Bruce I. Sacerdote

Dartmouth College

Recent news reports and a Department of Justice investigation highlight the potential for insider informed trading by U.S. Senators and Members of the House of Representatives, an activity which the STOCK Act of 2012 was intended to deter. We use a new and comprehensive data set of these officials’ trades of public equities from January 2012-Decemb...

Measuring the geographic spillovers from an economic shock remains a challenging econometric problem. In Feyrer, Mansur, and Sacerdote (2017) we study the propagation of positive shocks from the recent boom in oil and gas production in the United States. We regress changes in income per capita on new energy production per capita within increasingly...

The combining of horizontal drilling and hydrofracturing unleashed a boom in oil and natural gas production in the US. This technological shift interacts with local geology to create an exogenous shock to county income and employment. We measure the effects of these shocks within the county where production occurs and track their geographic propaga...

In the past 10 years, there has been an explosion of well-identified studies that measure peer effects across many settings and for many outcomes. The emphasis on natural experiments and randomization is a highly useful one; in more standard observational studies, the self-selection of people into peer groups can make the measurement of peer effect...

We take cohorts of entering freshmen at the United States Air Force Academy and assign half to peer groups designed to maximize the academic performance of the lowest ability students. Our assignment algorithm uses nonlinear peer effects estimates from the historical pre-treatment data, in which students were randomly assigned to peer groups. We fi...

We present evidence from an ongoing field experiment in college coaching/ mentoring. The experiment is designed to ask whether mentoring plus cash incentives provided to high school students late in their senior year have meaningful impacts on college going and persistence. For women, we find large impacts on the decision to enroll in college and t...

We examine the degree to which federal fiscal integration smoothes income and unemployment shocks across US States. We find that roughly 25 cents of every dollar of income shock at the state level is offset by federal fiscal policy. This stabilization comes entirely through the Federal tax system, not through spending stabilizers, automatic or othe...

In 2005, Hurricanes Katrina and Rita forced many children to relocate across the Southeast. While schools quickly enrolled evacuees, families in receiving schools worried about the impacts on incumbent students. We find no effect, on average, of the inflow of evacuees on achievement in Houston. In Louisiana we find little impact on average and we r...

I examine long-term academic performance and college going for students affected by Hurricanes Katrina and Rita. Students who are forced to switch schools due to the hurricanes experience sharp declines in test scores in the first year following the hurricanes. However, by the third and fourth years after the disaster, evacuees displaced from Orlea...

This chapter summarizes the recent literature on peer effects in student outcomes at the elementary, secondary, and post-secondary levels. Linear-in-means models find modest sized and statistically significant peer effects in test scores. But the linear-in-means model masks considerable heterogeneity in the effects experienced by different types of...

No abstract available.

We take cohorts of entering freshmen at the United States Air Force Academy and assign half to peer groups with the goal of maximizing the academic performance of the lowest ability students. Our assignment algorithm uses peer effects estimates from the observational data. We find a negative and significant treatment effect for the students we inte...

We use state and county level variation to examine the impact of the American Recovery and Reinvestment Act on employment. A cross state analysis suggests that one additional job was created by each $170,000 in stimulus spending. Time series analysis at the state level suggests a smaller response with a per job cost of about $400,000. These results...

Using a new database of islands throughout the Atlantic, Pacific, and Indian Oceans we find a robust positive relationship between the number of years spent as a European colony and current GDP per capita. We argue that the nature of discovery and colonization of islands provides random variation in the length and type of colonial experience. We in...

I examine academic performance and college going for public school students affected by Hurricanes Katrina and Rita. Students who are forced to switch schools due to the hurricanes experience sharp declines in test scores in the first year following the hurricane. However, by the second and third years after the disaster, Katrina evacuees displaced...

Only a few rich nations are currently at replacement levels of fertility and many are considerably below. We believe that changes in the status of women are driving fertility change. At low levels of female status, women specialize in household production and fertility is high. In an intermediate phase, women have increasing opportunities to earn a...

In the United States, religious attendance rises sharply with education across individuals, but religious attendance declines sharply with education across denominations. This puzzle is explained if education both increases the returns to social connection and reduces the extent of religious belief, and if beliefs are closely linked to denomination...

How do counties, cities, or regions respond to adverse economic shocks? How quickly does an area recover and through which adjustment mechanisms? These questions touch on many different areas of social science and economics and are relevant to our understanding of economic growth, income gaps across regions (for example, North and South in the Unit...

In the past two elections, richer people were more likely to vote Republican while richer states were more likely to vote Democratic. This switch is an aggregation reversal, where an individual relationship, like income and Republicanism, is reversed at some level of aggregation. Aggregation reversals can occur when an independent variable impacts...

I analyze a new set of data on Korean American adoptees who were quasirandomly assigned to adoptive families. I find large effects on adoptees' education, income, and health from assignment to parents with more education and from assignment to smaller families. Parental education and family size are significantly more correlated with adoptee outcom...

Using a new database of islands throughout the Atlantic, Pacific and Indian Oceans we examine whether colonial origins affect modern economic outcomes. We argue that the nature of discovery and colonization of islands provides random variation in the length and type of colonial experience. We instrument for length of colonization using wind directi...

This 20th edition of the NBER Macroeconomics Annual treats many questions at the cutting edge of macroeconomics that are central to current policy debates. The papers and discussions include an analysis of the differential between American and European unemployment rates, with the authors of the paper taking issue with Edward Prescott's view that h...

We examine how people form social networks among their peers. We use a unique data set that tells us the volume of email between any two people in the sample. The data are from students and recent graduates of Dartmouth College. First-year students interact with peers in their immediate proximity and form long-term friendships with a subset of thes...

