show that the scarring effects are much stronger for individuals who already suffer from lengthy and repeated spells of unemployment.     

RELEASING THE TRAP: A METHOD TO REDUCE INATTENTION BIAS IN SURVEY DATA WITH APPLICATION TO U.S. BEER TAXES

This study uses discrete choice experiments to explore the efficacy of prompts targeted at reducing inattention bias. Upon receiving feedback, inattentive respondents are given the opportunity to reanswer a so‐called “trap question” that checks for attentiveness. We find that individuals who miss trap questions and do not correctly revise their responses have significantly different choice patterns as compared to individuals who correctly answer the trap question. Adjusting for these inattentive responses has a substantive impact on policy impacts. Results, based on attentive participant responses, indicate that a minimum beer price would have to be substantial to substantially reduce beer demand. (JEL C83, Q18, Q51)     

DOES A GOOD CENTRAL BANKER MAKE A DIFFERENCE?

The personalities of central bankers moved center stage during the recent financial crisis. Indeed, several central bankers even became “superstars.” In this article, we investigate whether superstar central bankers have an impact on economic performance. We employ school grades given to central bankers by the financial press, defining as superstars those central bankers receiving the top grade. First, we explain the grades in a probit estimation with measures of economic performance, institutional features, and personal characteristics. Second, we employ a matching approach to account for the endogeneity of grading with respect to economic performance. Using entropy balancing, we identify credible counterfactuals for top‐graded central bankers, that is, nonsuperstar central bankers who face similar situations. Comparing the economic performance of both groups, we find that superstars do indeed matter: a top‐graded central banker faces a significantly more favorable output‐inflation tradeoff than his peers. This effect is driven by outstanding central bankers in both advanced and emerging economies and is especially prevalent in the precrisis subsample. (JEL E52, E58)     

Time for Each Other: Work and Family Constraints Among Couples

Little is known about couples' shared time and how actual time spent together is associated with well‐being. In this study, the authors investigated how work and family demands are related to couples' shared time (total and exclusive) and individual well‐being (happiness, meaningfulness, and stress) when with one's spouse. They used individual‐level data from the 2003–2010 American Time Use Survey (N = 46,883), including the 2010 Well‐Being Module. The results indicated that individuals in full‐time working dual‐earner couples spend similar amounts of time together as individuals in traditional breadwinner–homemaker arrangements on weekdays after accounting for daily work demands. The findings also show that parents share significantly less total and exclusive spousal time together than nonparents, though there is considerable variation among parents by age of the youngest child. Of significance is that individuals experience greater happiness and meaning and less stress during time spent with a spouse opposed to time spent apart.     

WILL GIRLS BE GIRLS? RISK TAKING AND COMPETITION IN AN ALL‐GIRLS' SCHOOL

We conduct an experiment that examines the relationship between girls only schooling and risk taking and competitive behavior. In it, we compare decisions made by students in an all‐girls' school to those made by students in a closely matched coeducational school. We further investigate the developmental nature of this behavior by comparing choices made by younger students (Grades 7 and 8) with those of older students (Grades 11 and 12). We focus on the differences between those who select into the all‐girls' school, and find that although girls educated in a single sex environment are the most risk averse, they are also among the most competitive. These results lend texture to the hypothesis that “nurture matters” in the gender differences debate. (JEL C93, J16, I21)     

Adolescent Electronic Media Use: Instead of Doing What?

Adolescents like to watch TV and listen to the radio, even on school days, but their day contains, like for all other people, only 24 hours. What do those who use electronic media frequently neglect? Data from 14- and 16-year-old adolescents from 12 European countries and from the USA (EURONET sample) were analyzed (N = 3,250). The correlations between time spent using electronic media (EM) and 15 other daily activities were all negative, which is not surprising given the fact that the sum of all activities is bound to be 24 hours. We, therefore, calculated correlations between electronic media use and the proportions of each other activity within the remaining time. A clear pattern emerged. The method allowed us to identify “mandatory” activities that always have high priority, such as sleeping and attending school, and “optional” activities that enter into competition with electronic media use, including engaging in sports, playing music, leisure reading, and being with friends without media use. As to the mandatory activities, the correlations between media-using time and the proportions of remaining time were positive; relative to the optional activities, the correlations between media-using time and the proportions of remaining time were negative. While one might expect school homework to be regarded as mandatory, the correlation patterns identified it as optional. As to the average electronic media-using times, there were marked differences not only between the individual participants, but also between the countries. While Bulgarian adolescents spent an average of 2.37 hours of a regular school day using electronic media, French adolescents averaged only 1.72 hours.     

