Thought Leadership

This paper studies the impact of the US-China tariff war on China, using high-frequency night lights data and grid-level measures of tariff exposure. Exploiting within-grid variation over time and controlling extensively for grid-specific contemporaneous trends, we find that each one-percentage-point increase in exposure to the US tariffs was associated with a 0.59% reduction in night-time luminosity. This impact was highly skewed across locations: Grids with negligible direct exposure to the US tariffs accounted for 70% of China’s population. But the tail 2.5% of China’s population with the highest exposure saw an implied 2.52% (1.62%) decrease in income per capita (employment) relative to unaffected grids. These effects were moreover concentrated in locations with a high commuting openness. By contrast, we do not find significant effects from China’s retaliatory tariffs, and offer evidence of several channels through which the impact on imported inputs was mitigated. In a parallel analysis at the prefecture level, we confirm that the US tariffs had discernible negative aggregate consequences.

Using firm-level earnings forecasts and managerial guidance data, we construct guidance surprises for analysts, i.e., differences between managerial guidance and analysts' initial forecasts. We document new evidence on expectation formation: (i) analysts overreact to managerial guidance and the overreaction is state-dependent, i.e., it is stronger for negative guidance surprises but weaker for surprises that are larger in size; and (ii) forecast revisions are neither symmetric in guidance surprises nor monotonic. We organize these facts with a model where analysts are uncertain about the quality of managerial guidance. We show that a reasonable degree of ambiguity aversion is necessary to account for the documented heterogeneous overreaction pattern.

Many consumers are caregivers and, as part of caregiving, frequently make food choices for their dependents. This research examines how food choices made for children influence the healthiness of parents’ subsequent self-choices. Whereas prior work focuses on choices for the self (others) as based on self-needs (other-needs), the authors theorize when and why self-choices involve consideration of other-needs. Five studies, including a nursery school field study, test the effect of choosing healthy food for a child on the healthiness of parents’ self-choices, focusing on the role of anticipating potentially sharing self-choices with one's child. Potential sharing increased parents’ likelihood of making an unhealthy subsequent self-choice if they first made a healthy choice for their child. This effect was driven by parents’ present-focused parenting concerns about whether one's child would eat and enjoy healthy options chosen for them. This effect was mitigated when parents instead had future-focused parenting concerns. Additionally, this effect was mitigated after making an initial choice for the child that was (1) unhealthy or (2) healthy but relatively liked by the child. This research contributes to understanding how choices for others shape choices for the self and offers important marketing and policy implications.