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#1451.

David Longworth, Frank Milne

Public Health and Government Preparations For Future Pandemics

Substantial weaknesses in the preparation by public health authorities and governments increased the health and economic costs of the Covid-19 pandemic relative to what they would have been if pre-existing recommendations had been followed and a wider set of plans had been put into place. Therefore, we set forth recommendations…

#1450.

N'Golo Kone

Regularized Maximum Diversification Investment Strategy

The maximum diversification portfolio as defined by Choueifaty (2011) depends on the vector of asset volatilities and the inverse of the covariance matrix of the asset return. In practice, these two quantities need to be replaced by their sample statistics. The estimation error associated with the use of these sample statistics may be amplified due to (near) singularity of the covariance matrix, in financial markets with many assets. This in turn may lead to the selection of portfolios that are far from the optimal regarding standard portfolio performance measures of the financial…

#1449.

Steven Lehrer, Tian Xie

The Bigger Picture: Combining Econometrics with Analytics Improve Forecasts of Movie Success

There exists significant hype regarding how much machine learning and incorporating social media data can improve forecast accuracy in commercial applications. To assess if the hype is warranted, we use data from the film industry in simulation experiments that contrast econometric approaches with tools from the predictive analytics literature. Further, we propose new strategies that combine elements from each literature in a bid to capture richer patterns of heterogeneity in the underlying relationship governing revenue. Our results demonstrate the importance of social media data…

#1448.

Christopher Cotton, Ardyn Nordstrom, jordan_naowski_wp, Eric Richert

Information and Advocacy Campaigns in Support of Girls' Education Increase Math Performance and Enrolment

We evaluate a large, randomized UKaid Girls' Education Challenge project in rural Zimbabwe, where the staggered rollout of the project allows us to isolate the impact of intervention components specifically intended to improve individual and community-wide knowledge of and support for girls' education. Such advocacy and information campaigns are often included as components of major development projects, but previous work has been unable to isolate their importance and effectiveness separately from the broader projects. We show that advocacy and information campaigns increased mathematics…

#1447.

Robert Clark, mario.samano

Incentivized Mergers and Cost Effciency: Evidence from the Electricity Distribution Industry

In an effort to lower costs of provision, authorities have encouraged the consolidation of providers for a number of services such as electricity distributors, school boards, hospitals, and municipalities. In this paper we propose an endogenous merger process to evaluate the impact of government-provided incentives on consolidation patterns,
and to evaluate the resulting outcomes. The process takes as input estimates from a stochastic frontier cost model, which yields an average cost curve for the industry. Policy parameters are used to simulate final configurations using offers that…

#1446.

Robert Clark, Decio Coviello, adleverano

Complementary bidding and the collusive arrangement: Evidence from an antitrust investigation

A number of recent papers have proposed that a pattern of isolated winning bids may be associated with collusion. In contrast, others have suggested that bid clustering, especially of the two lowest bids, is indicative of collusion. In this paper, we present evidence from an actual procurement cartel uncovered during an anticollusion investigation that reconciles these two points of view and shows that both patterns arise naturally together as part of a cartel arrangement featuring complementary bidding. Using a difference-in-difference approach, we compare the extent of winning-bid…

#1445.

Robert Clark, Shaoteng Li

The strategic response of banks to macroprudential policies: Evidence from mortgage stress tests in Canada

Following the crisis, macroprudential regulations targeting mortgage-market vulnerabilities were widely adopted, their success often depending on intermediaries' responses. We show that Canadian banks behaved strategically to limit the potency of recently implemented mortgage stress tests, requiring borrower qualification based on the mode of 5-year rates posted by the Big 6 banks rather than transaction rates. The government aimed to cool credit markets, but since many mortgages are government-insured, Big 6 interests were not aligned. Using DiD comparing changes in 5-year spreads with 3-…

#1444.

Christopher Cotton, Brent R. Hickman, Johnlist, Joseph P. Price, SutanukaRoy

Productivity Versus Motivation in Adolescent Human Capital Production: Evidence from a Structurally-Motivated Field Experiment

We leverage a field experiment across three distinct school districts to identify key pieces of a structural model of adolescent human capital production. Our focus is inspired by the contemporary psychology of education literature, which expresses learning as a function of the ratio of the time spent on learning to the time needed to learn. By capturing two crucial student-level unobservables—which we denote as academic efficiency (turning inputs into outputs) and time preference (motivation)—our field experiment lends insights into the underpinnings of adolescent skill formation and…

#1443.

Edi Karni, Marie-Louise Vierø

Comparative Incompleteness: Definitions, Behavioral Manifestations and Elicitation

This paper introduces measures of overall incompleteness of preference relations under risk and uncertainty, as well as measures of incompleteness of beliefs and tastes. These measures are used to define "more incomplete than" relations among different preference relations. We show how greater incompleteness is manifested in the representations of decision makers' preferences and illustrate its behavioral implications. In addition, the paper introduces incentive compatible schemes of eliciting the degrees of overall incompleteness and those of…

Events

Arun Chandrasekhar

2021 January 25

Internal, Research

Affiliation: Stanford University

Evan Piermont

2021 February 01

Research

Affiliation: Royal Holloway, University of London