Abstract: Does providing consumers with information about discounts, help them realize more savings? We address this question using data from a field experiment on a website that offers purchase and delivery from a local supermarket chain in the U.S. Our results illustrate the difficulty in using information provision to steer shoppers towards cheaper alternatives (of equal or higher quality than their substitutes) when consumers shop for multiple products with changing prices. We find that providing (treatment) shoppers with promotional information on sale categories increases the probability of purchasing within the category. This effect is driven by an increase in purchasing rates for both the reduced priced items and regularly priced alternatives. Our analysis focuses on understanding how item placement, promotional information, and the way promotional information is diplayed play a role in affecting consumer surplus. Keywords: Limited attention, Salience, Information processing, Supermarket shopping.
Abstract: The delayed response of law enforcement to calls for service has become a hot button issue when evaluating police department performance. While it is often assumed that faster response times could play an important role in quelling potentially violent incidents, there is no empirical evidence to support this claim. In this paper, we measure the effect of police response time on the likelihood that an incident will result in an injury. To overcome the endogeneity of more severe calls being assigned higher priority, which requires a faster response, we take several steps. First, we focus on the subset of calls for service categorized as ``Major Disturbance-Violence" that all receive the same priority level. Second, we instrument for police response time with the number of vehicles within a 2.5-mile radius of the incident at the time it is received by the call center. When controlling for beat, month, and time-of-day fixed effects, this instrumenting strategy allows us to take advantage of the geographical constraints faced by a dispatcher when assigning officers to an incident. In contrast to the OLS estimates, our two-stage least squares analysis establishes a strong causal relationship whereby increasing response time increases the likelihood that an incident results in an injury. The effect is concentrated among female victims, suggesting that faster response time could potentially play an important role in reducing injuries related to domestic violence.
Abstract: We study the effects of public pension systems on the retirement timing of older workers and, in turn, the health consequences of delaying retirement by those workers. Causal inference relies on a social security reform in Israel that shifted payments from husbands to their (non-working) wives, thereby substantially reducing the implied tax on the husband’s employment while keeping overall household wealth constant. Using administrative social security data, we estimate extensive-margin labor supply elasticities w.r.t. the average net-of-tax rate of about 0.43 for men over 65. Using the reform to instrument for employment, we find that working an additional full year at old age decreases longevity. This mortality effect occurs after age 75 and is driven by workers holding blue-collar jobs. Finally, we evaluate the effect of the reform on earnings. The results imply a small value for an additional year of life, suggesting that workers underestimate the health cost of employment at older ages.
Abstract: This paper estimates the impact of police presence on crime using a unique database that tracks the exact location of Dallas Police Department patrol cars throughout 2009. To address the concern that officer location is often driven by crime, my instrument exploits police responses to calls outside of their allocated coverage beat. This variable provides a plausible shift in police presence within the abandoned beat that is driven by the police goal of minimizing response times. I find that a 10 percent decrease in police presence at that location results in a 7 percent increase in crime. This result sheds light on the black box of policing and crime and suggests that routine changes in police patrol can significantly impact criminal behavior.. JEL Codes: D29, K42.
Abstract: Existing studies examining the crime impacts of stop, question, and frisks (SQFs) have focused on large geographic areas. The current study aims to address the limitations of prior studies by exploring the impact of SQFs on daily and weekly crime incidents in NYC at a micro-geographic level. The findings suggest that SQFs produce a significant yet modest deterrent effect on crime.
Abstract: This paper capitalizes on a unique situation in Israel where car insurance coverage is often distributed as a benefit by employers. In our sample, employer-determined coverage resulted in an average $235 discount in accident costs. Using instrumental variable analysis on data provided by an insurance firm in Israel (2001-2008), we find that each $100 reduction in accident costs results in a 1.7 percentage point increase in the probability of an accident. At an average accident rate of 16.3 percent, this 10 percent increase in auto accidents can be interpreted as the effect of moral hazard on car accidents. (JEL: D82, G22)
Abstract: This paper investigates the consequences of a randomized information-based intervention involving about 10,000 online grocery shoppers. The four-month-long ``Swap and Be Healthy'' experiment exposed consumers to the nutritional advantages of healthier product alternatives when they added less-healthy versions of certain food items to their shopping baskets, on average leading to a significant increase in the purchase of healthier alternatives. Using machine learning techniques to characterize consumers, we analyze the relationship between direct responsiveness to the nudge and broader changes in behavior. More-responsive consumers exhibit modest yet discernible shifts toward healthier purchasing behaviors extending beyond the immediate scope of the intervention. Less-responsive consumers engage in more active shopping behaviors, including spending more time shopping and making cost-saving substitutions. These results highlight the capacity of information-based approaches not only to affect isolated consumer decisions but also to reshape behavior across multiple domains.
Works in Progress - Draft Coming Soon
"The Accident Implications of a Company Car Benefit"
Abstract: Company cars that include free fuel, insurance and maintenance have become a staple employee benefit in many Israeli and European companies. Moral hazard would suggest that the benefits associated with these cars would result in lower driving care and higher accident rates. However, it is often argued that drivers receiving this benefit face longer commutes and/or a more difficult work schedule which would result in an increased rate of car accidents regardless of a moral hazard effect. Using a difference in differences strategy, we analyze the impact of a legislative change that doubled the monthly tax rate on company cars in Israel (an annual increase in costs of about $3,500). We find evidence that this increase in company car costs resulted in an 11% decrease in the probability of an accident for company car type drivers.
"Multinational Companies and Entrepreneurship: Evidence From The Start-up Nation" (with Itai Ater and Noam Gruber)
Abstract: Entrepreneurship and globalization are key factors in promoting economic growth and improving welfare. How do these two important phenomena interact with each other? In this study, we examine the impact of technology multinational companies (MNCs) on entrepreneurship, measured by the opening of new technological startups. Using data that includes information on the establishment and growth of all firms in the technology sector between 2005-2018, as well as the earnings and characteristics of workers in these firms, we show that the entrance of MNCs into a local market led to a significant decrease in entrepreneurship in the same market. We claim that this decrease is likely driven by a wage increase resulting from the entry of MNCs. Higher wages can discourage employees from taking the risks associated with starting their own firm. Indeed, we find that workers in MNCs earn roughly 40 percent more than their counterparts in local firms. Furthermore, MNC's entrance into a new geographic area drives a salary increase of roughly 7 percent for employees in nearby local firms.
"Gender Wage Gap and Job Mobility: Evidence from the Tech Sector" (with Itai Ater, Noa Barnir, Noam Gruber, and Assaf Kovo)
Abstract: This paper examines the role that job mobility plays in the gender wage gap using administrative data tracking all workers in Israel who were ever employed in the tech sector between 2005 and 2018. We find that men and women both increase their wages significantly following a job transition, 8%-9% respectively. However, women are more likely to remain with their original employer than their male colleagues. Over a 10-year period, men on average change employers 1.25 times, while female workers change employers 0.89 times. Specifically, almost 50% of women employed in tech in this period never changed employers compared to 35% of men. Overall, we calculate that the difference in job transition explains roughly 10 percent of the total gender wage gap, and more than a third of the difference explained by all other control variables, such as experience, education, marital status, and other demographic and geographic characteristics. We explore possible mechanisms for lower job mobility rates among female workers and provide evidence consistent with both preferences and bargaining explanations. For instance, consistent with a preference point-of-view, we show that females' job mobility rate falls surrounding childbirth and childbearing years. Consistent with a bargaining power point-of-view, we show that once a multinational firm enters a local market, men's wages increase more than women's, even if none of these workers move to the new firm.