Behavioral Economics Commons^™

Intra-Firm Hierarchies And Gender Gaps, Nicolo Dalvit, Aseem Patel, Joanne Tan

Research Collection School Of Economics

We study how changes in female representation at the top of a firm’s organisation affect gender-specific outcomes across hierarchies within firms. We start by developing a theoretical model of a hierarchical firm, where gender representation in top organisational layers can affect gender-specific hiring and promotion probabilities at lower layers. We then exploit a recent French reform that imposed gender representation quotas in the boards of directors and test the model’s predictions in the data. Our empirical results show that the reform was successful in reducing gender wage and representation gaps at the upper layers of the firm, but not at …

Strategic Parent Meets Detached Child? Parental Intended Bequest Division And Support From Children, Christine Ho

Research Collection School Of Economics

Whereas the literature has found that elderly parents may use bequests to reward children who provide them with time support, there is limited evidence on whether younger less needy parents may base their intended bequest division on alternative forms of support from children. Using a large-scale dataset of middle-aged and older Singaporeans, I find that parents intend to leave larger bequest shares to coresident children and to children who provide greater material support. Parents also intend to bequeath more to children in whom they confide frequently while they bequeath more to children in whom they rarely confide when the latter …

Three Essays On Development Economics And Human Capital, Arpita Khanna

Dissertations and Theses Collection (Open Access)

In the first chapter, we estimate the impact of exposure to the 2015 Nepal Earthquake on intimate partner violence with two rounds of Demographic and Health Surveys data. Using differences-in-differences estimation, we find that exposure to the earthquake lead to a statistically and economically significant increase in intimate partner violence in the urban areas but not in the rural areas. This is possibly due to an increase in the stress felt by the victims. We also offer some evidence that the impact heterogeneity between the urban and rural areas is attributable to the differences in the reconstruction processes and assistance …

Start-Up Firms And Corporate Culture: Evidence From Advertised Corporate Culture, Jungho Lee

Research Collection School Of Economics

I document advertised corporate culture among start-up firms from an online job board. Two corporate-culture types emerge, one that concerns the well-being of em- ployees (worker-centered culture) and another that emphasizes other values, such as cus- tomers, firms, and markets (firm-centered culture). The worker-centered culture attracts 20% more applications than the other culture type. Firms advertising the worker-centered culture exploit worker preference by paying 5% lower salaries than measurably similar jobs. Using a standard model of business creation, I show financially constrained start- ups are incentivized to advocate popular culture, even though doing so is not optimal without financial constraints.

Natural Disasters And Domestic Violence?: A Study Of The 2015 Nepal Earthquake, Arpita Khanna, Tomoki Fujii

Research Collection School Of Economics

This study estimates the impact of exposure to the 2015 Nepal Earthquake on intimate partner violence with two rounds of Demographic and Health Surveys data. Using differences-in-differences estimation, we find that exposure to the earthquake lead to a statistically and economically significant increase in intimate partner violence in the urban areas but not in the rural areas. This is possibly due to an increase in the stress felt by the earthquake victims. We also offer some evidence that the impact heterogeneity between the urban and rural areas is attributable to the differences in the reconstruction processes and assistance provided.

Geopolitics And Ballpark Estimates, Thomas Lam, David Fernandez

Sim Kee Boon Institute for Financial Economics

Most economist commenced 2022 with 3 key assumptions on the global economy:

1) Some policy normalisation and reversal, though cautious and uneven, are likely to occur in economies with above-average growth and inflation;

2) The Covid-19 infection wave, while presumably asymmetric and recurrent across countries, appears to have less of an imprint on cyclical activity on balance;

3) The lingering supply disruptions resulting from the pandemic, albeit still intense and widespread, should be easing gradually.

Assessing Gender Parity In Intrahousehold Allocation Of Educational Resources: Evidence From Bangladesh, Sijia Xu, Abu S. Shonchoy, Tomoki Fujii

Research Collection School Of Economics

Gender parity in education—an important global development goal—has been primarily measured through school enrollment, and the gender parity in education quality has received limited attention until recently. We address this issue by highlighting the intrahousehold allocation of education expenditure. We extend the hurdle model into a three-part model to enable decomposition of households’ education decisions into enrollment, total education expenditure, and share of the total education expenditure on the core component, or items relating to the quality of education such as private tutoring. We apply this model to four rounds of nationally representative household surveys from Bangladesh, a country that …

Forced Moves And Home Maintenance: The Amplifying Effects Of Mortgage Payment Burden On Underwater Homeowners, John Harding, Li Jing, Stuart Rosenthal, Xirui Zhang

