Tradeoff between Entrepreneurship and Lineage: Evidence from China's Nationwide Two-Child Policy with Po-Hsuan Hsu and Seungjoon Oh
We study how entrepreneurial choices are influenced by households’ child-rearing opportunities. Employing a difference-in-differences approach by exploiting the introduction of China’s nationwide two-child policy, we find a decreased (increased) likelihood of entrepreneurial participation (having a child) in households with a married woman aged between 20 and 40 years old. This tradeoff can be attributed to family risk consideration – we document lower revealed risk preference of households experiencing a recent childbirth and find stronger policy effects in households lacking intra-household risk-sharing and in those facing higher uncertainty about career prospects. More importantly, we find that the policy effect is stronger in families with the first child being female due to son preference. Our empirical evidence highlights demographic policy can give rise to unintended consequences in the determent of entrepreneurship.
The Impact of Investment Gains on Gambling Consumption with Jake An and Baek Jung Kim
Using unique Australian investment app data, we document gamblers' propensity and sensitivity to spend money on online sports betting upon experiencing mutual fund investment gains. Employing past asset weights within portfolios as instruments for current positions, we find that investment gains lead to more gambling for individuals who previously gambled, suggesting a complementary relationship. We propose that changes in risk attitude resulting from mutual fund investment experiences drive this increased gambling consumption. This tendency, however, hinders the growth of investment wealth, particularly among financially vulnerable individuals. Our study highlights the intricate connection between investment and gambling consumption.
The Price of Losing Trust: An Empirical Study of Social Misconduct by YouTube Creators with Rajiv Garg and Jeong Ho (John) Kim
We study the consequences of reported social misconduct for YouTube creators. Using a staggered difference-in-differences approach, we find that YouTube channels of creators who are found to have misconducted themselves experience significant drops in both subscription and viewership. Such drops translate to economically significant financial losses between $4,734 and $8,233 per month per channel. We also find that the effects are similar for channels that feature products and those that do not, and that the effects are more pronounced for channels whose creators can be visually identified. These consequences of social misconduct can be attributed to loss of customer trust, which we show can be partially mitigated by means of credible online apologies.
Fintech Nudges: Overspending Messages and Personal Finance Management
Using large proprietary money management app data from a major commercial bank in Canada, I study how the app users manage their personal finance upon seeing an overspending message on the mobile app. First, I find that the message recipients reduced spending on the following day by C$8.15, which corresponds to 5.4% of their daily average spending, compared to the non-recipients. Second, these fintech nudges had temporary effect on flow spending and resulted in permanent reduction in cumulative spending. Third, the effects are especially pronounced for the users who are older, have higher liquid wealth, are more finance-savvy, are new to the app experience, or reside in a city with a higher fraction of educated population. Fourth, I find suggestive evidence that these effects could spill over from one app user to another in the same household. On the other hand, the message recipients were less likely to monitor their accounts via log-ins afterward, which is selective inattention known as the ostrich effect.
Do Credit Supply Shocks Affect Fertility Choices? with Jeong Ho (John) Kim and Heebum Lee
We empirically investigate the role of credit supply in fertility decisions. Using the U.S. banking deregulation in the 1980s and the 2007–2009 Great Recession as two different laboratories for credit supply shocks, we find that an increase in credit supply consistently implies higher fertility rates, as well as higher propensity to have a child. This relation, which is economically and statistically significant, differs across individuals: It is more pronounced for young women and for families with unemployed husbands. Finally, we provide suggestive evidence that increased credit access leads to more optimistic expectations about personal prospects, and in turn, higher fertility rates.