Kevin Lewis

August 26, 2019

For Safety or Profit? How Science Serves the Strategic Interests of Private Actors
Rebecca Perlman
American Journal of Political Science, forthcoming

Science is central to the regulation of risk. But who provides the science on which risk regulations are based? Through an in‐depth empirical analysis of domestic health and safety standards, this article shows how private actors use scientific information to acquire preferential outcomes. I develop a formal model delineating conditions under which firms will seek stricter standards on their own products, and I reveal how companies can acquire these outcomes through the strategic provision of information. To test the theory, I track changes to U.S. agrochemical standards over a two‐decade period. I also introduce firm‐level petition data and historical evidence to test the mechanism directly. My findings provide new insight into the strategies companies use to benefit from regulations, while also forcing us to reevaluate what it means for regulations to be based on science.

Disciplinary Actions by State Professional Licensing Boards: Are They Fair?
Cynthia Krom
Journal of Business Ethics, August 2019, Pages 567-583

This study examines 14,900 disciplinary actions by the professional licensing boards for attorneys, CPAs, and physicians in four states from 2008 through 2014. It was found that both attorneys and physicians are disciplined at a rate at least seven times that of CPAs. While the majority of disciplinary actions are for misconduct directly related to the professional practice, nearly 14% of sanctions were the result of “social crimes” such as failure to pay child support or student loans, driving under the influence, and general unprofessional conduct. The severity of licensure sanctions varied with the cause for discipline, but was inconsistent both within and between jurisdictions. These results raise important questions about the purpose and performance of state licensing boards and possible reasons for inequitable treatment. Additionally, the widespread and severe sanctions for conduct not related to the professional practice suggest that moral turpitude clauses may violate both equal protection and prohibitions on excessive fines.

The Strategic Effects of Trademark Protection
Davidson Heath & Christopher Mace
Review of Financial Studies, forthcoming

We study the effects of trademark protection on firms’ profits and strategy using the 1996 Federal Trademark Dilution Act, which granted additional legal protection to selected trademarks. We find that the FTDA raised treated firms’ operating profits and was followed by a spike in trademark lawsuits and lower entry and exit in affected product markets. Treated firms reduced R&D spending, produced fewer patents and new products, and recalled a higher number of unsafe products. Our results suggest that stronger trademark protection negatively affected innovation and product quality.

Asymmetric Effects on Fatality Rates of Changes in Workers’ Compensation Laws
Elissa Philip Gentry & Kip Viscusi
American Law and Economics Review, forthcoming

With irreversible investments in safety, changes in workers’ compensation laws should affect employer incentives asymmetrically: increases in workers’ compensation generosity should cause employers to invest more in safety, but comparable decreases might not cause them to disinvest in existing precautionary programs or equipment. Although maximum weekly benefits caps have been fairly stable, state laws have expanded or restricted workers’ compensation on multiple other dimensions. State laws may impose new requirements regarding burdens of proof, access to medical care, and the duration of benefits. This article estimates the effect of changes in these more comprehensive measures of workers’ compensation laws on workplace safety. Using confidential, restricted data from the Census of Fatal Occupational Injuries, the article finds that increases in workers’ compensation generosity lead to a significant decrease in fatality rates, while decreases in workers’ compensation generosity do not significantly increase fatality rates.

Taking Innovation to the Streets: Microgeography, Physical Structure and Innovation
Maria Roche
Review of Economics and Statistics, forthcoming

In this paper, we analyze how the physical layout of cities affects innovation by influencing the organization of knowledge exchange. We exploit a novel data set covering all Census Block Groups in the contiguous United States with information on innovation outcomes, street infrastructure, as well as population and workforce characteristics. To deal with concerns of omitted variable bias, we apply commuting zone fixed effects and construct instruments based on historic city planning. The results suggest that variation in street network density may explain regional innovation differentials beyond the traditional location externalities found in the literature.

Does Condominium Development Lead to Gentrification?
Leah Platt Boustan et al.
NBER Working Paper, August 2019

The condominium structure, which facilitates ownership of units in multi-family buildings, was only introduced to the US during the 1960s. We ask whether the subsequent development of condominiums encouraged high-income households to move to central cities. Although we document a strong positive correlation between condominium density and resident income, this association is entirely driven by endogenous development of condos in areas otherwise attractive to high-income households. When we instrument for condo density using the passage of municipal regulations limiting condo conversions, we find little association between condo development and resident income, education or race.

Estimating the success of re-identifications in incomplete datasets using generative models
Luc Rocher, Julien Hendrickx & Yves-Alexandre de Montjoye
Nature Communications, July 2019

While rich medical, behavioral, and socio-demographic data are key to modern data-driven research, their collection and use raise legitimate privacy concerns. Anonymizing datasets through de-identification and sampling before sharing them has been the main tool used to address those concerns. We here propose a generative copula-based method that can accurately estimate the likelihood of a specific person to be correctly re-identified, even in a heavily incomplete dataset. On 210 populations, our method obtains AUC scores for predicting individual uniqueness ranging from 0.84 to 0.97, with low false-discovery rate. Using our model, we find that 99.98% of Americans would be correctly re-identified in any dataset using 15 demographic attributes. Our results suggest that even heavily sampled anonymized datasets are unlikely to satisfy the modern standards for anonymization set forth by GDPR and seriously challenge the technical and legal adequacy of the de-identification release-and-forget model.

Ruining popcorn? The welfare effects of information
Cass Sunstein
Journal of Risk and Uncertainty, June 2019, Pages 121-142

Some information is beneficial; it makes people’s lives go better. Some information is harmful; it makes people’s lives go worse. Some information has no welfare effects at all; people neither gain nor lose from it. Under prevailing executive orders, federal agencies must investigate the welfare effects of information by reference to cost-benefit analysis. Federal agencies have (1) claimed that quantification of benefits is essentially impossible; (2) engaged in “breakeven analysis”; (3) projected various endpoints, such as health benefits or purely economic savings; and (4) relied on private willingness to pay for the relevant information. All of these approaches run into serious objections. With respect to (4), people may lack the information that would permit them to make good decisions about how much to pay for (more) information; they may not know the welfare effects of information. Their tastes and values may shift over time, in part as a result of information. These points suggest the need to take the willingness-to-pay criterion with many grains of salt, and to learn more about the actual effects of information, and of the behavioral changes produced by information, on people’s experienced well-being.

Capacity Constraints and Service Quality: Do Airport Slot Controls Reduce Flight Delays?
Alexander Luttmann
University of California Working Paper, May 2019

Slot controls (restrictions on the number of departing and arriving flights) are implemented at over 200 capacity constrained airports worldwide to mitigate persistent congestion and delays. However, evidence is limited regarding the effectiveness of these policies. This paper uses a quasi-experiment to evaluate whether the introduction of slot controls at John F. Kennedy (JFK) and Newark (EWR) in 2008 reduced the incidence and severity of flight delays. No evidence is found of a reduction in delays at both airports. In the months after slot controls were introduced, the average arrival delay at EWR actually increased by 7 minutes. Further, the length of Delta's departure banks (high-volume periods of departing flights) decreased by about 2 minutes at JFK while the scheduled time of EWR flights decreased by 1.52-2.24 minutes. These findings are consistent with Ater (2012), who suggested that policies aimed at reducing congestion at highly concentrated airports will only have a limited impact because dominant airlines already internalize congestion. The results highlight the need for policymakers to carefully consider how the allocation of airport slots will impact flight scheduling decisions when implementing similar policies in the future.

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