Stephen Wu

Publications and Working Papers


Health and Health Status

Adapting to Heart Conditions: A Test of the Hedonic Treadmill, Journal of Health Economics, July 2001
Abstract: This paper tests the hypothesis of hedonic adaptation by analyzing the role that a history of heart problems has on the ability to deal with future heart conditions. The results show that those who have had a heart condition in the past are less likely to report worse self-assessed health and emotional health due to the onset of a new condition than those who have not previously had exposure to heart trouble. The results are fairly supportive of the notion of a hedonic treadmill.

The Effects of Health Events on the Economic Status of Married Couples, Journal of Human Resources, Winter 2003
Abstract: There is a growing literature showing the relationship between health and economic status, though little research has focused on distinguishing between the effects for men and women. I use measures of exogenous health “shocks” to identify the different channels through which changes in health conditions affect income, wealth and consumption behavior of couples. The results indicate that serious health conditions have strong effects on household wealth, but that the effects for women are larger and more significant than the effects for men. The source of the asymmetry arises from the fact that general living expenses increase when wives become seriously ill, while for husbands, health shocks do not affect theses expenditures.

Sickness and Preventive Medical Behavior, Journal of Health Economics, July 2003
Abstract: Using data from two sources, the Health and Retirement Study and the Medical Expenditure Panel Survey, I analyze the relationship between health status and the likelihood of engaging in medical screening and other preventive behavior. The results show that individuals who are generally in poorer health are more likely to get flu shots and cholesterol checks, but less likely to have mammograms, pap smears, breast exams and prostate checks. There is some evidence that suggests that psychological factors such as fear and anxiety may be important reasons why sicker people are less likely to get cancer screens.

Portfolio Choice and Health Status (with Harvey Rosen), Journal of Financial Economics, June 2004
Abstract: This paper analyzes the role that health status plays in household portfolio decisions using data from the first wave of the Health and Retirement Study. The results indicate that health is a significant predictor of both the probability of owning different types of financial assets and the share of financial wealth held in each asset category. Households in poor health are less likely to hold both safe and risky financial assets, other things (including the level of total wealth) being the same. Poor health is associated with a smaller share of financial wealth held in risky assets and a larger share in safe assets. We find no evidence that the cross sectional relationship between health status and portfolio allocation is driven by “third variables” that simultaneously affect health and financial decisions. Further, the relationship between health status and portfolio choice is robust to the inclusion of a number of variables relating to individuals’ attitudes toward risk and their planning horizons.

Is Trade Good for Your Health? (with Ann Owen), Review of International Economics, September 2007
Abstract: We use a panel of 219 countries to examine the relationship between a country’s openness to international trade and several health outcomes and find that, in general, increased openness is associated with lower rates of infant mortality and higher life expectancies, especially in developing countries. We find evidence suggesting that some of the positive correlation between trade and health can be attributed to knowledge spillovers. In addition, openness is associated with sound economic policies which themselves are related to better health outcomes.

Assessing the Relationship Between Health and Household Portfolio Allocation, Financial Planning Review, December 2021
Abstract: This paper surveys the literature on the relationship between health and household portfolio allocation and provides updated empirical analysis based on recent data. Prior research finds robust evidence for cross-sectional correlations between measures of health status and portfolio decisions, but establishing the causal pathways and underlying mechanisms has proven more difficult and complex. Analysis from the most recently available 2016 and 2018 waves of the Health and Retirement Study yields results that are consistent with the existing literature. Households with worse self-reported health have a lower probability of holding various types of financial assets and also invest a higher share of their portfolios in safe assets, relative to other asset categories. However, there is only weak evidence that new health shocks to a household change portfolio holdings.