I analyze a new set of data on Korean-American adoptees who were quasi-randomly assigned to adoptive families. I find large treatment effects from assignment to parents with more education and to smaller families. The treatment effects on educational attainment and college graduation from being assigned to a small, high education family are equal t...

IntroductionThe lottery dataEstimating the propensity scoresResultsConcluding remarks

Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the v...

How much do sins visited upon one generation harm that generation's future sons, daughters, grandsons, and granddaughters? I study this question by comparing outcomes for former slaves and their children and grandchildren to outcomes for free blacks (pre-1865) and their children and grandchildren. The outcome measures include literacy, whether a ch...

Americans average 25.1 working hours per person of working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the v...

I use a new data set of Korean-American adoptees who, as infants, were randomly assigned to families in the U.S. I examine the treatment effects from being assigned to a high income family, a high education family or a family with four or more children. I calculate the transmission of income, education and health characteristics from adoptive paren...

We use traffic data from a series of experiments in Israel and San Francisco to examine how illegal behavior is deterred by higher fines and whether deterrence varies with personal characteristics such as criminal record, driving record, income, and age. We find that red-light running decreases sharply in response to an increase in the fine. The el...

Does the economic model of optimal punishment explain the variation in the sentencing of murderers? While there is strong support for several predictions of the model, we document that sentences respond to victim characteristics in a way that is hard to reconcile with optimal punishment. In particular, victim characteristics are important determina...

Aggregate data is often used to make inferences about individual level behavior. If there are social interactions in which one person's actions influence his neighbor's incentives or information, then these inferences are inappropriate. The presence of positive social interactions, or strategic complementarities, implies the existence of a social m...

We examine how Dartmouth College seniors use social networks to obtain their first jobs. We do this by analyzing self reports of networking and by examining the correlation in employment outcomes among randomly assigned freshman roommates and hallmates. We find that the use of social networks differs for men and women and for white and nonwhite stu...

A new measure of 'voraciousness' in leisure activities is introduced as an indicator of the pace of leisure, facili-tating a theoretical linkage between the literature on time pressure, busyness and harriedness in late modernity, and the literature on cultural consumption. On the methodological side it is shown that time use diaries can pro-vide at...

A standard optimal investment model can be used to analyse an individual"s decision to accumulate social capital. We analyse six facts that support the predictions of this individual--based approach: (1) social capital first rises and then falls with age, (2) social capital declines with expected mobility, (3) social capital rises in occupations wi...

We use traffic data from a series of experiments in the United States and Israel to examine how illegal behavior is deterred by various penalty schemes and whether deterrence varies with age, income, driving record and criminal record. We find that red light running decreases sharply in response to an increase in the fine or an increase in the prob...

European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of taxation and the expected income mobility of the medi...

This paper uses a unique data set to measure peer effects among college roommates. Freshman year roommates and dormmates are randomly assigned at Dartmouth College. I find that peers have an impact on grade point average and on decisions to join social groups such as fraternities. Residential peer effects are markedly absent in other major life dec...

EUROPEAN GOVERNMENTS REDISTRIBUTE income among their citizens on a much larger scale than does the U.S. government. European social pro- grams are more generous and reach a larger share of citizens. European tax systems are more progressive. European regulations designed to protect the poor are more intrusive. In this paper we try to understand why...

This paper provides empirical evidence about the effect of unearned income on earnings, consumption, and savings. Using an original survey of people playing the lottery in Massachusetts in the mid-1980s, we analyze the effects of the magnitude of lottery prizes on economic behavior. The critical assumption is that among lottery winners the magnitud...

European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre-tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of taxation and the expected income mobility of the medi...

In the United States, religious attendance rises sharply with education across individuals, but religious attendance declines sharply with education across denominations. This puzzle is explained if education both increases the returns to social connection and reduces the extent of religious belief. The positive effect of education on sociability e...

To identify the determinants of social capital formation, it is necessary to understand the social capital investment decision of individuals. Individual social capital should then be aggregated to measure the social capital of a community. This paper assembles the evidence that supports the individual-based model of social capital formation, inclu...

The social capital literature documents a connection between social connection and economic outcomes of interest ranging from government quality to economic growth. Popular authors suggest that housing and architecture are important determinants of social connection. This paper examines the connection between housing structure and social connection...

Does the economic model of optimal punishment explain the variation in the sentencing of murderers? As the model predicts, we find that murderers with a high expected probability of recidivism receive longer sentences. Sentences are longest in murder types where apprehension rates are low, and where deterrence elasticities appear to be high. Howeve...

Knowledge of the effect of unearned income on economic behavior of individuals in general, and on labor supply in particular, is of great importance to policy makers. Estimation of income effects, however, is a difficult problem because income is not randomly assigned and exogenous changes in income are difficult to identify. Here we exploit the ra...

Crime rates are much higher in big cities than in either small cities or rural areas. This paper explains this connection by using victimization data, evidence from the NLSY on criminal behavior, and the Uniform Crime Reports. Higher pecuniary benefits for crime in large cities can explain at most one-quarter of the connection between city size and...

The high variance of crime rates across time and space is one of the oldest puzzles in the social sciences; this variance appears too high to be explained by changes in the exogenous costs and benefits of crime. We present a model where social interactions create enough covariance across individuals to explain the high cross-city variance of crime...

Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the v...

We construct and analyze a database consisting of the words used in speeches made by the candidates in the 2008 Democratic and Republican Presidential Primary. We present findings in two key areas. First, we estimate which candidates are more negative by counting the number of times they mention their opponents by name. Both Obama and Clinton are a...

This paper examines the negotiated settlements of 20 market timing and late trading cases, comparing the restitution obtained for shareholders with an estimate of shareholder dilution. This restitution ratio varies from 0.04 to 5, or from 0.1 to 10 if penalties are included. While some of this variation is explained by differences in the defendants...