Leonardo Bursztyn

The Schooling Decision: Family Preferences, Intergenerational Conflict, and Moral Hazard in the Brazilian Favelas

This paper experimentally analyzes the schooling decisions of poor households in urban Brazil. We elicit parents’ choices between monthly government transfers conditional on their adolescent child attending school and guaranteed, unconditional transfers of varying sizes. In the baseline treatment, an overwhelming majority of parents prefer conditional transfers to larger unconditional transfers. However, few parents prefer conditional payments if they are offered text message notifications whenever their child misses school. These findings suggest important intergenerational conflicts in these schooling decisions, a lack of parental control and observability of school attendance, and an additional rationale for conditional cash transfer programs—the monitoring they provide.

A Tear in the Iron Curtain: The Impact of Western Television on Consumption Behavior

This paper examines the impact of exposure to foreign media on the economic behavior of agents in a totalitarian regime. We study private consumption choices focusing on the former East Germany, where differential access to Western television was determined by geographic features. Using data collected after the transition to a market economy, we find no evidence of a significant impact of previous exposure to Western television on aggregate consumption levels. However, exposure to Western broadcasts affects the composition of consumption, biasing choices in favor of categories of goods with a high intensity of prereunification advertisement. The effects vanish by 1998.

Moral incentives : experimental evidence from repayments of an Islamic credit card

This paper studies the role of morality in the decision to repay debts. Using a field experiment with a large Islamic bank in Indonesia, the paper finds that moral appeals strongly increase credit card repayments. In this setting, all of the banks late-paying credit card customers receive a basic reminder to repay their debt one day after they miss the payment due date. In addition, two days before the end of a ten-day grace period, clients in a treatment group also receive a text message that cites an Islamic religious text and states that “non-repayment of debts by someone who is able to repay is an injustice.” This message increases the share of customers meeting their minimum payments by nearly 20 percent. By contrast, sending either a simple reminder or an Islamic quote that is unrelated to debt repayment has no effect on the share of customers making the minimum payment. Clients also respond more strongly to this moral appeal than to substantial financial incentives: receiving the religious message increases repayments by more than offering a cash rebate equivalent to 50 percent of the minimum repayment. Finally, the paper finds that removing religious aspects from the quote does not change its effectiveness, suggesting that the moral appeal of the message does not necessarily rely on its religious connotation.

Killer Incentives: Status Competition and Pilot Performance during World War II

A growing theoretical and empirical literature shows that public recognition can lead employees to exert greater effort. However, status competition is also associated with excessive expenditure on status goods, greater likelihood of bankruptcy, and more risk taking by money managers. This paper examines the effects of recognition and status competition jointly. In particular, we focus on the spillover effects of public recognition on the performance and risk taking of peers. Using newly collected data on monthly “victory�? scores of more than 5,000 German pilots during World War II, we find that status competition had important effects: After the German armed forces bulletin mentioned the accomplishments of a particular fighter pilot, his former peers performed considerably better. This outperformance varied across skill groups. When a former squadron peer was mentioned, the best pilots tried harder, scored more, and died no more frequently; in contrast, average pilots won only a few additional victories but died at a significantly higher rate. Hence our results show that the overall efficiency effect of nonfinancial rewards can be ambiguous in settings where both risk and output affect aggregate performance.