The 2025 AEJ Best Paper Awards Have Been Announced
The 2025 AEJ Best Paper Awards have been announced. The papers selected are highlighted below.
AEJ: Applied Economics
In “Working Remotely? Selection, Treatment, and the Market for Remote Work,” authors Natalia Emanuel and Emma Harrington use the COVID-19 pandemic to determine the impact of remote work on productivity and its implications for hiring practices. Analyzing data from a Fortune 500 company’s call center, they find that on-site workers who transitioned to remote work saw their productivity drop by 4 percent relative to the less productive, already-remote workers. The authors argue that while this drop in productivity could be outweighed by savings in reduced office space and lower worker turnover, individual companies may not offer remote jobs for fear of attracting workers who are less productive. (AEJ: Applied Economics, Vol. 16, No. 4, October 2024)
AEJ: Economic Policy
In “Adaptation and Adverse Selection in Markets for Natural Disaster Insurance,” author Katherine R. H. Wagner estimates homeowners’ willingness to pay for flood insurance across 20 Atlantic and Gulf Coast states from 2001 to 2017. She finds that the average price of flood insurance is only about two-thirds of homeowners’ own expected payouts, and yet more than 40 percent of homeowners still go uninsured. Moreover, she finds no evidence for adverse selection based on private information. Overall, her results challenge traditional explanations for consumer behaviors in natural disaster insurance markets. (AEJ: Economic Policy, Vol. 14, No. 3, August 2022)
AEJ: Macroeconomics
In “Earnings-Based Borrowing Constraints and Macroeconomic Fluctuations,” author Thomas Drechsel examines the macroeconomic implications of earnings-based borrowing constraints for businesses, which limit their debt capacity by their current earnings rather than by the value of their collateral. Using a structural vector autoregression, he finds that firms with earnings-based constraints increase borrowing in response to positive investment shocks, while firms with collateral constraints reduce borrowing. Drechsel argues that incorporating earnings-based borrowing constraints into macroeconomic models provides significant insights into the relative importance of supply versus demand shocks for driving business cycles. (AEJ: Macroeconomics, Vol. 15, No. 2, April 2023)
AEJ: Microeconomics
In “Competition in Pricing Algorithms,” authors Zach Y. Brown and Alexander MacKay document that online retailers use a wide range of pricing practices—with some updating prices hourly while others do so weekly—and that faster retailers quickly react to price changes by slower rivals. Using high-frequency price data and theoretical modeling, they estimate that these algorithmic pricing strategies increase market prices by 5 percent compared to traditional simultaneous-price competition, generating higher profits for all retailers but especially those with superior technology. Their results challenge standard assumptions about price competition in digital markets. (AEJ: Microeconomics, Vol. 15, No. 2, May 2023)