Publications

Working Papers

TitleExtension of the franchise and government expenditure on public goods: evidence from nineteenth-century England.      

Abstract:

Many theories of democratization suggest that extending the right to vote will lead to increased government expenditure (e.g. Meltzer and Richard, 1981; Lizzeri and Persico, 2004; Acemoglu and Robinson, 2000). However, these models frequently assume that government can engage in transfer expenditure, which is often not true for local governments. This paper presents a model in which government expenditure is limited to the provision of public goods. The model predicts that the poor and the rich desire lower public goods expenditure than the middle class: the rich because of the relatively high tax burden, and the poor because of a high marginal utility of consumption. Consequently, extensions of the franchise to the poor can be associated with declines in government expenditure on public goods. This prediction is tested using a new dataset of local government financial accounts in England between 1867 and 1900, which captures government expenditure on key infrastructure projects that are not included in many studies of national democratic reform. The empirical analysis, by exploiting plausibly exogenous variation in the extent of the franchise, shows strong support for the theoretical prediction: expenditure increased following relatively small extensions of the franchise but fell following extensions of the franchise beyond around 50% of the adult male population.

Title: Willingness-To-Pay and Willingness-To-Accept are Probably Less Correlated than You Think
with Mark Dean, Pietro Ortoleva, Erik Snowberg, and Colin Camerer.

Abstract:

An enormous literature documents that willingness to pay (WTP) is less than willingness to accept (WTA) a monetary amount for an object, a phenomenon called the endowment effect. Using data from an incentivized survey of a representative sample of 3,000 U.S. adults, we add one (probably) surprising additional finding: WTA and WTP for a lottery are, at best, slightly correlated. Across all respondents, the correlation is slightly negative. A meta-study of published experiments with university students shows a correlation of around 0.15-0.2, consistent with the correlation in our data for high-IQ respondents. While poorly related to each other, WTA and WTP are closely related to different measures of risk aversion, and relatively stable across time. We show that the endowment effect is not related to individual-level measures of loss aversion, counter to Prospect Theory or Stochastic Reference Dependence.

Title: Econographics.
with Mark Dean, Pietro Ortoleva, Erik Snowberg, and Colin Camerer.

Abstract:

We study the pattern of correlations across a large number of behavioral regularities, with the goal of creating an empirical basis for more comprehensive theories of decision-making. We elicit 21 behaviors using an incentivized survey on a representative sample (n=1,000) of the U.S. population. Our data show a clear and relatively simple structure underlying the correlations between these measures. Using principal components analysis, we reduce the 21 variables to six components corresponding to clear clusters of high correlations. We examine the relationship between these components, cognitive ability, and demographics, and discuss the theoretical implications of the structure we uncover.

Title: Loss Attitudes in the U.S. Population: Evidence from Dynamically Optimized Sequential Experimentation (DOSE)
with Erik Snowberg, Colin Camerer and Stephanie Wang
(previously "Dynamically Optimized Sequential Experimentation (DOSE)  for Estimating Economic Preference Parameters").

Abstract:

We introduce DOSE—Dynamically Optimized Sequential Experimentation—and use it to estimate individual-level loss aversion in a representative sample of the U.S. population (N=2,000). DOSE elicitations are more accurate, more stable across time, and faster to administer than standard methods. We find that around 50% of the U.S. population is loss tolerant. This is counter to earlier findings, which mostly come from lab/student samples, that a strong majority of participants are loss averse. Loss attitudes are correlated with cognitive ability: loss aversion is more prevalent in people with high cognitive ability, and loss tolerance is more common in those with low cognitive ability. We also use DOSE to document facts about risk and time preferences, indicating a high potential for DOSE in future research.