Participants in means-tested programs must periodically document continued eligibility through a recertification process. We find evidence that the administrative burden associated with SNAP recertification leads to decreases in program participation. Cases assigned to later recertification interview dates, which leave less time to reschedule missed interviews, are over 20 percent less likely to recertify than cases assigned to interviews earlier in the month. Cases that fail due to later assignments lose an average of $600 in benefits in the following year. These losses are highly skewed: many cases quickly re-enroll, while one quarter remain off SNAP for over a year post-recertification.
Quantifying Brand Loyalty: Evidence from the Cigarette Market (with Philip DeCicca, Donald S. Kenkel, and Feng Liu) [pdf]
[Revise and Resubmit at the Journal of Health Economics]
We exploit a quasi-experiment created when New York State began in 2011 to tax cigarettes sold on Native American Reservations. The regime change represents a unique opportunity to quantify brand loyalty because it almost doubled the price of premium-brand cigarettes, while Native brands were still untaxed. We use data from two different sources—the New York State Adult Tobacco Survey and the Nielsen Homescan Panel. We find that the increase in relative prices led to substantial declines in premium cigarette purchases. However, even among the premium consumers with the most to gain from switching, about three-quarters remained brand loyal.
Previous research in multiple judgment domains has found that nonlinear functions are typically processed less accurately than linear ones. This empirical regularity has potential implications for consumer choice, given that nonlinear functions (e.g. diminishing returns) are commonplace. In two experimental studies we measured precision and bias in consumers' ability to identify surpluses when returns to product attributes were nonlinear. We hypothesised that nonlinear functions would reduce precision and induce bias towards linearization of nonlinear relationships. Neither hypothesis was confirmed for monotonic nonlinearities. However, precision was greatly reduced for products with nonmonotonic attributes. Moreover, assessments of surplus were systematically and strongly biased, regardless of the shape of returns and despite feedback and incentives. The findings imply that consumers use a flexible but coarse mechanism to compare attributes against prices, with implications for the prevalence of costly mistakes.
Modeling Risk Aversion in Economics (with Ted O'Donoghue) Journal of Economic Perspectives, 2018, 32(2): 10-25.
Can Chocolate Cure Blindness? Investigating the Effect of Preference Strength and Incentives on the Incidence of Choice Blindness (with Feidhlim McGowan) Journal of Behavioral and Experimental Economics, 2016, 61(4): 1-11.
Choice Blindness in Financial Decision Making (with Owen McLaughlin) Judgement and Decision Making, 2013, 8(5): 561-572.