American Economic Review Research Articles

Examining sharing economy operations: A process perspective

<scp>Examining sharing economy operations</scp>: A <scp>process perspective</scp>

Shlomo Yitzhaki (1944–2023): In Memoriam

Review of Income and WealthEarly View Obituary Shlomo Yitzhaki (1944–2023): In Memoriam Carsten Schröder, Corresponding Author Carsten Schröder [email protected] DIW, Berlin Freie Universitaet, BerlinSearch for more papers by this authorJacques Silber, Jacques Silber Bar-Ilan UniversitySearch for more papers by this author Carsten Schröder, Corresponding Author Carsten Schröder [email protected] DIW, Berlin Freie Universitaet, BerlinSearch for more papers by this authorJacques Silber, Jacques Silber Bar-Ilan UniversitySearch for more papers by this author First published: 16 June 2023 https://doi.org/10.1111/roiw.12649Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL References Lambert, P. J. and A. Decoster, “The Gini Coefficient Reveals More,” Metron, LXIII, 373– 400, 2005. Lerman, R. I. and S. Yitzhaki, “Income Inequality Effects by Income Source: A New Approach and Applications to the United States,” Review of Economics and Statistics, 67, 151– 6, 1985. Mayshar, J. and S. Yitzhaki, “Dalton- Improving Indirect Tax Reform,” The American Economic Review, 85, 793– 807, 1995. Mookherjee, D. and A. F. Shorrocks, “A Decomposition Analysis of the Trend in UK Income Inequality,” Economic Journal, 92, 886– 902, 1982. Schröder, C. and S. Yitzhaki, “Reasonable Sample Sizes for Convergence to Normality,” Communications in Statistics – Simulation and Computation, 46, 7074– 87, 2017a. Schröder, C. and S. Yitzhaki, “Revisiting the Evidence for Cardinal Treatment of Ordinal Variables,” European Economic Review, 92, 337– 58, 2017b. Slemrod, J. and S. Yitzhaki, “ Tax Avoidance, Evasion and Administration,” Chapter 22 in J. Auerbach, and M. Feldstein (eds), Handbook of Public Economics, Vol 3, North-Holland, 1423– 70, 2002. Stark, O., J. E. Taylor and S. Yitzhaki, “Remittances and Inequality,” Economic Journal, 96, 722– 40, 1986. Yitzhaki, S., “Relative Deprivation and the Gini Coefficient,” Quarterly Journal of Economics, 93, 321– 4, 1979. Yitzhaki, S., “The Relation Between Return and Income,” Quarterly Journal of Economics, 102, 77– 96, 1987. Yitzhaki, S. and J. Slemrod, “Welfare Dominance: An Application to Commodity Taxation,” American Economic Review, 81, 480– 96, 1991. Yitzhaki, S. and E. Schechtman, The Gini Methodology: A Primer on Statistical Methodology, Springer, New York, 2013. Early ViewOnline Version of Record before inclusion in an issue ReferencesRelatedInformation

Adjustments in markups after a Free Trade Agreement: An analysis of Pakistani firms gaining increased access to China

ABSTRACT Increased market access through trade liberalization can affect the markups, prices, and marginal costs of exporters. Understanding these dynamics is critical for firms and policymakers, particularly as they formulate export strategies. We examine the impact of China lowering tariffs on Pakistani products under the Pakistan–China Free Trade Agreement (FTA), which gave Pakistani exporters greater market access. Using disaggregated output and price data for textile manufacturers in Punjab, Pakistan, we estimate product-level markups and marginal costs using the methodology of De Loecker, Goldberg, Khandelwal, and Pavcnik (2016) [“Prices, Markups, and Trade Reform.” Economterica 84 (2): 445–510]. We then extend this to the firm level by using the methodology of De Loecker and Warzynsksi (2012) [“Markups and Firm-Level Export Status.” American Economic Review, 2437–2471]. We find that Pakistani firms exporting to China followed a dynamic pricing strategy by reducing prices to compete with global competitors in the Chinese market. We also find evidence of a decrease in marginal costs as a result of reductions in X-inefficiencies. But because Pakistan's exports to China are relatively homogeneous, the extent of quality differentiation and markup margins was limited. Finally, we find evidence of pro-competitive effects.

