Inaccurate Statistical Discrimination: An Identification Problem
(with J. Aislinn Bohren, Alex Imas, & Devin G. Pope)
NBER Working Paper #25935
Forthcoming at Review of Economics and Statistics
This paper studies inaccurate beliefs as a source of discrimination. Economists have typically characterized discrimination as stemming from tastes (preference-based) or accurate statistical (belief-based) sources---a valuable distinction for policy design and welfare analysis. However, in many situations individuals may have inaccurate beliefs about how relevant characteristics?e.g. productivity, signals? are correlated with group identity. A review of the empirical discrimination literature in economics reveals that a small minority of papers---fewer than 7%---consider the possibility of such inaccurate statistical discrimination. Using a theoretical framework and an experiment in a labor market setting, we show that not accounting for inaccurate beliefs will lead to a misclassification of discrimination?s source. We then outline three methodologies that either fully or partially identify the three potential sources: varying the amount of information presented to evaluators, eliciting their beliefs, and presenting them with accurate information about the relevant distributions. Importantly, the third method can be used to differentiate whether inaccurate beliefs are due to a lack of information or motivated factors.
Moved to Vote: The Long-Run Effects of Neighborhoods on Political Participation
(with Eric Chyn)
NBER Working Paper #26515
Forthcoming at Review of Economics and Statistics
How does one's childhood neighborhood shape political engagement later in life? We study voting rates of children who were displaced by public housing demolitions and moved to higher opportunity areas using housing vouchers. Those displaced during childhood had 11% (2pp) higher participation in the 2016 Presidential election and were 10% (2.9pp) more likely to vote in any general election. We argue that the results are unlikely to be driven by changes in incarceration or parental outcomes, but rather by political socialization or improvements in education and earnings. These results suggest that housing assistance programs may reduce inequality in political participation.
Racial Disparities in Voting Wait Times: Evidence from Smartphone Data
(with M. Keith Chen, Devin G. Pope, & Ryne Rohla)
NBER Working Paper #26487
Review of Economics and Statistics, 104(6), 1341-1350. 2022.
Equal access to voting is a core feature of democratic government. Using data from millions of smartphone users, we quantify a racial disparity in voting wait times across a nationwide sample of polling places during the 2016 U.S. presidential election. Relative to entirely-white neighborhoods, residents of entirely-black neighborhoods waited 29% longer to vote and were 74% more likely to spend more than 30 minutes at their polling place. This disparity holds when comparing predominantly white and black polling places within the same states and counties, and survives numerous robustness and placebo tests. We shed light on the mechanism for these results and discuss how geospatial data can be an effective tool to both measure and monitor these disparities going forward.
The Long-Run Effects of School Racial Diversity on Political Identity
(with Stephen B. Billings & Eric Chyn)
NBER Working Paper #27302
American Economic Review: Insights, 3(3), 267-284. 2021. [Lead Article]
How do early-life experiences shape political identity? We examine the end of race-based busing in Charlotte-Mecklenburg schools, an event that led to large changes in school racial composition. Using administrative data, we compare party affiliation in adulthood for students who had lived on opposite sides of newly-drawn school boundaries. Consistent with the contact hypothesis, we find that a 10-percentage point increase in the share of minorities in a white student's assigned school decreased their likelihood of registering as a Republican by 2 percentage points (12 percent). Our results suggest that schools in childhood play an important role in shaping partisanship.
Attribution Bias in Major Decisions: Evidence from the United States Military Academy
(with Richard W. Patterson, Nolan G. Pope, & Aaron Feudo)
Journal of Public Economics, Volume 200, August 2021, 104445
Using administrative data, we study the role of attribution bias in a high-stakes, consequential decision: the choice of a college major. Specifically, we examine the influence of fatigue experienced during exposure to a general education course on whether students choose the major corresponding to that course. To do so, we exploit the conditional random assignment of student course schedules at the United States Military Academy. We find that students who are assigned to an early morning (7:30 AM) section of a general education course are roughly 10% less likely to major in that subject, relative to students assigned to a later time slot for the course. We find similar effects for fatigue generated by having one or more back-to-back courses immediately prior to a general education course that starts later in the day. Finally, we demonstrate that the pattern of results is consistent with attribution bias and difficult to reconcile with competing explanations.
Blue Porches: Finding the Limits of External Validity of the Endowment Effect
(with Gharad Bryan, Matthew Grant, Dean Karlan, Meredith Startz, & Chris Udry)
Journal of Economic Behavior and Organization, 176, 269-271. 2020.
We test whether the endowment effect holds in an experiment conducted with children during Halloween trick-or-treating. We do not find evidence of the endowment effect in this context and experimental protocol.
