Nicolas L. Bottan

Subjective Expectations & Information Frictions

Published & Forthcoming

1. Betting on the House: Subjective Expectations and Home Sales
   with Ricardo Perez-Truglia — American Economic Journal: Applied Economics, 2025, Vol. 17(1), 459–500.
   Journal Ungated Replication
   Abstract

   Home price expectations play a central role in macroeconomics and finance. However, there is little direct evidence on their effect on market choices. We provide causal evidence using a large-scale, high-stakes field experiment in the United States. We sent letters about home price trends to 57,910 homeowners who listed their homes. These letters contained randomized information creating nondeceptive, exogenous variation in home price expectations. Consistent with economic theory, higher expectations reduced selling probability. Behavior was highly elastic: a 1 percentage point increase in expectations caused a 2.63 percentage point reduction in the probability of selling the property within 12 weeks.
2. Backlash Against Expert Recommendations: Reactions to COVID-19 Advice in Latin America
   with Facundo Albornoz, Guillermo Cruces, Bridget Hoffmann & Maria Lombardi — Journal of Economic Behavior & Organization, 2024, Vol. 228, 106752.
   Journal - Open access
   Abstract

   Public adherence with health recommendations is vital for effective crisis response. During the COVID-19 pandemic, governments faced considerable challenges in persuading the public to adopt new recommendations. Using large-scale survey experiments across 12 Latin American countries, we investigate how respondents’ agreement with health recommendations is affected by their attribution to experts from different sectors. Our results uncover a robust backlash against experts for pandemic-specific recommendations, but not for more general health advice. The backlash does not depend on the type of expert (academic, public or private sector). Our experimental setup allows us to concurrently assess the significance of different factors behind these results. Anti-intellectualism plays a role, since individuals with low initial trust in experts exhibit more negative reactions to expert attribution, although the backlash is also present for those with higher levels of trust, indicating that other factors likely play a role. We fail to find evidence that individual perceptions or personality traits such as social pressure, altruism or reactance contribute to the backlash. Beyond individual characteristics, we find that the backlash is stronger in countries that exhibited a more stringent government response to the pandemic.
3. Information Policies and Higher Education Choices: Experimental Evidence from Colombia
   with Leonardo Bonilla & Andres Ham — Journal of Behavioral and Experimental Economics, 2019, Vol. 83.
   Journal Ungated
   Abstract

   This paper studies the effects of a large-scale information policy that nudges high school students towards college information websites in Colombia. We collect panel data on 6000 students in 115 public schools and match them to administrative records. Students in 58 randomly-chosen schools received a 35-minute presentation on the earning premiums of college, funding opportunities to cover costs, and the importance of test scores for admissions and financial aid. Our findings indicate that students learn about financial aid but do not update their inflated beliefs about college earnings, are not motivated to improve academic performance, nor substantially modify their enrollment choices. These results are precisely estimated, robust, and consistent with the related literature. We conduct an in-depth analysis of the reasons driving the limited effects of information provision on higher education choices, identifying factors that may increase the effectiveness of these policies to motivate the demand for college.

Working Papers

1. Learning about Inflation and Exchange Rates: Experimental Evidence in a Small Open Economy
   with Diether Beuermann, Bridget Hoffmann, Jeetendra Khadan & Diego Vera-Cossio — under review.
   Ungated
   Abstract

   We study how expert forecasts about inflation and nominal exchange rates affect households inflation perceptions, exchange rate beliefs, and later durable-goods holdings in a small open economy. Using a randomized information experiment in Suriname, we provide households with expert forecasts about future inflation and depreciation. At baseline, households substantially underestimate both inflation and depreciation, and the information treatments generate large upward revisions in expectations. Linking the experiment to follow-up data two years later, we find lower ownership of tradable durable goods among households exposed to macroeconomic forecasts, particularly consumer electronics. Results suggest that households interpret macroeconomic forecasts as informative about broader economic conditions rather than only about relative prices.

Social Comparisons & Relative Concerns

Published & Forthcoming

1. Choosing Your Pond: Location Choices and Relative Income
   with Ricardo Perez-Truglia — Review of Economics and Statistics, 2022, Vol. 104(5), 1010–1027.
   Journal Ungated Replication
   Abstract

   Do individuals care about their relative income? While this is a long-standing hypothesis, revealed-preference evidence remains elusive. We provide a unique test by studying residential choices: individuals often must choose between places with different income distributions, and as a result they “choose” their relative income. We conducted a field experiment with 1,080 senior medical students who participated in the National Resident Matching Program. We estimate their preferences by combining choice data, survey data on perceptions, and information-provision experiments. The evidence suggests that individuals care about their relative income and that these preferences differ across single and nonsingle individuals.
2. Losing My Religion: The Effects of Religious Scandals on Religious Participation and Charitable Giving
   with Ricardo Perez-Truglia — Journal of Public Economics, 2015, Vol. 129, 106–119.
   Journal Ungated Media Replication & Data
   Abstract