The US Council of Economic Advisers on Changing Female Labor Force Participation

Population and Development ReviewEarly View DOCUMENTS The US Council of Economic Advisers on Changing Female Labor Force Participation First published: 13 June 2023 https://doi.org/10.1111/padr.12562Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL References Abraham, K., and M. Kearney. 2020. “Examining the Decline in the U.S. Employment-to-Population Ratio: A Review of the Evidence.” Journal of Economic Literature 58(3): 585– 643. https://doi.org/10.1257/jel.20191480 Baker, M., J. Gruber, and K. Milligan. 2008. “Universal Child Care, Maternal Labor Supply, and Family Well-Being.” Journal of Political Economy 116(4): 709– 745. https://doi.org/10.1086/591908 Black, S., D. Schanzenbach, and A. Breitwieser. 2017. “ The Recent Decline in Women's Labor Force Participation.” Hamilton Project. https://www.brookings.edu/wp-content/uploads/2017/10/es_10192017_decline_womens_labor_force_participation_blackschanzenbach.pdf. Blau, F., and L. Kahn. 2013. “Female Labor Supply: Why Is the United States Falling Behind?” American Economic Review 103(3): 251– 256. https://doi.org/10.1257/aer.103.3.251 BLS (U.S. Bureau of Labor Statistics). 2019. “ Number and Percent of Eldercare Providers Who Were Parents of Household Children Under Age 18 by Sex and Selected Characteristics, Averages for the Combined Years 2017–2018.” https://www.bls.gov/news.release/elcare.t09.htm. BLS (U.S. Bureau of Labor Statistics). 2022. “ Employee Benefits in the United States.” https://www.bls.gov/ncs/ebs/benefits/2022/home.him. Council of Economic Advisers. 2015. Economic Report of the President. https://www.whitehouse.gov/wp-content/uploads/2021/07/2015-ERP.pdf. Gelbach, J. 2002. “Public Schooling for Young Children and Maternal Labor Supply.” American Economic Review 92(1): 307– 322. https://doi.org/10.1257/0002828.02760015748 Goldin, C. 2006. “The Quiet Revolution That Transformed Women's Employment, Education, and Family.” AEA Papers and Proceedings, 1– 21, https://scholar.harvard.edu/files/goldin/files/the_quiet_revolution_that_transformed_womens_employment_education_and_family.pdf. Haeck, C., P. Lefebvre, and P. Merrigan. 2015. “Canadian Evidence on Ten Years of Universal Preschool Policies: The Good and the Bad.” Labour Economics, 36: 137– 157. https://doi.org/10.1016/j.labeco.2015.05.002 Maiello, M. 2017. “ Diagnosing William Baumol's Cost Disease.” Chicago Booth Review. https://www.chicagobooth.edu/review/diagnosing-william-baumolscost-disease. Morrissey, T. 2017. “Child Care and Parent Labor Force Participation: A Review of the Research Literature.” Review of Economics of the Household 15(1): 1– 24. https://doi.org/10.1007/s11150-016-9331-3. National Partnership for Women and Families. 2022. “ State Paid Family and Medical Leave Insurance Laws.” https://www.nationalpartnership.org/our-work/resources/economic-justice/paid-leave/state-paid-family-leave-laws.pdf. OECD (Organization for Economic Cooperation and Development). 2019. “ Public Spending on Childcare and Early Education.” OECD Family Database. https://www.oecd.org/els/soc/PF3_1_Public_spending_on_childcare_and_early_education.pdf. OECD (Organization for Economic Cooperation and Development). 2022. “ LFS by Sex and Age: Indicators.” https://stats.oecd.org/index.aspx?r=967539#. Shen, K. 2021. “ Who Benefits from Public Financing of Home Care for Low-Income Seniors?” Working paper, Harvard University. https://scholar.harvard.edu/files/kshen/files/caregivers.pdf. Siminski, P., and R. Yetsenga. 2022. “Specialization, Comparative Advantage, and the Sexual Division of Labor.” Journal of Labor Economics 40(4): https://doi.org/10.1086/718430. Ziliak, J. 2014. “ Supporting Low-Income Workers through Refundable Child-Care Credits.” Brookings Institution. https://www.brookings.edu/research/supporting-low-income-workers-through-refundable-child-care-credits/. Early ViewOnline Version of Record before inclusion in an issue ReferencesRelatedInformation

