[Banerjee] = Banerjee, Samiran. Intermediate Microeconomics: A Tool-Building Approach. 1st ed. Routledge, 2014. ISBN: 9780415870054. [Preview with Google Books]
[Mastering] = Angrist, Joshua D., and Jörn-Steffen Pischke. Mastering 'Metrics: The Path from Cause to Effect. Princeton University Press, 2014. ISBN: 9780691152844. [Preview with Google Books]
Note: If a reading is marked with an *, you are responsible for preparing the paper prior to class.
|Part I. Themes: Theory Causal Tests, Evidence, and a First Application|
Minimum wages and employment: Theory says?
[Banerjee] Chapters 10.1 and 10.2: Monopoly.
[Mastering] Chapter 5: Differences-in-Differences.
Krugman, Paul. Development, Geography, and Economic Theory. MIT Press, 1997. ISBN: 9780262611350. [Preview with Google Books]
Testing theory: The fundamental problem of causal evidence
*Card, David, and Alan B. Krueger. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania." The American Economic Review 84, no. 4 (1994): 772–93.
[Mastering] Chapter 1: Randomized Trials.
Dugger, Celia W. "Wage Laws Squeeze South Africa's Poor." The New York Times, September 26, 2010.
Dube, Arindrajit. "The Minimum We Can Do." The New York Times, November 30, 2013.
Neumark, David. "Who Really Gets the Minimum Wage." The Wall Street Journal, July 6, 2014.
Holland, Paul W. "Statistics and Causal Inference." Journal of the American Statistical Association 81, no. 396 (1986): 945–60.
Minimum wages and employment: Evidence
[Banerjee] "Mathematical Appendix."
|Part II. The Foundation of Everything: Consumer Preference, Choice, Optimization, and Demand|
Introducing consumer theory: The foundation of microeconomics
[Banerjee] Chapter 3: Preferences.
Consumer sovereignty: The Carte Blanche principle
*Waldfogel, Joel. "The Deadweight Loss of Christmas." (PDF) The American Economic Review 83, no. 5 (1983): 1328–36.
Thompson, Derek. "If Economists Wrote Christmas Cards." The Atlantic, December 2013, 1–4.
Blattman, Chrisopther, Nathan Fiala, and Sebastian Martinez. "Generating Skilled Self-Employment in Developing Countries: Experimental Evidence from Uganda." The Quarterly Journal of Economics 129, no. 2 (2014): 697–752.
Haushofer, Johannes, and Jeremy Shapiro. "The Short-Term Impact of Unconditional Cash Transfers to the Poor: Experimental Evidence from Kenya." The Quarterly Journal of Economics 131, no. 4 (2016): 1973–2042.
From preferences to demand curves
[Banerjee] Chapter 4: Individual Demands.
Income effects, substitution effects, and the design of anti-poverty programs
[Banerjee] Chapter 5.1: Consumer Comparative Statics: Price and Income Consumption Curves.
Williamson, Kevin D. "The White Ghetto." National Review, December 2013, 1–10.
*Eissa, Nada, and Jeffrey B. Liebman. "Labor Supply Response to the Earned Income Tax Credit." The Quarterly Journal of Economics 111, no. 2 (1996): 605–37.
Income, substitution, and subsistence
[Banerjee] Chapter 5.3: Consumer Comparative Statics: Decomposing Price Effects.
*Jensen, Robert, and Nolan Miller. "Giffen Behavior and Subsistence Consumption." American Economic Review 98, no. 4 (2008): 1553–77.
|9||Exam 1||No readings|
|Part III. From Consumer Demand to Market Demand|
Applied competitive analysis: The U.S. sugar program
*Scherer, Fredric M. "The U.S. Sugar Program." Harvard Kennedy School, Case 1128.0, 1992.
Editorial. "America's Sugar Daddies." The New York Times, November 29, 2003.
Malkin, Elizabeth. "In Mexico, Sugar vs. U.S. Corn Syrup." The New York Times, June 9, 2004.
American Sugar Alliance. "Trade Talks in Works Could Devastate U.S. Sugar Industry." October 21, 2003.
American Sugar Alliance. "New Global Study Confirms Americans Pay Less For Sugar." PR Newswire, February 21, 2003.
Driessche, Ray Van. "Sugar is Not Expensive." USA Today, May 23, 2000.
Applied competitive analysis: The market for real estate brokers
Applied Competitive Analysis: A Second Application
*Hsieh, Chang-Tai, and Enrico Moretti. "Can Free Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry." (PDF) Journal of Political Economy 111, no. 5 (2003): 1076–122. (NBER Working Paper no. 9208)
|Part IV. Putting Markets Together: General Equilibrium, Exchange, and International Trade|
Putting markets together: The Edgeworth box
[Banerjee] Chapter 6: Exchange Economies.
The gains from market integration: "The Digital Provide"
The principle of arbitage
*Jensen, Robert. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector." The Quarterly Journal of Economics 122, no. 3 (2007): 879–924.
International trade and comparative advantage
Krugman, Paul. "The Accidental Theorist." Slate, January 1997.
Kristof, Nicholas D. "Let Them Sweat." The New York Times, June 25, 2002. (Section A)
Does trade raise national income?
[Mastering] Chapter 3: Instrumental Variables.
