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briq student fellow portraits: Felix Chopra

The briq scholarship program supports about 25 Ph.D. students at the Bonn Graduate School of Economics. Some of them are directly involved in briq research activities. In a series of short portraits, the briq newsroom introduces our student fellows and what they do. One of them is Felix Chopra, who has been at briq since October 2016.

What are your main research interests?

My current research focuses mostly on improving our understanding of media markets and how media content shapes people’s beliefs, preferences and behavior. From print news to social media, people receive a substantial amount of information from the media. We learn about politics or the state of the economy from the news; about cultural norms, values and stereotypes from the behavior of movie characters and the opinions people express online. Research has shown that such media exposure can affect people’s decisions in many domains such as voting, gender attitudes or consumption. That’s why I think understanding the demand and supply of media content is an exciting topic to work on.

How does your research fit in?

For example, in a current project with Ingar Haaland and Chris Roth, we examine whether the desire for more information is people’s dominant motive for reading economic and political news. In our experiment, we vary people’s beliefs about the informativeness of a newspaper and study how their demand for news from this outlet responds to these changes. If people value more informative news, policies designed to increase competition should improve the quality of the press because they increase the incentives to deliver the product that consumers want. However, if people want to read news that align with their political views, the consequences of such policies are more difficult to predict.

And what do you find?

Behavioral motives other than the desire for more information play an important role in shaping news consumption.

In the experiment, people who learn that a newspaper is more informative reduce their demand for news. Moreover, in a separate experiment we show that learning that a newspaper is more likely to make false claims in its political reporting does not decrease people’s demand for news from this outlet. This suggests that behavioral motives other than the desire for more information play an important role in shaping news consumption.

How has briq contributed to your research?

I think the greatest benefit is that we have many outstanding researchers visit briq all year round. This is a great opportunity to discuss research ideas and start collaborations. In fact, I met one of my co-authors while he was visiting briq.

The dynamics of motivated beliefs

A key question in the literature on motivated reasoning and self-deception is how motivated beliefs are sustained in the presence of feedback. In a paper forthcoming in the American Economic Review, briq Research Director Florian Zimmermann explores dynamic motivated belief patterns after feedback.

Florian Zimmermann

Using a series of experiments with more than 700 participants, he establishes that positive feedback has a persistent effect on beliefs. Negative feedback, instead, influences beliefs in the short run, but this effect fades over time.

Zimmermann investigates the mechanisms of this dynamic pattern, and provides evidence for an asymmetry in the recall of feedback. Finally, he establishes that in line with theoretical accounts, incentives for belief accuracy mitigate the role of motivated reasoning.

briq student fellow portraits: Klara Röhrl

The briq scholarship program supports about 25 Ph.D. students at the Bonn Graduate School of Economics. Some of them are directly involved in briq research activities. In a series of short portraits, the briq newsroom introduces our student fellows and what they do. One of them is Klara Röhrl, who has been at briq since October 2016.

What are your main research topics?

I am very interested in equality of opportunity – the question to what degree the circumstances into which you are born determine your chances in life. There is a growing public debate on the rise of inequality both in Europe and the United States. However, I think most people don’t care so deeply about income inequality in itself. Rather, we care about it because we feel that when income is distributed very unequally, so are life chances and other things we care about.

The last two decades have provided some evidence that this feeling might be right. Countries with low inequality such as Denmark or Norway have more intergenerational mobility. So, the social position of parents is less predictive of their children’s social status. Similarly, countries with high inequality, such as the United States, also have more inequality in other important dimensions such as life expectancy. To me, the important question is: what can we do, as a society, to give everyone the chance to lead a good life.

What are you currently working on?

In a project with Armin Falk, Fabian Kosse and Pia Pinger, we study how life satisfaction develops during childhood and adolescence. Using the briq family panel – a unique longitudinal data set of children and their families – we analyze to what extent socio-economic background influences how children’s life satisfaction develops during adolescence.

It turns out that socio-economic background does not seem to play a role for children’s life satisfaction when they are in primary school and most children are very satisfied with their lives. However, as they grow older, disadvantaged children become increasingly less satisfied with their lives than their more advantaged peers.

What is unique about this dataset?

In my view, there are three features that make the briq family panel stand out. First, the children in the panel have so far been interviewed up to seven times since they were eight. I’m not aware of any other dataset that interviews children from such an early age onward for such a long time.

Second, the dataset looks at children’s development from different, complementary perspectives. On the one hand, this is done by asking a wide array of questions on the children’s personality and socio-emotional development and life circumstances. On the other hand, for many important concepts both parents and children are asked to rate the child, and if possible, children play incentivized games to get a completely objective measurement.

Third, a subset of the children whose families were classified to have low socio-economic status were randomized to participate in a mentoring program for one year. This randomized control trial together with the longitudinal nature and rich data on children’s development allows us to track the long-term impacts of the intervention and provide evidence on whether the social environment can make a difference.

Can you give an example of previous research that inspired your PhD studies?

