A paper by UCLA Professor Jay Lu and coauthor Annie Liang was featured in the Anderson Review. The paper studies the trade-off between accuracy and fairness across groups in designing algorithms — step-by-step instructions for accomplishing a task. The Review article can be found here.
The paper can be found here.
The UCLA’s team took third place in the annual Fed Challenge, a national competition that asks teams of undergraduate students to analyze the economy and present a monetary policy recommendation to judges from the Federal Reserve. This year, 107 schools took part in the competition, with 3 teams from each of the six regions chosen to advance to the semifinal Q&A round, and 6 finalists selected as the winners of each region. The other finalists were Harvard University (first place), Princeton University (second place), Columbia University, University of Chicago, and University of North Carolina Wilmington. The UCLA’s team was composed of Yohann Byun, Vivian Fan, Ryan Gonda, Laura Lu, and Sophie Simcox, with Casper Hsu, Carly King, and Jordan Lee serving as alternates and research support. Professor Chris Surro and graduate student Ali Haider Ismail advised the team. Our students registered for Econ 187 (The Fed Challenge) as part of their preparation for the Challenge. You can read more about the Fed Challenge here.
UCLA Professor Will Rafey contributes to the writing of the Fifth National Climate Assessment released by the White House. The report highlights the widespread negative effects of climate change with the most damaging effects for low-income communities.
The full report can be found here.
Professor Rafey’s contribution was also discussed in the following UCLA Newsroom article, found here.
By Jacob Kohlhepp
Full article available here.
Jacob Kohlhepp
Anyone who has shopped at a Costco and a corner convenience store knows that firms selling the same products assign tasks to workers differently and have dramatically different levels of profitability. Economists have long recognized via case studies and theoretical work that some of these differences are due to differences in organizational capability. For example, some companies use sophisticated workforce management software while others use a clipboard. But are these individual examples reflective of a larger reality? And if so, how does incorporating organizational capabilities change our understanding of economics?
In his paper “The Inner Beauty of Firms,” Professor Jacob Kohlhepp (UNC Chapel Hill and UCLA graduate) answers these questions using millions of task assignments across hundreds of hair salons. He finds that salons using the same management software assign work very differently. At some salons, workers essentially operate as miniature salons with little task specialization. At others, workers play a specific role as part of a task specialized team. Further, task specialization is positively associated with firm performance. Specialized salons earn more revenue per minute, are larger, and set higher prices. At least for hair salons, there is evidence that organizational capability plays a large role in economic outcomes.
He then builds a new model where competing firms with different organizational capabilities choose both who to hire and how to assign tasks. Firms strategically design the jobs of each employee based on individual skills, prevailing wages, consumer demand for quality, and importantly, a firm-specific organizational cost. He develops a procedure which uses machine learning to link the theory with the data, and estimate the firm’s organizational costs, worker skills and worker wages.
Using the estimated model, Professor Kohlhepp reexamines classic economic policies, using Manhattan’s hair salon industry as a laboratory. He starts with a minimum wage. When the minimum wage is increased from $15 to $20, firms which initially employ many minimum wage workers see a cost increase. All workers initially at these firms, minimum-wage or not, are disadvantaged. Internally, firms layoff minimum wage workers and the remaining workers pick up the slack by performing the leftover tasks. In this way, the minimum wage spills over onto non-minimum wage workers, generating wage increases for some and wage decreases for others that depend on the context.
He also considers a sales tax cut. When the sales tax decreases from 4.5% to 0%, workers flow towards more organizationally capable salons increasing productivity. In addition, cutting the sales tax makes producing a high quality product more profitable. This induces firms of all capabilities to increase specialization, which raises worker productivity across the market.
Both the minimum wage and sales tax cut tell a similar story: even firms which look similar on paper can be quite different in terms of their organization capabilities, and accounting for this changes what we predict even from classic economic policies.
The paper ‘Index Funds, Asset Prices, and the Welfare of Investors’ by UCLA Professor Bill Zame and coauthor Martin Schmalz was featured in the Bloomberg podcast. The podcast featuring the article can be found here.
The paper ‘Index Funds, Asset Prices, and the Welfare of Investors’ by UCLA Professor Bill Zame and coauthor Martin Schmalz was featured in the Anderson Review. The article featuring the paper can be found here.
UCLA Professor Till Von Wachter has received an award from The California Collaborative for Pandemic Recovery and Readiness Research for their research on how workers fared under different unemployment insurance programs during the COVID-19 pandemic.The research will help to address evidence gaps in how the COVID-19 pandemic affected the health and wellbeing of communities throughout California.
Biography: Aravinth Ruppa, a second-year undergraduate student from the central coast of California, is currently majoring in Economics with a pre-medicine focus. He intends to pursue a double major in Microbiology, Immunology & Molecular Genetics. He plans to blend his unique background in economics and medicine to bring about positive impact on the healthcare industry to improve access to care for all patients. Aravinth is also a 3rd degree black belt in Karate and has been practicing martial arts for the last 14 years. In his free time he enjoys playing soccer, hiking, and going to the beach. Aravinth looks forward to continuing to explore Los Angeles and try all the different types of food the city has to offer.
Future Plans: In the upcoming academic year, Aravinth will continue his research in the Economics department, focusing on investigating water pollution levels and the corresponding water legislation. Additionally, he will be working in the cardiology laboratory at the Geffen School of Medicine, utilizing molecular biology research techniques to study therapies aimed at enhancing post-heart attack repair. Following his undergraduate studies, Aravinth intends to further his education by pursuing an MD (Doctor of Medicine) and an MBA (Master of Business Administration) in a medical school dual degree program. Aravinth’s aspiration is to blend his interests in medicine and healthcare to initiate meaningful change and improve access to care for patients, regardless of their socioeconomic status.
What this scholarship means to me? I feel honored and so thankful to have been chosen for the Venu and Ana Kotamraju Endowed Scholarship. I would like to extend my deepest gratitude to Mr. and Mrs. Kotamraju for their incredible generosity, which has given me confidence to continue to seek opportunities to gain tools that I can use to make a positive impact. This scholarship not only alleviates financial burdens but also inspires me to continue to learn and grow. I am truly appreciative of the chance to pursue my educational goals with the assistance of this scholarship, and I am committed to making the most of this privilege to achieve my aspirations.
