Working Papers
Publication Bias Re-examined: A New Communication Model and Correction Method (2021)
Abstract: This paper builds a model of communication between researchers and a policymaker and develops a new meta-analysis method based on the model’s implications for publication bias. The conventional assumption is that bias results from the biased motives of researchers, and that their reporting process can be well-approximated by simple rules. This paper, in contrast, shows that publication bias can result from cognitive frictions readers face when aggregating multiple papers. The model suggests that the reporting rules will not be parsimonious, a prediction that is consistent with the evidence. Motivated by these results, a robust method for bias correction is proposed.
Tax Transparency and Social Welfare: the Role of Government Commitment (2022)
Abstract: Although transparency has long been held as the key principle of taxation, recent behavioral public finance theory has shown that it may reduce social welfare as inattention can alleviate behavioral distortions. This paper extends this analysis by modeling inattention as a noise in the tax rate signal received by Bayesian citizens. In equilibrium, we find that transparency will improve social welfare by ensuring the government's ability to commit to a fairly low tax rate that is socially optimal. Moreover, this model yields new sufficient statistics formulas that inform whether a policy effort to ensure tax transparency is socially worthwhile.
A Statistical Foundation for the Shape of Utility Functions over Wealth (to be uploaded)
Abstract: This paper proposes a statistical foundation for the shape of utility-of-wealth functions that holds regardless of contextual details. In particular, when decisionmakers face various consumption values for which they allocate their wealth, their utility over that wealth is governed by that consumption value distribution. When the distribution has a Pareto tail, the utility function exhibits Constant Relative Risk Aversion. When its exponent is 1 by Zipf's Law, the utility function becomes logarithmic. When the distribution is lognormal by Gibrat's Law, the utility function exhibits Increasing Relative Risk Aversion. Altogether, this analysis not only reaffirms the consistency, but also resolves the contradiction, between theory and evidence on risk aversion.
Bounded Rationality and Randomized Experiments (to be uploaded)
Abstract: For what reasons, and under what conditions, does randomization become the optimal experimental design? Randomization will be generically sub-optimal when the Bayesian audience can infer treatment effects from non-random studies by using their prior beliefs to account for the selection bias. By contrast, randomization can become optimal when the boundedly rational audience will otherwise need to pay efforts to think through the selection effects. The sufficient statistics formula of the Marginal Value of Statistical Randomization shows this ease of interpretation provides the formal reason for randomization.
Published Papers
Fiscal Responses to the COVID-19 Crisis in Japan: the First Six Months (2020,
with Michihito Ando, Daigo Nakata, and Kazuhiko Sumiya)
Abstract: This paper provides an overview of the Japanese government’s response to the COVID-19 crisis in terms of the fiscal measures taken between January and June 2020. As the crisis intensified, the government passed emergency budgets with a total value exceeding 10 percent of gross domestic product. One of the main programs was an unconditional cash transfer for households in the amount of 100,000 JPY (i.e., 909 USD) per resident. In addition, to prevent layoffs and bankruptcies, the government created and expanded various loan and subsidy programs to support firms and workers. Other existing social programs and local economic policies are also reviewed.
(Published in National Tax Journal )
Do Solar Lamps Help Children Study? Contrary Evidence from a Pilot Study in Uganda (2013)
Abstract: Over half a billion children lack adequate lighting and use dim, smoky and dangerous kerosene-based lighting for their evening studies. This article examines the conventional wisdom that the brighter, clean, safe and zero-marginal-cost light of solar lamps enhances children’s learning outcomes. In a randomised experiment, unexpectedly, solar lamps lowered test scores by five points out of 100 (0.25 standard deviation), but increased reported study time by approximately 30 minutes per day. This may be due to flickering from lack of full charge, lowering their productivity. The nationwide learning assessment suggests that solar lamps likely have an insignificant effect on educational attainment.
(Published in the Journal of Development Studies )
(Old) Working Papers
Power Laws in Superspreading Events: Evidence from Coronavirus Outbreaks and
Implications for SIR Models (2020, with Masao Fukui)
Abstract: While they are rare, superspreading events (SSEs), wherein a few primary cases infect an extraordinarily large number of secondary cases, are recognized as a prominent determinant of aggregate infection rates (R0). Existing stochastic SIR models incorporate SSEs by fitting distributions with thin tails, or finite variance, and therefore predicting almost deterministic epidemiological outcomes in large populations. This paper documents evidence from recent coronavirus outbreaks, including SARS, MERS, and COVID-19, that SSEs follow a power law distribution with fat tails, or infinite variance. We then extend an otherwise standard SIR model with the fat-tailed power law distributions, and show that idiosyncratic uncertainties in SSEs will lead to large aggregate uncertainties in infection dynamics, even with large populations. That is, the timing and magnitude of outbreaks will be unpredictable. While such uncertainties have social costs, we also find that they on average decrease the herd immunity thresholds and the cumulative infections because per-period infection rates have decreasing marginal effects. Our findings have implications for social distancing interventions: targeting SSEs reduces not only the average rate of infection (R0) but also its uncertainty. To understand this effect, and to improve inference of the average reproduction numbers under fat tails, estimating the tail distribution of SSEs is vital.
(Vetted in Covid Economics )
Health Benefits of Replacing Kerosene Candles with Solar Lamps: Evidence from Uganda (2017)
Abstract: A randomized controlled trial in rural Uganda shows that there can be improvement in air-quality-related health such as headaches, chest pain, fever, and eye irritation if non-electrified households switch from kerosene to solar lamps. This five-month study worked with a sample of 155 schoolchildren. Those who received solar lamps reported having better overall air-quality-related health (0.25 standard deviation of baseline distribution, 6% lower probability of any symptoms), although there was no statistically significant change in self-reported cough symptoms or in lung capacity, as measured by spirometer tests. The health improvements were concentrated in school exam periods, most likely because students who switched to studying under solar lamps were exposed to less indoor air pollution. While health benefits exist, a follow-up survey shows that poor maintenance and low adoption remain major challenges for scaling up this new technology.