Working Papers

These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.

Juliane Begenau, Saki Bigio, Jeremy Majerovitz
April 2019

This paper presents five facts on the behavior of U.S. banks between 2007 and 2015 that impose useful restrictions on the formulation of a bank problem. (1) Market to book leverage ratio diverged significantly during...

Susan Athey, Guido W. Imbens
March 24, 2019

We discuss the relevance of the recent Machine Learning (ML) literature for economics and econometrics. First we discuss the differences in goals, methods and settings between the ML literature and the traditional econometrics and statistics...

John Kepler, Christopher Armstrong, Stephen Glaeser
March 21, 2019

We examine how firms’ accounting quality affects their reaction to monetary policy. The balance sheet channel of monetary transmission emphasizes the role of information asymmetry between firms and capital providers in propagating the effects of...

Zhengyang Jiang, Arvind Krishnamurthy, Hanno Lustig
March 19, 2019

We develop a theory that links the U.S. dollar’s valuation in FX markets to foreign investors’ demand for U.S. safe assets. When the convenience yield that foreign investors derive from holding U.S. safe assets increases,...

Julian Runge, Harikesh S. Nair, Jonathan Levav
March 18, 2019

The “freemium” model for digital goods involves selling a base version of the product for free, and making premium product features available to users only on payment. The success of the model is predicated on...

Katherine Casey, Rachel Glennerster, Kelly Bidwell
March 15, 2019

Candidate debates have a rich history and remain integral to contemporary campaign strategy. There is, however, little evidence that they affect the behavior of voters or politicians. The scarcity of political information in the developing...

Wenxin Du, Benjamin Hébert, Amy Wang
March 14, 2019

Violations of no-arbitrage conditions measure the shadow cost of constraints on intermediaries, and the risk that these constraints tighten is priced. We demonstrate in an intermediary-based asset pricing model that violations of no-arbitrage such as...

Richard Lu, Jennifer A. Chatman, Amir Goldberg, Sameer B. Srivastava
March 3, 2019

Why are some people more successful than others at fitting in culturally over time? Prior research has offered divergent and seemingly inconsistent answers to this question. One perspective has highlighted the importance of shared values...

Katharina Lix, Amir Goldberg, Sameer B. Srivastava, Melissa A. Valentine
March 2019

How does diversity among members of a team affect their performance? Prior research has found diversity to be a double-edged sword that sometimes boosts and in other

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Pedro M. Gardete, Megan H. Antill
March 2019

Previously titled “Avoiding Lemons in Search of Peaches: Designing Information Provision”

The increasing amount of data available to consumers has most likely aided in decision-making. However, it has also created an opportunity for sellers to...

David F. Larcker, Edward M. Watts
February 22, 2019

This study investigates whether investors are willing to trade-off wealth for societal benefits. We take advantage of unique institutional features of the municipal securities market to provide insight into this question. Since 2013, over $23...

Susan Athey, Stefan Wager
February 20, 2019

We apply causal forests to a dataset derived from the National Study of Learning Mindsets, and consider resulting practical and conceptual challenges. In particular, we discuss how causal forests use estimated propensity scores to be...

David F. Larcker, Charles McClure, Christina Zhu
February 11, 2019

We examine the selection of peer groups that boards of directors use when setting the level of CEO compensation. This choice is controversial because it is difficult to ascertain whether peer groups are selected to...

Rebecca Lester
February 7, 2019

How do U.S. companies respond to incentives intended to encourage domestic manufacturing? I study the Domestic Production Activities Deduction (DPAD), which was enacted in the American Jobs Creation Act of 2004 and was the third...

Heitzman Shane, Rebecca Lester
February 6, 2019

We examine the relation between tax net operating loss (NOL) carryforwards and corporate cash holdings. Corporate taxation of passive income increases the cost of holding liquid assets (“cash”), but NOLs can shield that income from...

Rebecca Lester, Lisa De Simone, Aneesh Raghunandan
February 1, 2019

We examine the association between state and local firm-specific tax subsidies and business activity in the surrounding county, measured as the number of business establishments, number of employees, aggregate wages, per capita employment, and per...

Dmitry Arkhangelsky, Susan Athey, David A. Hirshberg, Guido W. Imbens, Stefan Wager
February 1, 2019

We present a new perspective on the Synthetic Control (SC) method as a weighted least squares regression estimator with time fixed effects and unit weights. This perspective suggests a generalization with two way (both unit...

Lisa De Simone, Rebecca Lester, Kevin Markle
February 1, 2019

We examine how U.S. individuals respond to regulation intended to reduce offshore tax evasion.   Specifically, we study investment responses to the Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions to report information...

Susan Athey, Billy Ferguson, Mathew Gentzkow, Tobias Schmidt
February 2019

We introduce a novel measure of segregation, experienced isolation, that captures individuals’ exposure to diverse others in the places they visit over the course of their days. Using novel Global Positioning System (GPS) data collected...

Ruihuan Du, Yu Zhong, Harikesh S. Nair, Bo Cui, Ruyang Shou
January 30, 2019

This paper describes a practical system for Multi Touch Attribution (MTA) for use by a publisher of digital ads. We developed this system for JD.com, an eCommerce company, which is also a publisher of digital...