Work in progress

Abstract:

Optimal targeting of social aid is a fundamental issue in public policy design. A key aim is to create welfare systems that are manipulation-proof. Using rich administrative and survey data, along with a fuzzy difference-in-discontinuities design, we study manipulation of eligibility for a nationwide welfare program in Georgia. Large drops in benefits at key thresholds of welfare scores, coupled with the ability to request reassessments, provide households with both the means and incentives to manipulate in this setting. We (i) document substantial levels of manipulation at a key benefit discontinuity, (ii) characterize manipulating households, (iii) document how these households engage in manipulation, and (iv) provide evidence on the downstream consequences of manipulation. We find that successful manipulation crowds out labor market participation for women, but not men. Finally, we provide a lower bound estimate of the cost of manipulation at 25% of the initial expenditure on our target households.

Keywords: Welfare Eligibility, Manipulation, Public Policy Design, Bunching

JEL Codes: D1, E21, H24, H53, I38

Abstract:

How can households be encouraged to spend social assistance on children? We collaborated with the Government of Georgia and randomized all households eligible for targeted social assistance to test two approaches: (i) providing food vouchers instead of cash and (ii) labeling cash transfers to promote child-related spending. Compared to cash alone, we find that labeled transfers increase the share of household expenditure on children. By contrast, vouchers reduce overall consumption, likely due to higher transportation costs, suggesting they may be poorly suited to rural areas with limited access to markets.

Keywords: Cash Transfers, Labeling Effect, Food Vouchers, Child Welfare, Large-scale Experiments.

JEL: C93, D04, I38, J13, O12

Abstract:

We study the housing market response to a country-wide policy that mandated the provision of energy efficiency information with all marketing materials at the time of listing. Using the near universe of housing sales in England and Wales, we match the energy efficiency status of the property from Energy Performance Certificates data. Wedevelopaconceptual framework that makes clear the key channels through which the policy may impact house prices – an information-driven salience channel and a market evaluation channel. We provide causal evidence of homebuyers' willingness to pay for a higher energy-rated property, documenting a 1-3% premium to a higher energy efficiency rating at the national level, and a 3- 6% premium in the London market. We explore a set of key margins along which homebuyers can respond, ruling out as explanations both a consumption channel and an information channel. We conclude that the elevated EPC-rating premiums are driven by a market valuation channel, a conclusion for which we provide empirical support. Such a conclusion is of key policy importance, as it suggests market-facing energy efficiency regulations can increase demand for more energy-efficient housing, even in absence of any discernible demand-side consumption or information effects. 

Keywords: Hedonic Price Models, Energy Performance Certificates, Information Shocks. 

JEL: R38, Q48, K32

This paper examines the effect of violent crime on the prevalence of early motherhood in Colombia. To instrument for the predominance of violent crime I use geographical and temporal variation in drug trafficking networks. My results suggest that one standard deviation increase in the homicide rate induces a 2.55 percentage points increase in the probability of early motherhood.

JEL: D74, K42, J13, C41