Monica Andini, Emanuele Ciani, Guido de Blasio, Alessio D'Ignazio, 21 November 2018

The impact of a public policy partly depends on how effective it is in selecting its targets. Machine learning can help by exploiting increasingly available amounts of information. Using data from Italy, this column presents two examples of how to employ machine learning to target those groups that could plausibly gain more from the policy. It illustrates the benefits of machine-learning targeting when compared to the standard practice of employing coarse policy assignment rules based on a few arbitrarily chosen characteristics.

Klaus Desmet, Dávid Krisztián Nagy, Esteban Rossi-Hansberg, 02 October 2018

Assessments of the economic cost of a rise in sea-level are often limited to estimating the current value of structures and output in low-lying coastal areas. This column argues that understanding how economic activity will move when faced with flooding is key to correctly evaluating the cost of permanent inundation. When using a high-resolution dynamic spatial model of the world economy, combined with state-of-the-art local projections of sea-level rise for the next 200 years, the cost is substantially lower than when ignoring adaptation through moving. There is huge heterogeneity across space though, with some low-lying coastal areas hit particularly hard. 

Lubos Pastor, Pietro Veronesi, 28 September 2018

The vote for Brexit and the election of protectionist Donald Trump to the US presidency – two momentous markers of the ongoing pushback against globalisation – led some to question the rationality of voters. This column presents a framework that demonstrates how the populist backlash against globalisation is actually a rational voter response when the economy is strong and inequality is high. It highlights the fragility of globalisation in a democratic society that values equality.

Eli P Fenichel, Matthew Kotchen, Ethan T Addicott, 20 August 2017

How the future is discounted in cost-benefit analyses is a contested issue, with economists disagreeing on whether approaches to discounting should be prescriptive or descriptive. This column presents a new way to model individuals’ discounting based on a demographic approach. The advantages of a purely mortality-based approach are transparency, an empirical basis, and broad data availability.

Liwa Rachel Ngai, Kevin Sheedy, 06 October 2015

The housing market is important for many developed economies, not least in the UK. This column presents new research in search and matching modelling suggesting that the quality of a house-buying match is important in understanding not only the time taken to sell a house, but also the length of time homeowners will live in the new house before their next move. The research should provide economists with new insights into housing market dynamics.

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