   We study how the U.S. Catholic clergy abuse scandals affected religious participation, religious beliefs, and pro-social behavior. To estimate the causal effects of the scandals on various outcomes, we conduct an event-study analysis that exploits the fine distribution of the scandals over space and time. First, a scandal causes a significant and long-lasting decline in religious participation in the zip code where it occurs. Second, the decline in religious participation does not generate a statistically significant decline in religious beliefs, pro-social beliefs, and some commonly used measures of pro-social behavior. This evidence is consistent with the view that changes in religious participation during adulthood may have limited or no effect on deep beliefs and values. Third, the scandals cause a long-lasting decline in charitable contributions. Indeed, the decline in charitable giving is an order of magnitude larger than the direct costs of the scandals to the Catholic churches (e.g., lawsuits). If we assume that the scandals affect charitable giving only through the decline in religious participation, our estimates would suggest that the strong cross-sectional correlation between religious participation and charitable giving has the presumed direction of causality.
3. Deconstructing the Hedonic Treadmill: Is Happiness Autoregressive?
   with Ricardo Perez-Truglia — The Journal of Socio-Economics, 2011, Vol. 40(4), 224–236.
   Journal Ungated
   Abstract

   Affective habituation is well-documented in social sciences: people seem to adapt to many life events, ranging from lottery windfalls to terminal illnesses. A group of studies have tried to measure habituation by seeing how lagged values of life events affect present happiness. We propose an additional adaptation channel: current happiness may depend directly on past happiness, which amounts to assessing whether happiness is autoregressive. We run dynamic happiness regressions using individual-level panel data from the German Socio-Economic Panel Study, the Japanese Panel Survey of Consumers, the British Household Panel Survey and the Swiss Household Panel. As in previous studies, the coefficients on lagged events (e.g., becoming unemployed, getting married) suggest strong habituation. However, all the econometric models suggest that the coefficient on lagged happiness is positive and significant. We discuss whether this may be evidence of happiness having an inertial force (besides the usual habituation channel).

Working Papers

1. Small Fish in a Big Pool: The Discouraging Effects of Relative Assessments
   with Dan Bernhardt — under review.
   SSRN
   Abstract

   This paper studies how relative assessments affect performance using a quasiexperiment in US club swimming. Exploiting the age-group structure, where swimmers are assessed against peers and experience a sharp shift in standing upon aging up, we identify the causal effects of facing better-performing peers. Using a regression discontinuity design, we find that swimmers, on average, swim slower after aging up. This effect is similar across genders and strongest among swimmers in the middle and top of the ability distribution, while those in the bottom third show no change. The findings highlight the psychological impacts of relative assessments in competitive environments.
2. Feeling Rich or Looking Rich? Self-Perceived vs. Socially-Perceived Relative Income
   with Ricardo Perez-Truglia, Hitoshi Shigeoka & Katsunori Yamada — Journal of Public Economics (revise & resubmit).
   NBER WP
   Abstract

   Research on status concerns typically discusses two distinct channels: individuals may care about either their self-perceived relative standing or their socially-perceived standing. While abundant evidence supports each channel in isolation, little is known about their relative importance. We address this gap through a hypothetical discrete-choice experiment in which subjects choose between scenarios involving trade-offs among absolute income, self-perceived standing, and socially-perceived standing. We elicit these preferences across multiple domains (e.g., income versus grades) and using alternative methods (incentivized versus non-incentivized choices). In four of the five conditions, individuals prefer higher socially-perceived standing. However, the remaining condition exhibits the opposite pattern, indicating that the finding is sensitive to methodology and warrants further investigation.

Human Capital & Social Protection in Developing Countries

Published & Forthcoming

1. Integrating Learning Platforms within Regular School Time: Experimental Evidence from Chilean Primary Schools
   with Roberto Araya, Elena Arias Ortiz & Julian Cristia — Economics of Education Review, 2025, Vol. 106, 102647.
   Journal Ungated
   Abstract

