2023 Robert Day School of Economics and Finance Publications and Grants

*Indicates student co-author.

Bjerk, David and Shawn Bushway. “The Long-Term Incarceration Consequences of Coming-of-Age in a Crime Boom.” Journal of Quantitative Criminology, vol. 39, 2023, pp. 1003-1025.  

We examine the relationship between incarceration rates individuals experience in their thirties and the crime conditions they experienced throughout their youth.

We employ a cross state panel data regression design to assess how the crime conditions state/birth-year cohort members experienced from adolescence through their twenties impacts their incarceration rates in their early thirties.

Birth-year cohorts who experienced higher crime during adolescence had substantially higher incarceration rates in their early thirties than birth-year cohorts in the same state who experienced lower crime during adolescence. By contrast, the crime rates state/birth-year cohorts experienced during their late teens and early twenties have little systematic relationship with their incarceration rates in their thirties.

The crime conditions individuals are exposed to during adolescence appear to be pivotal with respect to their long-term connections with the criminal justice system.

Burdekin, Richard C.K. and Quynh Nguyen. “Daily Monetary Policy Reactions to the Pandemic: The Australian Case.” Economic Analysis and Policy, vol. 78, no. 2, 2023, pp. 24-32.

Abstract: In contrast to the more typical monthly series, Reserve Bank of Australia data offer a high frequency window into central bank actions following the onset of the pandemic. Daily observations demonstrate not only the absolute size of the Reserve Bank’s open market purchases but also a dramatic increase in the conditional variance identified under GARCH estimation. Regression analysis and impulse response functions reveal significant monetary policy responses to government support measures and exchange rate movements against the US dollar. Notwithstanding its overall highly expansionary monetary policy, the Reserve Bank appears to have tempered the pace of its open market purchases when either the government policy response intensified or currency depreciation increased.

Burdekin, Richard C.K. “Powell vs. the Pandemic: Some Simple Monetary Arithmetic.” Modern Economy, vol. 14, no 2, 2023, pp. 66-75.

Abstract: The lack of inflation in 2020 despite the fastest money growth rates since World War II at first seems puzzling for anyone believing that money still matters. The monetary expansion merely offset the effects of declining velocity of money and reduced spending associated with the lockdowns, however, making the scale of the 2020 monetary expansion both appropriate and justified. The subsequent uptick in inflation in 2021 that accelerated in 2022 was caused not by the rapid money growth in 2020 but rather by the Federal Reserve’s failure to sufficiently adjust policy in 2021 as the environment changed. The need to adjust policy in 2021 is clearly demonstrated in the monetary data analyzed in this paper. It took far too long for the Federal Reserve to recognize the problems inherent in continuing its 2020 policy bent into 2022.

External Grant: Burdekin, Richard. Chiang Ching-kuo Foundation for International Scholarly Exchange, 2023, $18,000.

Fernholz, Ricardo and Kara Hagler. “Rising Inequality and Declining Mobility in the Forbes 400.” Economics Letters, vol. 230, 2023, 111235.

Abstract: We examine the joint evolution of inequality and mobility from 1985–2020 using a novel data set of intergenerational family wealth dynamics constructed from the Forbes 400 list of wealthiest Americans. In recent decades, the concentration of wealth at the very top of the distribution has risen in the U.S. Over this same period, we show that mobility among the wealthiest American family dynasties has declined, with mobility measured either as family wealth-rank correlations over one-year and five-year periods or as the number of new entrants at the top of the distribution.

Filson, Darren. “COVID-19 as a Trigger of Persistent Innovations: Evidence From an Economics Elective at Claremont McKenna College.” The Journal of Economic Education, vol. 54, issue 2, 2023, pp. 191-197.

Abstract: The COVID-19 pandemic made it necessary for instructors to innovate, and some of the innovations will persist and be refined post-pandemic. An economics elective at Claremont McKenna College provides examples. Innovations likely to persist include replacing in-class exams with context-rich assignments and conducting a set of student presentations and an initial Q&A using recordings posted online. Both innovations advance the learning objectives, and they also free up class time, which permits additional innovations.

