Reminders, but not monetary incentives, increase COVID-19 booster uptake

PNAS, 120(31), 2023

with Mireille Jacobson, Manisha Shah, Matthew Kopetsky, Rajiv Pramanik, and Samir Shah

Despite substantially decreasing the risk of hospitalization and death from COVID-19, COVID-19 booster vaccination rates remain low around the world. A key question for public health agencies is how to increase booster vaccination rates, particularly among high- risk groups. We conducted a large preregistered randomized controlled trial (with 57,893 study subjects) in a county health system in northern California to test the impact of personal reminder messages and small financial incentives of $25 on booster vaccination rates. We found that reminders increased booster vaccination rates within 2 weeks by 0.86 percentage points (P = 0.000) or nearly 33% of the control mean of 2.65%. Monetary incentives had no additional impact on vaccination rates. The results highlight the potential of low-cost targeted messages, but not small financial incentives, to increase booster vaccination rates.

Financial Incentives and Other Nudges Do Not Increase COVID-19 Vaccinations among the Vaccine Hesitant

Vaccine, 40(43), 2022

with Mireille Jacobson, Manisha Shah, Rajiv Pramanik, and Samir Shah

Despite rapid initial uptake, COVID-19 vaccinations in the United States stalled within a few months of widespread rollout in 2021. In response, many state and local governments, employers and health systems used public health messaging, financial incentives and creative scheduling tools to increase vaccine uptake. Although these approaches drew on evidence from influenza and other vaccination efforts, they were largely untested in the context of SARS-CoV-2. In mid-2021, months after vaccines were widely available, we evaluated vaccination intentions and vaccine uptake using a randomized control trial. To do this, we recruited unvaccinated members of a Medicaid managed care plan in California (n=2,701) and randomly assigned them to different public health messages, $10 or $50 financial incentives for vaccination, a simple vaccination appointment scheduler, or control. While messages increased vaccination intentions, none of the interventions increased vaccination rates. Estimates for financial incentives rule out even relatively small increases in vaccination rates. Small financial incentives and other behavioral nudges do not meaningfully increase COVID-19 vaccination rates amongst the vaccine hesitant.

Selected Press Coverage: The Atlantic, Bloomberg, Freakonomics M.D., NPR [1,2,3], Wall Street Journal

The Chinese Collectibles Bubble

with Jing She and Yongxiang Wang

Using novel, hand-collected data from the largest Chinese collectibles exchange, we examine the asset price bubble in the collectibles market in the 2010s. Because the collectibles securitized on the exchange were also widely traded off the exchange, we are able to observe the fundamental price of the traded securities (i.e., the retail price of the securitized collectible). This feature of our data, combined with plausibly exogenous shocks to the trading environment, allows us to examine bubble theories in ways typically possible only in laboratory experiments. Our results are broadly consistent with resale-option theory and provide support for the external validity of several key findings from the experimental bubble literature.

Racial and Ethnic Disparities in SARS-CoV-2 Testing and COVID-19 Outcomes in a Medicaid Managed Care Cohort

with Mireille Jacobson, Manisha Shah, Rajiv Pramanik, and Samir Shah

American Journal of Preventive Medicine, 61(5), July 2021

A retrospective cohort study was conducted of racial/ethnic differences in SARS-CoV-2 testing and positive tests and COVID-19 hospitalizations and deaths among adults impaneled at a Northern California regional medical center and enrolled in the county Medicaid managed care plan (N=84,346) as of March 1, 2020. Logistic regressions adjusted for demographics, comorbidities, and neighborhood characteristics.

Nearly 30% of enrollees were ever tested for SARS-CoV-2, and 4% tested positive. A total of 19.7 per 10,000 were hospitalized for and 9.4 per 10,000 died of COVID-19. Those identified as Asian, Black, or of other/unknown race had lower testing rates, whereas those identified as Latino had higher testing rates than Whites. Enrollees of Asian or other/unknown race had slightly higher odds of a positive test, and Latinos had much higher odds of a positive test (OR=3.77, 95% CI=3.41, 4.17) than Whites. The odds of hospitalization (OR=2.85, 95% CI=1.85, 4.40) and death (OR=4.75, 95% CI=2.23, 10.12) were higher for Latino than for White patients, even after adjusting for demographics, comorbidities, and neighborhood characteristics.