Subjective Well-Being

Objective Confirmation of Subjective Measures of Human Well-being: Evidence from the USA (with Andrew Oswald), Science, January 2010 (Appendix)
Abstract: A huge research literature, across the behavioral and social sciences, uses information on individuals’ subjective well-being. These are responses to questions -- asked by survey interviewers or medical personnel -- such as “how happy do you feel on a scale from 1 to 4?” Yet there is little scientific evidence that such data are meaningful. This study examines a 2005-2008 Behavioral Risk Factor Surveillance System random sample of 1.3 million United States citizens. Life-satisfaction in each U.S. state is measured. Across America, people’s answers trace out the same pattern of quality of life as previously estimated, using solely non-subjective data, in a literature from economics (so-called ‘compensating differentials’ neoclassical theory due originally to Adam Smith). There is a state-by-state match (r = 0.6, p < 0.001) between subjective and objective well-being. This result also has some potential to help to unify disciplines.

Well Being Across America: Evidence from a Sample of One Million U.S. Citizens (with Andrew Oswald), Review of Economics and Statistics, November 2011
Abstract: This paper uses new Behavioral Risk Factor Surveillance System data to provide the first estimates of well-being across the states of America. From this sample of 1.3 million US citizens, we analyze measures of life satisfaction and mental health. Controlling for people’s characteristics, Louisiana and DC have high psychological well-being levels while California and West Virginia have low well-being. There is no correlation between states’ well-being and their GDP per capita. Correcting for people’s incomes, satisfaction with life is lowest in the rich states. We discuss implications for the arbitrage theory that regions provide equal utility and compensating differentials.

The Happiness-Suicide Paradox (with Mary C. Daly, Andrew J. Oswald, and Daniel Wilson), Journal of Economic Behavior and Organization, December 2011
Abstract: Suicide is an important scientific phenomenon. Yet its causes remain poorly understood. This study documents a paradox: the happiest places have the highest suicide rates. The study combines findings from two large and rich individual-level data sets — one on life satisfaction and another on suicide deaths — to establish the paradox in a consistent way across U.S. states. It replicates the finding in data on Western industrialized nations and checks that the paradox is not an artifact of population composition or confounding factors. The study concludes with the conjecture that people may find it particularly painful to be unhappy in a happy place, so that the decision to commit suicide is influenced by relative comparisons.

Social Comparisons and Life Satisfaction across Racial and Ethnic Groups: The Effects of Status, Information and Solidarity (with Lewis Davis), Social Indicators Research, July 2014
Abstract: This paper explores the role of within group social comparisons on the life satisfaction of different racial and ethnic groups in the US. We use data from the U.S. Behavioral Risk Factor Surveillance System (BRFSS) to study how life satisfaction is affected by own income and average group income. For Whites, Hispanics, and Asians, we find that higher group income levels are associated with lower levels of life satisfaction, as result that is consistent with a preference for within group status. In contrast, life satisfaction is increasing in group income for Blacks. This results, which we term Black social exceptionalism, is consistent with either higher levels of Black group solidarity or an information effect in which peer income is used to form expectations regarding an individual’s future prospects. We consider a number of specifications to distinguish between the solidarity and information effects. While the information effect appears to play some role in the effect of group income on the life satisfaction of all groups, our results are consistent with the hypothesis that group solidarity plays a larger role in social comparisons by Blacks than by other racial and ethnic groups.

Happiness as a Driver of Risk Avoiding Behavior (with Robert Goudie, Sach Mukherjee, Emmanuel DeNeve, and Andrew J. Oswald), Economica, October 2014
Abstract: Understanding the reasons why individuals take risks, particularly unnecessary risks, remains an important question in economics. We provide the first evidence of a powerful connection between happiness and risk-avoidance. Using data on 300,000 Americans, we demonstrate that happier individuals wear seatbelts more frequently. This result is obtained with five different methodological approaches, including Bayesian model-selection and an instrumented analysis based on unhappiness through widowhood. Independent longitudinal data corroborate the finding, showing that happiness is predictive of future motor vehicle accidents. Our results are consistent with a rational-choice explanation: happy people value life and thus act to preserve it.