Burn, Ian, Daniel Firoozi, Daniel Ladd, and David Neumark. “Age Discrimination and Age Stereotypes in Job Ads.” Federal Reserve Bank of San Francisco Economic Letter, March 6, 2023.

Abstract: Studies suggest that employers discriminate against older workers in hiring, responding less favorably to equally qualified job applicants who are older. Employers may also limit hiring of older workers by including age stereotypes in job ads that signal a preference for younger workers. Evidence from an experimental study shows that older workers are less likely to apply to job advertisements that contain language with ageist stereotypes. The results indicate that this impact is comparable to the direct effects of employer age discrimination in hiring decisions.

Burn, Ian, Daniel Firoozi, Daniel Ladd, and David Neumark. “Stereotypes of Older Workers and Perceived Ageism in Job Ads: Evidence From an Experiment.” Journal of Pension Economics and Finance, vol. 22, issue 4, 2023, pp. 463-489.

Abstract: We explore whether ageist stereotypes in job ads are detectable using machine-learning methods measuring the linguistic similarity of job-ad language to ageist stereotypes identified by industrial psychologists. We then conduct an experiment to evaluate whether this language is perceived as biased against older workers searching for jobs. We find that job-ad language classified by the machine-learning algorithm as closely related to ageist stereotypes is perceived by experimental subjects as biased against older job seekers. These methods could potentially help enforce anti-discrimination laws by using job ads to predict or identify employers more likely to be engaging in age discrimination.

Flory, Jeffery, Andreas Leibbrandt, Olga Shurchkov, Olga Stoddard, and Alva Taylor. “Perceptions of Gender Diversity in Occupations.” American Economic Association Papers and Proceedings, vol. 113, 2023, pp. 436-439.

Abstract: We design a survey experiment to investigate the effect of intervention with diversity on preferences for diverse outcomes. First, subjects report their perceptions of the archetypical occupations boss, professor, nurse, and clerk, rating boss/professor as higher status than nurse/clerk. Importantly, while respondents expect overrepresentation of women among nurses and clerks, they expect a relatively equal gender distribution among bosses and professors. We then randomize participants to view either diverse or nondiverse images for each occupation. Diversifying the image sets significantly increases the likelihood of underrepresented individuals being selected in both domains, but correctness of preexisting beliefs only matters in female-typed domains.

Flory, Jeffrey. “Bridging the Savings Gap: Evidence from a Field Experiment in Malawi.” Economic Development and Cultural Change, vol. 71, no. 3, 2023, pp. 963-1002.

Abstract: This study examines evidence from a randomized controlled trial of a novel financial services intervention designed to spur savings uptake in rural areas of the developing world. The sample includes over 2,000 households from 325 villages in rural Malawi. Results show that an information treatment consisting of periodic village visits from a trained bank staff person significantly increased adoption and use of savings accounts. The findings also show important impact heterogeneities along dimensions such as education level, remoteness of village, and gender of household head, as well as positive spillover effects onto account uptake at other financial institutions. Further analysis reveals active account use among adopters. These findings confirm recent suggestions from survey evidence in the literature on an important role played by "soft" barriers to financial inclusion (such as low information and trust), and provide insights on how such barriers can be overcome.

Gelman, Michael, Yuriy Gorodnichenko, Shachar Kariv, Dmitri Koustas, Matthew D. Shapiro, Dan Silverman, and Steven Tadelis. “The Response of Consumer Spending to Changes in Gasoline Prices.” American Economic Journal: Macroeconomics, vol. 15, no. 2, 2023, pp. 129-160.

Abstract: This paper estimates how overall consumer spending responds to changes in gasoline prices. It uses the differential impact across consumers of the sharp drop in gasoline prices in 2014 for identification. This estimation strategy is implemented using comprehensive, high-frequency, transaction-level data for a large panel of individuals. The average estimated marginal propensity to consume (MPC) out of unanticipated, permanent shocks to income is approximately one. This estimate accounts for the elasticity of demand for gasoline and potential slow adjustment to changes in prices. The high MPC implies that changes in gasoline prices have large aggregate effects.

