Topic
Natural experiment
About: Natural experiment is a research topic. Over the lifetime, 1171 publications have been published within this topic receiving 28420 citations.
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TL;DR: In this paper, the authors investigated the economic effects of conflict, using the terrorist conflict in the Basque Country as a case study, and found that after the outbreak of terrorism in the late 1960's, per capita GDP in the basque country declined about 10 percentage points relative to a synthetic control region without terrorism.
Abstract: This article investigates the economic effects of conflict, using the terrorist conflict in the Basque Country as a case study. We find that, after the outbreak of terrorism in the late 1960's, per capita GDP in the Basque Country declined about 10 percentage points relative to a synthetic control region without terrorism. In addition, we use the 1998-1999 truce as a natural experiment. We find that stocks of firms with a significant part of their business in the Basque Country showed a positive relative performance when truce became credible, and a negative relative performance at the end of the cease-fire.
3,128 citations
TL;DR: This article found that living in enclaves improves labor market outcomes; for instance, the earnings gain associated with a standard deviation increase in ethnic concentration is in the order of four to five percent.
Abstract: Recent immigrants tend to locate in ethnic ”enclaves” within metropolitan areas. The economic consequence of living in such enclaves is still an unresolved issue. We use an immigrant policy initiative in Sweden, when government authorities distributed refugee immigrants across locales in a way that may be considered exogenous. This policy initiative provides a unique natural experiment, which allows us to estimate the causal effect on labor market outcomes of living in enclaves. We find substantive evidence of sorting across locations. When sorting is taken into account, living in enclaves improves labor market outcomes; for instance, the earnings gain associated with a standard deviation increase in ethnic concentration is in the order of four to five percent.
906 citations
TL;DR: The recent literature exploiting natural events as "natural experiment" instruments is reviewed in this article to assess to what extent it has advanced empirical knowledge, and a weakness of the studies that adopt this approach is that the necessary set of behavioral, market, and technological assumptions made by the authors in justifying their interpretations of the estimates is often absent.
Abstract: The recent literature exploiting natural events as "natural experiment" instruments is reviewed to assess to what extent it has advanced empirical knowledge. A weakness of the studies that adopt this approach is that the necessary set of behavioral, market, and technological assumptions made by the authors in justifying their interpretations of the estimates is often absent. The methodology and findings from twenty studies are summarized and simple economic models are used to elucidate the implicit assumptions made by the authors and to demonstrate the sensitivity of the interpretations of the findings to the relaxation of some of these assumptions.
695 citations
TL;DR: In this paper, the authors designed three longitudinal, quasi-experimental field studies to examine three issues regarding the two types of social interaction: (1) their differential impact on product sales, (2) their lifetime effects, and (3) their interaction effects.
Abstract: Consumers’ purchase decisions can be influenced by others’ opinions, i.e., word-of-mouth (WOM), and/or others’ actions, i.e., observational learning. While information technologies are creating increasing opportunities for firms to facilitate/manage these two types of social interaction, researchers so far have encountered difficulty in disentangling their competing effects and have provided limited insights into how these two social influences may differ from and interact with each other. Based on a unique natural experimental setting resulting from information policy shifts at the online seller Amazon.com, we design three longitudinal, quasi-experimental field studies to examine three issues regarding the two types of social interaction: (1) their differential impact on product sales, (2) their lifetime effects, and (3) their interaction effects. An intriguing finding is that, while negative WOM is more influential than positive WOM, positive observational learning information significantly increases sales but negative observational learning information has no effect. This suggests that reporting consumer purchase statistics can help mass-market products without hurting niche products. Our results also reveal that the sales impact of observational learning increases with WOM volume.
559 citations
TL;DR: This article examined a natural experiment and a field experiment that provided direct information on school test scores to lower-income families in a public school choice plan and found that receiving information significantly increased the fraction of parents choosing higher-performing schools.
Abstract: We examine a natural experiment and a field experiment that provided direct information on school test scores to lower-income families in a public school choice plan. Receiving information significantly increases the fraction of parents choosing higher-performing schools. Parents with high-scoring alternatives nearby were more likely to choose nonguaranteed schools with higher test scores. Using random variation from each experiment, we find that attending a higher-scoring school increases student test scores. The results imply that school choice will most effectively increase academic achievement for disadvantaged students when parents have easy access to test score information and good options from which to choose.
492 citations