Abstract: This paper provides new evidence on the effects of moving out of disadvantaged neighborhoods on the long-run economic outcomes of children. My empirical strategy is based on public housing demolitions in Chicago which forced households to relocate to private market housing using vouchers. Specifically, I compare adult outcomes of children displaced by demolition to their peers who lived in nearby public housing that was not demolished. Displaced children are 9 percent more likely to be employed and earn 16 percent more as adults. These results contrast with the Moving-to-Opportunity (MTO) relocation study, which detected effects only for children who were young when their families moved. To explore this discrepancy, this paper also examines a housing voucher lottery program (similar to MTO) conducted in Chicago. I find no measurable impact on labor market outcomes for children in households that won vouchers. The contrast between the lottery and demolition estimates remains even after re-weighting the demolition sample to adjust for differences in observed characteristics. Overall, this evidence suggests lottery volunteers are negatively selected on the magnitude of their children's gains from relocation. This implies that moving from disadvantaged neighborhoods may have substantially larger impact on children than what is suggested by results from voucher experiments where parents elect to participate.
Effects of Relocation on Employment of Children Across Studies
Notes: This figure displays box and whisker plots of the effects on adult labor market participation for children (age 7 to 18 at baseline) from different studies examining the impact of relocating children from high-poverty areas. From left to right, the effects are from the following samples of youth: Chicago's public housing demolition, the 1997 Chicago Housing Authority voucher lottery, the understricted Section 8 voucher treatment arm of the MTO social experiment, and the "experimental" voucher treatment arm of MTO. The center of each box is the point estimate in each sample while the top and bottom of each box represent effects that are one standard error above and below the point estimate. The top and the bottom of the whiskers display the 95-percent confidence interval. See Figure 6 of the text for further details.
Abstract: This paper explores whether and how environmental stewardship can be provided by private markets through green advertising. We examine the period surrounding the BP oil spill [April 2010] and estimate how BP's pre-spill investment in "green advertising" affected the spill's impact on retail prices and demand at BP gasoline stations. We use station-level prices and sales from a large sample of U.S. retail gasoline stations and market-level advertising expenditures during BP's 2000-2008 "Beyond Petroleum" advertising campaign. We find evidence consistent with consumer punishment of BP in the months following the spill; overall BP margins declined significantly by 4.2 cents per gallon, and volumes declined by 3.6 percent during the spill. We examine how pre-spill environmental advertising affected the spill's impact on margins and sales, testing whether expenditures on green reputation act as a commitment to green production or as insurance against environmental damage. We find evidence in support of the latter: pre-spill exposure to BP advertising significantly softened the impact of the spill on BP retail margins and abated losses to station share from stations switching to alternative gasoline brands.
Consumer Response to the 2010 BP Oil Spill:
Weekly Gas Prices for BP and Non-BP, Non-Competing Stores
Work in Progress:
"Peer Effects in the Workplace: Experimental Evidence from Malawi," with Lasse Brune and Jason Kerwin.
Abstract: Much of the existing research on peer effects comes from studies of education. In contrast, the role of peers in the workplace has been a relatively understudied topic. This paper sheds light on the existence and structure of occupational peer effects by conducting an experiment with an agricultural (tea-harvesting) firm in Malawi. We randomly allocate workers to locations on fields to estimate the impact of peers on worker performance. We find strong evidence of positive peer effects from working near high-ability peers. Shifting the permanent productivity of peers from the minimum to the maximum of the ability distribution increases worker output by 4.3 percent. We also examine the structure of peer effects, finding evidence of nonlinearities in the magnitude of peer effects across the distribution of own-ability. Specifically, the magnitude of the (positive) peer effects is largest for the lowest ability workers, and there is no detectable impact of peers for the highest ability workers.
Estimates of Non-Linear Peer Effects by Worker's Own-Ability