Innovation and Public Policy, by AustanGoolsbee and Benjamin F.Jones (University of Chicago Press, Chicago, 2021), 248 pages + ix front matter

Economic RecordEarly View Review Innovation and Public Policy, by Austan Goolsbee and Benjamin F. Jones (University of Chicago Press, Chicago, 2021), 248 pages + ix front matter Christopher Bottomley, Corresponding Author Christopher Bottomley [email protected] Productivity Commission, Canberra, AustraliaSearch for more papers by this author Christopher Bottomley, Corresponding Author Christopher Bottomley [email protected] Productivity Commission, Canberra, AustraliaSearch for more papers by this author First published: 29 May 2023 https://doi.org/10.1111/1475-4932.12737Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL No abstract is available for this article. REFERENCE Bloom, N., Jones, C.I., Van Reenen, J. and Webb, M. (2020), ‘Are Ideas Getting Harder to Find?’, American Economic Review, 110, 1104– 44. Early ViewOnline Version of Record before inclusion in an issue ReferencesRelatedInformation

Identifying Chinese supply shocks: Effects of trade on labor markets

AbstractAn influential literature estimates the impact of trade on labor markets with shift‐share instrumental variable designs under the assumption that common demand shocks in advanced economies are negligible. This article documents empirical patterns, which suggest that such common demand shocks are prevalent. It then proposes a strategy that directly identifies country‐specific export supply shocks. Finally, it uses these supply shocks in reduced‐form regression, which suggest contractions of manufacturing employment that are larger than those in the seminal contribution by Autor et al. (American Economic Review, 2013, 103, 2121–2168).

Model-Selection Inference for Causal Impact of Clusters and Collaboration on MSMEs in India.

Do firms benefit more from agglomeration-based spillovers than the technical know-how obtained through inter-firm collaboration? Quantifying the relative value of the industrial policy of cluster development vis-à-vis firm's internal decision of collaboration can be valuable for policy-makers and entrepreneurs. I observe the universe of Indian MSMEs inside an industrial cluster (Treatment Group 1), those in collaboration for technical know-how (Treatment Group 2) and those outside clusters with no collaboration (Control Group). Conventional econometric methods to identify the treatment effects would suffer from selection bias and misspecification of the model. I use two data-driven, model-selection methods, developed by (Belloni, A., Chernozhukov, V., and Hansen, C. (2013). Inference on treatment e ects after selection among high-dimensional controls. Review of Economic Studies, 81(2):608 650.) and (Chernozhukov, V., Hansen, C., and Spindler, M. (2015). Post selection and post regulariza- tion inference in linear models with many controls and instruments. American Economic Review, 105(5):486 490.), to estimate the causal impact of the treatments on GVA of firms. The results suggest that ATE of cluster and collaboration is nearly equal at 30%. I conclude by offering policy implications.

Report of the Editor, American Economic Review: Insights

Report of the Editor, <i>American Economic Review: Insights</i>

The demand for money at the zero interest rate bound

SummaryThis paper undertakes both a narrow and wide replication of the estimation of a money demand function conducted by Ireland (American Economic Review, 2009). Using US data from 1980 to 2013, we show that the substantial increase in the money‐income ratio during the period of near‐zero interest rates is captured well by the log–log specification but not by the semi‐log specification, contrary to the result obtained by Ireland (2009). Our estimate of the interest elasticity of money demand over the 1980–2013 period is about one‐tenth that of Lucas's paper published in 2000, which used a log–log specification. Finally, neither specification satisfactorily fits post‐2015 US data.

