Contributions published at Department of Economics (Florian Scheuer)

Economic research on gender largely focuses on biological sex, the binary classification as either a “man” or “woman.” We investigate the value of incorporating a measure of continuous gender identity (CGI) into economics by exploring whether it explains variation in economic preferences and behavior beyond the explanatory power of binary sex. First, we validate a novel single-item CGI measure in a survey study, showing that it correlates with measures used in gender research. Second, we use our single-item CGI measure in an incentivized laboratory experiment to assess CGI's power in explaining previously documented gender gaps in four important economic preferences.

Previous brain imaging studies with chronic cocaine users (CU) using diffusion tensor imaging (DTI) mostly focused on fractional anisotropy to investigate white matter (WM) integrity. However, a quantitative interpretation of fractional anisotropy (FA) alterations is often impeded by the inherent limitations of the underlying tensor model. A more fine-grained measure of WM alterations could be achieved by measuring fibre density (FD). This study investigates this novel DTI metric comparing 23 chronic CU and 32 healthy subjects. Quantitative hair analysis was used to determine intensity of cocaine and levamisole exposure-a cocaine adulterant with putative WM neurotoxicity. We first assessed the impact of cocaine use, levamisole exposure and alcohol use on group differences in WM integrity. Compared with healthy controls, all models revealed cortical reductions of FA and FD in CU. At the within-patient group level, we found that alcohol use and levamisole exposure exhibited regionally different FA and FD alterations than cocaine use. We found mostly negative correlations of tract-based WM associated with levamisole and weekly alcohol use. Specifically, levamisole exposure was linked with stronger WM reductions in the corpus callosum than alcohol use. Cocaine use duration correlated negatively with FA and FD in some regions. Yet, most of these correlations did not survive a correction for multiple testing. Our results suggest that chronic cocaine use, levamisole exposure and alcohol use were all linked to significant WM impairments in CU. We conclude that FD could be a sensitive marker to detect the impact of the use of multiple substances on WM integrity in cocaine but also other substance use disorders.

Previous evidence shows that better insurance coverage increases medical expenditure. However, formal studies on the effect of spending on health outcomes, and especially mental health, are lacking. To fill this gap, we reanalyze data from the Rand Health Insurance Experiment and estimate a joint non-linear model of spending and mental health. We address the endogeneity of spending in a flexible copula regression model with Bernoulli and Tweedie margins and discuss its implementation in the freely available GJRM R package. Results confirm the importance of accounting for endogeneity: in the joint model, a $1000 spending in mental care is estimated to reduce the probability of low mental health by 1.3 percentage points, but this effect is not statistically significant. Ignoring endogeneity leads to a spurious (upwardly biased) estimate.

This paper studies the problem of endogenous coalition formation in contests: how players organize themselves in groups when faced with the common objective of securing a prize by exerting costly effort. The model presented adopts an axiomatic approach by assuming certain properties for the winning probability that imply efficiency gains from cooperation in contest settings. Efficiency gains are said to be generated if any coalition experiences increasing marginal returns with aggregate effort until a threshold. These properties identify a wide class of generalised Tullock contest success functions. We analyse a sequential coalition formation game for an arbitrary number of symmetric players and exogenous effort. If coalitions generate sufficient efficiency gains, then any equilibrium always consists of two or more coalitions where at least two coalitions are of unequal size. This result extends to endogenous efforts if the cost functions are sufficiently convex.

We study the effect of exposure to colonial public primary education on contemporary education outcomes in Tunisia. We assemble a new data set on the location of schools with the number of pupils by origin, along with population data during the French protectorate (1881–1956). We match those with contemporary data on education at both district and individual level. We find that the exposure of local population to colonial public primary education has a long-lasting effect on educational outcomes, even when controlling for colonial investments in education. A one per cent increase in Tunisian enrolment rate in 1931 is associated with a 1.69 percentage points increase in literacy rate in 2014. Our results are driven by older generations, namely individuals who attended primary schools before the 1989/91 education reform. We suggest that the efforts undertaken by the Tunisian government after independence to promote schooling finally paid off after 40 years and overturned the effects of history.

We show experimentally and theoretically that trust and contract enforcement can be complements, and identify the key mechanisms that drive this complementarity. In our experiments, the effect of improvements in contract enforcement is trust-dependent, and the effect of increases in trust is shaped by the strength of contract enforcement. We identify three key mechanisms underlying this complementarity: (1) heterogeneity in trustworthiness; (2) strength of contract enforcement affecting the ability to elicit reciprocal behavior from trustworthy types, and screen out untrustworthy types; (3) trust beliefs determining willingness to try such strategies.

Do the people around us influence our personality? To answer this question, we conduct an experiment with 543 university students who we randomly assign to study groups. Our results show that students become more similar to their peers along several dimensions. Students with more competitive peers become more competitive, students with more open-minded peers become more open-minded, and students with more conscientious peers become more conscientious. We see no significant effects of peers’ extraversion, agreeableness, or neuroticism. To explain these results, we propose a simple model of personality development under the influence of peers. Consistent with the model’s prediction, personality spillovers are concentrated in traits predictive of performance. Students adopt personality traits that are productive in the university context from their peers. Our findings highlight that socialization with peers can influence personality development.

