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Arvind Magesan

Submitted by mives on Thu, 05/16/2013 - 1:04pm

Arvind Magesan joined the Department of Economics in July 2010, after completing his doctoral work at the University of Toronto under the supervision of Victor Aguirregabiria. Arvind’s fields of research fall into two broad areas. The first is applied microeconomics: the application of econometric methods, often with the guidance of microeconomic theory, to data on individual decision makers in order to understand and interpret real world phenomena. Together with Sacha Kapoor, of Erasmus University in the Netherlands, Arvind has recently worked on two research projects that fall into this area. In the first, the authors use data from the installation of pedestrian countdown timers in the City of Toronto to study how providing information to the public affects public welfare. While they were installed with the intention of informing pedestrians how much time they have to reach the other side of the street before a light change, the timers are in clear view of all who transit an intersection, including drivers. Announcing the time until a light change is a little bit like announcing that there is a time bomb in the building: if there are relatively few people in the building and the pathways to the exit are wide and clear, it seems sensible to announce that there is a bomb. But if the building is full and the pathways are narrow, the inevitable stampede to the exit following an announcement would probably cause as much harm as the bomb itself, and in this case it would be better to hide the information and try to manage a calm and orderly evacuation.

How did announcing a “bomb” effect driver and pedestrian behavior at busy intersections in a major urban center? The authors find that although countdown signals reduce the number of pedestrians struck by automobiles, they increase the number of collisions between automobiles and the number of collisions overall, and that this effect is most prominent at intersections that are historically more safe. The results generally suggest that drivers who learn that they will make it through the intersection before the light turns red if and only if they speed up tend to do just that, resulting in more car on car collisions. A potentially more effective policy from the standpoint of public welfare may be to make the countdowns visible only to pedestrians. The paper, entitled “Paging Inspector Sands: The Costs of Public Information” is forthcoming at the American Economic Journal: Economic Policy.

Another paper, also with Sacha Kapoor, draws on extraordinarily unique data from inside a large-scale restaurant to study how consumer preferences for the physical traits of workers shape the behavior of workers on the job. In particular, the authors ask, do consumers care about the looks of workers they interact with? Do workers account for this when deciding how to carry out their jobs? How?

As is the case with many jobs in the service sector, workers in the restaurant face a classical “quality or quantity” trade off. By providing better quality service to each customer they serve, workers earn more per customer, as customers tend to reward good service. But quality takes time; by providing higher quality service to the tables they serve workers sacrifice the volume of customers they serve. The authors find evidence that workers with more desirable physical traits deliver lower quality service but serve more customers than their coworkers, suggesting that workers substitute service quality for physical traits in generating earnings. This finding speaks to consumer preferences in the restaurant – it implies that worker physical traits are a substitute for service quality in consumer demand.The working paper, entitled “The Effects of Consumer Preferences on Specialization in the Workplace” is available on Arvind’s webpage.

Arvind’s other research field of interest is the identification and estimation of structural models: using data and economic theory to uncover primitives of an economic model, such as the deep parameters in individual preferences and constraints . In one paper, joint with Victor Aguirregabiria, the authors consider the problem of identification and estimation of dynamic games of strategic interaction when one relaxes one of the most common (and controversial) assumptions made by researchers in the field of economics: perfect rationality of economic agents. The authors consider a specific type of departure from rationality, incorrect beliefs about the other players in the game. The authors show that under relatively weak conditions, one can not only test whether players’ beliefs are correct, but all the usual objects of interest to a researcher are identified. The working paper, entitled "Identification and Estimation of Dynamic Discrete Games when Players' Beliefs are not in Equilibrium” is available on Arvind’s website.

Arvind has taught several courses in econometrics in the economics department, at both the graduate and upper-year undergraduate levels

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