Research Collection School Of Economics

Although the adverse effect of high loan to value ratios (LTV) on mortgage default is known, the potential amplifying effect of high payment-to-income (PTI) ratios that can force families out of their homes has received limited attention. High PTI and LTV can also add to default costs by discouraging home maintenance. Using the 1985-2013 AHS panel, we show that high PTI prompts families to move and especially so for households with LTV above 120%. This lends support for policies like HAMP and HARP that seek to reduce forced moves and mortgage default by lowering mortgage payment burden for financially stressed …

Domains For Well Behaved Monotonic Social Choice Functions, Salles Paulo Daniel Ramos

Research Collection School Of Economics

We present here a set of necessary and sufficient conditions for an MD-Connected Domain to support a Well Behaved Monotonic Social Choice Function. We require the domain to have a minimal number of preferences in which a pair of alternatives flips their relation, and these reversals must occurr in accordance to a tree graph. While this condition cannot be sum-marized by a set of restrictions on individual preferences, we provide two alternative characterizations that can, one that is necessary and another that is sufficient.

Short-Term Impact Of Covid-19 On Consumption Spending And Its Underlying Mechanisms: Evidence From Singapore, Seonghoon Kim, Kanghyock Koh, Xuan Zhang

Research Collection School Of Economics

We examine the short-term impact of COVID-19 on consumption spending and labor market outcomes. Using monthly panel data of individuals mainly aged 50–70 in Singapore, we find that COVID-19 reduced consumption spending and labor market outcomes immediately after its outbreak, and its negative impact quickly evolved. At its peak, the pandemic reduced total household consumption spending by 22.8% and labor income by 5.9% in April. Probability of full-time work also went down by 1.2 pp and 6.0 pp in April and May, respectively, but employment and self-employment were only mildly affected. Our heterogeneity analysis indicates that the reduction in consumption …

Heterogeneous Health Effects Of Medical Marijuana Legalization: Evidence From Young Adults In The United States, Junxing Chay, Seonghoon Kim

Research Collection School Of Economics

Legalizing marijuana for medical purposes is a longstanding debate. However, evidence of marijuana's health effects is limited, especially for young adults. We estimate the health impacts of medical marijuana laws (MML) in the U.S. among young adults aged 18–29 years using the difference-in-differences method and data from the Behavioral Risk Factors Surveillance System. We find that having MMLs with strict regulations generate health gains, but not in states with lax regulations. Our heterogeneity analysis results indicate that individuals with lower education attainments, with lower household income and without access to health insurance coverage gain more health benefits from MML with …

What Drives Subjective Well-Being In Singapore’S Youth?, Kong Weng Ho, Smu Office Of Research

Research@SMU Infographics

Subjective well-being, which is the scientific term for happiness and life satisfaction, can impact productivity and health. It is driven by three determining factors – the quality of relationships (relationship stocks), life aspirations and perceived opportunities. Research conducted by SMU Associate Professor Ho Kong Weng examined how these factors affect the subjective well-being of Singapore’s youth.

Jue Insight: Migration, Transportation Infrastructure, And The Spatial Transmission Of Covid-19 In China, Bingjing Li, Lin Ma

Research Collection School Of Economics

This paper evaluates the impacts of migration flows and transportation infrastructure on the spatial transmission of COVID-19 in China. Prefectures with larger bilateral migration flows and shorter travel distances with Hubei, the epicenter of the outbreak, experienced a wider spread of COVID-19. In addition, richer prefectures with higher incomes were better able to contain the virus at the early stages of community transmission. Using a spatial general equilibrium model, we show that around 28% of the infections outside Hubei province can be explained by the rapid development in transportation infrastructure and the liberalization of migration restrictions in the recent decade.

Does A District Mandate Matter For The Behavior Of Politicians? An Analysis Of Roll-Call Votes And Parliamentary Speeches, Andreas Born, Aljoscha Janssen

Research Collection School Of Economics

In most democracies, members of parliament (MPs) are elected either through a party list or by a district. We use a discontinuity in the German electoral system to investigate the causal effect of a district election on an MP’s conformity with the party line. A district election does not affect roll-call voting behavior causally, possibly due to overall high adherence to party-line voting. Analyzing the parliamentary speeches of each MP allows us to overcome the high party-line discipline with regard to parliamentary voting. Using textual analysis and machine learning techniques, we create two measures of closeness of an MP’s speeches …

Does Precise Case Disclosure Limit Precautionary Behavior? Evidence From Covid-19 In Singapore, Aljoscha Janssen, Matthew H. Shapiro

Research Collection School Of Economics

Limiting the spread of contagious diseases can involve both government-managed and voluntary efforts. Governments have a number of policy options beyond direct intervention that can shape individuals’ responses to a pandemic and its associated costs. During its first wave of COVID-19 cases, Singapore was among a few countries that attempted to adjust behavior through the announcement of detailed case information. Singapore's Ministry of Health maintained and shared precise, daily information detailing local travel behavior and residences of COVID-19 cases. We use this policy along with device-level cellphone data to quantify how local and national COVID-19 case announcements trigger differential behavioral …

