Jörg L. Spenkuch

Moral Hazard and Selection Among the Poor: Evidence from a Randomized Experiment

Not only does economic theory predict high-risk individuals to be more likely to purchase insurance, but insurance coverage is also thought to crowd out precautionary activities. In spite of stark theoretical predictions, there is conflicting empirical evidence on adverse selection, and evidence on ex ante moral hazard is very scarce. Using data from the Seguro Popular Experiment in Mexico, this paper documents patterns of selection on observables into health insurance as well as the existence of non-negligible ex ante moral hazard. More specifically, the findings indicate that (i) agents in poor self-assessed health prior to the intervention have, all else equal, a higher propensity to take up insurance; and (ii) insurance coverage reduces the demand for self-protection in the form of preventive care. Curiously, however, individuals do not sort based on objective measures of their health.

Political Advertising and Election Outcomes

We implement a new approach for estimating the persuasive effects of political advertising. Our empirical strategy exploits FCC regulations that result in plausibly exogenous variation in the number of impressions across the borders of neighboring counties. Applying this approach to uniquely detailed data on television advertisement broadcasts and viewership patterns during the 2004 and 2008 presidential campaigns, our results indicate that total political advertising has virtually no impact on aggregate turnout. The point estimates are precise enough to rule out even moderately sized effects. By contrast, we find a positive and economically meaningful effect of advertising on candidates’ vote shares. Evidence from a regression discontinuity design with millions of observations suggests that advertising’s impact on elections is largely due to compositional changes of the electorate.

Special Interests at the Ballot Box? Religion and the Electoral Success of the Nazis

Adolf Hitlers seizure of power was one of the most consequential events of the twentieth century. Yet, our understanding of which factors fueled the astonishing rise of the Nazis remains highly incomplete. This paper shows that religion played an important role in the Nazi partys electoral success---dwarfing all available socio-economic variables. To obtain the first causal estimates we exploit plausibly exogenous variation in the geographic distribution of Catholics and Protestants due to a peace treaty in the sixteenth century. Even after allowing for sizeable violations of the exclusion restriction, the evidence indicates that Catholics were significantly less likely to vote for the Nazi Party than Protestants. Consistent with the historical record, our results are most naturally rationalized by a model in which the Catholic Church leaned on believers to vote for the democratic Zentrum Party, whereas the Protestant Church remained politically neutral.

A Theory of Intergenerational Mobility

We study the link between market forces, cross-sectional inequality, and intergenerational mobility. Emphasizing complementarities in the production of human capital, we show that wealthy parents invest, on average, more in their offspring than poorer ones. As a result, economic status persists across generations even in a world with perfect capital markets and without differences in innate ability. In fact, under certain conditions, successive generations of the same family may cease to regress toward the mean. We also consider how short- and long-run mobility are affected by changes in the returns to human capital.

Self-Selection and Comparative Advantage in Social Interactions

We propose a model of social interactions based on comparative advantage. When comparative advantage is the guiding principle of social interactions, the effect of moving a student into an environment with higher-achieving peers depends on where in the ability distribution she falls and the shadow prices that clear the social market. We show that the model’s key prediction -- an individual’s ordinal rank predicts her behavior and test scores, ceteris paribus -- is borne out in one randomized controlled trial in Kenya as well as two large observational data sets from the U.S. To test whether comparative advantage can explain the effect of rank on outcomes, we conduct an experiment with nearly 600 public school students in Houston. The experimental results suggest that social interactions are, at least in part, governed by comparative advantage.

Please Don’t Vote for Me: Strategic Voting in a Natural Experiment with Perverse Incentives

Whether individuals vote strategically is one of the most important questions at the intersection of economics and political science. Exploiting a flaw in the German electoral system by which a party may gain seats by receiving fewer votes, this paper documents patterns of strategic voting in a large, real world election. During the 2005 elections to the Bundestag, the sudden death of a right-wing candidate necessitated a by-election in one electoral district. Knowing the results in all other districts and aware of the paradoxical incentives in place, a substantial fraction of the electorate reacted tactically and either voted for a party other than their most preferred one, or abstained. As a result, the Christian Democratic Union won an additional mandate, extending its narrow lead over the Social Democrats.