Discussion Paper No. 442
November 5, 2023
Fairness in Matching Markets: Experimental Evidence
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Abstract:
We investigate fairness preferences in matching mechanisms using a spectator design. Participants choose between the Boston mechanism or the serial dictatorship mechanism (SD) played by others. In our setup, the Boston mechanism generates justified envy, while the strategy-proof SD ensures envy-freeness. When priorities are merit-based, many spectators prefer the Boston mechanism, and this preference increases when priorities are determined by luck. At the same time, there is support for SD, but mainly when priorities are merit-based. Stated voting motives indicate that choosing SD is driven by concerns for envy-freeness rather than strategy-proofness, while support for the Boston mechanism stems from the belief that strategic choices create entitlements.
Keywords:
matching markets; school choice; voting; Boston mechanism; sincere agents; justified envy;
JEL-Classification:
D47; C92; I24; D74;
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Discussion Paper No. 433
October 24, 2023
Religion and Growth
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Abstract:
We use the elements of a macroeconomic production function—physical capital, human capital, labor, and technology—together with standard growth models to frame the role of religion in economic growth. Unifying a growing literature, we argue that religion can enhance or impinge upon economic growth through all four elements because it shapes individual preferences, societal norms, and institutions. Religion affects physical capital accumulation by influencing thrift and financial development. It affects human capital through both religious and secular education. It affects population and labor by influencing work effort, fertility, and the demographic transition. And it affects total factor productivity by constraining or unleashing technological change and through rituals, legal institutions, political economy, and conflict. Synthesizing a disjoint literature in this way opens many interesting directions for future research.
Keywords:
religion; growth; Christianity; Judaism; Islam; preferences; norms; institutions; capital; saving; financial development; human capital; education; population; labor; demography; fertility; total factor productivity; technological change; rituals; political economy; conflict;
JEL-Classification:
Z12; O40; N30; I25; O15;
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Discussion Paper No. 429
September 19, 2023
Can Patience Account for Subnational Differences in Student Achievement? Regional Analysis with Facebook Interests
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Decisions to invest in human capital depend on people’s time preferences. We show that differences in patience are closely related to substantial subnational differences in educational achievement, leading to new perspectives on longstanding within-country disparities. We use social-media data – Facebook interests – to construct novel regional measures of patience within Italy and the United States. Patience is strongly positively associated with student achievement in both countries, accounting for two-thirds of the achievement variation across Italian regions and one-third across U.S. states. Results also hold for six other countries with more limited regional achievement data.
Keywords:
patience; student achievement; regions; social media;
JEL-Classification:
I21; Z10;
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Discussion Paper No. 387
February 27, 2023
Transparency and Policy Competition: Experimental Evidence from German Citizens and Politicians
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Abstract:
A lack of transparency about policy performance can pose a major obstacle to welfare-enhancing policy competition across jurisdictions. In parallel surveys with German citizens and state parliamentarians, we document that both groups misperceive the performance of their state’s education system. Experimentally providing performance information polarizes citizens’ political satisfaction between high- and low-performing states and increases their demand for greater transparency of states’ educational performance. Parliamentarians’ support for the transparency policy is opportunistic: Performance information increases (decreases) policy support in high-performing (low-performing) states. We conclude that increasing the public salience of educational performance information may incentivize politicians to implement welfare-enhancing reforms.
Keywords:
yardstick competition; beliefs; information; citizens; politicians; survey experiment;
JEL-Classification:
H11; I28; D83;
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Discussion Paper No. 383
February 14, 2023
The ifo Education Survey 2014-2021
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Abstract:
The ifo Education Survey is a representative opinion survey of the German voting-age population on education topics that has been conducted annually since 2014. It covers public preferences on a wide range of education policy issues ranging from early childhood education, schools, and apprenticeships to university education and life-long learning. The dataset comprises several survey experiments that facilitate investigating the causal effects of information provision, framing, and question design on answering behavior. This paper gives an overview of the survey content and methodology, describes the data, and explains how researchers can access the dataset of over 4000 participants per wave.
Keywords:
education; policy; survey; experiment; public opinion; political economy; Germany;
JEL-Classification:
I28; D72; H52;
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Discussion Paper No. 377
January 30, 2023
Confidence and College Applications: Evidence from a Randomized Intervention
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This paper investigates the role self-confidence plays in college applications. Using incentivized experiments, we measure the self-confidence of more than 2,000 students applying to colleges in France. This data reveals that the best female and low-SES students significantly underestimate their rank in the grade distribution compared to male and high-SES students. By matching our survey data with administrative data on real college applications and admissions, we show that miscalibrated confidence affects college choice on top of grades. We then estimate the impact of a randomized intervention that corrects students' under- and overconfidence by informing them of their real rank in the grade distribution. The treatment reduces the impact of under- and overconfidence for college applications, to the point where only grades but not miscalibrated confidence predict the application behavior of treated students. Providing feedback also makes the best students, who were initially underconfident, apply to more ambitious programs with stronger effects for female and low-SES students.