Report of the Search Committee for the Editor for the American Economic Review: Insights

Report of the Search Committee for the Editor for the <i>American Economic Review: Insights</i>

DEVELOPING HIGH-QUALITY HUMAN RESOURCES IN THE FIELD OF EDUCATION AND TRAINING: POLICIES, LEGAL PROVISIONS AND RECOMMENDATIONS FOR SOME SOLUTIONS

DEVELOPING HIGH-QUALITY HUMAN RESOURCES IN THE FIELD OF EDUCATION AND TRAINING: POLICIES, LEGAL PROVISIONS AND RECOMMENDATIONS FOR SOME SOLUTIONS

Editor’s Introduction to JPE Micro

Editor’s Introduction to <i>JPE Micro</i>

Inference for Linear Conditional Moment Inequalities

Abstract We show that moment inequalities in a wide variety of economic applications have a particular linear conditional structure. We use this structure to construct uniformly valid confidence sets that remain computationally tractable even in settings with nuisance parameters. We first introduce least-favorable critical values which deliver non-conservative tests if all moments are binding. Next, we introduce a novel conditional inference approach which ensures a strong form of insensitivity to slack moments. Our recommended approach is a hybrid technique which combines desirable aspects of the least favorable and conditional methods. The hybrid approach performs well in simulations calibrated to Wollmann (2018, American Economic Review, 108, 1364–1406), with favorable power and computational time comparisons relative to existing alternatives.

Scientific Mapping of Gravity Model of International Trade Literature: A Bibliometric Analysis

The Gravity Model is the galloper of applied international trade literature. This model allows us to estimate trade-impacts of various trade related policies. Thousands of research studies have applied gravity models in their research works. The purpose of this paper is to look at bibliometric analysis of worldwide publication output based on a gravity model of international trade, as covered by Scopus from 1987 to 2021. The study analyses annual productivity, most productive source titles, prolific countries, eminent institutions, linguistic analysis and productivity of authors and their contribution in the subject area. According to the findings, Estimation of trade variables and projections are the most popular areas of subject specification, while in terms of literature gaps, estimation of economic integration, Extensive and Intensive Margin, and Logistics Performance Index receive less attention. 2019 was the most productive year for research on gravity models in international trade. In terms of contemporary research output, the United States, Germany, Spain, and China are the most productive countries; while as per citation analysis the United States, Germany, and the United Kingdom are the top three countries. The most prolific journals for publishing works in the subject of the gravity model of international trade are Journal of International Economics, American Economic Review, and Review of Economics and Statistics. The study attempts to portray the existing literature more comprehensively by showing research collaborations and bibliographic coupling. The findings of this study can be useful to conduct further studies in the future.

Academic business research: Impact on academics versus impact on practice.

Business journalists and editors of academic business journals have lamented that academic research has little use for any nonacademic stakeholders, including companies, nonprofits, regulators, and governments. Although emotionally unsettling, these commentaries are bereft of evidence on how well a journal's academic impact (measured by impact factor) translates into practice impact. The authors provide this evidence. Specifically, they sample 56 journals, spanning 12 business disciplines, from 2000 to 2020. For each journal-year, they measure two- and five-year impact factor, which proxies the impact on academics. Next, for each article published in each journal-year, they collect attention score-a weighted sum of the number of times the article is cited in 19 types of practitioner outlets-from Altmetric. The authors then measure the correlation coefficient between the impact factor and attention score for each journal in periods of two-year and five-year. The coefficient indicates how well the journal's academic impact has translated into practice impact. Among the 12 disciplines, international business discipline tops the chart, while information systems, accounting, and finance occupy the bottom positions. American Economic Review leads the 56 journals, with Journal of Marketing Research and California Management Review as close followers. The findings highlight the impact of academic business research-or the lack thereof.

Introduction to Special Issue: Topics Related to Real Estate Market Efficiency.

The efficiency of the real estate market is a major concern for homeowners, investors, lenders, policymakers, and researchers. Modern academic literature has mostly moved beyond an early emphasis on formal tests of informational efficiency. The Grossman and Stiglitz (The American Economic Review 70:393-408, 1980) paradox holds that perfect informational efficiency is impossible and the joint hypothesis problem implies that market efficiency is not even testable. Instead, researchers now commonly examine the speed, accuracy, and persistence of price movements in response to new information, as the allocative efficiency of a market ultimately depends on its degree of informational (and operational) efficiency. This special issue is devoted to exploring these issues.

Milton Friedman and the Road to Monetarism: A Review Essay

Milton Friedman and the Road to Monetarism: A Review Essay

Informal Providers-Ground Realities in South Asian Association for Regional Cooperation Nations: Toward Better Cancer Primary Care: A Narrative Review.

