Publications
Household surveys do not capture incomes at the top of the distribution well. This yields biased inequality measures. We compare the performance of the reweighting and replacing methods to address top incomes underreporting in surveys using information from tax records. The biggest challenge is that the true threshold above which underreporting occurs is unknown. Relying on simulation, we construct a hypothetical true distribution and a “distorted” distribution that mimics an underreporting pattern found in a novel linked data for Uruguay. Our simulations show that if one chooses a threshold that is not close to the true one, corrected inequality measures may be significantly biased. Interestingly, the bias using the replacing method is less sensitive to the choice of threshold. We approach the threshold selection challenge in practice using the Uruguayan linked data. Our findings are analogous to the simulation exercise. These results, however, should not be considered a general assessment of the two methods.
The increase in employment polarization observed in several high-income economies has coincided with a reduction in inter-generational mobility. This paper argues that the disappearance of middling jobs can drive changes in mobility, notably by removing a stepping stone towards high-paying occupations for those from less well-off family backgrounds. Using data from two British cohorts who entered the labour market at two points in time with very different degrees of employment polarization, we examine how parental income affects both entry occupations and occupational upgrading over careers. We find that transitions across occupations are key to mobility and that the impact of parental income has grown over time. At regional level, using a shift-share IV-strategy, we show that the impact of parental income has increased the most in regions experiencing the greatest increase in polarisation. This indicates that the disappearance of middling jobs played a role in the observed decline in mobility.
This paper studies differences across genders in the re-contesting decisions of politicians following electoral wins or defeats. Using close races in mixed-gender French local elections, we show that women are less likely to persist in competition when they lose compared to male runners-up, but are equally or more prone than male winners to re-contest when they win. Differences in observable characteristics or in the expected electoral returns of running again cannot fully account for these gender gaps in persistence. In contrast, evidence suggests that results are driven by behavioural explanations such as cross-gender differences in candidates’ attitudes toward competition, or by political parties behaving differently toward female and male candidates for a given electoral outcome. Additionally, we provide evidence that a woman’s victory encourages former female challengers to re-contest but does not trigger the entry of new female candidates.
We examine the links between age, risk tolerance, and impatience in a large French representative sample. We combine elicited preferences data based on an incentivized web experiment and stated preferences data based on self-reported surveys. Our findings highlight distinct patterns: when considering stated preferences, both risk tolerance and impatience exhibit a decline with age. Higher risk tolerance is associated with higher impatience, and this relationship strengthens with age in the financial domain. In contrast, our analysis of elicited measures uncovers a different dynamic. Specifically, risk tolerance tends to increase with age, while age exhibits no significant influence on impatience. Furthermore, individuals endowed with higher risk tolerance tend to demonstrate lower levels of impatience, irrespective of their age.
The expansion of digital financial services leads to severe consumer protection issues such as fraud and scams. As these potentially decrease trust in digital services, especially in developing countries, avoiding victimization has become an important policy objective. In an online experiment, we first investigate how well individuals in Kenya identify phone scams using a novel measure of scam identification ability. We then test the effectiveness of scam education, a commonly used approach by organizations for fraud prevention. We find that common tips on how to spot scams do not significantly improve individuals’ scam identification ability, i.e., the distinction between scams and genuine messages. This null effect is driven by an increase in correctly identified scams and a decrease in correctly identified genuine messages, indicating overcaution. Additionally, we find suggestive evidence that genuine messages with scam-like features are misclassified more often, highlighting the importance of a careful design of official communication.
We surveyed economists’ attitudes toward adjusting discount rates to the risk profile of public programs. Three-quarters of respondents recommend to use project-specific discount rates. For example, on average, respondents discount railway infrastructures more than hospitals and climate mitigation. But the degree of discount discrimination between distinct risk profiles of different projects is fairly limited in our sample given the differences in risk profiles for these projects. Economic experts thus penalize risky public projects far less than financial markets penalize private investments. We call this the ”discount premium puzzle”. Finally, among experts in favor of a single discount rate, there is no consensus on whether it should be based on the average cost of capital in the economy, the sovereign borrowing cost, or the Ramsey rule, which gives rise to disagreement over the level of the recommended discount rate.
We revisit the question of colonial legacies in education by focusing on quality rather than quantity. We study Cameroon, a country where a Francophone education system with French colonial origins coexists with an Anglophone system with British colonial origins. This allows us to investigate the impact of different teaching practices on students’ test scores. We find that pupils schooled in the Francophone system perform better in mathematics in Grade 5, with test scores higher by two thirds of a standard deviation. Thanks to detailed school survey data, we are able to account for a wide array of inputs of the education production function, such as the economic and social conditions of students, the material conditions of the schools and classrooms, as well as some information on the teachers’ practices and pedagogical culture. We find that Francophone schools have better classroom equipment and that Francophone teachers use more vertical teaching methods, but that these differences cannot explain why Francophone students perform better in mathematics. In the end, we cannot pin down the exact mechanism behind our result.
With the low adherence to voluntary mutual health insurance, Senegal’s policymakers have sought to understand the feasibility of compulsory health insurance membership. This study aims to measure the acceptability of mandatory membership in community-based mutual health insurance (CBHI) and to understand its possible administrative modalities. The study consists of a national survey among a representative population sample selected by marginal quotas. The survey was conducted in 2022 over the phone, with a random composition method involving 914 people. The questionnaire measured the socio-economic characteristics of households, their level of acceptability concerning voluntary and compulsory membership, and their level of confidence in CBHIs and the health system. Respondents preferred voluntary (86%) over mandatory (70%) membership of a CBHI. The gap between voluntary and compulsory membership scores was smaller among women (p = 0.040), people under 35 (p = 0.033), and people with no health coverage (p = 0.011). Voluntary or compulsory membership was correlated (p = 0.000) to trust in current CBHIs and health systems. Lack of trust in the CBHI management has been more disadvantageous for acceptance of the mandatory than the voluntary membership. No particular preference emerged as the preferred administrative channel (e.g. death certificate, identity card, etc.) to enforce the mandatory option. The results confirmed the well-known challenges of building universal health coverage based on CBHIs—a poorly appreciated model whose low performance reduces the acceptability of populations to adhere to it, whether voluntary or mandatory. Suppose Senegal persists in its health insurance approach. In that case, it will be essential to strengthen the performance and funding of CBHIs, and to gain population trust to enable a mandatory or more systemic membership.
Under triopoly and Cournot competition, we study an infinite horizon Markov perfect equilibrium merger game in which in each period one of the firms (“the Buyer”) selects a bid price and then the two sellers accept or reject this offer with some probability. The possibility of a “war of attrition” equilibrium in which the seller who outlasts the other is then able to sell in the following period at a greater price, is a distinct feature of the model. Delayed monopolization is all the more likely when the discount factor is small and the ratio duopoly/ triopoly profits is important. Two other equilibria are shown to be possible: an unmerged and an immediate monopolization equilibrium. Each equilibrium is shown to correspond to a different set of parameter values. The two special cases of linear and constant price elastic demand functions are fully characterized.
Wine experts' ratings provide quality information and reduce the information asymmetry for the consumer. We hypothesize that consumers' ratings will come to dominate expert ratings in the wine expertise market. We employ a hedonic regression framework on the attributes of 36,970 French red wines to determine the relative impacts of expert and Vivino community ratings on wine prices. Average consumer ratings are found to have a larger effect on price than expert scores. These results are found to be robust to outliers and the general conclusion that peers matter more than experts holds when we exclude the top-end wines.
