Expected utility theory (EUT) is a parsimonious theory that explains behavior under risk and uncertainty. Previous research showed that EUT of wealth is not a satisfactory explanation of risk aversion. We use empirical data from a controlled laboratory experiment to show that EUT of income...

In this study, we exploit a policy shock that differentially increased capital gains taxes for housing units with holding period less than 5 years, and document tax avoidance and tax evasion in the residential resale market in China. We show suggestive evidence that after the capital gains tax...

The topic of air pollution has drawn considerable attention globally. In this paper, we examine the immediate effect of air pollution on a substantial decision, that is, a housing purchase. By linking housing purchasing behavior with the air quality in Beijing, we document market participants'...

Ranking information is often provided to improve task performance, yet its welfare and spillover effects are rarely measured. We measure these effects in a controlled laboratory experiment, in which participants conduct a simple cognitive task and report their willingness-to-pay (WTP) to receive...