This paper empirically estimates the degree to which the marginal utility of income changes across income groups. The estimation is based on survey responses indicating willingness to pay to avoid unpleasant experiences and relies on the assumption that the associated discomfort, or disutility, is equal on average across income groups. This assumption implies that any differences in average willingness to pay for relief are entirely driven by differences in marginal utilities of income. The results suggest that marginal utility of income is constant across income groups, implying that (cardinal) utility is roughly linear in dollars.
Dissertation Chapter 2
From Value Added to Welfare Added: A Social Planner Approach to Education Policy and Statistics
With Tanner S Eastmond, Michael David Ricks, and Julian Betts
Mean-oriented statistics---although ubiquitous in empirical welfare analysis---are less informative when policies have heterogeneous effects or when policy makers have distributionally-based objectives. In this paper we formally articulate when estimating heterogeneity in a policy's effect is necessary to determine welfare impacts. To test this theory, we estimate the heterogeneity in teacher value added over the achievement distribution using data from the San Diego Unified School District. These estimates are used to quantify the importance of heterogeneity in an enormous public service provision problem: the allocation of teachers to elementary school classes. We find teachers do have a comparative advantage across student types, and assigning teachers based on that comparative advantage to existing classrooms significantly improves outcomes above what is achievable with standard value added. We also find welfare gains from considering heterogeneity are even larger when policymakers prefer to prioritize lower (or higher) achieving students. These results point to the importance of optimizing other public programs by using information about effect heterogeneity to both increase average outcomes via comparative advantage and better match distributional impacts from policy recommendations to the social preferences of decision makers.
Dissertation Chapter 3
I'll Have What They're Having: State Fiscal Policy Interdependence
This paper examines to what extent state spending is influenced by neighboring states. The paper starts by laying out a formal model for state fiscal interdependence. The model is built on two core ideas. The first is that voters look at ``similar" states via news coverage to determine what a normal level of spending is. The second is that the government responds to these shifting preferences by maximizing the probability of reelection. The model informs the empirical analysis which uses state newspaper articles to form a new metric of state interconnectivity that is compared against previous metrics used in the literature.