The present paper combines nonlinear shrinkage with the Multivariate Generalized Hyperbolic (MGHyp) distribution to account for heavy tails in estimating the first and second moments in high dimensions. An Expectation-Maximization (EM) algorithm is developed that is fast, stable, and applicable in high dimensions. Theoretical arguments for the monotonicity of the proposed algorithm are provided and it is shown in simulations that it is able to accurately retrieve parameter estimates. Finally, in an extensive Markowitz portfolio optimization analysis, the approach is compared to state-of-the-art benchmark models. The proposed model excels with a strong out-of-sample portfolio performance combined with a comparably low turnover.

This paper investigates how exposure to higher-achieving male and female peers in university affects students’ major choices and labor market outcomes. For identification of causal effects, we exploit the random assignment of students to university sections in compulsory first-year courses. We present two main results. First, studying with higher-achieving peers has no statistically significant or economically meaningful effects on educational choices. Second, we find suggestive evidence that women who have been exposed to higher- achieving male peers end up in jobs in which they are more satisfied.

This paper contributes to quantifying the biological implications of short-run climatic shocks and economic fluctuations in developing countries. Relying on a unique economic, climatic and anthropometric Japanese data covering the period from 1872 to 1917 (corresponding to the early phase of Japanese industrialization), we estimate the impact of yearly and monthly regional climate anomalies and yearly nationwide business cycle reversals on the average height of Japanese conscripts and its dispersion. Our estimations detect that climate anomalies during gestation and early infancy induced a decrease in average height observed at adulthood, as well as an increase in height dispersion, indicating greater welfare inequalities. These results indicate that pre-Anthropocene climate shocks had irremediable welfare implications for the poorest segments of the population in lower income countries.

Human longevity is rising rapidly all over the world, but are longer lives more satisfied lives? This study suggests that the answer might be no. Despite a substantial increase in months of satisfying life, people’s overall life satisfaction declined between 1985 and 2011 in West Germany due to substantial losses of life satisfaction in old age. When compared to 1985, in 2011, elderly West Germans were, on average, much less satisfied throughout their last five years of life. Moreover, they spent a larger proportion of their remaining lifetime in states of dissatisfaction, on average. Two important mechanisms that contributed to this satisfaction decline were health and social isolation. Using a broad variety of sensitivity tests, I show that these results are robust to a large set of alternative explanations.

In production economies with incomplete markets, shareholders disagree about the objective of the firm. We show that a weak financial intermediary, who is unable to complete markets, can offer just enough spanning to resolve this disagreement. The intermediary is limited to offering one customized contract per consumer. Knowledge of demand functions is sufficient for offering the right contracts. Once agreement among shareholders is reached, productive efficiency is restored, which in turn permits a Pareto efficient market outcome. This result shows that the first welfare theorem does not depend on complete spanning, but merely on institutions that provide the right span. However, this cannot be said about the second welfare theorem: For some wealth distributions, equilibria with transfers fail to exist due to nonconvexities caused by market incompleteness.

Motivation is a hallmark of healthy aging, but the motivation to engage in effortful behavior diminishes with increasing age. Most neurobiological accounts of altered motivation in older adults assume that these deficits are caused by a gradual decline in brain tissue, while some psychological theories posit a switch from gain orientation to loss avoidance in motivational goals. Here, we contribute to reconcile the psychological and neural perspectives by providing evidence that the frontopolar cortex (FPC), a brain region involved in cost–benefit weighting, increasingly underpins effort avoidance rather than engagement with age. Using anodal transcranial direct current stimulation together with effort–reward trade-offs, we find that the FPC’s function in effort-based decisions remains focused on cost–benefit calculations but appears to switch from reward-seeking to cost avoidance with increasing age. This is further evidenced by the exploratory, independent analysis of structural brain changes, showing that the relationship between the density of the frontopolar neural tissue and the willingness to exert effort differs in young vs older adults. Our results inform aging-related models of decision-making by providing preliminary evidence that, in addition to cortical thinning, changes in goal orientation need to be considered in order to understand alterations in decision-making over the life span.

Habits pose a fundamental puzzle for those aiming to understand human behavior. They pervade our everyday lives and dominate some forms of psychopathology but are extremely hard to elicit in the lab. In this Registered Report, we develop novel experimental paradigms grounded in computational models, which suggest that habit strength should be proportional to the frequency of behavior and, in contrast to previous research, independent of value. Specifically, we manipulate how often participants perform responses in two tasks varying action repetition without, or separately from, variations in value. Moreover, we ask how this frequency-based habitization relates to value-based operationalizations of habit and self-reported propensities for habitual behavior in real life.