*Feyrer, James. "Trade and Income: Exploiting Time Series in Geography." NBER Working Paper No. 14910, 2009.
The free trade dilemma
Autor, David, David Dorn, and Gordon H. Hanson. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States." American Economic Review 103, no. 6 (2013): 2121–68.
Autor, David. "International Trade and U.S. Worker Welfare: Understanding the Costs and Benefits." Washington Center for Equitable Growth, October 31, 2016.
Autor, David, David Dorn, and Gordon H. Hanson. "The China Shock: Learning from Labor-Market Adjustment to Large Changes in Trade." Annual Review of Economics 8 (2016): 205–40.
|Part V. Markets Are Not Perfect: Externalities|
Externalities: Definition, consequences, and remedies
[Banerjee] Chapter 14: Externalities.
Bergstrom, Theodore. "Lecture 5-Externalities." UC Santa Barbara, March 2002.
Internalizing externalities: Barbed wire fencing
Enforcement of property rights: The case of barbed wire fencing
*Hornbeck, Richard. "Barbed Wire: Property Rights and Agricultural Development." The Quarterly Journal of Economics 125, no. 2 (2010): 767–810.
Prediction is difficult, especially about the future: Choice under uncertainty
[Banerjee] Chapters 11.1, 11.2, and 11.3: Expected Utility, Attitudes Towards Risk, Stochastic Dominance.
|20||Exam 2||No readings|
|Part VI. Choice Under Uncertainty: Risk Preference, the Value of Safety, and the Market for Risk|
Risk preference, the value of time, and the value of statistical life
Using revealed preference to estimate the implicit value of statistical life
*Ashenfelter, Orley, and Michael Greenstone. "Using Mandated Speed Limits to Measure the Value of a Statistical Life." Journal of Political Economy 112, no. S1 (2004): S226–7.
Newman, Thomas P., Brian D. Johnston, and David C. Grossman. "Effects and Costs of Requiring Child-Restraint Systems for Young Children Traveling on Commercial Airplanes." Archives of Pediatric Adolescent Medicine 157, no. 10 (2003): 969–74.
Banzhaf, H. Spencer. "Retrospectives: The Cold-War Origins of the Value of Statistical Life." Journal of Economic Perspectives 28, no. 4 (2014): 213–26.
There's a market for risk? How insurance works
[Banerjee] Chapter 11.4: Pareto Efficient Risk Sharing.
Moral hazard in the housing market: Subprime lending
[Mastering] Chapter 4: Regression Discontinuity Designs.
*Keys, Benjamin J., Tanmoy Mukkerjee, et al. "Did Securitization Lead to Lax Screening? Evidence from Subprime Loans." The Quarterly Journal of Economics 125, no. 1 (2010): 307–62.
|Part VII. Markets are Not Perfect: TMI or NEMI?|
Imperfect information: Signaling in markets
Spence, Michael. "Job Market Signaling." The Quarterly Journal of Economics 87, no. 3 (1973): 355–74.
[Banerjee] Chapter 12 and Chapter 15: Game Theory (especially section 12.3 on Nash Equilibrium), Asymmetric Information.
Why do educated people earn more?
*Tyler, John H., Richard J. Murnane, and John B. Willett. "Estimating the Labor Market Signaling Value of the GED." The Quarterly Journal of Economics 115, no. 2 (2000): 431–68.
[Mastering] Chapter 6: The Wages of Schooling.
Mandating a pooling equilibrium: "Ban the Box" legislation
*Agan, Amanda, and Sonja Starr. "Ban the Box, Criminal Records, and Statistical Discrimination: A Field Experiment." (PDF) University of Michigan Law and Economics Research Paper, August 24, 2016.
Autor, David H., and David Scarborough. "Does Job Testing Harm Minority Workers? Evidence from Retail Establishments." The Quarterly Journal of Economics 123, no. 1 (2008): 219-277.
Doleac, Jennifer L., and Benjamin Hansen. "Does 'Ban the Box' Help or Hurt Low-Skilled Workers? Statistical Discrimination and Employment Outcomes When Criminal Histories are Hidden." NBER Working Paper No. 22469, 2016.
Bartik, Alexander W., and Scott Nelson. "Credit Reports as Résumés: The Incidence of Pre-Employment Credit Screening." MIT Department of Economics Graduate Student Research Paper 16–01, March 2016.
Adverse selection and the Lemons Problem
Akerlof, George A. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism." The Quarterly Journal of Economics 84, no. 3 (1970): 488–500.
*Einav, Liran, and Amy Finkelstein. "Selection in Insurance Markets: Theory and Empirics in Pictures." Journal of Economic Perspectives 25, no. 1 (2011): 115–38.
Cutler, David, and Sarah Reber. "Paying for Health Insurance: The Trade-Off between Competition and Adverse Selection." The Quarterly Journal of Economics 113, no. 2 (1998): 433–66.
Health insurance in practice: Why it works, why it matters
Finkelstein, Amy, and Kathleen McGarry. "Multiple Dimensions of Private Information: Evidence from the Long-Term Care Insurance Market." American Economic Review 96, no. 4 (2006): 938–58.
*Card, David E., Carlos Dobkin, et al. "Does Medicare Save Lives?" The Quarterly Journal of Economics 124, no. 2 (2009): 597–636.
|Exam 3 (during exam period)||No readings|