Elaine M. Liu

Professor, Department of Economics, University of Houston

Ph.D. in Economics, Princeton University

NBER, Research Associate; IZA, Research Fellow

Associate Editor, Journal of Health Economics and Journal of Economic Behavior & Organization



Relative Obesity and the Formation of Non-cognitive Abilities During Adolescence (With Wei Huang and C. Andrew Zuppann) Accepted at the Journal of Human Resources

We study the role of relative childhood and adolescent obesity in the development of noncognitive abilities. We employ a novel identification strategy, utilizing the fact that one's body size is a relative concept and there are large variations in body sizes across MSAs. We focus on children who move between MSAs. Controlling for origin-destination state pair fixed effects, we find that a 10 percentile point increase in relative body size would increase behavioral problems by 2 percentile points. This effect is of a similar magnitude to a two-year reduction in maternal education.

Malleability in Alcohol Consumption: Evidence from Migrants (With Marit Hinnosaar) (2022) Vol 85: 102648 Journal of Health Economics

How malleable is alcohol consumption? Specifically, how much is alcohol consumption driven by the current environment versus individual characteristics? To answer the question, we analyze changes in alcohol purchases when consumers move from one state to another in the United States. Right after move, movers' alcohol purchases converge sharply towards the average level in their destination state, implying that the current environment explains about two-thirds of the differences in alcohol purchases. The adjustment takes place both on the extensive and intensive margin.

Media Coverage: VoxEU

Property Rights, Land Misallocation and Agricultural Efficiency in China (with Shing-Yi Wang, Yongxiang Wang and Amalavoyal Chari ) (2021) 88(4), 1831–1862, Review of Economic Studies

Media Coverage: VoxChina, VoxDev

This paper examines the impact of a property rights reform in rural China that allowed farmers to lease out their land. We find the reform led to increases in land rental activity in rural households. Our results indicate that the formalization of leasing rights resulted in a redistribution of land toward more productive farmers. Consequently, output and aggregate productivity increased by 8 and 10%, respectively. We also find that the reform increased the responsiveness of land allocation across crops to changes in crop prices.

Measuring the Impact of Interaction between Children from a Matrilineal and a Patriarchal Culture on Gender Differences in Risk Aversion (With Sharon Xuejing Zuo) (2019) 116 (14), 6713-6719, Proceedings of the National Academy of Sciences

Media Coverage: NPR, BBC Radio, BBC News, Newsweek, London Times, Quartz

Many studies find that women are more risk averse than men. Why does such a gender gap exist, and how malleable is this gender gap in risk aversion? The paper takes advantage of a rare setting in which children of the matrilineal Mosuo and the traditionally patriarchal Han attend the same schools in Yunnan, China to shed light on these questions. In particular, we exploit the fact that children would experience a shock in gender norms when they start to intermingle with children from other ethnic groups with the opposite gender norms at school. Using survey and field experiments, we elicit risk attitudes from Mosuo and Han elementary and middle school students. We find that, at the time when they first enter school, Mosuo and Han children exhibit opposite gender norms-Mosuo girls take more risks than Mosuo boys, while Han girls are more risk averse than Han boys, reflecting cultural differences. However, after Mosuo students spend more time with Han students, Mosuo girls become more and more risk averse. By age 11, Mosuo girls are also more risk averse than Mosuo boys. We also observe a shrinking gap in risk aversion for Han over time. Using random roommate assignment for boarding middle school students, we find Mosuo boys who have fewer Mosuo roommates behave more similarly to Han boys. This shows that risk preferences are shaped by culture and malleable in response to new environments.

