Your Own Private Fiscal Cliff: Dean Karlan Wall Street Journal Op-ed

Making a New Year's resolution is easy. Keeping one isn't. When it comes to losing weight or quitting smoking, a commitment contract, wherein one publicly agrees to achieve a certain goal, can help. The commitment contract is based on two well-known principles of behavioral economics: 1) People don't always do what they claim they want to do; and 2) incentives get people to do things.

The "fiscal cliff" was a huge self-imposed commitment contract, timed for the end of the year. Politicians, to please shortsighted...

Wall Street Journal with IPA on effective giving

The Wall Street Journal’s Weekend Investor featured a long piece titled “Don’t Let Your Charitable Donation go to Waste” about the importance of donors asking for evidence that a charity works before donating. They cite IPA’s work in the field, quoting investor (and IPA board member) Ben Appen explaining: 

By applying the scientific method to economic development, organizations like IPA are contributing to a “culture of doing more of what works and less of what doesn’t work,” says Mr. Appen.

(Note, there is an ungated version of the article here)

IPA and randomista movement in Wall Street Journal feature

The Wall Street Journal Weekend Review section had front page feature on Innovations for Poverty Action and randomized controlled trials called "The Anti-Poverty Experiment." It explains how IPA approaches evidence-baesd policy through rigorous evaluations, and how the approach has changed the field, featuring perspective from Dean Karlan, Esther Duflo, Richard Thaler and others. The story also explains how behavioral economics is being integrated into anti-poverty programs and looks at several of them. It was also featured in the Chronicle of Philanthropy and Real Clear Politics. An ungated version of the text is available here.

Dean Karlan research on charitable giving in Wall Street Journal

IPA Founder and President Dean Karlan's research on charitable giving is featured in the Wall Street Journal. The article summarizes recent research in charitable giving, including Karlan's research with IPA affiliate John List, showing that a recognizable outside donor can increase others' giving. The piece also reviews his paper with IPA researcher Margaret McConnell, showing how social recognition can increase donations.

 

Next Generation of Homeowners Are Freaked Out

A new research paper by IPA Research Affiliate Julian Jamison of the Boston Federal Reserve Bank is cited in the Wall Street Journal's Real Time Economics blog:

The younger you are, the more freaked out you are likely to be by the housing market crash.

new paper by Federal Reserve Bank of Boston economists used consumer sentiment data collected in the Michigan Survey of Consumers over the summer to try to find out how the housing market's terrible state of affairs was affecting the willingness to buy a new home. Age mattered, which suggests a new generation may be coming along that will cast a wary eye at home ownership for a long time to come. The finding also suggests a new headwind to future growth levels, given that it's hard for the economy to achieve a better rate of growth when the housing sector remains moribund.

The Michigan data suggests younger survey respondents “are relatively less confident about home ownership after larger declines, while older respondents are relatively more confident,” the paper said.

Importantly, attitudes were affected by personal experience. For both age groups attitude changes were “observed only for those with personal experience of loss (via themselves or someone close) during the crash.”

The paper said that older survey respondents with stable attitudes on home ownership's value, even in the face of price declines, were over the age of 58. The paper's authors, Anat Bracha and Julian Jamison, both of the Boston Fed, speculated “in terms of the striking age differential, one possibility is that relatively younger respondents were indeed more malleable, and hence they internalized the sharp drop as a regime change.”

Meanwhile, “older respondents — whose models of the world are harder to alter — see the drop in house prices as a temporary dip in a stable long-term upward trend, making it a particularly good time to purchase.”

Happiness on Tap: Featured in The Wall Street Journal

An experiment they ran in Tangiers showed that households were willing to pay a substantial amount of money to have a private tap in their home. Once they had a tap, there was no reduction in water borne illness. But there was a substantial increase in self-reported well-being as families had more time for leisure, and the tensions that arose between households as they jostled in line at the public tap disappeared.

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