OF MICE AND MERCHANTS: CONNECTEDNESS AND THE LOCATION OF ECONOMIC ACTIVITY IN THE IRON AGE Jan David Bakker, Stephan Maurer, Jörn-Steffen Pischke, and Ferdinand Rauch* Abstract—We study the causal relationship between geographic connect- edness and development using one of the earliest massive trade expansions: the first systematic crossing of open seas in the Mediterranean during the time of the Phoenicians. We construct a geography-based measure

REVISIONS IN UTILIZATION-ADJUSTED TFP AND ROBUST IDENTIFICATION OF NEWS SHOCKS André Kurmann and Eric Sims* Abstract—This paper documents large revisions in a widely used series of utilization-adjusted total factor productivity (TFP) by Fernald (2014) and shows that these revisions can materially affect empirical results about the effects of news shocks. We trace these revisions to changes in estimated factor utilization that are evocative of cyclical

THE LIGHT AND THE HEAT: PRODUCTIVITY CO-BENEFITS OF ENERGY-SAVING TECHNOLOGY Achyuta Adhvaryu, Namrata Kala, and Anant Nyshadham* Abstract—We study the adoption of energy-efficient LED lighting in gar- ment factories around Bangalore, India. Combining daily production line– level data with weather data, we estimate a negative, nonlinear productivity- temperature gradient. We find that LED lighting raises productivity on hot days. Using the firm’s costs data, we

TRADE AND UNCERTAINTY Dennis Novy and Alan M. Taylor* Abstract—We offer a new explanation as to why international trade is so volatile in response to economic shocks. Our approach combines the idea of uncertainty shocks with international trade. Firms order inputs from home and foreign suppliers. In response to an uncertainty shock firms dispro- portionately cut orders of foreign inputs due to higher fixed costs.

MOTIVATING INNOVATION: THE EFFECT OF LOSS AVERSION ON THE WILLINGNESS TO PERSIST Yaroslav Rosokha and Kenneth Younge* Abstract—We investigate the willingness of individuals to persist at ex- ploration when confronted by prolonged periods of negative feedback. We design a two-dimensional maze game and run a series of randomized ex- periments with human subjects in the game. Our results suggest individuals explore more when they are

TWIN BIRTH AND MATERNAL CONDITION Sonia Bhalotra and Damian Clarke* Abstract—Twin births are often construed as a natural experiment in the so- cial and natural sciences on the premise that the occurrence of twins is quasi- random. We present population-level evidence that challenges this premise. Using individual data for 17 million births in 72 countries, we demonstrate that indicators of mother’s health, health-related behaviors, and

WORKERS BENEATH THE FLOODGATES: LOW-WAGE IMPORT COMPETITION AND WORKERS’ ADJUSTMENT Hale Utar* Abstract—Using employee-employer matched data, I analyze the impact of a low-wage trade shock on manufacturing workers in a high-wage country, Denmark, and how they adjust to the shock over a decade. I derive causal effects by exploiting the dismantling of the Multifiber Arrangement quotas on products from China upon its WTO accession as

PERFORMANCE IN MIXED-SEX AND SINGLE-SEX COMPETITIONS: WHAT WE CAN LEARN FROM SPEEDBOAT RACES IN JAPAN Alison Booth and Eiji Yamamura* Abstract—In speedboat racing in Japan, men and women compete under the same conditions and are randomly assigned to mixed-sex or single-sex groups for each race. We use a sample of over 140,000 individual-level records to examine how male-dominated circumstances affect women’s racing performance. Our fixed-effects

The Review of Economics and Statistics Vol. C July 2018 Number 3 SOCIAL COHESION, RELIGIOUS BELIEFS, AND THE EFFECT OF PROTESTANTISM ON SUICIDE Sascha O. Becker and Ludger Woessmann* Abstract—In an economic theory of suicide, we model social cohesion of the religious community and religious beliefs about afterlife as two mechanisms by which Protestantism increases suicide propensity. We build a unique microregional data set of

THE SELECTION OF HIGH-SKILLED EMIGRANTS Matthias Parey, Jens Ruhose, Fabian Waldinger, and Nicolai Netz* Abstract—We measure selection among high-skilled emigrants from Ger- many using predicted earnings. Migrants to less equal countries are positively selected relative to nonmigrants, while migrants to more equal countries are negatively selected, consistent with the prediction in Borjas (1987). Positive selection to less equal countries reflects university qual- ity and grades,

FORECASTING CONDITIONAL PROBABILITIES OF BINARY OUTCOMES UNDER MISSPECIFICATION Graham Elliott, Dalia Ghanem, and Fabian Krüger* Abstract—We consider constructing probability forecasts from a parametric binary choice model under a large family of loss functions (“scoring rules”). Scoring rules are weighted averages over the utilities that heterogeneous decision makers derive from a publicly announced forecast (Schervish, 1989). Using analytical and numerical examples, we illustrate how different scoring

MEASURING INTERTEMPORAL SUBSTITUTION IN CONSUMPTION: EVIDENCE FROM A VAT INCREASE IN JAPAN David Cashin and Takashi Unayama* Abstract—We estimate the intertemporal elasticity of substitution in con- sumption (IES) using a preannounced increase in Japan’s consumption tax rate. Because this tax is highly comprehensive, the rate increase was announced prior to its implementation, and because other factors that affect the real interest rate were constant, the

SOCIAL NETWORKS AND RESEARCH OUTPUT Lorenzo Ductor, Marcel Fafchamps, Sanjeev Goyal, and Marco J. van der Leij* Abstract—We study how knowledge about the social network of an individ- ual researcher, as embodied in his coauthor relations, helps us in developing a more accurate prediction of his or her future productivity. We find that incorporating information about coauthor networks leads to a mod- est improvement in

COMMODITY MARKET DYNAMICS AND THE JOINT EXECUTIVE COMMITTEE, 1880–1886 Franco Mariuzzo and Patrick Paul Walsh* Abstract—Using weekly spot and future commodity prices in Chicago and New York, we construct expected transportation rates for grain between these two cities, expected inventory levels in New York, and realized errors in the expectations of such variables. We incorporate these exogenous com- modity market dynamics into Porter’s (1983) structural

THE LOG OF GRAVITY J. M. C. Santos Silva and Silvana Tenreyro* it: under heteroskedasticity, Abstract—Although economists have long been aware of Jensen’s in- equality, many econometric applications have neglected an important implication of log- linearized models estimated by OLS lead to biased estimates of the true elasticities. We explain why this problem arises and propose an appropri- ate estimator. Our criticism of conventional practices

PUBLIC POLICY, PRIVATE PREFERENCES, AND THE JAPANESE TRADE PATTERN Marcus Noland* Abstract —As nontariff forms of trade protection proliferate it has become more difficult to analyze the impact of trade policy on trade flows. In a number of well-known papers researchers have attempted to infer the impact of trade policy indirectly by ascribing to trade policy the differences between actual and predicted trade flows. Much