Current Table of Contents

• Altruism, Favoritism, and Guilt in the Allocation of Family Resources: Sophie’s Choice in Mao’s Mass Send‐Down Movement
  Journal of Political Economy, Volume 118, Issue 1, Page 1-38, February 2010. <br/> We use survey data on twins in urban China, among whom many experienced the consequences of the forced mass rustication movement of the Cultural Revolution, to identify the roles of altruism, favoritism, and guilt in affecting family behavior. We exploit the fact that many families were forced to select one of their adolescent children to be sent down. We show the conditions under which guilt, favoritism, and altruism can be identified using such data. We find that parents behaved altruistically, showed favoritism, but also exhibited guilt: the child experiencing more rustication years received higher parental transfers despite having higher earnings.
• Why Do the Elderly Save? The Role of Medical Expenses
  Journal of Political Economy, Volume 118, Issue 1, Page 39-75, February 2010. <br/> This paper constructs a model of saving for retired single people that includes heterogeneity in medical expenses and life expectancies, and bequest motives. We estimate the model using Assets and Health Dynamics of the Oldest Old data and the method of simulated moments. Out‐of‐pocket medical expenses rise quickly with age and permanent income. The risk of living long and requiring expensive medical care is a key driver of saving for many higher‐income elderly. Social insurance programs such as Medicaid rationalize the low asset holdings of the poorest but also benefit the rich by insuring them against high medical expenses at the ends of their lives.
• How Well Does the U.S. Social Insurance System Provide Social Insurance?
  Journal of Political Economy, Volume 118, Issue 1, Page 76-112, February 2010. <br/> We analyze the insurance provided by the U.S. social security and income tax system within a model in which agents receive idiosyncratic, wage rate shocks that are privately observed. We consider two reforms: a piecemeal reform that optimally chooses the social security benefit function and a radical reform that eliminates the entire social insurance system and replaces it with an optimal tax on lifetime earnings. The radical reform outperforms the piecemeal reform and achieves nearly all of the maximum possible welfare gain when wages differ permanently over the lifetime. When wage shocks match properties in U.S. data, the piecemeal reform outperforms the radical reform.
• Cyclicality, Mortality, and the Value of Time: The Case of Coffee Price Fluctuations and Child Survival in Colombia
  Journal of Political Economy, Volume 118, Issue 1, Page 113-155, February 2010. <br/> Recent studies demonstrate procyclical mortality in wealthy countries, but there are reasons to expect a countercyclical relationship in developing nations. We investigate how child survival in Colombia responds to fluctuations in world arabica coffee prices and document starkly procyclical child deaths. In studying this result’s behavioral underpinnings, we highlight that (1) the leading determinants of child health are inexpensive but require considerable time, and (2) as the value of time declines with falling coffee prices, so does the relative price of health. We find a variety of direct evidence consistent with the primacy of time in child health production.
• Cost Benefit Analyses versus Referenda
  Journal of Political Economy, Volume 118, Issue 1, Page 156-187, February 2010. <br/> We consider a planner who chooses between two public policies and ask whether a referendum or a cost benefit analysis leads to higher welfare. We find that a referendum leads to higher welfare than a cost benefit analysis in a “common value” environment. Cost benefit analysis is better in a “private value” environment.
• Journal of Political Economy: acknowledges the assistance of
  Journal of Political Economy, Volume 118, Issue 1, Page In Back Cover, February 2010. <br/>
• Asymmetries in Habit Formation
  Journal of Political Economy, Volume 118, Issue 1, Page Back Cover, February 2010. <br/>