At the exam you have to apply economic reasoning to a specific misbehavior related to what we have seen during the summer school (modules). Please choose one of the topics presented (from addiction to corruption, from criminal activities to unethical decisions, from repugnant markets to pandemic, etc.) and analyze it by using the tools and concepts discussed in class.
Remember (follow the instructions, for additional questions as the Study administration):
- Answers only in English.
- A take-home exam paper cannot exceed 10 pages – and one page is defined as 2400 keystrokes
- The paper must be uploaded as one PDF document. The PDF document must be named with exam number only (e.g. ‘1234.pdf’) and uploaded to Digital Exam.
- Be careful not to cheat at exams! Exam cheating is always sanctioned by a written warning and expulsion from the exam in question. In most cases, the student will also be expelled from the University for one semester.
Exam cheating is for example if you:
- Copy other people’s texts without making use of quotation marks and source referencing, so that it may appear to be your own text
- Use the ideas or thoughts of others without making use of source referencing, so it may appear to be your own idea or your thoughts
- Reuse parts of a written paper that you have previously submitted and for which you have received a pass grade without making use of quotation marks or source references (self-plagiarism)
- Receive help from others in contrary to the rules laid down in part 4.12 of the Faculty of Social Science’s common part of the curriculum on cooperation/sparring
You can read more about the rules on exam cheating on your Study Site and in part 4.12 of the Faculty of Social Science’s common part of the curriculum.
The exam consists of 15 bullet points divided in four sections:
Question, Method, Analysis and Reflections.
*** Answer each bullet point separately ***
Question [In this section you have to provide evidence and a compelling argumentation that a specific misbehavior is important to study. Please answer the following four bullet points].
1) Explain the economic relevance of the topic. Why is it puzzling, interesting and exciting? Why should we care about it? Why is it important to economics, or to social welfare?
Remember you can use data and graphs for your argumentation, for instance you can use Our World in data or similar websites.
Example (in what follows, in green, I will use some excerpts from this Dahl and DellaVigna “Does Movie Violence Increase Violent Crime?):
In 2000, the Federal Trade Commission issued a report at the request of the president and the Congress, surveying the scientific evidence and warning of negative consequences. In the same year, the American Medical Association, together with five other public-health organizations, issued a joint statement on the risks of exposure to media violence (American Academy of Pediatrics et al. 2000).
2) Present the state of the conversation/art in the field. Describe what has been done (previous literature) and what we know about a specific phenomenon. If necessary, highlight the main finding from Economics but also from other disciplines.
Google Scholar is a great tool to find papers on a specific topic. For instance, here is the result of a search “opioid crisis economics”. Websites like Essential Science Indicator that identify the most cited papers in a field along with the emerging branches, influential contributors, publications, and countries in that field can be immensely useful to know which topics are considered important. You can also use Google Trends to learn more about the popular questions related to your research area.
Example: Besley and Burgess (2002), Stromberg (2004), Gentzkow (2006), and DellaVigna and Kaplan (2007) provide evidence that media exposure affects political outcomes. Card and Dahl (2009) show that emotional cues provided by local NFL football games (in the form of unexpected upset losses) cause a spike in family violence. […] Gentzkow and Shapiro (2008) show the introduction of television during preschool had positive effects on test scores for children of immigrants, who otherwise would have had less exposure to the English language. […]
3) Identify a gap in the literature: What is still not (well) understood? What is missing? Explain why this gap deserves to be studied.
When you explore what has being written in a specific field, ask yourself: What issues or questions has the author not addressed? Is there a different perspective that I can consider? What other factors could have influenced the results? Are the data or methods used outdated or no longer considered valid? Is there scope for you to test the findings using more a current approach?
Example: […] The evidence cited in these reports […] does not establish a causal link between media violence and violent crime. The experimental literature exposes subjects in the laboratory (typically children or college students) to short, violent video clips. These experiments find a sharp increase in aggressive behavior immediately after the media exposure, compared to a control group exposed to nonviolent clips. This literature provides causal evidence on the short-run impact of media violence on aggressiveness, but not whether this translates into higher levels of violent crime in the field. A second literature […] shows that survey respondents who watch more violent media are substantially more likely to be involved in self-reported violence and crime. This second type of evidence, although indeed linking media violence and crime, has the standard problems of endogeneity and reverse causation.
4) Explain what the opportunities are to analyze this topic (an existing datasets, novel experimental paradigm, a new theory, etc.). How can you use them effectively to find an answer to this question? What is the advantage of a specific method or a combination of two?
Remember there is an incredible wealth of economics data available online – but finding the right source can be tricky. Here a list of links to some of the most useful and popular economics data sources, categorized by data type.