Maternal education, parental investment and non-cognitive characteristics in rural China (With Jessica Leight) (2020) Vol 69.1, 213-251, Economic Development and Cultural Change

The importance of non-cognitive skills in determining long-term human capital and labor market outcomes is widely acknowledged, but relatively little is known about how educational investments by parents may respond to children's non-cognitive characteristics. This paper evaluates the parental response to non-cognitive variation across siblings in rural Gansu province, China, employing a household fixed effects specification; the non-cognitive measures of interest are defined as the inverse of both externalizing challenges (behavioral problems and aggression) and internalizing challenges (anxiety and withdrawal). The results suggest that there is significant heterogeneity with respect to maternal education. More educated mothers appear to compensate for differences between their children, investing more in a child who exhibits greater non-cognitive deficits, while less educated mothers reinforce these differences. Most importantly, there is evidence that these compensatory investments are associated with the narrowing of non-cognitive deficits over time for children of more educated mothers, while there is no comparable pattern in households with less educated mothers.

Who is Coming to the Field Experiment? Participation Bias amongst Chinese Rural Migrants (With Paul Frijters and Sherry Tao Kong) (2015) Vol.114, 62-74, Journal of Economic Behavior & Organization

In this paper, we compare participants in an artefactual field experiment in urban China with the survey population of migrants from which they were recruited. The experimental participants were more educated, more likely to lend money to friends, and worked fewer hours than the general population. They differ significantly from non-participants in terms of regression coefficients, such as the effects of wealth and marital status on the probability of being self-employed and distance migrated. We thus find that there was selection into our experiments on the basis of both observable characteristics and on unobserved differences in behavioral relations.

Does in Utero Exposure to Illness Matter? The 1918 Influenza Epidemic in Taiwan as a Natural Experiment (With Ming-Jen Lin) (2014) Vol. 37, 152-163, Journal of Health Economics

This paper uses the 1918 influenza pandemic in Taiwan as a natural experiment to test whether in utero conditions affect long run developmental outcomes. Combining several historical and contemporaneous datasets, we find that cohorts in utero during the pandemic are less educated, shorter as teenagers, and more likely to have kidney disease, glaucoma, respiratory problems and diabetes in old age than other birth cohorts. Despite the possible positive selection on health with the high infant mortality rates during this period (18%), our findings suggest a strong negative effect of in utero exposure to influenza.

Confucianism and Individual Preferences: Evidence from Lab Experiments in Taiwan and China (with Juanjuan Meng and Joseph Tao-yi Wang), (2014) Vol. 104, 106-122, Journal of Economic Behavior & Organization

This paper investigates how Confucianism affects individual decision making in Taiwan and in China. We found that Chinese subjects in our experiments became less accepting of Confucian values, such that they became significantly more risk loving, less loss averse, and more impatient after being primed with Confucianism, whereas Taiwanese subjects became significantly less present-based and were inclined to be more trustworthy after being primed by Confucianism. Combining the evidence from the incentivized laboratory experiments and subjective survey measures, we found evidence that Chinese subjects and Taiwanese subjects reacted differently to Confucianism.

Time to Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton Farmers in China, (2013) Vol. 95(4), 1386-1403, Review of Economics and Statistics

This paper examines the role of individual risk attitudes in the decision to adopt a new form of agricultural biotechnology in China. I conducted a survey and a field experiment to elicit the risk preferences of Chinese farmers, who faced the decision of whether to adopt genetically modified Bt cotton a decade ago. In my analysis, I expand the measurement of risk preferences beyond expected utility theory to incorporate prospect theory. I find that farmers who are more risk averse or more loss averse adopt Bt cotton later. Farmers who overweight small probabilities adopt Bt cotton earlier.

Risk Preferences and Pesticide Use by Cotton Farmers in China (With JiKun Huang) (2013) Vol. 103, July 2013, 202-215, Journal of Development Economics

Despite insect-resistant Bt cotton has been lauded for its ability to reduce the use of pesticides, studies have shown that Chinese Bt cotton farmers continue to use excessive amounts of pesticides. Using results from a survey and an artefactual field experiment, we find that farmers who are more risk averse use greater quantities of pesticides. We also find that farmers who are more loss averse use lesser quantities of pesticides. This result is consistent with our conceptual framework and suggestive evidence where farmers behave in a loss averse manner in the health domain and place more weight on the importance of health over money in the loss domain.