Attribution Bias in Consumer Choice
(with Devin G. Pope, Kinsey B. Bryant-Lees, & Maarten W. Bos)
Review of Economic Studies, 86(5), 2136-2183. 2019.
When judging the value of a good, people may be overly influenced by the state in which they previously consumed it. For example, someone who tries out a new restaurant while very hungry may subsequently rate it as high quality, even if the food is mediocre. We produce a simple framework for this form of attribution bias that embeds a standard model of decision making as a special case. We test for attribution bias across two consumer decisions. First, we conduct an experiment in which we randomly manipulate the thirst of participants prior to consuming a new drink. Second, using data from thousands of amusement park visitors, we explore how pleasant weather during their most recent trip affects their stated and actual likelihood of returning. In both of these domains, we find evidence that people misattribute the influence of a temporary state to a stable quality of the consumption good. We provide evidence against several alternative accounts for our findings and discuss the broader implications of attribution bias in economic decision making.
Learning by Driving: Productivity Improvements by New York City Taxi Drivers
(with Brian McManus & Giovanni Paci)
American Economic Journal: Applied Economics, 9(1), 70-95. 2017.
We study learning by doing (LBD) by New York City taxi drivers, who have substantial discretion over their driving strategies and receive compensation closely tied to their success in finding customers. In addition to documenting significant learning by these entrepreneurial agents, we exploit our data’s breadth to investigate the factors that contribute to driver improvement across a variety of situations. New drivers lag farther behind experienced drivers when in difficult situations. Drivers benefit from accumulating neighborhood-specific experience, which affects how they search for their next customers.
(with Giovanni Paci)
American Economic Journal: Applied Economics, 6(3), 1-19. 2014. [Lead Article]
We examine the role of defaults in high-frequency, small-scale choices using unique data on over 13 million New York City taxi rides. Using a regression discontinuity design, we show that default tip suggestions have a large impact on tip amounts. These results are supported by a secondary analysis that uses the quasi-random assignment of customers to different cars to examine default effects on a wider range of fares. Finally, we highlight a potential cost of setting defaults too high, as a higher proportion of customers opt to leave no credit card tip when presented with the higher suggested amounts.
The Effects of Racial Segregation on Intergenerational Mobility: Evidence from Historical Railroad Placement (June 2023)
(with Eric Chyn and Bryan Stuart)
NBER Working Paper #30563
This paper provides new evidence on the causal impacts of citywide racial segregation on intergenerational mobility. We use an instrumental variable approach that relies on plausibly exogenous variation in segregation due to the arrangement of railroad tracks in the nineteenth century. Our analysis finds that higher segregation reduces upward mobility for Black children from households across the income distribution and White children from low-income households. Moreover, segregation lowers academic achievement while increasing incarceration and teenage birth rates. An analysis of mechanisms shows that segregation reduces government spending, weakens support for anti-poverty policies, and increases racially conservative attitudes among White residents.
The Value of a Higher ACT Exam Score (June 2022)
(with Emily Leslie, Devin Pope, and Nolan Pope)
Revise & Resubmit at Journal of Human Resources
Entrance exams are an integral aspect of the college admissions process. We use rounding in ACT composite exam scores to identify the causal effect of receiving a higher score. Using data for over 3 million test takers, we estimate that *randomly* receiving one extra point on the ACT leads to a 0.44 percentage point increase in the probability of attending a 4-year college. Our results have implications for the importance of entrance exams in the admissions process, the value of test preparation and retaking, and the inequities that can be created by unequal access to test prep and resources.
Expanding Access to Finance through Micro-Equity (October 2022)
(with Adam Osman)
Revise & Resubmit at Journal of Development Economics based on pre-results review.
Eventual publication venue TBD. Progress: In the field
Conventional microcredit has expanded access to finance for many borrowers; however, a growing literature suggests that the rigid structure of standard debt contracts may limit both their impact and access. We run a field experiment to test the effects of a promising alternative to conventional microcredit. Specifically, we partner with a microfinance institution to design equity contracts in which clients are provided with a productive asset (a set of goats/sheep) and split the proceeds of the sale of the asset at a fixed rate with the MFI. We market this product to livestock farmers alongside a flexible debt contract. Relative to the debt-financing status quo, expanding equity finance to small-scale entrepreneurs could affect both the type of client that participates in the formal financial market (*selection* effects), as well as their outcomes conditional on participation (*contract* effects). Our first set of results will characterize relative demand for the two contracts, as well as key characteristics on which the borrowers may differ (e.g. debt aversion, risk aversion, and religion). Our randomized experiment with 1,500 clients will then characterize the effects on borrower outcomes (repayment, goat/sheep sale prices, livestock profits, and total income).