Publications

[1]  Social Interactions and Households' Flood Insurance Decisions

Journal of Financial Economics, 2022, 144(2), 414–432

Abstract: Flooding is the most costly natural disaster faced by US households, yet policymakers are puzzled by the low take-up rates for flood insurance. Leveraging novel transaction-level data, this paper studies the influence of social interactions on households' insurance decisions. I show that households increase flood insurance purchases by 1-5 percent when their geographically distant friends are exposed to flooding events or to campaigns for flood insurance. These exogenous shocks to far-away friends should not affect local households' own insurance decisions except through peer effects. I provide evidence suggesting that social interactions facilitate learning through information dissemination and attention triggering.

Note: this paper largely subsumes the previously-circulated "Salience and Households' Flood Insurance Decisions."

[2]  Information Dispersion Across Employees and Stock Returns, with Ashwini Agrawal and Isaac Hacamo

Review of Financial Studies, 2021, 34(10), 4785–4831

 * Hillcrest Best Paper Award in Behavioral Finance, awarded by the RFS 

Abstract: Rank-and-file employees are becoming increasingly critical for many firms, yet we know little about how their employment dynamics matter for stock prices. We analyze new data from the individual CVs of public company employees, and find that rank-and-file labor flows can be used to predict abnormal stock returns. Accounting data and survey evidence indicate that workers’ labor market decisions reflect information about future corporate earnings. Investors, however, do not appear to fully incorporate this information into their earnings expectations. The findings support the hypothesis that rank-and-file employees’ entry and exit decisions convey valuable insight into their employers’ future stock performance.

Working Papers

[3]  The Response of Mortgage Supply to Expected Flood Insurance Lapses

Abstract: Flooding is the costliest natural disaster in the US. To protect collateral, many mortgage borrowers are legally required to maintain flood insurance. However, lax enforcement leads to frequent policy lapses. This paper hypothesizes that lenders, facing high monitoring costs, provide credit contingent on borrowers' insurance incentives. Exploiting exogenous premium rises ($266 annually) that disincentivize insurance take-up, I find lenders increase mortgage denial rates dramatically by 0.56-0.81pp. As a comparison, lowering income by $266 has an effect of only 0.01pp. Total applications and borrower characteristics remain unchanged, refuting demand-side explanations. Evidence suggests that lenders internalize ex-post monitoring costs into ex-ante credit restrictions.

Note: previously circulated with the title "Mortgage, Monitoring, and Flood Insurance Disincentive"

[4]  Redeploying the Jockeys: The Intermediary Role of Venture Capital in Entrepreneurial Labor Markets

Management Science, Revise & Resubmit

Abstract: This paper sheds light on the black box of venture capitalists' value-adding activities from a labor perspective. While VC-backed startups experience frequent founder turnover due to either failure or strategic replacement, little is known about the broader picture of intra-portfolio labor dynamics. I analyze new hand-collected data and use two identification strategies to show that VCs create an internal labor market (ILM) to facilitate entrepreneurial mobility across portfolio firms. This result, highlighting VCs' emphasis on human capital, can be explained by VCs using private information to reallocate talent. Consistently, I show that (a) former VC partners continue to influence founders' mobility, (b) ILM intensity positively predicts VC fund-level return, and (c) the effect is stronger where information is more asymmetric.

[5]  Hiring Gap: The Struggles of Female Entrepreneurs in Recruiting Talent, with Isaac Hacamo (draft coming soon)

Abstract: We partner with multiple tech startups to conduct a randomized field experiment where an entrepreneur contacts prospective employees to discuss a job opening.

Work In Progress

[6] The Heterogeneous Value of Connections across Race and Gender in Job Search, with Isaac Hacamo

[7] Conflicts between Early and Late-stage Investors: Evidence from Sudden Death of Angel Investors, with Guangli Lu and Wenhao Yang

[8] The Value of Risk Sharing in Housing Markets: Evidence from Flood Insurance Availability