Curriculum vitae

Fields:
Corporate finance, labor economics

Expected graduation:
June 2013

Dissertation committee:
Nicholas Bloom (Committee Chair)
nbloom@stanford.edu

Ran Abramitzky
ranabr@stanford.edu

Caroline Hoxby
choxby@stanford.edu

Job market paper

The Effect of Uncertainty on Investment, Hiring, and R&D: Causal Evidence from Equity Options  (with Elizabeth Stone)
There is wide debate over the impact of uncertainty on firm behavior, due to the difficulty both of measuring uncertainty and of identifying causality. This paper takes three steps that attempt to address these challenges. First, we develop an instrumental variables strategy that exploits firms’ differential exposure to energy and currency prices and volatility. For example, airlines are negatively affected by high oil prices while oil refiners benefit from them, but both are sensitive to oil price volatility; retailers, in comparison, are not particularly sensitive to either the level or volatility of oil prices. Second, we use the expected volatility of stock prices as implied by equity options to obtain forward-looking measures of uncertainty over firms’ business conditions. Finally, we examine how uncertainty affects a range of outcomes: capital investment, hiring, research and development, and advertising. We find that uncertainty depresses capital investment, hiring, and advertising, but encourages R&D spending. This perhaps-surprising result for R&D is consistent with a theoretical literature emphasizing that long investment lags create valuable real put options which offset the effects of call options lost when projects are started. Aggregating across our panel of Compustat firms, we find that rising uncertainty accounts for roughly a third of the fall in capital investment and hiring that occurred in 2008–10.

Other research

The “Visible Hand”: Race and Online Market Outcomes  (with Jennifer Doleac)
Revise and resubmit, Economic Journal
Do prospective customers behave differently based on sellers’ perceptible race or signals about sellers’ socioeconomic class? Does the answer to this question depend on whether a customer lives in an area that is racially segregated or plagued by property crime? We investigate these questions in a year-long experiment in which we sold iPods through local online classified advertisements throughout the United States. Each ad features a photograph of the product being held by a hand that is dark-skinned (“black”), light-skinned (“white”), or light-skinned with a wrist tattoo (traditionally associated with lower social class). We find that black sellers do worse than white sellers on a variety of metrics: they receive 13% fewer responses to their advertisements and receive 17% fewer offers. These effects are similar in magnitude to those associated with the display of a wrist tattoo. Conditional on receiving at least one offer, black sellers receive offers that are lower by 2 to 4%, despite the self-selected — and presumably less biased — pool of buyers. In addition, buyers corresponding with a black seller behave in ways that suggest they trust the seller less: they are 17% less likely to include their name in e-mails, 44% less likely to accept delivery by mail, and 56% more likely to express concern about making a long-distance payment. We find that black sellers suffer particularly poor outcomes in thin markets; it appears that discrimination may not “survive” in the presence of significant competition among buyers. Furthermore, black sellers do worst in markets that are racially segregated and that have high property crime rates. The latter result suggests that at least part of the explanation is statistical discrimination — that is, buyers being concerned about the time and potential danger involved in the transaction, or that the iPod is stolen goods.

Race, Skin Color, and Economic Outcomes in Early Twentieth-Century America  (with Roy Mill)
We study the effect of race on economic outcomes using unique data from the first half of the twentieth century, a period in which skin color was explicitly coded in population censuses as “White,” “Black,” or “Mulatto.” We construct a panel of siblings by digitizing and matching records across the 1910 and 1940 censuses and identifying all 12,000 African-American families in which enumerators classified some children as light-skinned (“Mulatto”) and others as dark-skinned (“Black”). Siblings coded “Mulatto” when they were children (in 1910) earned similar wages as adults (in 1940) relative to their Black siblings. This within-family earnings difference is substantially lower than the Black-Mulatto earnings difference in the general population, suggesting that skin color in itself played only a small role in the racial earnings gap. To explore the role of the more social aspect that might be associated with being Black, we then focus on individuals who “passed for White,” an important social phenomenon at the time. To do so, we identify individuals coded “Mulatto” as children but “White” as adults. Passing for White meant that individuals changed their racial affiliation by changing their social ties, while skin color remained unchanged. We compare passers to their siblings who did not pass. Passing was associated with substantially higher earnings, suggesting that race in its social form could have significant consequences for economic outcomes. We discuss how our findings shed light on the roles of discrimination and identity in driving economic outcomes.

Work in progress

Economic uncertainty and earnings manipulation (with Iván Marinovic and Charles Wang)
In uncertain times, investors may attribute surprising firm performance to luck rather than managerial skill. We are investigating whether uncertainty makes investors less likely to “punish” managers for bad earnings announcements. We also use data on restated financial results to understand whether firms try to avoid such punishment by manipulating earnings to shift bad news towards periods of high uncertainty.

Innovation dynamics under uncertainty
“The Effect of Uncertainty on Investment, Hiring, and R&D” presents evidence that uncertainty can encourage firms to spend more on research and development, but causes them to reduce net hiring. By investigating patent filing and citation, as well as detailed data on worker hiring and firing, I seek to understand in more detail the channels through which uncertainty affects innovation.

Teaching experience

Awards

• Walter J. Gores Award (Stanford’s “highest award for excellence in teaching,” awarded annually to one graduate student university-wide)
• Economics Department Outstanding Teaching Assistant Award

Instructor, Stanford University

• Intermediate Undergraduate Microeconomics (Economics 50)
• Microeconomic Theory for Non-Economics Ph.D. Students (Economics 202N)
• Online High School Microeconomics (EPGY OHS Economics 20)

Teaching assistant, Stanford University

• First-Year Graduate Macroeconomics (Economics 210)
• Managerial Economics for MBAs (GSB Management Economics 200)
• Economics for Sloan Fellows (GSB Management Economics 209)

Teaching evaluations