Plott, Charles R., Timothy N. Cason, Ben Gillen, Hsingyang Lee, and Travis Maron. “General Equilibrium Methodology Applied to the Design, Implementation, and Performance Evaluation of Large, Multi-Market and Multi-Unit Policy Constrained Auctions.” Economic Theory, vol. 75, no. 3, 2023, pp. 641-693.

Abstract: The paper reports on the methodology, experiments, design and outcome of a large auction with multiple, interdependent markets constructed from principles of general equilibrium as opposed to game theoretic auction theory. The auction distributed 18,788 entitlements to operate electronic gaming machines in 176 interconnected markets to 363 potential buyers representing gaming establishments subject to multiple policy constraints on the allocation. The multi-round auction, conducted in one day, produced over $600M in revenue. All policy constraints were satisfied. Revealed dynamics of interim allocations and new statistical tests provide evidence of multiple market convergence hypothesized by classical principles and theories of general equilibrium. Results support the use of computer supported, “tâtonnement–like” market adjustments as a reliable empirical processes and not as purely theoretical constructs.

Helland, Eric, Carolyn Kuhl, and Richard Sander, editors. Rethinking Case Management and the Process of Civil Justice Reform: Summary and Papers Presented at a UCLA-RAND Center for Law and Public Policy Conference. RAND Corporation, 2023.

Abstract: Despite the wide acknowledgment that the American civil justice system has room for improvement in both its fairness and its efficiency, there is not really a culture of experimentation and incremental reform. Yet the case for reform is strong. Around 30 judges, scholars, and other observers of the civil justice system gathered in Santa Monica, California, in November 2021 for the UCLA-RAND Center for Law and Public Policy–sponsored "Rethinking Civil Case Management" conference to discuss how and whether the American civil justice system might develop a stronger culture of experimentation and reform. The focus was on case management — how judges can institute methods and procedures to shape and channel litigation — but more-general issues of civil justice reform regularly surfaced. This publication summarizes the discussions and presents four pieces of scholarship presented during the conference. The participants brought diverse views to the conference, but there was a palpable consensus that a stronger culture of experimentation and reform was a worthwhile and attainable goal. The key to such efforts, it was generally agreed, is close collaboration between teams of judges and scholars to identify worthy innovations to study, to develop good data sources (that can, preferably, be widely shared), to use methodologies that are in some way experimental rather than just observational, and to "evangelize" results. Strong working relationships between judges and scholars make it more likely that judges will seriously pursue the goals of particular reforms and that scholars will correctly understand and interpret the data they are gathering.

Helland, Eric and George Vojta. “Legal Outcomes and Home Court Advantage: Evidence from the SEC’s Shift to Administrative Courts.” The Journal of Law and Economics, vol. 66, no. 4, 2023, pp. 797–835.

Abstract: Administrative law judges’ (ALJs’) relative lack of formal independence has engendered worries that they give agencies a home-court advantage. We examine the 2010 Dodd-Frank Act, which allowed the Securities and Exchange Commission (SEC) to move cases into its administrative court. The problem with this policy experiment is that the SEC retains the discretion to bring cases in federal court, so it is impossible to identify which cases the policy treats. We propose a difference-in-differences design, using natural-language-processing methods to create control and treatment groups. We construct propensity scores using random-forest methods. After binning cases into likely or not likely to be affected by the courts’ expansion, the difference-in-differences estimation indicates that the expansion made defendants 30 percentage points more likely to settle and 36 percentage points more likely to receive a nonmonetary penalty. There is a 24-percentage-point reduction in the likelihood of a monetary penalty.

Sander, Richard and Eric Helland. “Case Management Reform: The Promise of Big Data.” Judicature, vol. 107, issue 1, 2023, pp. 47-48.