   Despite the potential of learning platforms to improve educational outcomes in developing countries, transitioning their use from supplementary after-school activities to integrate their use during the regular school time has proven difficult. This paper presents results from a randomized evaluation of a bundled program employing an external coordinator to aid 4th grade teachers with the integration of a math learning platform that partially replaced regular school math instruction in Chile. Students in treatment classrooms experienced sizable gains in math achievement, scoring 0.27 standard deviations more than control students as measured in the national standardized exam. The program increased students’ preference for using technology in math instruction and students’ beliefs regarding the malleability of intelligence, while reducing preferences for teamwork. These findings suggest that the integration of the use of learning platforms during the regular school time can produce large gains in academic achievement and influence non-academic outcomes in developing countries.
2. Does Education Prevent Job Loss During Downturns? Evidence from Exogenous School Assignments and Covid-19 in Barbados
   with Diether Beuermann, Kirabo Jackson, Bridget Hoffmann & Diego Vera-Cossio — European Economic Review, 2024, Vol. 162, 104675.
   Journal Ungated
   Abstract

   Canonical human capital theories posit that education, by enhancing worker skills, reduces the likelihood that a worker will be laid-off during times of economic change. Yet, this has not been demonstrated causally. We link administrative education records from 1987 through 2002 to nationally representative surveys conducted before and after the COVID-19 onset in Barbados to explore the causal impact of improved education on job loss during this period. Using a regression discontinuity design, we show that females (but not males) who score just above the admission threshold for more selective secondary schools attain more years of education than those who scored just below (essentially holding initial ability fixed). We then find that these same females are much less likely to have lost a job after the onset of COVID-19. We show that these effects are not driven by labor supply decisions, selection into more resilient sectors and occupations, the ability to telework, job seniority, health status, fertility or access to child care, or improved social networks. Because employers observe incumbent worker productivity, these patterns are inconsistent with pure education signaling and suggest that education enhances worker skill.
3. Resource Rents, Coercion, and Local Development: Evidence from Post-Apartheid South Africa
   with Paulo Bastos — World Development, 2023, Vol. 169, 106289.
   Journal Ungated
   Abstract

   We examine how the dismantling of coercive institutions associated with the end of apartheid in South Africa in 1994 affected the distribution of natural resource rents, and thereby impacted local economic development. Individual-level data from 1993 to 2015 reveal that relative real wages of Black workers increased at a significantly faster pace in the mining industry than in other sectors. Community-level data from the 1996 and 2011 population census reveal that this pattern helped explain the evolution of relative incomes of the former self-governing territories set aside for Black inhabitants. Using data from the 1996 census, we document large income gaps between communities located just-inside and just-outside the former self-governing territories set aside for Black inhabitants. Examining relative changes between 1996 and 2011, we find that spatial income convergence was considerably stronger among marginalized communities with higher initial exposure to resource rents. These results accord with bargaining theory in which the dismantling of coercive institutions improves the negotiating position of unionized workers in the mining industry.
4. Stepping Up During a Crisis: The Unintended Effects of a Noncontributory Pension Program during the COVID-19 Pandemic
   with Bridget Hoffmann & Diego Vera-Cossio — Journal of Development Economics, 2021, Vol. 150, 102635.
   Journal Ungated
   Abstract

   We use a regression discontinuity design to study the impacts of a noncontributory pension program covering one-third of Bolivian households during the COVID-19 pandemic. Becoming eligible for the program during the crisis increased the probability that households had a week's worth of food stocked by 25% and decreased the probability of going hungry by 40%. Although the program was not designed to provide emergency assistance, it provided unintended positive impacts during the crisis. The program's effects on hunger were particularly large for households that lost their livelihoods during the crisis and for low-income households. The results suggest that, during a systemic crisis, a preexisting near-universal pension program can quickly deliver positive impacts in line with the primary goals of a social safety net composed of an income-targeted cash transfer and an unemployment insurance program.
5. The Unequal Burden of the Coronavirus Pandemic: Evidence from Latin America and the Caribbean
   with Bridget Hoffmann & Diego Vera-Cossio — PLoS ONE, 2020, 15(10), e0239797.
   Journal Replication
   Abstract

   The current coronavirus pandemic is an unprecedented public health challenge that is having a devastating economic impact on households. Using a sample of 230,540 respondents to an online survey from 17 countries in Latin America and the Caribbean, the study shows that the economic impacts are large and unequal: 45 percent of respondents report that a household member has lost their job and, among households owning small businesses, 59 percent of respondents report that a household member has closed their business. Among households with the lowest income prior to the pandemic, 71 percent report that a household member lost their job and 61 percent report that a household member has closed their business. Declines in food security and health are among the disproportionate impacts. The findings provide evidence that the current public health crisis will exacerbate economic inequality and provides some of the first estimates of the impact of the pandemic on the labor market and well-being in developing countries.
6. Access to Preprimary Education and Progression in Primary School: Evidence from Rural Guatemala
   with Paulo Bastos & Julian Cristia — Economic Development and Cultural Change, 2017, Vol. 65(3), 521–547.
   Journal Ungated
   Abstract

   Evidence on the impacts of a large-scale expansion in preprimary education is limited and mostly circumscribed to high- and middle-income nations. We estimate the effects of such an expansion on progression in primary school in rural communities of Guatemala, where the number of preprimaries increased from about 5,300 to 11,500 between 1998 and 2005. Combining administrative and population census data in a difference-in-differences framework, we find that access to preprimary education increased by 2.4 percentage points the proportion of students who progress adequately and attend sixth grade by age 12. These positive although limited effects suggest the need for complementary actions to produce substantial improvements in adequate progression.