In a Medicaid managed care population, where socioeconomic differences may be reduced, the odds of a positive SARS-CoV-2 test, COVID-19 hospitalization, and COVID-19 death were higher for Latino but not Black patients than for White patients. Racial/ethnic disparities depend on local context. The substantially higher risk facing Latinos should be a key consideration in California's strategies to mitigate disease transmission and harm.

Selected Press Coverage: KNX Newsradio, NBC News, Telemundo, Univision, USC News

Fear: Endogenous Risk Aversion, Stock Market Volatility, and Financial Decision-Making with Wei Huang, Hui Lin, and Yongxiang Wang 

Working paper

Using data from a large commercial bank and a large retail insurance company, we examine the impact of the stock market volatility on financial decision-making. Consistent with prior experimental evidence that stock market volatility increases individual risk aversion, we find that on days with high stock market volatility, individuals purchase more life insurance and loan officers set a higher hurdle rate for loan approval.

Battle for the Thermostat: Gender and the Effects of Temperature on Cognitive Performance with Agne Kajackaite
PLOS One, 14 (5), 2019

This paper studies differences in the effect of temperature on cognitive performance by gender in a large controlled lab experiment (N=543). We study performance in math, verbal and cognitive reflection tasks and find that the effects of temperature vary significantly across men and women. At higher temperatures, women perform better on a math and verbal task while the reverse effect is observed for men. The increase in female performance in response to higher temperature is significantly larger and more precisely estimated than the corresponding decrease in male performance. In contrast to math and verbal tasks, temperature has no impact on a measure of cognitive reflection for either gender.  Our findings suggest that gender mixed workplaces may be able to increase productivity by setting the thermostat higher than current standards.

Selected Press Coverage: The Atlantic, BBC [1, 2, 3], Bloomberg, CNN, The Daily Show, Fox, Los Angeles Times, New York Times, NPR Weekend Edition, NPR Morning Edition, PBS, Planet Money, Popular Science, Smithsonian, Scientific American, Time, USA Today, Washington Post [1, 2]

The Effect of Pollution on Worker Productivity: Evidence from Call Center Workers in China
with Joshua S. Graff Zivin and Tal Gross and Matthew J. Neidell
AEJ: Applied Economics, 11 (1), 2019

We investigate the effect of pollution on worker productivity in the service sector by focusing on two call centers in China. Using precise measures of each worker’s daily output linked to daily measures of pollution and meteorology, we find that higher levels of air pollution decrease worker productivity by reducing the number of calls that workers complete each day. These results manifest themselves at commonly found levels of pollution in major cities throughout the developing and developed world, suggesting that these types of effects are likely to apply broadly. To our knowledge, this is the first study to demonstrate that the negative impacts of pollution on productivity extend beyond physically demanding tasks to indoor, white-collar work.
 

Press Coverage: Washington Post, PBS Newshour, Martha Stewart, Mic, Yahoo! FInance, The Economist, Financial Times

In Brief: Harvard Business Review, NBER Digest, Vox

Something in the Air: Pollution and the Demand for Health Insurance
with Wei Huang and Yongxiang Wang 
Review of Economic Studies, 85(3), 2018

Using data on insurance contracts from a large insurance company, we find that daily air pollution levels have a significant effect on the decision to purchase or cancel health insurance in a manner inconsistent with rational choice theory.  A one standard deviation increase in daily air pollution leads to a 7.2% increase in the number of insurance contracts sold that day.  Conditional on purchase, a one standard deviation decrease in air pollution during the cooling-off (i.e., cost-free cancellation) period relative to the order-date level increases the return probability by 4.0%.  We explore a range of potential mechanism and find the most support for projection bias and salience.

Going to Pot? Medical Marijuana Dispensaries and Crime
 with Mireille Jacobson 
Journal of Urban Economics, 100, 2017

Many jurisdictions that sanction medical or, more recently, recreational marijuana use allow retail sales at dispensaries. Dispensaries are controversial as many consider them crime magnets. To assess this claim, we analyze the short-term mass closing of hundreds of medical marijuana dispensaries in Los Angeles. Contrary to conventional wisdom, crime increases around dispensaries ordered to close relative to those allowed to remain open. The increase is specific to crimes most plausibly deterred by bystanders, and is correlated with neighborhood walkability. A similar pattern of results is found for temporary restaurant closures. These findings provide some of the first credible evidence that “eyes upon the street” deter crime. 