Are Pregnant Women Happier? Racial Differences in the Relationship Between Pregnancy and Life Satisfaction (with Paul Hagstrom), Review of Economics of the Household, September 2016
Abstract: This paper uses a sample of over 300,000 women from the 2005-2009 waves of the Behavioral Risk Factor Surveillance System to study the relationship between pregnancy and life satisfaction for women of childbearing age. The results show strong differences by race. Pregnancy has a significant positive correlation with happiness for Whites and Hispanics, but no relationship for Blacks. The results cannot be explained by differences in other demographics such age, income, education, or marital status. Within each racial group, the results are consistent across different categories for all these characteristics. Racial differences in the effects of pregnancy on support from others can partly explain this result. For Whites and Hispanic women, pregnancy increases their feelings of social and emotional support from others, while pregnant Black women report lower levels of social and emotional support than non-pregnant Black women.

The Taste for Status in International Comparison (with Lewis Davis), Journal of Happiness Studies, August 2020
Abstract: This paper provides the first comparative analysis of the preference for social status across countries.  We develop and provide support for two hypotheses: the cultural foundations hypothesis, which claims that individuals’ preferences for status are rooted in persistent cultural values, and the standard of living hypothesis, which states that in more developed economies, relative income matters more and absolute income matters less to individual utility. We find that the taste for status is positively associated with individualism, egalitarianism and per capita income. We also identify and provide evidence regarding two threshold values of the taste for status, which are associated with the onset of status preferences and with the emergence of an hedonic treadmill.  Our estimates indicate that most countries fall between these two thresholds, and thus experience a positive taste for social status. 

The Happiness of Refugees in the United States: Evidence from Utica, NY (with Paul Hagstrom and Javier Pereira), Journal of Refugee Studies, March 2021
Abstract: We study determinants of happiness, a subjective measure of wellbeing, for roughly 600 refugees from over 30 different countries currently residing in Utica, New York. For refugees from the former Soviet Union, the former Yugoslavia, and Southeast Asia, having many friends from one’s own ethnic group is strongly positively correlated with happiness in Utica, while for African refugees, English language skills are a strong determinant of happiness with living in their local area. Income is only modestly related to the happiness of refugees in general, though the results vary by group. We do find strong evidence that those with children are happier than those without. These last two results represent departures from much of the broader literature on happiness in the United States.

Religion and Refugee Well-Being: The Importance of Inclusive Community (with Stephen Ellingson, Paul Hagstrom, and Jaime Kucinskas), Journal for the Scientific Study of Religion, June 2021
Abstract: Building upon the vast literature on religion and well-being, we investigate among refugees, how both religiosity and the ability to practice their religion are related to well-being -- in the form of happiness in one’s community -- in a small city in the Northeast. In doing so, we first examine if and how the relationship between religiosity and well-being is distinctive in some ways for the particularly vulnerable group of refugees from other populations. Second, we include religious and secular facets of the community in which they live, such as their perceived ability to practice their religion, their sense of safety and experiences of discrimination. To our surprise, we find that religiosity is generally unrelated to refugees’ sense of well-being, but their perceived ability to practice is strongly related to happiness in their community. Ability to practice religion remains strongly related to happiness in the community even for refugees who are not religious. These findings point to the need for more studies to include measures not only of individual religiosity, but facets of religion in people’s larger communities. Such factors may be particularly important for vulnerable populations like refugees.

Income Improves Subjective Well-Being: Evidence from South Africa (with Mo Alloush), Economic Development and Cultural Change, forthcoming
Abstract: This paper estimates the causal impact of income on life satisfaction for a broad sample of individuals in a developing country. Using a large and representative panel survey of South African residents, we find that receipt of the Older Person’s Grant,a means-tested cash transfer that is given to residents age 60 and over regardless of labor force status, increases several household-level measures of economic well-being, resulting in a large and significant increase in subjective well-being. Specifically, the average 20% increase in per capita household income due to this grant increases life satisfaction by approximately 0.2 points—a large effect that extends to all members ofthe household. The discontinuity in the eligibility of the Older Person’s Grant provides a reliable causal estimate of the effect of income on life satisfaction that is larger than OLS estimates.