South Asian Association for Regional Cooperation (SAARC) nations are a group of eight countries with low to medium Human Development Index values. They lack trained human resources in primary health care to achieve the WHO-stated goal of Universal Health Coverage. An unregulated service sector of informal health care providers (IPs) has been serving these underserved communities. The aim is to summarize the role of IPs in primary cancer care, compare quality with formal providers, quantify distribution in urban and rural settings, and present the socioeconomic milieu that sustains their existence. A narrative review of the published literature in English from January 2000 to December 2021 was performed using MeSH Terms Informal Health Care Provider/Informal Provider and Primary Health Care across databases such as Medline (PubMed), Google Scholar, and Cochrane database of systematic reviews, as well as World Bank, Center for Global Development, American Economic Review, Journal Storage, and Web of Science. In addition, citation lists from the primary articles, gray literature in English, and policy blogs were included. We present a descriptive overview of our findings as applicable to SAARC. IPs across the rural landscape often comprise more than 75% of primary caregivers. They provide accessible and affordable, but often substandard quality of care. However, their network would be suitable for prompt cancer referrals. Care delivery and accountability correlate with prevalent standards of formal health care. Acknowledgment and upskilling of IPs could be a cost-effective bridge toward universal health coverage and early cancer diagnosis in SAARC nations, whereas state capacity for training formal health care providers is ramped up simultaneously. This must be achieved without compromising investment in the critical resource of qualified doctors and allied health professionals who form the core of the rural public primary health care system.

An Urban Configuration with Online Competition

Abstract This paper introduces the impact of online competition to analysis of the urban configuration of a small open city, which was first developed by Alonso (1964. Location and Land Use. Cambridge: Harvard University Press), Mills (1967. “An Aggregative Model of Resource Allocation in a Metropolitan Area.” The American Economic Review 57 (2): 197–210), and Muth (1969. Cities and Housing. Chicago: University of Chicago Press) (AMM hereafter). In comparison to a revised AMM model in Lai and Tsai (2008. “Simplified Alonso-Mills-Muth Model with a Monopoly Vendor.” Journal of Urban Economics 63 (2): 536–43) which assumed a monopoly vendor, the present paper’s online entry brings competition, eventually causes price reduction, city expansion, and asymmetrically ascending land rent, and makes the incumbent vendor relocate to a more remote city boundary. When the disadvantage of online purchasing is not large, the urban configuration demonstrates that most residents purchase online, and only the residents living near the physical vendor make shopping trips. Finally, the benefit of city expansion from online competition eventually goes to the absentee landowners by way of the raised land rents.

The R&amp;D Investment Decision Game with Product Differentiation

Abstract This article extends the cost-reducing R&amp;D model with spillovers by d’Aspremont and Jacquemin (1988. “Cooperative and Noncooperative R&amp;D in Duopoly with Spillovers.” The American Economic Review 78: 1133–7, 1990. “Cooperative and Noncooperative R&amp;D in Duopoly with Spillovers: Erratum.” The American Economic Review 80: 641–2) to allow quantity-setting firms (Cournot rivalry) to play the non-cooperative R&amp;D investment decision game with horizontal product differentiation. Unlike Bacchiega, Lambertini, and Mantovani (2010. “R&amp;D-hindering Collusion.” The B.E. Journal of Economic Analysis &amp; Policy 10 (Topics): 66), who identify a parametric region (defined by the extent of technological spillovers and the efficiency of R&amp;D activity), in which the game is a prisoner’s dilemma (self-interest and mutual benefit of cost-reducing innovation conflict), this work shows that product differentiation changes the game into a deadlock (self-interest and mutual benefit do not conflict), regardless of the parameter scale (i.e. also in the absence of spill-over effects). Then investing in R&amp;D challenges the improvement of interventions aimed at favouring product differentiation. This is because social welfare when firms invest in cost-reducing R&amp;D is greater than when firms do not invest in R&amp;D. Alternatively, R&amp;D subsidies can be used as a social welfare maximising tool also in the absence of R&amp;D spillovers. These results also hold for price-setting firms (Bertrand rivalry).