Steven D. Levitt’s research while affiliated with University of Chicago and other places

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Publications (143)


The power of natural experiments
  • Article

February 2025

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11 Reads

Business Economics

Steven D. Levitt

The natural experiment approach is one that is uniquely suited to the types of problems businesses face, and yet it is almost never used in the business world. Any company that embraces natural experiments, in my opinion, will gain a huge competitive advantage. They are easy analyses to carry out, and the findings are easy to explain. To do them well relies on a deep understanding of the institutional details and often access to proprietary data, something businesses naturally have that academics don’t have. Because they only involve analyzing events that occurred in the past, they are free to carry out, generate immediate parameter estimates, and pose no risks.



Enhancing the Efficacy of Teacher Incentives through Framing: A Field Experiment

November 2022

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77 Reads

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24 Citations

American Economic Journal Economic Policy

In a field experiment, we provide financial incentives to teachers framed either as gains, received at the end of the year, or as losses, in which teachers receive up-front bonuses that must be paid back if their students do not improve sufficiently. Pooling two waves of the experiment, loss-framed incentives improve math achievement by an estimated 0.124 standard deviations (σ), with large effects in the first wave and no effects in the second wave. Effects for gain-framed incentives are smaller and not statistically significant, approximately 0.051σ. We find suggestive evidence that the effects on teacher value added persist posttreatment. (JEL C93, I21, I28, J32, J45)


Figure 1. Effective Abortion Rates in High-and Low-Abortion States (Weighted by Violent Crime).
Figure 2. Violent Crime Rates in High-and Low-Abortion States, 1977-2014.
Figure 3. The Growing Abortion Disparity Corresponds to a Relative Decline in the Violent Crime Rate, 1977-2014.
Figure 4. The Growing Abortion Disparity Corresponds to a Relative Decline in the VS Murder Rate, 1977-2014.
Figure 5. The Growing Abortion Disparity Corresponds to a Relative Decline in the Property Crime Rate, 1977-2014.

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The Impact of Legalized Abortion on Crime over the Last Two Decades
  • Article
  • Full-text available

November 2020

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699 Reads

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30 Citations

American Law and Economics Association

Donohue and Levitt (2001) presented evidence that the legalization of abortion in the early 1970s played an important role in the crime drop of the 1990s. That paper concluded with a strong out-of-sample prediction regarding the next two decades: “When a steady state is reached roughly twenty years from now, the impact of abortion will be roughly twice as great as the impact felt so far. Our results suggest that all else equal, legalized abortion will account for persistent declines of 1% a year in crime over the next two decades.” Estimating parallel specifications to the original paper, but using the seventeen years of data generated after that paper was written, we find strong support for the prediction and the broad hypothesis, while illuminating some previously unrecognized patterns of crime and arrests. We estimate that overall crime fell 17.5% from 1998 to 2014 due to legalized abortion—a decline of 1% per year. From 1991 to 2014, the violent and property crime rates each fell by 50%. Legalized abortion is estimated to have reduced violent crime by 47% and property crime by 33% over this period, and thus can explain most of the observed crime decline.

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Heads or Tails: The Impact of a Coin Toss on Major Life Decisions and Subsequent Happiness

May 2020

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474 Reads

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47 Citations

Review of Economic Studies

Little is known about whether people make good choices when facing important decisions. This article reports on a large-scale randomized field experiment in which research subjects having difficulty making a decision flipped a coin to help determine their choice. For important decisions (e.g. quitting a job or ending a relationship), individuals who are told by the coin toss to make a change are more likely to make a change, more satisfied with their decisions, and happier six months later than those whose coin toss instructed maintaining the status quo. This finding suggests that people may be excessively cautious when facing life-changing choices.



Catching Cheating Students

December 2019

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59 Reads

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14 Citations

We develop a simple algorithm for detecting exam cheating between students who copy off one another's exams. When this algorithm is applied to exams in a general science course at a top university, we find strong evidence of cheating by at least 10% of the students. Students studying together cannot explain our findings. Matching incorrect answers proves to be a stronger indicator of cheating than matching correct answers. When seating locations are randomly assigned, and monitoring is increased, cheating virtually disappears.


Behavior in Strategic Settings: Evidence from a Million Rock-Paper-Scissors Games

April 2019

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502 Reads

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24 Citations

Dimitris Batzilis

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Sonia Jaffe

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Steven Levitt

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[...]

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Jeffrey Picel

We make use of data from a Facebook application where hundreds of thousands of people played a simultaneous move, zero-sum game—rock-paper-scissors—with varying information to analyze whether play in strategic settings is consistent with extant theories. We report three main insights. First, we observe that most people employ strategies consistent with Nash, at least some of the time. Second, however, players strategically use information on previous play of their opponents, a non-Nash equilibrium behavior; they are more likely to do so when the expected payoffs for such actions increase. Third, experience matters: players with more experience use information on their opponents more effectively than less experienced players, and are more likely to win as a result. We also explore the degree to which the deviations from Nash predictions are consistent with various non-equilibrium models. We analyze both a level-k framework and an adapted quantal response model. The naive version of each these strategies—where players maximize the probability of winning without considering the probability of losing—does better than the standard formulation. While one set of people use strategies that resemble quantal response, there is another group of people who employ strategies that are close to k1; for naive strategies the latter group is much larger.




