We challenge a commonly used assumption in the literature on social preferences and show that this assumption leads to significantly biased estimates of the social preference parameter. Using Monte Carlo simulations, we demonstrate that the literature's common restrictions on the curvature of...

This paper studies a model of the distribution of income under bounded needs. Utility derived from any given good reaches a bliss point at a finite consumption level of that good. On the other hand, introducing new varieties always increases utility. It is assumed that each variety is owned by a...

It is commonly claimed in the recent happiness literature in psychology and economics that we have proved diminishing marginal utility of income. This paper suggests that we have not. It draws a distinction between concavity of the utility function and concavity of the reporting function. --...

I suggest the idea of a reporting function, r(.), from reality to feelings. The 'happiness' literature claims we have demonstrated diminishing marginal utility of income. I show not, and that knowing r(.)'s curvature is crucial. A quasi-experiment on heights is studied. -- Money ; diminishing...

We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved...

Child labor is often condemned as a form of exploitation. I explore how the notion of exploitation, as used in everyday language, can be made precise in economic models of child labor. Exploitation is defined relative to a specific social welfare function. I first show that under the standard...

We examine the incentives to self-select into politics and how they depend on the transparency of the entry process. To this end, we set up a two-stage political competition model and test its key mechanisms in the lab. At the entry stage, potential candidates compete in a contest to become...

In this paper, I analyze the pros and cons of implementing structural reforms of the labor market in booms vs. recessions, in light of considerations of social efficiency, political viability, and macroeconomic fine tuning. While the optimal timing of a reform depends on the relative importance...

Ever since Goldin (1995) proposed the idea that there is a U-shaped female labor force participation rate function in economic development, empirical research is stunned by the question why the countries of the Middle East and North Africa (MENA) are characterized by such low rates of female...

This paper studies a natural experiment to identify the causal effect of exposure to refugees in the neighborhood on the support for far-right, nationalist, anti-immigration parties. In the state elections in an Austrian state in September 2015 the far-right Freedom Party of Austria (FPOE)...