The Effects of Daughters on Health Choices and Risk Behaviour (with Nattavudh Powdthavee and Andrew Oswald)
Abstract: Little is known about why some human beings make risky life-choices. This paper provides evidence that people’s health decisions and addictive actions are influenced by the gender of their children. Having a daughter leads individuals -- in micro data from Great Britain and the United States -- to reduce their smoking, drinking, and drug-taking. The paper’s results are consistent with the hypothesis that human beings ‘self-medicate’ when under stress


Higher Education and Academic Labor Markets

Forecasting Job Placements of Economics Graduate Students (with Alan Krueger), Journal of Economic Education, Winter 2000
Abstract: This article identifies the characteristics of applicants to graduate school in economics that predict successful job placement after completion of graduate school. Although there is considerable uncertainty in predicting the success of prospective Ph.D. students, the results indicate that GRE scores, reference writers, and admissions committee ratings are significant predictors of job placement.

Where do Faculty Receive their PhDs? A Comparison Across Six Disciplines, Academe, July/August 2005
Abstract: This paper studies the doctoral origins of faculty at top research universities and liberal arts colleges across six different disciplines: chemistry, economics, english, history, mathematics and sociology. The results show that in general, a large proportion of faculty receive their doctorates from a select group of top PhD granting institutions within their field. However, these concentration ratios vary significantly across discipline as well between research universities and liberal arts colleges.

Recent Publishing Trends at the AER, JPE and QJE, Applied Economics Letters, January 2007
Abstract: This note summarizes recent trends in institutional affiliation of authors who publish in three leading general interest journals, American Economic Review, Journal of Political Economy, and Quarterly Journal of Economics. The statistics show that well over forty percent of the pages published in the QJE between 2000 and 2003 are by authors affiliated with one of four institutions. This represents a significant increase from analogous figures during the 1980s and earlier periods. The concentrations of affiliations are not as high at the AER or JPE, but they still show a reversal of the declining trend in concentration that occurred from 1950-1989.

The Search for Economics Talent: Doctoral Completion and Research Productivity (with Wayne Grove), American Economic Review Papers and Proceedings, May 2007
Abstract: The search for talent is of particular interest to economists; in fact, nothing unites academic economists’ interest like speculation about the causes of two key measures of success in their profession: completion of the doctorate and success in publishing. We assess both outcomes by using a rich set of pre-graduate school characteristics to forecast both success in the Ph.D. program and professional achievement. Using information contained in application files to a top 5 economics Ph.D. program in 1989, we predict the determinants of doctoral degree completion and research productivity 17 years later. The results suggest that several variables consistently predict degree completion and long run research productivity: quantitative GRE scores, having a foreign undergraduate degree, and the quality of the individuals who write letters of reference.

Early Decision and College Performance (with Elizabeth Jensen), Economics of Education Review, August 2010
Abstract: This paper examines the relationship between admission status and college performance. In particular, we analyze admissions data from Hamilton College and find that students who applied through the Early Decision Plan II program have significantly lower GPAs and are less likely to receive departmental honors, fellowships, and outside scholarships than those admitted through the regular decision process. However, the results for Early Decision Plan I students are less consistent. These students have lower outcomes for some measures of academic achievement than regular decision students.

Sharing Common Roots: Student-Graduate Committee Matching and Job Market Outcomes (with Qi Ge), Southern Economic Journal, October 2021
Abstract: In this paper, we investigate the impact of student-advisor matching, in the form of country of origin and native language, on student initial placement outcomes in the economics PhD job market, accounting for both the type and quality of the placement. We utilize manually collected data on the identities and research pro les of both the candidates and their advisors to identify the student-advisor pairs with relevant matches. Our findings suggest that for international students,  having at least one committee member from the same country of origin or at least one that speaks the same native language increases the chances of being placed into a tenure track academic job and being at an institution with higher research productivity, as measured by the research rankings in the Research Papers in Economics (RePEc) database. A closer examination of the results shows that these effects are primarily driven by matches from Chinese speaking students with their corresponding committee members.

How Do You Say Your Name? Difficult to Pronounce Names and Labor Market Outcomes (with Qi Ge), in progress
Abstract: We test for labor market discrimination based on a previously unstudied characteristic: name fluency. Analysis on two recent cohorts of economics PhD job candidates shows that those with difficult-to-pronounce names are less likely to obtain an academic or tenure-track position and are placed at institutions with lower research productivity. Discrimination due to name fluency is also found using experimental data from two prior audit studies. Within a sample of African-American candidates (Bertrand and Mullainathan, 2004) and a sample of ethnic Indian, Pakistani, and Chinese candidates (Oreopoulos, 2011), job applicants with less fluent names have significantly lower callback rates.

