It is commonly believed that HIV testing is essential for disease prevention. Indeed, spending on counseling and testing accounts for over half of the total expenditures on HIV prevention in some African countries. Despite this, there is evidence that even when testing is available most people do not take advantage of it, and there is virtually no persuasive evidence on the behavioral response to knowing one's status. For this paper, I designed and implemented a randomized experiment to evaluate the demand for learning HIV results and to estimate subsequent behavior change. In the experiment, over 2,700 individuals in rural Malawi were randomly assigned monetary incentives to learn their HIV results after testing. Two months later, they were re-interviewed and given the opportunity to purchase condoms. I find that while less than half of the participants attended clinics to learn their HIV status without any incentive, even a very small incentive (about one-tenth of a day’s wage) increased the share learning their results by 50%. Using the exogenously assigned incentives and distance from results centers as instruments for HIV knowledge, I find that HIV positive subjects with a sexual partner who learn their status purchase significantly more condoms; however, the average number of condoms purchased is low. Using these estimates, I calibrate an epidemiological model of infection that suggests that HIV testing is not as cost-effective as other prevention strategies; however, if testing services already exist, offering incentives may more effectively avert new infections. ∗ e-mail: rlthornt@fas.harvard.edu; address: NBER, 1050 Massachusetts Ave, Cambridge, MA 02138; phone: (617)-588-0349; web address: www.people.fas.harvard.edu/~rlthornt. I am grateful to Randy Akee, David Cutler, Eliza Hammel, Richard Holden, Erica Field, Ed Glaeser, Emir Kaminica, Larry Katz, Michael Kremer, David Laibson, Sendhil Mullainathan, Ben Olken, Emily Oster, Michelle Poulin, Mark Rosenzweig, Jesse Shapiro, and participants at the Harvard Development and Labor Lunches for helpful comments and discussion. I thank Jere Behrman, Hans-Peter Kohler, Susan Watkins and the MDICP team for support and data and Kondwani Chavula for excellent assistance with fieldwork. The Malawi Diffusion and Ideational Change Project is supported by grants from the Rockefeller Foundation; NICHD (R01HD4173, R01 HD372-276); NIA (AG1236-S3); the Center for AIDS Research and the Center on the Demography of Aging at the University of Pennsylvania. The project on Information, Incentives and HIV/AIDS Prevention is supported by the University Research Foundation, University of Pennsylvania. Follow-up data is supported by the Warburg Foundation of the Economics of Poverty. I acknowledge financial support from the Harvard Population Center, Harvard Graduate Council, the Harvard Center for International Development, National Bureau of Economic Research Fellowship on Aging, and the University of Pennsylvania.

/pdf/the-demand-for-and-impact-of-learning-hiv-status-evidence-1aj7g4yg0o.pdf

The Demand for and Impact of Learning HIV Status: Evidence from a Field Experiment

This paper evaluates an experiment in which individuals in rural Malawi were randomly assigned monetary incentives to learn their HIV results after being tested. Distance to the HIV results centers was also randomly assigned. Without any incentive, 34 percent of the participants learned their HIV results. However, even the smallest incentive doubled that share. Using the randomly assigned incentives and distance from results centers as instruments for the knowledge of HIV status, sexually active HIV-positive individuals who learned their results are three times more likely to purchase condoms two months later than sexually active HIV-positive individuals who did not learn their results; however, HIV-positive individuals who learned their results purchase only two additional condoms than those who did not. There is no significant effect of learning HIV-negative status on the purchase of condoms.

https://www.poverty-action.org/sites/default/files/publications/demand-and-impact-learning-hiv-status-evidence-field-experiment.pdf

The Demand for, and Impact of, Learning HIV Status

In this paper, I selectively review recent literature on illegal migration from Mexico to the United States. I begin by discussing methods for estimating stocks and flows of illegal migrants. While there is uncertainty about the size of the unauthorized population, new data sources make it possible to examine the composition of legal and illegal populations and the time-series covariates of illegal labor flows. I then consider the supply of and demand for illegal migrants. Wage differentials between the United States and Mexico are hardly a new phenomenon, yet illegal migration from Mexico did not reach high levels until recently. An increase in the relative size of Mexico%u2019s working-age population, greater volatility in U.S.-Mexico relative wages, and changes in U.S. immigration policies are all candidate explanations for increasing labor flows from Mexico. Finally, I consider policies that regulate the cross-border flow of illegal migrants. While U.S. laws mandate that authorities prevent illegal entry and punish firms that hire unauthorized immigrants, these laws are imperfectly enforced. Lax enforcement may reflect political pressure by employers and other interests that favor open borders.

