Liang Bai

I'm a Lecturer (Assistant Professor) in Economics at the University of Edinburgh. My research interests are in the fields of Development Economics, International Trade, and Political Economy.


Address: 31 Buccleuch Place, Edinburgh, EH8 9JT, United Kingdom

Curriculum Vitae

Research Papers

"Estimating US Consumer Gains from Chinese Imports", with Sebastian Stumpner (paper) forthcoming, American Economic Review: Insights

We estimate the size of US consumer gains from Chinese imports during 2004-15. Using barcode-level price and expenditure data, we construct inflation rates under CES preferences, and use Chinese exports to Europe as an instrument. We find significant negative effects of Chinese imports on US prices. The effect is driven by both changes in the prices of existing goods and the entry of new goods. It is similar across consumer groups by income or region. A simple benchmarking exercise suggests that Chinese imports led to a 0.19 percentage point annual reduction in the price index for consumer tradables.

"Self-Control and Demand for Preventive Health: Evidence from Hypertension in India", with Ben Handel, Edward Miguel and Gautam Rao, NBER Working Paper No. 23727 (paper)

Self-control problems constitute a potential explanation for the under-investment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically-motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. Despite achieving high take-up of such contracts in some arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment, but fail to follow through on the specified task, losing money without experiencing any health benefit. We develop and structurally estimate a pre-specified model of consumer behavior under present bias with varying levels of naivete. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment, but overly optimistic about whether a given level of commitment is sufficiently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing in some contexts, and serve as a cautionary tale about their role in health care.

"Political Conflict and Development Dynamics: Economic Legacies of the Cultural Revolution" with Lingwei Wu (paper)

As one of the most influential socio-political movements in 20th-century China, the Cultural Revolution (1966-1976) resulted in widespread conflict. This paper investigates its economic legacies, utilizing county-level variation in revolutionary intensity, as measured by the number of resulting deaths. After constructing a county-level panel of industrialization (1953-2000), we use a generalized difference-in-differences strategy to estimate the revolution’s dynamic effects on economic development. The results show that worse-affected counties performed at least as well during the pre-revolution periods, but were slower to industrialize afterwards. The effects were largest in 1982, and decline through 1990 to 2000. Moreover, using individual-level census data, and combining cohort and regional variation in revolutionary intensity, we find cohorts with more exposure are less likely to obtain higher education degrees, and to take up professional and entrepreneurial occupations.

Works in Progress:

"Rural Banks and Agricultural Production: Evidence from India's Social Banking Experiment", with C. Boudot, A. Butler, and J. Eigner