My research in economics primarily falls into the areas of applied economics and industrial organization. This means that I try to understand the ways firms, consumers, governments interact strategically, with a specific focus on using data to create this understanding.
Sales and Perishable Products
(Job Market Paper)
Why are products sales for perishable goods so predictable in their timing?
This paper examines the role of sales (temporary price reductions) in the pricing of perishable products. When products can be stored, periodic sales are commonly explained using inventories: the ability to store lets consumers wait for better prices, and so they have a more elastic demand. When consumers differ in their ability to wait (e.g. different inventories or demands), firms periodically reduce prices in order to keep the regular price high, targeting the low prices to just the most elastic consumers.
However, this explanation is not reasonable for perishable goods, since they cannot be stored. Using a large retail dataset, I show that a cyclic pattern of sales is a major feature of how perishable products are priced, which cannot be explained by product expiration. To explain this, I develop a dynamic model of loss leadership. The link between storable good inventories and perishable products creates, in equilibrium, periodic sales on the perishable good.
I test my model by linking the retail data to consumer choice data, a process which requires the development of a data-driven method of classifying prices into sales. The results validate the central prediction of the loss leadership model: when consumers buy perishables on sale they also buy more of other products, particularly storable ones, relative to their purchasing in non-sale periods.
Large Contributions and Crowdfunding Success
(Presented at the 2016 CEA Conference)
How important are large contributions to crowdfunding projects in determining their success?
This paper studies large contributions and their impact on the outcomes of crowdfunding projects. I first examine the driving forces behind large contributions, finding that they display an apparent preference for being effective in helping projects succeed; indeed, a substantial proportion of large contributions occur simultaneously with projects reaching their goal, often being pivotal in the success of a project. These findings agree with a consumer choice explanation of how large contributions are made, matching predictions from a theoretical model.
I further examine the role large contributions play in project success. Using an instrumental variables approach, I find that the ability of a project to attract large contributors is important: a project is approximately 40-60% more likely to succeed if they can attract a large contributor. Large contributions also appear to be disproportionately effective relative to their size, indicating they not only provide support in the amount needed, but also when it is needed. This inverts the standard logic of crowdfunding: the crowd may be important, but the success of many projects is driven by large contributors.
(Last updated: 2020-05-11)