Frontiers of economic research

Heterogeneity in the value of life

Joseph E. Aldy, Seamus J. Smyth, 14 August 2014

Increasing longevity yields large economic benefits. However, public policies do not take into account the heterogeneity in these benefits across the population. This column presents simulated experimental findings about the heterogeneity in the value of statistical life. There is heterogeneity over the life-cycle, as well as prominent ‘black-white’ and ‘female-male’ gaps in the value of life, driven by differences in the labour income across these groups. The findings suggest that one-size-fits-all policies would not correctly reflect the individual willingness to pay to reduce mortality risk.

‘Data mining’ with more variables than observations

Jennifer L. Castle, David F. Hendry, 13 August 2014

A typical Oxford University econometrics exam question might take the form: “Data mining is bad, so mining with more candidate variables than observations must be pernicious. Discuss.” Similar questions may well be asked at other academic institutions, but there may be few outside Oxford University where the candidates are expected to refute both myths. This column explains why that is the right answer.

Lessons from an experiment with referees at the Journal of Public Economics

Raj Chetty, Emmanuel Saez, László Sándor, 11 August 2014

Peer review is at the heart of academic economics, but there are few professional rewards for submitting detailed referee reports on time. This column reports the results from an experimental study of referee motivation. Shorter deadlines ‘nudged’ referees to submit reports earlier. Cash incentives also reduced turnaround times, suggesting that any ‘crowding out’ of intrinsic motivation is small. Social incentives – publication of turnaround times – were more effective for tenured referees than shorter deadlines or cash incentives.

Risk attitudes are context-specific

Graham Loomes, Ganna Pogrebna, 2 August 2014

Researchers use various measures of individual risk attitudes to help explain a wide variety of economic behaviours, including investment decisions and firms’ entry and exit decisions. This column presents recent evidence showing that such measures are very context-specific and need to be used with caution, since the very same people can sometimes appear to be risk taking and sometimes appear to be risk averse, depending on the specific measure used. These discrepancies may arise because people have imprecise preferences under risk, and their responses are liable to be influenced by the particular methods used to elicit them.

Research quality assessment tools: Lessons from Italy

Graziella Bertocchi, Alfonso Gambardella, Tullio Jappelli, Carmela A. Nappi, Franco Peracchi, 28 July 2014

Assessing the quality of academic research is important – particularly in countries where universities receive most of their funding from the government. This column presents evidence from an Italian research assessment exercise. Bibliometric analysis – based on the journal in which a paper was published and its number of citations – produced very similar evaluations of research quality to informed peer review. Since bibliometric analysis is less costly, it can be used to monitor research on a more continuous basis and to predict the outcome of future peer-reviewed assessments.

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