Household and Behavioral Economics

Fatalistic Tendencies: An Explanation of Why People Don’t Save, Contributions to Economic Analysis and Policy, September 2005
Abstract: This paper uses data from the 2001 Survey of Consumer Finances (SCF) and the 2000 World Values Survey (WVS) to analyze the role of fatalism in determining household savings behavior. SCF respondents who feel that luck has played an important role in their financial affairs are more likely to realize their need to save, but are less likely to actually do so. Cross-country evidence from the WVS shows that those who believe they have little freedom and control over their lives are also less likely to save. The results hold after controlling for a number of demographic and behavioral factors, and are consistent across income and wealth levels.

Financial Shocks and Worry about the Future (with Ann Owen), Empirical Economics, November 2007
Abstract: Using data from the Health and Retirement Study and the Survey of Consumer Finances, we show that households that experience adverse financial shocks worry more about the adequacy of their financial resources in retirement, even after controlling for the effects of these shocks on overall wealth. We find supporting evidence that suggests that at least part of the increased worry about retirement is due to general pessimism rather than changes in an individual’s own circumstances. Specifically, experiencing idiosyncratic financial shocks is also associated with greater pessimism about the general future of the economy. Finally, we present some suggestive evidence that links the increased level of worry to reduced consumption.

Fatalism and Savings (with Joel Shapiro), Journal of Socio-Economics, October 2011
Abstract: We examine the impact of fatalism, the belief that one has little or no control over future events, on the decision of whether or not to save. We develop a model that predicts that fatalism decreases savings for moderately risk averse individuals, increases savings for highly risk averse individuals, and otherwise has no impact. Furthermore, fatalism decreases effort in learning about savings and investment options. We use data from National Longitudinal Survey of Youth (NLSY) and find general support for the theoretical predictions of the model. The results are robust to the inclusion of a number of additional control variables.

The Effects of Cueing and Framing on Attitudes Towards Gun Control and Gun Rights, Social Sciences, February 2018
Abstract: I use results from a new survey of American high school students to analyze youth attitudes towards gun control and gun rights.  Attitudes vary significantly across the political spectrum, but are also affected by the framing and ordering of questions.  Importantly, these framing effects vary across the political spectrum.  For students that most closely identify as Republicans, cueing them to think about prior school shootings increases the degree to which they think arming citizens and having armed guards in schools will improve safety and decrease potential acts of violence.  For students that most closely identify as Democrats and Independents, providing them with selective information that certain states have both loose gun control laws and low rates of gun violence prompts them to be more supportive of gun rights.  For Republicans, providing selective information that certain states have both loose gun control laws and high rates of gun violence prompts them to be less supportive of gun rights.  Taken together, these results suggest that emotional cues are more likely to enhance a priori biases, while informational cues are more likely to moderate people’s minds about these issues.

Priming Past Experiences and Preferences for Redistribution (with Jeffrey Cross and Wei Zhan), in progress
Abstract: This paper analyzes the effects of priming people to think about negative past experiences such as losing their job, becoming ill, or being the victim of a natural disaster on attitudes towards redistribution. Individuals who were randomly assigned to be primed to think about past misfortunes are generally more likely to support redistribution than individuals in a control group where not primed, but these effects are starkly different by gender. Being cued to think about negative past experiences strongly increases sympathy for governmental redistribution for male respondents, but not for non-male respondents. For non-male respondents, past misfortunes increase support for redistribution regardless of whether or not they are primed to think about them. Psychological research shows that women generally have more vivid memories of the past, suggesting that they do not need reminders in order for those incidences to affect their preferences and beliefs.