Economic Impact Of Targeted Government Responses To Covid-19: Evidence From The Large-Scale Cluster In Seoul, Kim, Kanghyock Koh, Jinwook Shin

Research Collection School Of Economics

We estimate the economic impact of South Korea's targeted responses to the first large-scale COVID-19 cluster in Seoul. We find that foot traffic and retail sales decreased only within a 300 meter radius of the cluster and recovered to its pre-outbreak level after four weeks. The reductions appear to be driven by temporary business closures rather than the risk avoidance behavior of the citizens. Our results imply that less intense, but more targeted COVID-19 interventions, such as pin-pointed, temporary closures of businesses, can be a low-cost alternative after lifting strict social distancing measures.

The Price Elasticity Of African Elephant Poaching, Quy-Toan Do, Andrei A. Levchenko, Lin Ma, Julian Blanc, Holly Dublin, Tom Milliken

Research Collection School Of Economics

The objective of this paper is to provide an estimate of the elasticity of elephant poaching with respect to prices. Ivory being a storable commodity subjects its price to Hotelling’s no-arbitrage condition, hence allowing identification of the supply curve. The price of gold, one of many commodities used as stores of value, is thus used as an instrument for ivory prices. The supply of illegal ivory is found to be price inelastic with an elasticity of 0.4, with changes in consumer prices passing-through to prices faced by producers at a rate close to unity. Estimations based on a number of …

Social Norms And Fertility, Sunha Myong, Junghae Park, Junjian Yi

Research Collection School Of Economics

We document three stylized facts on marriage and fertility patterns in East Asian societies: (i) their marriage rates are among the highest in the world, but their total fertility is the lowest; (ii) although they have the lowest total fertility, almost all married women have at least one child; and (iii) almost no single women have any children. As these societies have been influenced by Confucianism over millennia, marriage and fertility decisions are potentially shaped by two social norms: the unequal gender division of childcare and the stigma attached to out-of-wedlock births. We present a model incorporating the two social …

Providing Childcare, Christine Ho, Sunha Myong

Research Collection School Of Economics

Women’s economic empowerment has been hailed as one of the most remarkable revolutions in the past 50 years. Yet, women still face the lion’s share of the burden of childcare despite major progress in their education and earnings capacity. This is particularly salient in many Asian countries. This chapter proposes a synthesis of the state of knowledge on childcare and discusses policy-relevant issues applicable to the Singapore context. Selected policies are documented and lessons from the international landscape are discussed. Raising children incurs both direct costs in the form of childcare and opportunity costs in the form of career costs. …

Squawking About Persistently Higher Inflation?, Thomas Lam

Sim Kee Boon Institute for Financial Economics

All signs point to an uncertain path for inflation in the future. While inflation is set to stay prospectively higher in the US in the near-term, it's unlikely to remain so.

Hedonic Price Of Housing Space, Sumit Agarwal, Yanying Chen, Li Jing, Yi Jin Tan

Research Collection School Of Economics

This article estimates hedonic prices for different levels of housing space, by exploiting a unique space‐adding project in Singapore that added a uniform amount of space to each existing housing unit regardless of the original size. This space adding program was carried out if sufficient residents vote in favor of space adding. Using a difference‐in‐differences (DiD) strategy after restricting our sample to narrow margins around the voting cutoff, we find that the additional space increased the resale price of a housing unit by 7% on average, and the extent of price appreciation varied significantly across the original size of the …

Information Avoidance And Medical Screening: A Field Experiment In China, Yufeng Li, Juanjuan Meng, Changcheng Song, Kai Zheng

Research Collection Lee Kong Chian School Of Business

Will individuals, especially high-risk individuals, avoid a disease test because of information avoidance? We conduct a field experiment to investigate this issue. We vary the price of a diabetes test (price experiment) and offer both a diabetes test and a cancer test (disease experiment) after eliciting participants’ subjective beliefs about their disease risk. We find evidence that, first, some people avoid the test even when there is neither a monetary nor a transaction cost, and second, both low- and high-risk individuals select out of the test as the price increases. We explain our findings using three classes of models of …

The Missing Middle In Product Price Distribution, Pao-Li Chang, Xin Yi, Haeyeon Yoon

SMU Economics and Statistics Working Paper Series

The IO literature has typically studied the supply-side factors that determine the price structure of products/services competing in a market. This paper pro-poses that the demand-side demographics could play an important role in shaping the product price structure. In particular, we document a “missing middle” phe-nomenon in both the income and the product price distributions in the U.S., based on the IPUMS ACS dataset (2005–2017) and the Nielsen Retail Scanner Data (2006–2017), for a large set of goods sold in the U.S. at the national, state, or commuting-zone level. We show that the lagged population share of the middle-income class …