Abstract: In 1990, Congress passed the Civil Justice Reform Act, which sought to "simplify" federal civil case management in a number of ways. "Big data" is coming to court systems, and this can be a boon for the evaluation of case management innovations. See Eric Hell and S Minjae Yun, More TalkLess Conflict: Evidence from Requiring Informal Discovery Conferences (unpublished manuscript) (on file with authors); Richard Sander et al., Methods for Assessing Civil Justice Reform: The Case of "Meet and Confer"Requirements for California Demurrers, in Rethinking Case Management and the Process of Civil Justice Reform, RAND Institute for Civil Justice (2023), available at https://www.rand. org/pubs/conf_proceedings/CFA2386-l.html.

Sander, Richard, Minjae Yun, Henry Kim, Jacob Kempf, Richard Fruin, and Eric Helland. “Methods for Assessing Civil Justice Reform: The Case of ‘Meet and Confer.’” Rethinking Case Management and the Process of Civil Justice Reform: Summary and Papers Presented at a UCLA-RAND Center for Law and Public Policy Conference, edited by Eric Helland, Carolyn Kuhl, and Richard Sander. RAND Corporation, 2023, pp. 78-89. 

Hu, Jinghan, Manfred Keil, and Ivan Kolesnikov. “23 Good Things that Happened in 2023 in the Inland Empire and Beyond.” The San Bernardino Sun, December 29, 2023.

Hu, Jinghan, Manfred Keil, and Ivan Kolesnikov. “What Is the Outlook for the Economy in the U.S. and the Inland Empire?The San Bernardino Sun, December 15, 2023.

Keil, Manfred, Edward Leamer, and Yao Li. “An Investigation Into the Probability That This Is the Last Year of the Economic Expansion.” Journal of Forecasting, vol. 42, issue 5, 2023, pp. 1228-1244.

Abstract: The paper finds determinants for the end of U.S. economic expansions since 1960 using a binary variable approach. Different from previous studies, we specify a left-hand side variable that is coded as one during the year prior to NBER dated recessions rather than during recessions. We thereby avoid confounding the occurrence of a recession with its length. We limit the sample by excluding recession periods and the recovery months during the subsequent expansions. This eliminates contamination of the conclusions by taking out observations for which subsequent recessions are unlikely. The resulting specification with the interest rate spread as a predictor outperforms the traditionally used equation and is robust against alternative specifications regarding the warning period.

Keil, Manfred and Fernando Lozano. “The Future of the Inland Empire: Cyclical Change vs. Secular Change.” The San Bernardino Sun, January 19, 2023.

Keil, Manfred and Ivan Kolesnikov. “Is the Fed ‘Taking Away the Punch Bowl as the Party Gets Going’ in the Inland Empire?The San Bernardino Sun, July 1, 2023.

Keil, Manfred and Jinghan Hu. “Will the Inland Empire Have a Hard or Soft Landing in the Looming Economic Downturn?The San Bernardino Sun, September 18, 2023.

Keil, Manfred, Johannes Moenius, and Ivan Kolesnikov. “What Explains Losses in Warehousing Employment in the Inland Empire?The San Bernardino Sun, October 9, 2023.

Manfred, Keil, Robert Kleinhenz, Fernando Lozano, Ken Miller, Johannes Moenius, Barbara Sirotnik, Megan Anaya, Rosy Chen*, Jinghan Hu*, Muxi Li*. California's Competitiveness: A Regional Approacih. Los Angeles Chamber of Commerce, 2023.

Abstract: Our study focuses on California’s competitiveness relative to other U.S. states. We look at the topic from several angles to gauge how public policy can potentially influence the state’s future economic success,” said Dr. Manfred Keil, Chief Economist of the Inland Empire Economic Partnership. “California’s economy is now the fourth largest in the world as measured by GDP. It is by far the top recipient of venture capital in the country, and the leader in U.S. patents. Yet it has been viewed by many as losing its competitive edge to other states. Net out-migration in population and the exodus of firms to other states are mentioned as evidence in the popular press. The crucial question is what course of action the state should and can take in the coming years to maintain its competitive leadership position among the U.S. states.

