Publications
6 results found
Gupta A, Hansman C, 2022, Selection, leverage, and default in the mortgage market, The Review of Financial Studies, Vol: 35, Pages: 720-770, ISSN: 0893-9454
We ask whether the correlation between mortgage leverage and default is due to moral hazard (the causaleffect of leverage) or adverse selection (ex-ante risky borrowers choosing larger loans). We separate theseinformation asymmetries using a natural experiment resulting from the contract structure of Option Adjustable Rate Mortgages and unexpected 2008 divergence of indexes that determine rate adjustments. Our pointestimates suggest that moral hazard is responsible for 40% of the correlation in our sample while adverseselection explains 60%. We calibrate a simple model to show that leverage regulation must weigh default prevention against distortions due to adverse selection
Hansman C, Hjort J, León-Ciliotta G, et al., 2020, Vertical integration, supplier behavior, and quality upgrading among exporters, Journal of Political Economy, Vol: 128, Pages: 3570-3625, ISSN: 0022-3808
We study the relationship between firms’ output quality and organizational structure. Using data onthe production and transaction chain that makes up Peruvian fishmeal manufacturing, we establish threeresults. First, firms integrate suppliers when the quality premium rises for exogenous reasons. Second,suppliers change their behavior to better maintain input quality when vertically integrated. Third, firmsproduce a highershareof high-quality output when weather and supplier availability shocks shift theminto using integrated suppliers. Overall, our results indicate that quality upgrading is an important motivefor integrating suppliers facing a quantity-quality trade-off, as classical theories of the firm predict.
Hansman CJ, Hjort J, Leon G, 2018, Interlinked firms and the consequences of piecemeal regulation, Journal of the European Economic Association, Vol: 17, Pages: 876-916, ISSN: 1542-4766
Industrial regulations are typically designed with a particular policy objective and set of firms in mind. When input–output linkages connect firms across sectors, such piecemeal regulations may worsen externalities elsewhere in the economy. Using daily administrative and survey data, we show that in Peru’s industrial fishing sector, the world’s largest, air pollution from downstream (fishmeal) manufacturing plants caused 55,000 additional respiratory hospital admissions per year as a consequence of the introduction of individual property rights (over fish) upstream. The upstream regulatory change removed suppliers’ incentive to “race” for the resource and enabled market share to move from inefficient to efficient downstream firms. As a result, the reform spread downstream production out across time, as predicted by a conceptual framework of vertically connected sectors. We show evidence consistent with the hypothesis that longer periods of moderate air polluting production can be worse for health than concentrating a similar amount of production in shorter periods. Our findings demonstrate the risks of piecemeal regulatory design in interlinked economies.
Gupta A, Hansman C, Frenchman E, 2016, The Heavy Costs of High Bail: Evidence from Judge Randomization, The Journal of Legal Studies, Vol: 45, Pages: 471-505, ISSN: 0047-2530
Conti G, Hansman C, 2013, Personality and the education–health gradient: A note on “Understanding differences in health behaviors by education”, Journal of Health Economics, Vol: 32, Pages: 480-485, ISSN: 0167-6296
Conti G, Hansman C, Heckman JJ, et al., 2012, Primate evidence on the late health effects of early-life adversity, Proceedings of the National Academy of Sciences, Vol: 109, Pages: 8866-8871, ISSN: 0027-8424
<jats:p> This paper exploits a unique ongoing experiment to analyze the effects of early rearing conditions on physical and mental health in a sample of rhesus monkeys ( <jats:italic>Macaca mulatta</jats:italic> ). We analyze the health records of 231 monkeys that were randomly allocated at birth across three rearing conditions: mother rearing, peer rearing, and surrogate peer rearing. We show that the lack of a secure attachment relationship in the early years engendered by adverse rearing conditions has detrimental long-term effects on health that are not compensated for by a normal social environment later in life. </jats:p>
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