Press Coverage: Los Angeles Times, Curbed, Entrepreneur, Pacific Standard, N.Y. Daily News, L.A. Weekly

Physician Agency and Patient Survival 
with Craig C. Earle, M.D. and Mireille Jacobson and Joseph Newhouse
Journal of Economic Behavior & Organization, 134, 2017

We investigate the role of physician agency in determining health care supply and patient outcomes. A 2005 change to Medicare fees had a large, negative impact on physician profit margins for providing chemotherapy treatment. In response to these cuts, physicians increased their provision of chemotherapy and changed the mix of chemotherapy drugs they administered. We find that this change improved patient survival, extending median life expectancy for lung cancer patients by about 18%. In addition while physician response was larger in less concentrated markets, survival improvements were larger in more concentrated markets.

Press Coverage: New York Times

Being Surprised by the Unsurprising: Earnings Seasonality and Stock Returns
with Samuel M. Hartzmark and David Solomon and Eugene F. Soltes. 
Review of Financial Studies, 30(1), 2016

We present evidence consistent with markets failing to properly price information in seasonal earnings patterns. Firms whose earnings are historically larger in one quarter of the year (“positive seasonality quarters”) have higher returns when those earnings are usually announced. Analyst have more positive forecast errors in positive seasonality quarters, consistent with the returns being driven by mistaken earnings estimates. We show that investors appear to overweight recent lower earnings following a positive seasonality quarter, leading to pessimistic forecasts in the subsequent positive seasonality quarter. The returns are not explained by announcement risk, firm-specific information, increased volume, or idiosyncratic volatility.

Press Coverage: Bloomberg View, Bloomberg News, Alpha Architect, Capital Ideas 

In Brief: Harvard Law School Forum 

Hillcrest Behavioral Finance Award, 2015   

California Corporate Finance Conference Best Paper Award,  2015   

Looking for Someone to Blame: Delegation, Cognitive Dissonance, and the Disposition Effect 
with David Solomon and Mark Westerfield
Journal of Finance, 71(1), 2016

We analyze brokerage data and an experiment to test a cognitive dissonance based theory of trading: investors avoid realizing losses because they dislike admitting that past purchases were mistakes, but delegation reverses this effect by allowing the investor to blame the manager instead. Using individual trading data, we show that the disposition effect -- the propensity to realize past gains more than past losses -- applies only to nondelegated assets like individual stocks; delegated assets, like mutual funds, exhibit a robust reverse-disposition effect. In an experiment, we show increasing investors' cognitive dissonance results in both a larger disposition effect in stocks and a larger reverse-disposition effect in funds. Additionally, increasing the salience of delegation increases the reverse-disposition effect in funds. Cognitive dissonance provides a unified explanation for apparently contradictory investor behavior across asset classes and has implications for personal investment decisions, mutual fund management, and intermediation.

Press Coverage: Financial Times, CNN, Alpha Architect, Ignites, Psychology Today

Particulate Pollution and the Productivity of Pear Packers 
with Joshua S. Graff Zivin and Tal Gross and Matthew J. Neidell
American Economic Journal: Economic Policy, 8(3) 2016

We study the effect of outdoor air pollution on the productivity of indoor workers at a pear-packing factory. We focus on fine particulate matter (PM2.5), a harmful pollutant that easily penetrates indoor settings. We find that an increase in PM2.5 outdoors leads to a statistically and economically significant decrease in packing speeds inside the factory, with effects arising at levels well below current air quality standards. In contrast, we find little effect of PM2.5 on hours worked or the decision to work, and little effect of pollutants that do not travel indoors, such as ozone. This effect of outdoor pollution on the productivity of indoor workers suggests a thus far overlooked consequence of pollution. Back-of-the-envelope calculations suggest that nationwide reductions in PM2.5 from 1999 to 2008 generated $19.5 billion in labor cost savings, which is roughly one-third of the total welfare benefits associated with this change.

Corrigendum 11(3) 2019

Press Coverage: The Economist, Washington Post, Business Insider, Fin24, Softpedia, Freakonomics

Judge Specific Difference in Chapter 11 and Firm Outcomes
 with Antoinette Schoar
(Revision requested, Journal of Finance)

Using the random assignment of Chapter 11 filings to bankruptcy judges within a district court, we show that bankruptcy judges vary systematically in the creditor or debtor-friendliness of their rulings. Surprisingly, firms assigned to debtor-friendly judges have worse continuation outcomes: they have lower rates of survival, sales and employment growth in the five years after filing. These results are not driven by selective termination in Chapter 11, but seem to be the result of increased misalignment in incentives between managers and shareholders in distress and the ability of managers to extract private benefits from the firm.