https://papers.ssrn.com/sol3/Delivery.cfm/nber_w12141.pdf?abstractid=896214&mirid=3

Illegal Migration from Mexico to the United States

We estimate the interdependence between US monetary policy and the S&P 500 using structural VAR methodology.A solution is proposed to the simultaneity problem of identifying monetary and stock price shocks by using a combination of short-run and long-run restrictions that maintains the qualitative properties of a monetary policy shock found in the established literature (CEE 1999).We find great interdependence between interest rate setting and stock prices.Stock prices immediately fall by 1.5 per cent due to a monetary policy shock that raises the federal funds rate by ten basis points.A stock price shock increasing stock prices by one per cent leads to an increase in the interest rate of five basis points.Stock price shocks are orthogonal to the information set in the VAR model and can be interpreted as non-fundamental shocks.We attribute a major part of the surge in stock prices at the end of the 1990s to these non-fundamental shocks. Key words: VAR, monetary policy, asset prices, identification JEL classification numbers: E61, E52, E43

Identifying the interdependence between US monetary policy and the stock market

http://home.bi.no/a0310125/Interdependence.pdf

In a dynamic setting, housing is both an asset and a consumption good. But should it be taxed like other forms of consumption or like other forms of saving? We consider the optimal taxation of the imputed rent from owner housing within a version of the neoclassical growth model. We find that the optimal tax rate on the imputed rent is quite sensitive to the constraints imposed on the other available tax rates. In general, it is not optimal to tax the imputed rent at the same rate as the business capital income.

/pdf/the-optimal-tax-treatment-of-housing-capital-in-the-36vi0sr78o.pdf

The Optimal Tax Treatment of Housing Capital in the Neoclassical Growth Model

In its draft treaty establishing a constitution for the European Union, Convention suggests that each member state may withdraw from the European Union following its own constitutional requirements. We show that such a rule could lead into an increased use of threat of withdrawal to extract concessions in intergovernmental negotiations. This problem would be exacerbated by national electorates facing an incentive to elect more confrontational politicians. We also suggest a remedy: EU constitution should require that withdrawal from EU membership must be approved by the voters of the withdrawing member state in a referendum.

https://www.econstor.eu/bitstream/10419/63670/1/470462493.pdf

Citizens should vote on secession

We study how a household borrowing constraint in the form of a down payment requirement affects house price dynamics in an OLG model with standard preferences. We find that in certain situations the borrowing constraint shapes house price dynamics substantially. The importance of the constraint depends very much on whether house price changes are driven by interest rate or aggregate income shocks. Moreover, because of the borrowing constraint, house price dynamics display substantial asymmetries between large positive and large negative income shocks. These results are related to the fact that the share of borrowing-constrained households is different following different shocks.

/pdf/on-the-importance-of-borrowing-constraints-for-house-price-3a4colpkq8.pdf

On the Importance of Borrowing Constraints for House Price Dynamics

On the role of public price information in housing markets

​We study the interaction of matching and credit frictions in the housing market. In the model, risk-averse households may save or borrow in order to smooth consumption over time and finance owner housing. Prospective sellers and buyers meet randomly and bargain over the price. We analyze how borrowing constraints influence house price determination in the presence of matching frictions. We also show that credit frictions greatly magnify the effects of matching frictions. For instance, in the presence of matching frictions, a moderate tightening of the borrowing constraint increases idiosyncratic price dispersion and the average time-on-the-market substantially.

Essi Eerola

Papers

The Optimal Tax Treatment of Housing Capital in the Neoclassical Growth Model

Citizens should vote on secession

On the Importance of Borrowing Constraints for House Price Dynamics

On the role of public price information in housing markets

Matching and Credit Frictions in the Housing Market