· In the Economist, a summary of how much difference bridges have made or may make to female labor (and marriage) market outcomes in Bangladesh: “In 1998, when the Jamuna bridge connected Bangladesh’s north-west to Dhaka, journey times plummeted. For residents of one city, for instance, a trip that took anywhere from 12 to 36 hours was cut to four hours. The number of women migrating and finding work in garment factories soared compared with those in similarly remote regions… Yet that bridge, and the greater ease of getting to work it allowed, did not wholly offset the effect of conservative social norms, says Zaki Wahhaj, one of the study’s authors. These often prohibit women from travelling alone. The number of unmarried or unaccompanied women migrating did not go up. What changed was that families were happier to marry their daughters to men heading for Dhaka. They felt that a faraway place had come closer. Many of those women then took up work in the garment industry.”
· On the Brookings Future Development blog, Elena Ianchovichina, Remi Jedwab, and Federico Haslop ask whether it matters whether cities are engines of manufacturing production or are consumption cities in which most residents work in retail trade and other nontradeable activities. “Production cities are located mostly in China, Europe, India, and parts of the US, Mexico, Central America, and Brazil. Apart from some large production cities in Malaysia, Vietnam, and South Africa, other cities in Asia and Sub-Saharan Africa are either consumption or neutral cities…. Having mostly consumption cities would affect the potential of developing countries to catch up to the standards of living in the advanced economies and may even explain why some countries find themselves in a middle-income trap”.
· In the Chicago Booth Review, an experiment by Klaus M. Miller, Navdeep Sahni, and Avner Strulov-Shlain tests whether companies would be better off not trying to offer subscription-based services with automatic renewal. “The researchers ran a field experiment tracking promotion-backed online subscriptions to a well-known European newspaper between 2018 and 2020. The newspaper ran a range of promotions offering free access or access at €0.99 for two- or four-week periods, culminating in either an automatic full-priced subscription or automatic cancellation…The researchers find that in the long run, the promotions automatically enrolling website users in an ongoing subscription at regular prices were considerably less successful than those that were obligation free or simply ended with cancellation. Automatic renewals attracted about a quarter fewer subscribers to the promo.”
· On VoxDev, Matthew Grant and Meredith Startz look at how intermediation chains matter for consumers in Nigeria. “we have followed over a thousand wholesale and retail businesses in Lagos, Nigeria since 2013. These businesses buy and resell goods like apparel and electronics, and typically have only one outlet and one employee. In spite of their small scale, many source globally; about half import directly… Strikingly, these traders are just one link in the middle of longer chains that carry goods to consumers throughout Nigeria. Almost two-thirds of their international suppliers are wholesalers rather than manufacturers. The majority of their sales are wholesale, meaning that they sell to businesses that in turn resell the goods, rather than to final consumers. … Thus, Nigerian consumers are served by multi-intermediary chains, with at least two or three independent intermediaries between a foreign producer and a domestic consumer…. We show in our research that longer chains involve higher marginal costs for firms, but allow more of them to survive. More firms means more competition, and gives consumers access to a wider range of retailers and products. While higher marginal costs drive prices up, more competition drives them down. Either force may win out, and so, contrary to conventional wisdom, longer chains can sometimes mean lower consumer prices, even when middlemen have market power.”
· If rainfall is an instrument for everything, then it really is an instrument for nothing – Jonathan Mellon has a new working paper that looks at 288 social science studies and notes that weather has been linked to 192 variables, likely resulting in many exclusion restrictions being violated. This is summed up in this lovely figure – which shows rainfall has been used an instrument for income, hunger, voter turnout, church attendance, mood, social distancing, protests, property crime, and so much more, leading to this wonderful couple of sentences: “Some of these relationships are more directly relevant to some studies than others. Most researchers can safely assume “helicopter flying conditions” and “pirate attacks” are not possible exclusion-restriction violations. However, many causal routes on all figures have wide relevance to almost all social science outcomes”. He then suggests ways to use sensitivity analysis to see how big these violations of exclusions restrictions would have to be to overturn results.
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