MORE INFORMATION IS NOT ALWAYS BETTER: THE CASE OF VOLUNTARY PROVISION OF ENVIRONMENTAL QUALITY

We use a new U.S. survey on pro‐environmental behaviors, attitudes, and knowledge and find that individuals engage in activities that they believe are more effective in reducing carbon emissions, regardless of whether or not these beliefs are accurate. We find that low provision of the public good is greater among people who believe they cannot do much for the environment and do not consider themselves environmentalists. A policy implication of our results is that the effect of more accurate information on the provision of the public good is ambiguous. (JEL Q50, Q54, C10)     

GENDER DIFFERENCES IN MOTIVATIONAL CROWDING OUT OF WORK PERFORMANCE

This paper shows that prior financial incentives induce a crowding‐out effect when incentives are discontinued. In our real‐effort experiment workers receive a piece rate before monetary incentives are substituted by a one‐time payment. In this case, workers' performance significantly drops when receiving the one‐time payment. The effect is driven by a fraction of men who reduce effort substantially, whereas women constantly perform well. We find that this motivational crowding‐out effect disappears when men do not have prior experience of a piece rate. In a series of control treatments, we discard several alternative explanations besides motivational crowding out. (JEL C91, J16, M54)     

Early Family Transitions and Depressive Symptom Changes From Adolescence to Early Adulthood

Some research and theory suggest that early cohabitation, parenthood, and marriage have negative long‐term implications. Nevertheless, in the context of their resources and opportunities, early transitions may represent positive choices for some individuals. We studied the family and personal characteristics of young adults (N = 8,172) who did, versus those who did not, make early family transitions. We assessed changes in their depressive symptoms from adolescence to young adulthood. Individuals who made early family transitions were disadvantaged in many respects, but differed little from those who did not with respect to changes in depressive symptoms. That they stay “even” with those who do not make transitions suggests that some young adults make positive choices from among limited options.     

DISAPPOINTMENT AVERSION AND SOCIAL COMPARISONS IN A REAL‐EFFORT COMPETITION

We present an experiment to investigate the source of disappointment aversion in a sequential real‐effort competition. Specifically, we study the contribution of social comparison effects to the disappointment aversion previously identified in a two‐person real‐effort competition (Gill, D., and V. Prowse. “A Structural Analysis of Disappointment Aversion in a Real Effort Competition.” American Economic Review, 102, 2012, 469–503). To do this we compare “social” and “asocial” versions of the Gill and Prowse experiment, where the latter treatment removes the scope for social comparisons. If disappointment aversion simply reflects an asymmetric evaluation of losses and gains we would expect it to survive in our asocial treatment. Alternatively, if losing to or winning against another person affects the evaluation of losses/gains, as we show would be theoretically the case under asymmetric inequality aversion, we would expect treatment differences. We find behavior in social and asocial treatments to be similar, suggesting that social comparisons have little impact in this setting. Unlike in Gill and Prowse we do not find evidence of disappointment aversion. (JEL C91, D12, D81, D84)     

The “sharing” economy: labor,inequality, and social connection on for‐profit platforms

For social analysts, what has come to be called the “sharing economy” raises important questions. After a discussion of history and definitions, we focus on 3 areas of research in the for‐profit segment, also called the platform economy: social connection, conditions for laborers, and inequalities. Although we find that some parts of the platform economy, particularly Airbnb, do foster social connection, there are also ways in which even shared hospitality is becoming more like conventional exchange. With respect to labor conditions, we find they vary across platforms and the degree to which workers are dependent on the platform to meet their basic needs. On inequality, there is mounting evidence that platforms are facilitating person‐to‐person discrimination by race. In addition, platforms are advantaging those who already have human capital or physical assets, in contrast to claims that they provide widespread opportunity or even advantage less privileged individuals.     

YOUNG “STARS” IN ECONOMICS: WHAT THEY DO AND WHERE THEY GO

We construct a data set of job flyouts for junior economists between 2013 and 2018 to investigate three aspects of the market for “stars.” First, what is the background of students who become stars? Second, what type of research does the top of the market demand? Third, where do these students take jobs? Among other results, we show that stars are more likely to be international and male than PhDs overall, that theoretical and semi‐theoretical approaches remain dominant, that American programs both produce the most stars and hire even more, that almost none are hired by the private sector, and that there is a strong shift toward having pre‐PhD full‐time academic research jobs. (JEL A11, A12, A23, J24)     

Time-based versus money-based decision making under risk: An experimental investigation

This paper investigates whether individuals make similar decisions under risk when the outcomes are expressed in time versus monetary units. We address this issue in two studies measuring individual risk preferences and prospect theory parameters (i.e., utility curvature, probability weighting, and loss aversion) for both time and money. In the first (resp., second) study we consider relatively small (resp., large) time and monetary outcomes. We find that individuals hold similar risk preferences for time and money; we also find evidence that “time is money” with regard to the utility curvature for gains, loss aversion, and decision weighting. However, individuals have different valuations of losing time and money. The utility function for small losses of money is more concave and variable than the utility function for small losses of time (Study 1), but the utility function for large losses of time is more concave and variable than that for large losses of money (Study 2). We argue that these results reflect a difference in the perceived slack of the respective resource.