Working Papers

1. Learning Through Living-Room Screens: Experimental Evidence from Kenya
   with Jasmin Baier, Laura Barasa, Anushka Ghosh & Mark Millrine — conditionally accepted via pre-results review at the Journal of Development Economics.
   SSRN
   Abstract

   We present experimental evidence from Kenya on the effects of educational television on children’s literacy, socio-emotional skills, and gender attitudes. Using a preregistered encouragement design with 4,300 primary school children, we evaluate the impact of Nuzo & Namia, a literacy-focused television show broadcast free over the air. We find strong evidence the show increased curiosity by 12% of a standard deviation and suggestive evidence it increased reading comprehension by 9% of a standard deviation, with no spillovers onto other literacy outcomes. These gains are concentrated among children from English-speaking households, suggesting the English-language broadcast may exacerbate existing gaps. We also find suggestive evidence the show reinforced traditional gender attitudes. Evidence on mechanisms suggests effects are driven by its informational content rather than by changes in time use, preferences, or parental investment. At $18.48 per standard deviation gain in comprehension, the intervention remains highly cost-effective even under conservative effect-size estimates. Taken together, the findings highlight the promise and the limits of educational television as a scalable intervention.
2. Can't Stop the One-Armed Bandits: The Effects of Access to Gambling on Crime
   with Ignacio Sarmiento & Andres Ham — working paper (updated draft soon).
   Working Paper
   Abstract

   We estimate the effects on criminal activity due to the approval of state legislation in Illinois that legalized video gambling. The bill gave municipalities discretion over whether to allow video gambling within their local boundaries. Many jurisdictions adjacent to Chicago opted in, while the City of Chicago opted out. These decisions create a natural experiment that allows studying the effects of increasing access to gambling on crime. Using detailed incident-level crime data and a difference-in-differences strategy, we find that (i) access to gambling increases violent and property crimes; (ii) these crimes represent “new” rather than displaced incidents; and (iii) effects are persistent over time. We further study downstream effects on property values, finding that properties adjacent to gambling establishments sell on average at a three percent discount.

Work in Progress

A selection of active projects at various stages of development.

1. From Static to Adaptive: Comparing the Efficacy of Messaging Strategies in Student Online Engagement
   with Raphaelle Aulagnon, Julian Cristia & Mauricio Romero — Analysis complete--draft soon.
   Abstract

   We conduct a randomized field experiment in Peru to evaluate the effectiveness and cost-effectiveness of static and adaptive nudging strategies in increasing student engagement with a online math platform. Students were randomly assigned to receive no messages (control), in-app notifications, WhatsApp messages, phone calls, or an adaptive treatment that adjusted communication intensity based on recent usage. Notifications alone had no effect. WhatsApp and Calls generated substantial increases in platform use, while the Adaptive treatment produced intermediate effects at a lower cost than Calls. The Adaptive rule was particularly effective among students with low baseline usage, but less so among low-achieving students. These results show that adaptive nudging can improve engagement cost-effectively, but that its performance depends on the dimension used for targeting.
2. How Much Do We Gain from Personalization? Experimental Evidence from Peru
   with Raphaelle Aulagnon, Julian Cristia, José Montiel Olea & Mauricio Romero — Analysis complete--draft soon.
   AEA RCT Registry
3. Artificial Intelligence, Inequality, and the Public: The Impact of Economic Literacy on Policy Views
   with Marcel Preuss — Data collection complete. Analysis in progress
   AEA RCT Registry
4. Information Demand and Market Behavior
   with Ricardo Perez-Truglia — In design.
5. How does Elicitation Affect Expectation Updating?
   Piloting in progress.
6. Who You Race Against: Peer Effects in Competitive Swimming
   with Dan Bernhardt — Data collection in progress.
7. The Behavioral Effects of Performance Thresholds
   with Dan Bernhardt — Data collection in progress.
8. The Long-Run Effects of Early Math Learning: Evidence from a Fourth-Grade Intervention in Chile
   — Data collection in progress.