There is a long-standing working paper by Markus Jäntti and co-authors, in which they contrast mobility between the United States, the United Kingdom and several northern European countries. This really made me think about the role social policy can play in leveling the playing field.

How wage expectations differ by gender

Sorting, children, and negotiation styles explain gender inequalities in starting salaries and lifetime pay

Despite increasing policy efforts to achieve gender-based equality of opportunity, convergence in male-female wages remains slow, particularly among college graduates. A recent paper by briq Research Affiliate Pia Pinger and colleagues suggests that gender differences in wage expectations play an important role.

Based on a survey of over 15,000 students and recent graduates in Germany, the researchers document a significant and large gender gap in wage expectations that closely resembles actual wage differences. Their findings indicate that sorting and negotiation styles affect the gender gap in wage expectations much more than prospective child-related labor force interruptions. Given the importance of wage expectations for labor market decisions, household bargaining, and wage setting, the results may explain much of the persistent gender inequalities.

Gender gap in wage expectations amounts to nine years of extra work experience

The overall pattern of the results confirms previous findings on the importance of sorting into certain majors, industries or occupations, and a female preference for jobs with flatter wage schedules. In terms of relative magnitudes, females would need to work on average around four hours more per week in the same occupation and industry, or major in other fields (e.g. in medical sciences rather than humanities) to catch up with the starting wages of their male peers. Similarly, in expectation, it would take them about nine years more of accumulated work experience to make up for the gender penalty.

Moreover, reluctant negotiation behavior seems to lead to lower reference points and lower subsequent wage expectations. The data show that women plan to enter wage negotiations with more modest wage claims relative to their reservation wage. Expected wages are thus likely to drive actual wage differences and persistent gender wage gaps.

Women underestimate the long-term motherhood wage penalty

The results suggest that women are aware of the career cost of having children early, which may explain the observational tendency to delay childbirth among highly-educated women. However, aside from considerations of timing, women underestimate the child-related dampening in their wage trajectories, with potential implications for household bargaining and the distribution of child-rearing tasks. Thus, women may stay home at a higher rate not only because they expect lower labor market returns than their spouses, but also because they underestimate the wage loss associated with raising children.

In terms of policy implications, the authors suggest that negotiation trainings – rather than encouraging more negotiations per se – might be an effective measure to improve female labor market outcomes and reduce the gender wage gap. Also, information treatments on child-related wage penalties might help women to gain a more realistic view of the career costs of raising a family, leading them to bargain for a more equal distribution of child-rearing responsibilities within households.

2nd briq Summer School in Behavioral Economics

What our participants say…

“I got to see the bigger picture for the field, as well as being exposed to a more systematic, methodological way of approaching the field. I think it will help my research in keeping my approach more rigorous and systematic.”

“I learned that different methods can complement each other (like empirical data, lab, and field experiments) and I don’t have to clarify myself as an “experimental person,” for example. I also learned about interesting debates in the field, and how to form criticisms and approach a question.”

“The faculty members were super approachable and helpful during the lectures, the sign-ups, and the discussions in the breaks, as well. Everyone was interested in what I’m doing and gave very useful pieces of advice.”

“I most enjoyed the big picture lectures that went beyond individual papers (though these were great, too).”

“The summer school definitely highlighted the importance and benefits of working at the intersection between theoretical and empirical work.”

“It would be very interesting to see different faculty members discussing/debating over certain topics, given how different perspectives they have.”

“There are very diverse approaches to behavioral economics. Some convergence might be helpful, i.e. there is reason to treat them as less mutually-exclusive approaches as they have been so far.“

“There are still a lot of open interesting research questions, lots of inspiration.”

“It gave me extra energy to talk to enthusiastic and passionate behavioral scientists.”

“Behavioral IO-type models are really interesting, and I wasn’t aware of their existence. I learned to think of research agendas in a broader sense, not paper by paper.”

“I learned that behavioral economics is a mid-sized family.”

[Program – PDF]

Recent awards and grants for briq researchers

Chris Roth won the CESifo Distinguished Affiliate Award in Employment and Social Protection for his paper on Beliefs about Racial Discrimination and Support for Pro-Black Policies. In this joint work with Ingar Haaland (University of Bergen), he shows that Democrats and Republicans differ substantially in their beliefs about the extent of hiring discrimination against blacks. While these differences become smaller as people are exposed to scientific evidence, this does not lead to a similar convergence in support for pro-black policies to combat racial discrimination.

Together with Simon Jäger (MIT) and Benjamin Schoefer (UC Berkeley), Chris also successfully applied for inclusion of survey questions in the SOEP Innovation Sample (SOEP IS), which offers great potential as a source of household micro-data, particularly for researchers seeking specific information on households or on people’s opinions.

Matt Lowe was awarded a grant by the International Growth Centre in support of the delivery of the IGC India (Bihar) program funded by the Bill & Melinda Gates Foundation. He will use the funds for a joint project on “Norm Transmission among Bureaucrats” with Ray Fisman (Boston University) and Nishith Prakash (University of Connecticut).