What Do Not-For-Profit Hospitals Maximize? Evidence from California's Seismic Retrofit Mandate
with Mireille Jacobson 
(Revision Requested, Journal of Public Economics)

Despite a large literature and considerable policy interest, debate remains over the motives of nonprofit hospitals.  We test four leading theories of nonprofit behavior by studying the response of California hospitals to a large, plausibly exogenous fixed cost shock generated by an unfunded seismic retrofit mandate. We show that seismic risk is uncorrelated with a host of hospital and neighborhood characteristics but predicts increased shut down. Higher seismic risk is also associated with increases in the provision of a range of profitable services by nonprofits, but uncorrelated with the provision of charitable care.  These results allow us to reject two popular theories of nonprofits -- ``for-profits in disguise'' and ``pure altruism'' and lend support for theories of nonprofits as perquisite or output maximizers.

How Many Pears Would a Pear Packer Pack if a Pear Packer Could Pack Pears at Quasi-Exogenously Varying Piece Rates? 
with Tal Gross
Journal of Economic Behavior & Organization, 99, 2014 (Lead Article)

We examine labor supply using a unique dataset collected from a large pear-packing factory. Pear packers face both expected and unexpected shocks to their wages, and we use this to evaluate different models of inter-temporal labor supply. We find strong evidence for reference-dependent preferences, but only mixed support for models of rational-expectations-based targets.

Press Coverage: Don't Panic Geocast

Natural Disaster Management: Earthquake Risk and Hospitals' Provision of Essential Services in California 
with Mireille Jacobson 
Regulation versus Litigation: Perspectives from Economics and Law, Daniel Kessler, ed. 2010

In this work, we study a particular policy problem—California’s efforts to ensure the earthquake safety of its hospital infrastructure that is subject to an ex post enforcement problem.  As suggested by a wrongful death case after the 2003 San Simeon earthquake (discussed in more detail later), older hospital buildings were, at least in principle, subject to the threat of ex post litigation. The ineffectiveness of ex post litigation in this context is highlighted, however, by the fact that many hospitals responded legislation by deferring new construction in favor of extending the life span of their existing buildings. As such, the 1973 law had the perverse effect of increasing the susceptibility of California’s hospitals to seismic damage. This failure had real consequences in 1994 when twenty- three hospitals had to suspend some or all services due to structural damage sustained during the Northridge earthquake.

We proceed by first describing the evolution of California’s approach to ensuring the seismic safety of its hospital infrastructure, from an implicit reliance on ex post litigation to the current very detailed regulatory approach. We trace out some unintended consequences of the current regulation for the availability of hospital services. We provide a back- of- the- envelope estimate of the trade- off the state has made to ensure hospital operations after a seismic event. Finally, we discuss a market- based trading system for earthquake- safe bed obligations that could achieve the same functional goal as the mandate—to ensure that hospitals can sustain and, most importantly, remain operational following a major seismic event—but at a lower cost in terms of money, time, and the long- term availability of services. This approach could be adapted to other mandates that take a one-size-fits-all approach to compliance such as the uniform energy efficiency requirements for new building construction included as part of the American Clean Energy and Security Act of 2009.

Categorical Consideration: Theory, Evidence and Market Implications 
 

A growing body of evidence documents individual behavior that is difficult to reconcile with standard models of rational choice, and firm behavior difficult to reconcile with rational markets. In this paper I present a boundedly rational model of choice that reconciles several behavioral anomalies, and provides micro-foundational support for some puzzling empirical regularities in firm behavior. If the evaluation of an alternative is costly, individuals may find it inefficient to compare all available alternatives. Instead, when faced with an unfeasibly large choice set, some individuals may compare groups of alternatives (i.e. categories) to reduce the choice set into a more manageable set of relevant alternatives. I call these individuals categorical considerers and develop a model in which these decision makers sequentially apply a single well-behaved preference relation at different levels of aggregation. I explore the implications of this model for both individual behavior and equilibrium firm behavior in market settings. Under certain conditions, the existence of categorical considerers in a market causes firms to utilize strategies different from what would be optimal in a market of fully rational consumers. This simple model generates predictions about behavior consistent with several new field experiments, and offers possible explanations for excess spatial product differentiation, brand name premiums, and product branding