Research

Published and Forthcoming Papers

How Consumers Respond to the Phase-Out of Attribute-Based Subsidies: Evidence from the Chinese Electric Vehicle Market, with Yangfei Wang, Wei Lin, and Yue Niu, Annals of Economics and Finance, 2024, 25(2), 551-574.

This paper examines consumer responses to the 2020 phase-out of electric vehicle (EV) subsidies in China using a Difference-in-Differences (DD) strategy with monthly sales data. We uncover heterogeneous responses across different EV models, with significant impacts observed in the group facing a two-stage subsidy reduction. Moreover, evidence of forward-looking behavior indicates consumers adjusted their purchasing decisions in anticipation of future subsidy cuts. These findings highlight the significance of nuanced policy design in fostering sustainable EV adoption.

The Economic Effects of Facebook, with Roberto Mosquera, Mofioluwasademi Odunowo, Trent McNamara, and Ragan Petrie, Experimental Economics, 2020, 23(2), 575-602.

We ran a large field experiment with over 1,765 individuals to document the value of Facebook to users and its causal effect on news, well-being and daily activities. Participants reveal how much they value one week of Facebook usage and are then randomly assigned to a validated Facebook restriction or normal use. One week of Facebook is worth $67. Those who are off Facebook for one week reduce news consumption, are less likely to recognize politically-skewed news stories, report being less depressed and engage in healthier activities. These results are strongest for men. Results further suggest that, after the restriction, Facebook’s value increases, consistent with information loss or that using Facebook may be addictive.

Working Papers

Earned Income Tax Credit Experiments in the People’s Republic of China, with Li Gan, Qing He, and Junhui Wang

As more households in the China are lifted out of poverty, it becomes increasingly difficult to address the remaining poor by implementing traditional cash transfer programs due to inaccurate identification and the welfare dependency issue. One solution is to implement an incentive-compatible transfer program such as the Earned Income Tax Credit (EITC) in the United States. Starting in 2014, the China Household Finance Survey (CHFS) conducted a series of experiments. Evaluations present unambiguously strong evidence that EITC increases labor supply, earning, and expenditure in the PRC. Inspired by the early success, many Chinese local governments have been trying to come up with their own EITC-like programs or trials. This paper will discuss some of the ongoing experiments or trials in the PRC.

Household Specialization Under Work Incentives: Evidence from an EITC-type Field Experiment, with Li Gan, Qing He, and Junhui Wang

We examine whether EITC-style work incentives can be implemented through cash transfers in the absence of formal tax infrastructure. Using a field experiment in China, we design a program that conditions transfers on earnings, with simple verification procedures adapted to informal labor markets in a developing-country context. Results show program participation significantly increased the probability of working, hours worked, and earnings. Further analysis shows heterogeneous responses are largely driven by households’ labor capacity and specialization, underscoring the importance of complementary policies to maximize impact. Overall, our findings highlight the potential of simplified, low-cost designs that provide small rewards to reach the working poor in developing countries, offering a financially sustainable and feasible option for policymakers concerned about fiscal costs and welfare dependency.

How College Enrollment Limits Household Responses to Work Incentives: Evidence from a Cash Transfer Experiment, with Li Gan, Qing He, Pengzhan Qian, and Junhui Wang

This paper evaluates the first cash-transfer experiment modeled after Earned Income Tax Credit (EITC) in a developing-country setting, in which households received monthly cash rewards proportional to their earnings for one year. We find that the program effectively increases households’ labor supply, consumption, and savings, with substantial heterogeneity across household types. Households with college students primarily increased food and education expenditure, but showed only a limited increase in labor supply, potentially because the child was away at college. Households with younger children increased labor supply and focused on saving, likely in anticipation of future college expenses. Distinct from findings in developed countries, these patterns suggest that households prioritize resources for their offspring rather than investing in productivity. To formalize these mechanisms, we develop a two-period model that illustrates how these factors shape the observed patterns.

How Cash Transfers and Home Production Shape Labor Supply Responses among Low-Income Households, with Li Gan, Tingyu Zeng, Qing He, and Junhui Wang

This paper studies how low-income households adjust labor supply in response to cash transfers and work-incentive programs in China. We find little evidence that enrolling in Dibao reduces labor supply in the manner predicted by standard labor supply theory. By exploiting policy variations that separately shift wage rates and Dibao, we document a significant reduction in labor supply among individuals exiting Dibao. The effect is driven primarily by former farmers shifting their focuses from home productions to cash-generating works. We propose a simple model in which home production and cash income are complements rather than substitutes, reflecting the necessity for low-income households to engage in both activities to meet basic needs. Our findings reconcile conflicting evidence in the literature and suggest that cash transfers may not generate work disincentives in developing contexts.

Asymmetric Rural-Urban Peer Effects on Academic Achievement: Evidence from Random Dormitory Assignment, with Ya Tan, Fan Bi, and Xinzhi Zhang

This paper examines inter-group peer effects on academic achievement. Using data from a four-year public university in China, where first-year students are randomly assigned to dormitories, we find that the presence of rural roommates significantly lowers urban students’ GPA, while the corresponding effects on rural students are modest. This asymmetric peer effect is concentrated at the extensive margin and is stronger when students are outperformed by peers from the other group. Mechanism analyses indicate that these effects are primarily driven by social comparisons among students with similar socioeconomic status. Our findings highlight the role of inter-group dynamics in shaping peer effects and suggest that diversity may generate unintended short-run effects on educational outcomes.

Current Projects

Bedrooms and Babies: The Impact of Housing Upgrade Costs on Fertility in China, with Shilan Feng, Ya Tan, Yingjia Zhai, and Jingyi Zheng

From Stability to Mobility: Impact of Subways on Graduate Employment, with Yan Tan, and Fan Zhang

The Welfare Effects of Equalizing Compulsory Education: Evidence from Enrollment Restrictions on Migrant Children, with Shu Xu, and Ru Wang