Environmental Economics

Identity and Environmentalism: The Influence of Community Characteristics (with Ann Owen and Julio Videras), Review of Social Economy, December 2010
Abstract: This paper examines the influence of community characteristics on self-proclaimed environmentalism. We find that the composition of a community affects the likelihood that a person claims to be a strong environmentalist, even after controlling for individual characteristics and pro-environment behaviors. Individuals are more likely to definitely agree they are strong environmentalists if they live in areas where a large share of the population has post-graduate degrees and if they live in heavily Democratic areas or heavily Republican areas. These community effects occur only when individuals are predisposed to take on an environmental identity.

The Influence of Social Relationships on Pro-Environment Behaviors (with Julio Videras, Ann Owen, and Emily Conover), Journal of Environmental Economics and Management, January 2012
Abstract: We examine how social networks influence pro-environment behaviors. We use new data from a nationally representative U.S. sample to estimate latent cluster models in which we assign individuals to family, neighbor, and coworker networks that differ in the strength of connections and pro-environment norms. We find consistent effects of green family networks on altruistic behaviors. We also find that the effect of coworker networks is particularly visible for cost-saving activities and that neighbor networks matters for working with others in the community to solve a local problem, volunteering, and recycling.

More Information Isn’t Always Better: The Case of Voluntary Provision of Environmental Quality (with Ann Owen and Julio Videras), Economic Inquiry, July 2012
Abstract: We use a new U.S. survey on pro-environment behaviors, attitudes, and knowledge and find that individuals engage in activities that they believe are more effective in reducing carbon emissions, regardless of whether or not these beliefs are accurate. We find that low provision of the public good is greater among people who believe they cannot do much for the environment and do not consider themselves environmentalists. A policy implication of the results is that the effect of more accurate information on the provision of the public good is ambiguous.

Heat Waves, Droughts, and Preferences for Environmental Policy (with Ann Owen, Emily Conover, and Julio Videras), Journal of Policy Analysis and Management, Summer 2012
Abstract: Using data from a new household survey on environmental attitudes, behaviors, and policy preferences, we find that current weather conditions affect preferences for environmental regulation. Individuals who have recently experienced extreme weather (heat waves or droughts) are more likely to support laws to protect the environment even if it means restricting individual freedoms. We find evidence that the channel through which weather conditions affect policy preference is via perceptions of the importance of the issue of global warming. Furthermore, we find that individuals who are less educated and those who may be predisposed to concern for global warming are more likely to be affected by the weather, but that those who may be more sophisticated consumers of news may be less likely to have their attitudes towards global warming changed by current weather conditions.



Criminal Records and the Labor Market for Professional Athletes: The Case of the National Football League (with Kendall Weir '12), Journal of Sports Economics, December 2014
Abstract: This is the first paper to formally analyze character discrimination in the specific labor market for professional athletes. We observe all 1,273 players drafted into the National Football League between 2005-2009 to determine what effects character concerns, namely arrest records and team suspensions, have on draft status and performance in the NFL. Prospects that have a history of formal criminal charges or are suspended for team or university violations fall between 16-22 spots in the draft. The impacts of character concerns on performance depend on the nature of the issue. Players that have a history of suspension (non-criminal related) start and play in fewer games per season, but having an encounter with law enforcement does not negatively predict performance. This suggests that having a problem with coaches or fellow players is an indicator of future problems, but having a run in with the law does not adversely affect on the field performance. We also find some evidence that conditional on where players are picked in the draft, teams undervalue those with criminal records and overvalue those with other types of suspensions.

Leadership Matters: Police Chief Race and Fatal Shootings by Police Officers, Social Science Quarterly, January 2021
Abstract: This study analyses factors affecting fatal shootings by police officers in the 100 largest cities in the United States. I find that during the time period 2015-2020, the per capita rate of fatal shootings by officers is almost 50% higher in cities with police forces led by White police chiefs than in cities with Black police chiefs. Hispanic led police departments have per capita shooting rates that are in between these two rates. Of the 30 cities with the highest rates of fatal shootings, 23 have police departments led by Whites and only four have departments led by Blacks, while of the 30 cities with the lowest rates, 16 have police departments led by Blacks and only eleven are led by Whites. These differences in fatal shooting rates persist after controlling for cities’ crime rates, racial diversity of their police departments and overall population, and access to trauma centers.