A growing body of evidence suggests that consumers are not fully informed about prices, contrary to a critical assumption of classical consumer theory. We analyze a model in which consumer types can vary in both their preferences and their information about prices. Given data on demand and the distribution of prices, we identify the set of possible values of the consumer surplus. Each surplus in this set can be rationalized with simple information structures and preferences. We also show how to narrow down the set of values using richer datasets and provide bounds on counterfactual demands at perfectly observed prices.

Low-intensity transcranial electrical stimulation (tES), including alternating or direct current stimulation, applies weak electrical stimulation to modulate the activity of brain circuits. Integration of tES with concurrent functional MRI (fMRI) allows for the mapping of neural activity during neuromodulation, supporting causal studies of both brain function and tES effects. Methodological aspects of tES-fMRI studies underpin the results, and reporting them in appropriate detail is required for reproducibility and interpretability. Despite the growing number of published reports, there are no consensus-based checklists for disclosing methodological details of concurrent tES-fMRI studies. The objective of this work was to develop a consensus-based checklist of reporting standards for concurrent tES-fMRI studies to support methodological rigor, transparency and reproducibility (ContES checklist). A two-phase Delphi consensus process was conducted by a steering committee (SC) of 13 members and 49 expert panelists through the International Network of the tES-fMRI Consortium. The process began with a circulation of a preliminary checklist of essential items and additional recommendations, developed by the SC on the basis of a systematic review of 57 concurrent tES-fMRI studies. Contributors were then invited to suggest revisions or additions to the initial checklist. After the revision phase, contributors rated the importance of the 17 essential items and 42 additional recommendations in the final checklist. The state of methodological transparency within the 57 reviewed concurrent tES-fMRI studies was then assessed by using the checklist. Experts refined the checklist through the revision and rating phases, leading to a checklist with three categories of essential items and additional recommendations: (i) technological factors, (ii) safety and noise tests and (iii) methodological factors. The level of reporting of checklist items varied among the 57 concurrent tES-fMRI papers, ranging from 24% to 76%. On average, 53% of checklist items were reported in a given article. In conclusion, use of the ContES checklist is expected to enhance the methodological reporting quality of future concurrent tES-fMRI studies and increase methodological transparency and reproducibility.

Previous research in economics, social psychology, and sociology has produced compelling evidence that social norms influence behavior. In this paper we apply the Krupka and Weber (2013) norm elicitation procedure and present U.S. and non-U.S. born subjects with two scenarios for which tipping and punctuality norms are known to vary across countries. We elicit shared beliefs by having subjects match appropriateness ratings of different actions (such as arriving late or on time) to another randomly selected participant from the same university or to a participant who is born in the same country. We also elicit personal beliefs without the matching task. We test whether the responses from the coordination task can be interpreted as social norms by comparing responses from the coordination game with actual social norms (as identified using independent materials such as tipping guides for travelers). We compare responses elicited with the matching tasks to those elicited without the matching task to test whether the coordination device itself is essential for identifying social norms. We find that appropriateness ratings for different actions vary with the reference group in the matching task. Further, the ratings obtained from the matching task vary in a manner consistent with the actual social norms of that reference group. Thus, we find that shared beliefs correspond more closely to externally validated social norms compared to personal beliefs. Second, we highlight the importance that reference groups (for the coordination task) can play.

We consider the aggregate and distributional impact of Universal Basic Income (UBI). We develop a model to study a wide range of UBI programs and financing schemes and to highlight the key mechanisms behind their impact. The most crucial channel is the rise in distortionary taxation (required to fund UBI) on labor force participation. Second in importance is the decline in self-insurance due to the insurance UBI provides, resulting in lower aggregate capital. Third, UBI creates a positive income effect lowering labor force participation. Alternative tax-transfer schemes mitigate the impact on labor force participation and the cost of UBI.

Does growing up with a sister rather than a brother affect personality? In this paper, we provide a comprehensive analysis of the effects of siblings’ gender on adults’ personality, using data from 85,887 people from 12 large representative surveys covering 9 countries (the United States, the United Kingdom, the Netherlands, Germany, Switzerland, Australia, Mexico, China, and Indonesia). We investigated the personality traits risk tolerance, trust, patience, locus of control, and the Big Five. We found no meaningful causal effects of the gender of the next younger sibling, and no associations with the gender of the next older sibling. Based on high statistical power and consistent results in the overall sample and relevant subsamples, our results suggest that siblings’ gender does not systematically affect personality.

Social conflict pervades human society and fulfils a number of essential functions in its development and transformation, including the creation of new norms and institutions. The Historical Social Conflict Database (HiSCoD) is an ongoing project designed to provide to scholars and society at large with a set of resources for analysing social conflict from the Middle Ages to the late 19th century. Based on original archival research and existing repositories, the aim is to provide a global database of social conflict in past societies by collecting, aggregating, documenting and harmonising data. As of today, the database contains data more than 20,000 instances of conflict, from fiscal scuffles to urban revolts involving thousands of individuals. For every event, we provide information on the date, location, type of conflict, and, when possible, number of participants, participation of women, and a summary of events. Each individual event is documented through a hierarchical system of forms using XML-EAD technology. This article describes the data collection process and presents some descriptive statistics.