Example: […] Using a violence rating system from kids-in-mind.com and daily revenue data, we generate a daily measure of national-level box-office audience for strongly violent (e.g., Hannibal), mildly violent (e.g., Spider-Man), and nonviolent movies (e.g., Runaway Bride). Because blockbuster movies differ significantly in violence rating, and movie sales are concentrated in the initial weekends after release, there is substantial variation in exposure to movie violence over time. The audience for strongly violent and mildly violent movies, respectively, is as high as 12 million and 25 million people on some weekends, and is close to 0 on others.[…] We use crime data from the National Incident Based Reporting System (NIBRS) and measure violent crime on a given day as the sum of reported assaults (simple or aggravated) and intimidation.
Method [In this section you have to choose the correct method to answer your research question. You can propose a theoretical model, a specific analysis of existing data or suggest a novel data collection (in this case follow a pre-analysis plan, see here). You should explain why your method is appropriate to answer your research question. Please answer the following 4 bullet points].
5) Set out which research question(s) you aim to answer.
A good research question is essential to guide your research. It pinpoints exactly what you want to find out and gives your work a clear focus and purpose. All research questions should be:
- Focused on a single problem or issue
- Feasible to answer within the timeframe and practical constraints
- Specific enough to answer thoroughly
- Complex enough to develop the answer over the space you have
- Relevant to your field of study (Economics) and/or society more broadly
More suggestions here.
Example: Does media violence trigger violent crime? This question is important for both policy and scientific research. […] In this paper, we provide causal evidence on the short-run effect of media violence on violent crime. […]
6) Explain how you intend to answer the question(s). What is it necessary to do? In which sequence? Why is this the optimal method?
You have to decide which method you want to apply. You can use economic theory and/or empirical work. More info about the methods in Economics, here
Example: […] We develop a simple model where utility-maximizing consumers choose between violent movies, nonviolent movies, and an alternative activity. These options gen- erate violent crime at different rates. […] We exploit the natural experiment induced by time-series variation in the violence of movies shown in the theater. As in the psychology experiments, we estimate the short-run effect of exposure to violence, but unlike in the experiments, the outcome variable is violent crime rather than aggressiveness. Importantly, the laboratory and field setups also differ due to self-selection and the context of violent media exposure.
7) Identify what are the limitations and problems and how you can deal with them. Do you expect any major weakness?
Every study has limitations. Study limitations can exist due to constraints on research design or methodology, and these factors may impact the findings of your study. You should clearly acknowledge any limitations in your research to show readers that you are aware of these limitations and to explain how they affect the conclusions that can be drawn from the research. Additional information here.
Example: […] Although our research design (like the laboratory designs) cannot test for a long-run impact, we can examine the medium-run impact in the days and weeks following exposure. We find no impact on violent crime on Monday and Tuesday following weekend movie exposure. We also find no impact one, two, and three weeks after initial exposure, controlling for current exposure. Hence, the same-day decrease in crime is unlikely to be due to intertemporal substitution of crime from the following days. […] A common theme to the findings above is the importance of self-selection of potential criminals into violent movies. We provide additional evidence on selection using ratings data from the Internet Movie Database (IMDb). We categorize movies based on how frequently they are rated by young males. We find that, even after controlling for the level of violence, movies that disproportionately attract young males significantly lower violent crime.
8) Stress your major contribution(s): What can we expect to learn from your analysis? Explain why this is relevant given your research question.
Example: […] The results emphasize that media exposure affects behavior not only via content, but also because it changes time spent in alternative activities. The substitution away from more dangerous activities in the field can explain the differences with the laboratory findings. Our estimates suggest that in the short run, violent movies deter almost 1,000 assaults on an average weekend.
Analysis. [In this section you have to use the knowledge, skills and competences developed during the course to attempt to analyze the misbehavior you chose. Please answer the following four bullet points].
9) Present your main (expected) result. Is this novel, counter intuitive, unexpected? Why?
Example: […] We find that, on days with a high audience for violent movies, violent crime is lower, even after controlling flexibly for seasonality. […] The estimated effect of exposure to violent movies is small in the morning or afternoon hours (6 A.M.–6 P.M.), when movie attendance is minimal. In the evening hours (6 P.M.–12 A.M.), instead, we detect a significant negative effect on crime. For each million people watching a strongly or mildly violent movie, respectively, violent crimes decrease by 1.3% and 1.1%. The effect is smaller and statistically insignificant for nonviolent movies. In the nighttime hours following the movie showing (12 A.M.–6 A.M.), the delayed effect of exposure to movie violence is even more negative. For each million people watching a strongly or mildly violent movie, respectively, violent crime decreases by 1.9% and 2.1%. Nonviolent movies have no statistically significant impact.
