Publications
"On the Demand for Natural Gas in Urban China," with Xinye Zheng, Yihua Yu. Energy Policy, 70(2014): 57-63.
"Conservation Spillovers: the Effect of Rooftop Solar on Climate Change Beliefs," with Graham Beattie and Andrea LaNauze. Environmental and Resource Economics 74.3(2019): 1425-1451.
Working Papers
"Administrative Barriers, Market Integration and Economic Growth: Evidence from China," (Job Market Paper)
Along with the reduction in transportation costs in the last two centuries, institutional trade barriers have become increasingly important obstacles to further market integration. This paper examines the impact of a policy reform in China that removed inter-regional administrative trade barriers by incorporating counties into prefectures with a larger market. Using a difference-in-differences approach, I compare incorporated counties, both before and after the reform, to two control groups: counties that applied for incorporation but failed and counties that were incorporated several years later. I find that the reform immediately and persistently increased the economic growth of incorporated counties. Several sources of evidence suggest that treated counties experienced relatively rapid growth because they became more integrated into the domestic market. First, using an indirect measure of protection, I find that the reform significantly reduced local protectionism between incorporated counties and their corresponding prefectures. Second, market shares of more productive sectors increased in treated counties following the reform. Third, firms producing tradable goods rapidly entered treated counties. Finally, less profitable firms in treated counties were more likely to exit.
"Responsibility-Shifting through Delegation: Evidence from China's One Child Policy," with Yiming Liu.
There is a growing body of experimental evidence indicating that delegation can foster the shifting of responsibility for unpopular actions from a principal to an agent. Using the well-known episode of the one-child policy in China (OCP), we provide field evidence for responsibility shifting through delegation. We compare the impact of the OCP on parents who experienced OCP during 1979-1990 (Phase I), when local governments were the primary enforcer, versus 1991-2015 (Phase II) when the enforcement of the policy was delegated to the civilians by incentivizing them to report their neighbors' violations of the policy, and appointing cluster leaders to monitor neighbors. Our identification strategy exploits the exogeneity of the gender of the first born child and argues that parents whose firstborn was a girl were more likely to violate the OCP because of the traditional Chinese "at least one son" preference. Consistent with the predictions of the responsibility-shifting theory, we find that parents who were more exposed to the OCP in Phase II currently trust their neighbors less and this effect is exacerbated for those parents whose firstborn was a girl. The OCP exposure does not undermine trust in local governments. However, parents exposed to the OCP in Phase I currently trust their local governments less. Again it is the parents whose first child was a girl that are impacted more strongly. The OCP exposure does not have a significant impact on trust in neighbors in that phase. We explore three alternative interpretations of the results, but none of them can account for these findings.
"Correspondence Bias," with Yiming Liu and George Loewenstein. Draft available upon request.
We designed a series of lab experiment to investigate the idea that people often draw inferences about others’ enduring characteristics from behaviors that can be entirely explained by the incentives that induce them. We first let some people play a benign game in which cooperation is encouraged and let the other people play a malign game in which they are incentivized to harm each other. We then ask them to choose between a benign game player and a malign game player to play a new game with. We find that subjects are willing to pay a positive amount to be matched with their benign game partner in the new game. This benign premium is significantly larger when the subjects only observe one of the games compared to the case when they experience both games, suggesting that a rational Bayesian model cannot fully explain our findings as it would predict no differences between the two situations. We also find that when subjects can observe the “counterfactual” behaviors of their benign (malign) game partner in the malign (benign) game, the benign premium goes away. Our three-stage design also rules out two other potential confounders: subjects choose the benign game player simply to reciprocate; they believe that the institution can shape an individual’s kindness and a benign game can make its player a better person.
"On the Demand for Natural Gas in Urban China," with Xinye Zheng, Yihua Yu. Energy Policy, 70(2014): 57-63.
"Conservation Spillovers: the Effect of Rooftop Solar on Climate Change Beliefs," with Graham Beattie and Andrea LaNauze. Environmental and Resource Economics 74.3(2019): 1425-1451.
Working Papers
"Administrative Barriers, Market Integration and Economic Growth: Evidence from China," (Job Market Paper)
Along with the reduction in transportation costs in the last two centuries, institutional trade barriers have become increasingly important obstacles to further market integration. This paper examines the impact of a policy reform in China that removed inter-regional administrative trade barriers by incorporating counties into prefectures with a larger market. Using a difference-in-differences approach, I compare incorporated counties, both before and after the reform, to two control groups: counties that applied for incorporation but failed and counties that were incorporated several years later. I find that the reform immediately and persistently increased the economic growth of incorporated counties. Several sources of evidence suggest that treated counties experienced relatively rapid growth because they became more integrated into the domestic market. First, using an indirect measure of protection, I find that the reform significantly reduced local protectionism between incorporated counties and their corresponding prefectures. Second, market shares of more productive sectors increased in treated counties following the reform. Third, firms producing tradable goods rapidly entered treated counties. Finally, less profitable firms in treated counties were more likely to exit.
"Responsibility-Shifting through Delegation: Evidence from China's One Child Policy," with Yiming Liu.
There is a growing body of experimental evidence indicating that delegation can foster the shifting of responsibility for unpopular actions from a principal to an agent. Using the well-known episode of the one-child policy in China (OCP), we provide field evidence for responsibility shifting through delegation. We compare the impact of the OCP on parents who experienced OCP during 1979-1990 (Phase I), when local governments were the primary enforcer, versus 1991-2015 (Phase II) when the enforcement of the policy was delegated to the civilians by incentivizing them to report their neighbors' violations of the policy, and appointing cluster leaders to monitor neighbors. Our identification strategy exploits the exogeneity of the gender of the first born child and argues that parents whose firstborn was a girl were more likely to violate the OCP because of the traditional Chinese "at least one son" preference. Consistent with the predictions of the responsibility-shifting theory, we find that parents who were more exposed to the OCP in Phase II currently trust their neighbors less and this effect is exacerbated for those parents whose firstborn was a girl. The OCP exposure does not undermine trust in local governments. However, parents exposed to the OCP in Phase I currently trust their local governments less. Again it is the parents whose first child was a girl that are impacted more strongly. The OCP exposure does not have a significant impact on trust in neighbors in that phase. We explore three alternative interpretations of the results, but none of them can account for these findings.
"Correspondence Bias," with Yiming Liu and George Loewenstein. Draft available upon request.
We designed a series of lab experiment to investigate the idea that people often draw inferences about others’ enduring characteristics from behaviors that can be entirely explained by the incentives that induce them. We first let some people play a benign game in which cooperation is encouraged and let the other people play a malign game in which they are incentivized to harm each other. We then ask them to choose between a benign game player and a malign game player to play a new game with. We find that subjects are willing to pay a positive amount to be matched with their benign game partner in the new game. This benign premium is significantly larger when the subjects only observe one of the games compared to the case when they experience both games, suggesting that a rational Bayesian model cannot fully explain our findings as it would predict no differences between the two situations. We also find that when subjects can observe the “counterfactual” behaviors of their benign (malign) game partner in the malign (benign) game, the benign premium goes away. Our three-stage design also rules out two other potential confounders: subjects choose the benign game player simply to reciprocate; they believe that the institution can shape an individual’s kindness and a benign game can make its player a better person.