Citations (91)


... Here, we focus on experimental studies that compare rich and poor subjects, focusing on differences in their response to fundraising practices. In a field experiment targeting a sample of high-capacity potential donors (those who were estimated to have a median annual giving capacity greater than US$25,000), Levin et al. (2016) find that the behavior of wealthier alumni is consistent with many prior studies of ordinary donors. Andreoni et al. (2017) and Smeets et al. (2015) find different results that wealthy donors are more prosocial in specific settings. ...

Reference:

High-Capacity Donors’ Preferences for Charitable Giving
A Glimpse into the world of high capacity givers: Experimental evidence from a university capital campaign
  • Citing Article
  • August 2023

Journal of Economic Behavior & Organization

... Some studies find that, compared to selling houses for their clients, agents will leave their own houses on the market longer and enjoy a higher price [7,24] . Others find that using agents in transactions has no impact on housing prices, but accelerates sales time [8,25,26] . Competition among agents is absent in these studies, and housing prices are usually lowered due to the principal-agent problem. ...

Antitrust Implications of Outcomes When Home Sellers Use Flat-Fee Real Estate Agents
  • Citing Article
  • January 2008

Brookings-Wharton Papers on Urban Affairs

... school-level or group-based teacher incentive systems, finding no or modest effects of such compensation schemes, particularly when incentives to free ride are stronger and when students are assessed in low-stakes exams. 3 Finally, in a behavioural field experiment in Illinois, Fryer et al. (2022) find that financial incentives for teachers may indeed be effective if their design induces loss aversion. Several other studies focus on the cases of developing countries and find conflicting evidence. ...

Enhancing the Efficacy of Teacher Incentives through Framing: A Field Experiment
  • Citing Article
  • November 2022

American Economic Journal Economic Policy

... Similarly decreasing trends in crime were subsequently observed in other developed countries, including Canada (Ouimet 2004), England and Wales (Ganpat et al. 2022), as well as Australia (Mayhew 2012), among many others. Rather unsurprisingly, the reasons provided for the crime drop are myriad and include, among others, increased incarceration (Levitt 2004), the legalization of abortion (Donohue and Levitt 2020), strong and/or expanding economies (Fernández-Molina and Gutiérrez 2020), immigration (Ignatans and Matthews 2017), as well as the implementation of various situational crime prevention measures (Farrell et al. 2011). These multitude of explanations led, in part, to Farrell et al. (2014) outlining four evidence-based standardized 'tests' that each explanation (hypothesis) needed to 'pass' in order to be considered a suitable reason for why crime has declined. ...

The Impact of Legalized Abortion on Crime over the Last Two Decades

American Law and Economics Association

... Consistent with evidence from developmental psychology (e.g., Havron et al., 2019), a recent study in economics documents better vocabulary and fine motor skills for children with older sisters (rather than brothers) in Kenya (Jakiela et al., 2020), although recent evidence suggests that this result may not be universal (Havron et al., 2022). 11 See Cunha and Heckman (2007), Baker et al. (2008), Heckman (2013, Heckman et al. (2013), Felfe and Lalive (2018), Cornelissen and Dustmann (2019), Bernal et al. (2019), Cappelen et al. (2020), Fort et al. (2020), Fryer et al. (2020, Attanasio et al. (2022b), Agostinelli et al. (2022), Bjorvatn et al. (2022). 12 Heckman (2007), Heckman (2013), Heckman et al. (2013), Attanasio et al. (2022b) and Bjorvatn et al. (2022) document the long-term advantages in cognition, educational achievement, non-cognitive skills and earnings associated with the provision of early daycare among disadvantaged communities in the US, Latin America, and peri-urban areas of Uganda. ...

Introducing CogX: A New Preschool Education Program Combining Parent and Child Interventions
  • Citing Article
  • January 2020

SSRN Electronic Journal

... The advice 'never give up' has been uniquely disproven. A trial that randomly assigned people considering quitting to either a quitting condition or a non-quitting condition, found that the quitters did not regret their decisions and where better off than the non-quitters who often regretted not quitting earlier (1). This could be a direct result of athletes overly promoting the "never give up" approach as virtuous. ...

Heads or Tails: The Impact of a Coin Toss on Major Life Decisions and Subsequent Happiness
  • Citing Article
  • May 2020

Review of Economic Studies

... One of the most common means of cheating is collusion, in which small groups of students collaborate to copy each other's answers. Many methods have been proposed to detect collusion from exam data (Angoff (1974), Frary et al. (1977), Belleza & Belleza (1989), Jennings et al. (1996), Wesolowsky (2000), McManus et al. (2005), Sotaridona et al. (2006) (2015), Richmond & Roehner (2015), Romero et al. (2015), Maynes (2016), Fendler et al. (2018), Lin & Levitt (2020)). These methods use the answers from multiple-choice exams-for example, choices {a, b, c, d, or e} or {true or false} for each question-and identify pairs of students who share an unusually high number of answers. ...

Catching Cheating Students

... The effective abortion rate for murder from Donohue and Levitt (2020) is included because there is some evidence that legalized abortion could affect crime rates. Unfortunately, the Donohue and Levitt (2020) sample ends in 2014 and computation of the effective abortion rate is complicated. ...

The Impact of Legalized Abortion on Crime Over the Last Two Decades

SSRN Electronic Journal

... They also conclude from a recurrence plot that human play is "less complex and more deterministic" than pseudorandom data. A prior study on a different dataset has rejected uniform random play for 18% of "experienced" RPS players based on a chi-squared test (Batzilis et al. 2019). In comparison, our chi-squared test rejected uniform frequencies of play for 7.2% of the subjects. ...

Behavior in Strategic Settings: Evidence from a Million Rock-Paper-Scissors Games