10) Provide evidence to convince the reader about the (internal) validity of your finding. Discuss about the robustness of your approach.
Example: […] To rule out unobserved factors that contemporaneously increase movie attendance and decrease violence, such as rainy weather, we use two strategies. First, we add controls for weather and days with high TV viewership. Second, we instrument for movie audience using the predicted movie audience based on the following weekend’s audience. This instrumental variable strategy exploits the predictability of the weekly decrease in attendance. Adding in controls and instrumenting, the correlation between movie violence and violent crime becomes more negative and remains statistically significant. […] the importance of self-selection of potential criminals into violent movies. We provide additional evidence on selection using ratings data from the Internet Movie Database (IMDb). We categorize movies based on how frequently they are rated by young males. We find that, even after controlling for the level of violence, movies that disproportionately attract young males significantly lower violent crime.
11) Explain the possible unexpected findings (if any) and problems you encounter in the analysis.
Are there aspects of the model/design that increase confidence in the conclusions? Convince the reader that the conclusions are justified by the evidence provided.
Are the conclusions based on a logical explanation that adds to our understanding of the phenomenon of interest? Overall, does the evidence presented in this study support the conclusions? Does the evidence in this study build on the previous body of knowledge? Remember, extraordinary claims require extraordinary evidence.
Example: […] We also examine the delayed impact of exposure to movie violence on violent crime. Although our research design (like the laboratory designs) cannot test for a long-run impact, we can examine the medium-run impact in the days and weeks following exposure. We find no impact on violent crime on Monday and Tuesday following weekend movie exposure. We also find no impact one, two, and three weeks after initial exposure, controlling for current exposure. Hence, the same-day decrease in crime is unlikely to be due to intertemporal substitution of crime from the following days.
12) Conclude with a summary of what you find. Does this answer your research question?
Example: […] We have provided causal evidence on the short-run effect of exposure to media violence on violent crime. We exploit the natural experiment induced by time-series variation in the violence of movies at the box office. We show that exposure to violent movies has three main effects on violent crime: (i) it significantly reduces violent crime in the evening on the day of exposure; (ii) by an even larger percent, it reduces violent crime during the night hours following exposure; (iii) it has no significant impact in the days and weeks following the exposure.
Reflections. [In this section you have to provide your reflections about the analysis you performed and implications of your (expected) findings. Please answer the following three bullet points].
13) Connect what you find with the problem stated in the introduction and the previous literature. What is your main contribution?
Example: […] These findings appear to contradict evidence from laboratory experiments that document an increase in violent behavior follow-ing exposure to movie violence. However, the field and laboratory findings are not contradictory. Exposure to movie violence can lower violent behavior relative to the foregone alternative activity (the field finding), even if it increases violent behavior relative to exposure to nonviolent movies (the laboratory finding). In fact, we document suggestive evidence that, after accounting for selection, violent movies induce more violent crime relative to nonviolent movies, consistent with an arousal effect. This example suggests that other apparent discrepancies between laboratory and field studies might be reconciled if differences in treatment and setup are taken into account.
14) Discuss the consequences of your result(s) for the society and/or the economy (external validity).
Example: […] Given that movie attendance occupies a significant portion of leisure time use, our findings imply first-order welfare effects. We can calculate the change in assaults that would occur if the audience of violent movies did not go to the movies but instead engaged in their next best alternative. The total number of evening and nighttime assaults prevented is 997 assaults per weekend, adding up to almost 52,000 weekend assaults prevented. With an estimated (in year 2007 dollars) direct monetary cost of $2,217 and an estimated intangible quality-of-life cost of $11,154 per assault (Miller, Cohen, and Wiersema 1996), this implies a benefit of roughly $695 million each year. Our estimates suggest that a strongly violent blockbuster movie such as Hannibal (with 10.1 million viewers on opening weekend) reduced assaults by 1,056 on its opening weekend, which amounts to a 5.2% decrease in assaults, about half the impact of the reduction in crime due to a cold day.
15) Given what you find, explain what it is next. What remains unanswered? What are the open questions? Formulate future research ideas/hypothesis that come directly from your findings.
Example: […] In the paper, we find no impact of violent movies in the days and weeks following exposure. Still, our design (like the laboratory experiments) cannot address the important question about the long-run effect of exposure to movie violence. As such, this paper does not provide evidence on the long-term effects of a policy limiting the level of violence allowed in the media. However, it does indicate that in the short run these policies will likely increase violent crime, because they induce substitution toward more dangerous activities.