Keil, Manfred, Robert Kleinhenz, and Muxi Li. “National Recession vs. Inland Empire Recession.” The San Bernardino Sun, August 3, 2023.

Keil, Manfred, Robert Kleinhenz, and Rena O’Sullivan. “Logistics Industry’s Fortunes Busting After Booming in the Inland Empire.” The San Bernardino Sun, August 31, 2023.

Keil, Manfred and Sasha Rothstein. “A Conversation with AI on the Inland Empire’s Economy: Part II.” The San Bernardino Sun, May 7, 2023.

Keil, Manfred and Sasha Rothstein. “A Conversation with ChatGPT on the Inland Empire’s Economy.” The San Bernardino Sun, March 4, 2023.

Keil, Manfred. “State of the Region: Looking Back and Into the Future in the Inland Empire.” The San Bernardino Sun, April 12, 2023.

Keil, Manfred and Yao Li. “The Recession of 2023: Is It a Myth or a Reality?The San Bernardino Sun, January 5, 2023.

Keil, Manfred and Yao Li. “Why is It So Hard to Forecast a Recession?The San Bernardino Sun, February 14, 2023.

External Grant: Keil, Manfred. “California Competitiveness.” Bank of America and Greater Los Angeles Chamber of Commerce, 2023, $180,000.

Abstract: The grant asked us to investigate California Competitiveness in light of the recent outmigration of people and firms. California lost a Congressional Seat for the first time in its 170 year history, and headquarters of important firms, such as Tesla, Hewlett Packard, Oracle, and others have moved out of state.

Slattery, Caitlin, Alisa Tazhitdinova, and Sarah Robinson. “Corporate Political Spending and State Tax Policy: Evidence From Citizens United.” Journal of Public Economics, vol. 221, 2023, 104859.

Abstract: To what extent is U.S. state tax policy affected by corporate political contributions? The 2010 Supreme Court Citizens United v. Federal Election Commission ruling provides an exogenous shock to corporate campaign spending, allowing corporations to spend on elections in 23 states which previously had spending bans. Ten years after the ruling and for a wide range of outcomes, we are not able to identify statistically significant effects of corporate independent expenditures on state tax policy, including tax rates, discretionary tax breaks, and tax revenues. Our results allow for a moderate economic effect on corporate tax rates and revenues, but suggest economically insignificant effects for other tax outcomes of interest to firms and their owners. A complementary analysis of the original introduction of the spending bans supports our finding that corporate spending has modest, if any, effects on tax policy.

Shelton, Cameron. “Where Does Opportunity Knock? On Doors That Voted for the Executive.” Journal of Public Economics, vol. 225, 2023, 104961.

Abstract: The Trump Tax Bill of 2017 gave U.S. state governors a one-time opportunity to select an exogenously fixed number of census tracts for preferential tax treatment. We model a governors’ choice of tracts to maximize competing goals of mobilizing voters, rewarding co-partisan legislators, and alleviating poverty. We estimate the likelihood that an eligible tract is selected as a function of both the economic characteristics of the tract and the political characteristics of the governor and the relevant state and federal legislators. Our results show that the executive accountability engendered by eligibility for reelection is weakened by the dual constituency hypothesis.

Amujala, Someswar*, Angela Vossmeyer, and Sanjiv R. Das. “Digitization and Data Frames for Card Index Records.” Explorations in Economic History, vol. 87, 2023, 101469.

Abstract: We develop a methodology for converting card index archival records into usable data frames for statistical and textual analyses. Leveraging machine learning and natural-language processing tools from Amazon Web Services (AWS), we overcome hurdles associated with character recognition, inconsistent data reporting, column misalignment, and irregular naming. In this article, we detail the step-by-step conversion process and discuss remedies for common problems and edge cases, using historical records from the Reconstruction Finance Corporation.