Happy Lottery Winners And Lottery-Ticket Bias, Seonghoon Kim, Andrew J. Oswald

Research Collection School Of Economics

The world spends a remarkable $250 billion a year on lottery tickets. Yet, perplexingly, it has proved difficult for social scientists to show that lottery windfalls actually make people happier. This is the famous and still unresolved paradox due initially to Brickman and colleagues. Here we describe an underlying weakness that has affected the research area, and explain the concept of lottery‐ticket bias (LT bias), which stems from unobservable lottery spending. We then collect new data—in the world’s most intense lottery‐playing nation, Singapore—on the amount that people spend on lottery tickets (n = 5626). We demonstrate that, once we correct …

High-Frequency Internet Survey Of A Probability Sample Of Older Singaporeans: The Singapore Life Panel, Rhema Vaithianathan, Bryce Hool, Michael D. Hurd, Susann Rohwedder

Research Collection School Of Economics

Facing a rapidly ageing population, Singapore is presented with urgent policy challenges. Yet there is very little data on the economic, health and family circumstances of older Singaporeans. In response, the Centre for Research on the Economics of Ageing (CREA) at Singapore Management University has been collecting monthly data on a panel of Singaporeans aged between 50 and 70 years. We detail the methodology by which the Singapore Life Panel® (SLP) was constructed using a population-representative sampling frame from the Singapore Department of Statistics. Contact was made with 25,000 households through postal, phone and in-person canvassing. More than 15,200 respondents …

Three Essays On Panel And Factor Models, Ji Feng

Dissertations and Theses Collection (Open Access)

The dissertation includes three chapters on panel and factor models.

In the first chapter, we introduce a two-way linear random coefficient panel data models with fixed effects and the cross-sectional dependence. We follow the idea of the within-group fixed effects estimator to estimate parameters of interests. We establish the limiting distributions of the estimates and also propose the two-way heterogeneity bias test to check the desirability of the estimation strategy. The specification tests then are constructed to examine the existence of the slope heterogeneity and time-varyingness. We study the asymptotic properties of the specification tests and employ two bootstrap schemes …

Studying Successful Ageing: A Showcase Of The Singapore Life Panel, Jee Yuen Yew, Jia Wei Gwee, Anirudh Srivathsan

ROSA Research Briefs

In this special issue of the ROSA Research Brief Series, we showcase two aspects of the work being done at the Centre for Research on Successful Ageing (ROSA). Firstly, we showcase the capabilities of the Singapore Life Panel (SLP) and the data that the SLP is able to obtain and measure on a monthly basis. Secondly, we showcase the amazing work of the SGUnited Traineeship Programme’s Research Assistants at ROSA who have proven themselves to be incredible assets in helping further ROSA’s aims of enabling successful ageing in Singapore. ROSA aims to measure well-being among older adults holistically in order …

Asset Classes, Nicolas L. Jacquet

Research Collection School Of Economics

This paper proposes a theory of endogenous differences in liquidity of assets based on the interaction between differences in the risk of assets and differences in liquidity needs of investors. An equilibrium of the model, which always exists and is unique, displays a class structure, where investors’ types sort themselves across different types of assets. I also provide a detailed analysis of the possible types of sorting and of the consequences for the cross-sectional properties of asset prices and their velocity. The framework can also be useful to think about what constitute a ""light-to-liquidity" and a "safe asset".

The Evolution Of Income Risk And Consumption Insurance In South Korea Over The Last Two Decades, Taehyun Ahn, Chung Gu Chee, Seonghoon Kim

Research Collection School Of Economics

Using data from the Korea Labor Income Panel Study, we study the evolution of income risk and consumption insurance against transitory and permanent income shocks in South Korea over the last two decades. We find a decreasing trend in both income and consumption risks. Furthermore, we estimate that 47.6% of permanent income shocks and 9.8% of transitory income shocks pass through to consumption. We also provide evidence of substantial improvements in consumption insurance among the less educated and the older cohort nearing retirement. Our results suggest that recent developments of social safety net and welfare system may have played an …

Essays On Empirical Asset Pricing, Zilin Chen

Dissertations and Theses Collection (Open Access)

The dissertation consists of three chapters on empirical asset pricing. The first chapter examines whether the cross-sectional variation in private subsidiaries’ information disclosure predicts the cross-sectional dispersion in future equity returns of public parent firms. Information disclosure on private subsidiaries is not mandatory for public firms in the U.S., and thus these subsidiaries could be a good choice for public firms to hide bad news. We construct a private subsidiaries’ information disclosure (PSID) measure and find that a value-weighted portfolio that longs stocks in the highest PSID quintile and shorts stocks in the lowest PSID quintile yields a Fama and …