Keywords:
matching mechanism; confidence; information treatment; survey experiment;
JEL-Classification:
I24; J24; D91; C90;
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Discussion Paper No. 376
Improving Transparency and Verifiability in School Admissions: Theory and Experiment
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Students participating in centralized admissions procedures do not typically have access to the information used to determine their matched school, such as other students' preferences or school priorities. This can lead to doubts about whether their matched schools were computed correctly (the 'Verifiability Problem') or, at a deeper level, whether the promised admissions procedure was even used (the 'Transparency Problem'). In a general centralized admissions model that spans many popular applications, we show how these problems can be addressed by providing appropriate feedback to students, even without disclosing sensitive private information like other students' preferences or school priorities. In particular, we show that the Verifiability Problem can be solved by (1) publicly communicating the minimum scores required to be matched to a school ('cutoffs'); or (2) using `predictable' preference elicitation procedures that convey rich 'experiential' information. In our main result, we show that the Transparency Problem can be solved by using cutoffs and predictable procedures together. We find strong support for these solutions in a laboratory experiment, and show how they can be simply implemented for popular school admissions applications involving top trading cycles, and deferred and immediate acceptance.
Keywords:
school choice; matching; transparency; cutoffs; dynamic mechanisms; experiment;
JEL-Classification:
C78; C73; D78; D82;
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Discussion Paper No. 373
January 23, 2023
Global Universal Basic Skills: Current Deficits and Implications for World Development
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Abstract:
How far is the world away from ensuring that every child obtains the basic skills needed to be internationally competitive? And what would accomplishing this mean for world development? Based on the micro data of international and regional achievement tests, we map achievement onto a common (PISA) scale. We then estimate the share of children not achieving basic skills for 159 countries that cover 98.1% of world population and 99.4% of world GDP. We find that at least two-thirds of the world's youth do not reach basic skill levels, ranging from 24% in North America to 89% in South Asia and 94% in Sub-Saharan Africa. Our economic analysis suggests that the present value of lost world economic output due to missing the goal of global universal basic skills amounts to over $700 trillion over the remaining century, or 11% of discounted GDP.
Keywords:
skills; student achievement; development goals; economic growth;
JEL-Classification:
I25; O15; O47;
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Discussion Paper No. 355
January 4, 2023
Betting on Diversity – Occupational Segregation and Gender Stereotypes
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Abstract:
Many occupations and industries are highly segregated with respect to gender. This segregation could be due to perceived job-specific productivity differences between men and women. It could also result from the belief that single-gender teams perform better. We investigate the two explanations in a lab experiment with students and in an online experiment with personnel managers. The subjects bet on the productivity of teams of different gender compositions in tasks that differ with respect to gender stereotypes. We obtain similar results in both samples. Women are picked more often for the stereotypically female task and men more often for the stereotypically male task. Subjects do not believe that homogeneous teams perform better but bet more on diverse teams, especially in the task with complementarities. Elicited expectations about the bets of others reveal that subjects expect the effect of the gender stereotypes of tasks but underestimate others’ bets on diversity.
Keywords:
gender segregation; hiring decisions; teams; discrimination; stereotypes;
JEL-Classification:
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Discussion Paper No. 354
Behavioral Forces Driving Information Unraveling
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Abstract:
Information unraveling is an elegant theoretical argument suggesting that private information may be fully and voluntarily surrendered. The experimental literature has, however, failed to provide evidence of complete unraveling and has suggested senders' limited depth of reasoning as one behavioral explanation. In our novel design, decision-making is essentially sequential, which removes the requirements on subjects' reasoning and should enable subjects to play the standard Nash equilibrium with full revelation. However, our design also facilitates coordination on equilibria with partial unraveling which exist with other-regarding preferences. Our data confirm that the new design is successful in that it avoids miscoordination entirely. Roughly half of the groups fully unravel whereas other groups exhibit monotonic outcomes with partial unraveling. Altogether, we nd more information unraveling with the new design, but there is clear evidence that other-regarding preferences do play a role in impeding unraveling.
Keywords:
data protection; inequality aversion; information revelation; level-k reasoning;
JEL-Classification: