We examine how investors who experienced paper gains during a bubble-crash episode, deemed as investors “escaping from death”, adjusted their future risk-taking. Using detailed transaction-level data and a quasi-experiment based on an unanticipated government intervention in the 2007–08 Chinese stock market, we find that investors who “escaped from death” reduce risk-taking behaviors over the next five years. The evidence shows that the change in risk taking is likely at-tributable to reference-dependent preferences. However, the effect diminishes over time and investors “escaping from death” do not exhibit a diminished tendency toward risk-taking when confronted with a stock market bubble crash again.

While unintentional man-made disasters constitute the majority of man-made catastrophes, empirical evidence on their economic consequences remains scarce. Utilizing a unique dataset on extremely severe accidents (ESAs) in China and a nationally representative longitudinal household survey, we find that unintentional man-made disasters reduce individuals' willingness to take risks. We further demonstrate that the severity of official penalties following ESAs is positively correlated with both fatalities and economic losses, yet these punitive measures fail to mitigate the negative impact on risk preferences. Additionally, we find that ESAs reduce demand for riskier, high-return-oriented insurance products, though they do not diminish demand for protection-oriented, non-investment productslike health insurance. Our findings address a critical gap in the literature regarding the effects of unintentional manmade disasters on risk attitudes and insurance demand.

Does large-scale privatization increase income inequality? To answer this question, we analyze the impact of China’s reform of state-owned enterprises on labor market outcomes in urban areas from 1992 to 2004, exploiting cross-prefecture variation in reform exposure stemming from initial differences in the employment shares of urban collective enterprises and state-owned enterprises. Our analysis reveals that workers in prefectures with higher exposure to the reform experienced a more rapid decline in employment and a slower increase in income, compared to those in less exposed areas. Further analysis shows that individuals with lower income and those with lower educational attainment experienced greater losses. A back-of-the-envelope analysis indicates that the reform contributed to more than 40% of the study period’s increase in income inequality.

Cultural capital plays a crucial role in influencing entrepreneurial entry, yet the regulatory and supportive role of digital finance in this context remains unclear. Based on Chinese Family Panel Studies (CFPS) and data from the Chinese Intangible Cultural Heritage List, this paper examines the significant regulatory role of digital finance in driving entrepreneurial entry through cultural capital. The research findings indicate that cultural capital, represented by the Intangible Cultural Heritage List, significantly enhances the probability of entrepreneurial entry. The support of digital finance effectively amplifies this promoting effect, as validated by multiple robustness tests. Further heterogeneity analysis reveals that the regulatory impact of digital finance support is more pronounced among urban populations, low-income groups, and individuals with high internet usage frequency.

This study identifies an incentive-compatible mechanism to foster individual environmental engagement. Utilizing a dataset comprising 100,000 randomly selected users of Ant Forest—a prominent personal carbon accounting platform embedded within Alipay, China's leading BigTech super-app—we provide causal evidence that individuals strategically engage in eco-friendly behaviors to enhance their credit limits, particularly when approaching borrowing constraints. These behaviors not only illustrate the green nudging effect of BigTech but also generate value for the platform by leveraging individual green actions as soft information, thereby improving the efficiency of credit allocation. Using a structural model, we estimate an annual green value of 427.52 million US dollars generated by linking personal carbon accounting with BigTech credit. We also show that the incentive-based mechanism surpasses green mandates and subsidies in improving consumer welfare and overall societal welfare. Our findings highlight the role of an incentive-aligned approach, such as integrating personal carbon accounts into credit reporting frameworks, in addressing environmental challenges.

Using a large sample of US individuals, we show that individuals with higher levels of trust have lower likelihoods of default in household debt and higher net worth. The effect is driven by trust values inherited from cultural and family backgrounds more than by trust beliefs about others. We demonstrate a causal impact of trust on financial outcomes by extracting the component of trust correlated with early-life ex- periences. The effect of trust is more pronounced among females, those with lower education, lower income, lower financial literacy, and higher debt-to-income ratio. Further evidence suggests that enhancing individuals’ trust, to the right amount, can improve household financial well-being.

The “Internet celebrity economy” is a business model aimed at capitalizing on online traffic based on the purchasing power of users on social media in which “influencers”—highly influential individuals—exercise their marketing power to create a fandom. China has witnessed an abrupt outbreak in its “Wanghong” (internet celebrity) economy since 2016, eventually leading to consecutive high closes for related stocks from around 2020. The empirical findings are as follows: First, investors’ attention to Wanghong stocks and cumulative abnormal returns (CARs) are significantly positively associated. However, operational results and CARs are weakly linked, implying that the economic impact of intense influencer marketing is short-lived, and abnormal returns constitute an anomaly. Second, the positive abnormal returns of Wanghong stocks last approximately six months, which overlaps with the boom period of the Wanghong index based on influencer news articles.

Using iterative experiments to uncover causal links between critical policy details and outcomes helps to optimize policy design. This paper studies a large-scale staged fiscal stimulus program conducted during the COVID-19 pandemic, in which a provincial government in China disbursed digital coupons to 8.4 million individual accounts in consecutive waves and updated the program design each time. We find that ruling out unproductive program features leads to a pattern of increasing treatment effects over the waves and that program design matters more than the size of the fiscal stimulus in boosting spending. Our results show that (i) general coupons with no constraints on where the vouchers can be redeemed are more effective than specialized coupons in stimulating consumption in the targeted sectors; (ii) coupon packets with fewer denominations and shorter redemption windows tend to be more effective; and (iii) low-income residents and non-local residents are equally or even more responsive to the coupon program than other groups. Our results illustrate that generating variations in iterative policy experiments, combined with a timely assessment of individuals’ responses to marginal incentives, optimizes program design.

Does large-scale privatization increase income inequality? To answer this question, we analyze the impact of China’s reform of state-owned enterprises on labor market outcomes in urban areas from 1992 to 2004, exploiting cross-prefecture variation in reform exposure stemming from initial differences in the employment shares of urban collective enterprises and state-owned enterprises. Our analysis reveals that workers in prefectures with higher exposure to the reform experienced a more rapid decline in employment and a slower increase in income, compared to those in less exposed areas. Further analysis shows that individuals with lower income and those with lower educational attainment experienced greater losses. A backof-the-envelope analysis indicates that the reform contributed to more than 40% of the study period’s increase in income inequality.

By establishing a labor-retirement model within China’s unique intergenerational support culture and one-child policy, this study provides evidence of the one-child policy’s early effect on individuals’ retirement decisions. This finding highlights a contradiction between the retirement intentions of the 1960s and 1970s generations, who are most affected by the one-child policy, and the delayed retirement policy of Chinese government. Utilizing data from the CHARLS 2011-2018 and employing OLS, IV, and fuzzy cohort DID estimation methods, we observe that only-child parents tend to retire at an earlier age compared to non-only-child parents. This early effect of the one-child policy on retirement decisions can be attributed to intergenerational support for children’s marriage and career, as well as the educational attainments of children, as confirmed by both theoretical and empirical analysis.