Does Sorry Work? The Impact of Apology Laws on Medical Malpractice (with Benjamin Ho) (2011) Vol. 43(2), 141-167, Journal of Risk and Uncertainty

Media Coverage: Wall Street Journal, Harvard Business Review, Freaknomics Radio

Physicians’ apologies for adverse medical events are acknowledged as a factor in patients’ decisions to litigate. Apology laws which render physicians’ apologies inadmissible in court are written to encourage patient-physician communication and to overcome the physicians’ disinclination to apologize because apologies could invite lawsuits. We present a novel model of apologies and malpractice in order to examine whether state-level apology laws have an impact on malpractice lawsuits and settlements. Using a difference-in-differences estimation, we find that apology laws could expedite the resolution process. We also find that apology laws result in the greatest reduction in average payment size and settlement time in cases involving severe patient outcomes.

What’s an Apology Worth? Difference-in-Differences Analysis of State Apology Laws on Medical Malpractice Payouts  (with Benjamin Ho) (2011) Vol. 8(S1), 179-199, Journal of Empirical Legal Studies


Past studies find that apologies affect the outcomes of medical malpractice litigation, but such studies have largely been limited to laboratory surveys or case studies. Following Ho and Liu (2010), we use the passage of state-level apology laws that exclude apologies from being used as evidence in medical malpractice cases, and estimate that apologizing to a patient in cases of medical malpractice litigation reduces the average payout by $32,000. This paper seeks to unpack the mechanism of apologies by examining the differential impact of apologies laws by various sub-samples. We find that apologies are most valuable for cases involving obstetrics and anesthesia, for cases involving infants, and for cases involving improper management by the physician and failures to diagnose.

Working Papers

Externalities of Marijuana Legalization:Marijuana Use in Non-Legalizing States (With Marit Hinnosaar and Eva Loaeza-Albino)

We study the impact of distant connections on marijuana use. Leveraging the Facebook Social Connectedness Index, which measures the strength of connectedness between geographic areas based on Facebook friendship ties, we explore the impact of connections to states where recreational marijuana use is legalized on marijuana use and workplace drug testing positivity rates in areas where marijuana remains illegal. The findings reveal that areas which are more connected to legalized states exhibit higher rates of marijuana use and workplace drug testing positivity even after controlling for geographic proximity to the legalized states. The results suggest that even connections beyond closed proximity can play a significant role in shaping individuals' behaviors. Our findings of the externality of legalization in one state to other more connected out-of-state areas imply that studies that estimate the impact of legalization using a standard difference-in-differences approach without taking into account the network underestimate the direct effect on the state that legalizes.

The Impact of a Natural Disaster on the Incidence of Fetal Losses and Pregnancy Outcomes (With Jin-Tan Liu and Tzu-Yin Hazel Tseng)

We examine the impact of a magnitude-7.3 earthquake on fetal losses and birth outcomes in Taiwan. We compare the pregnancy outcomes and cohort sizes of those who resided in areas with high earthquake intensity to those who resided in areas with low earthquake intensity, before and after the earthquake. Our analysis suggests that a negative shock during the first trimester increases fetal losses by 4.4 percent and almost all the losses are due to the loss of male fetuses, whereas a later negative shock leads to worse pregnancy outcomes. We also find evidence of positive selection of the surviving fetuses.

Fetal Origins of Mental Health: Evidence from Natural Disasters in Taiwan (With Jin-Tan Liu and Tzu-Yin Hazel Tseng)

This paper examines the impact of poor intrauterine environment on psychological well-being later in life caused by severe typhoons that took place in Taiwan. Exploiting time and geographical variation, we compare the mental health of individuals who were exposed to severe typhoons while in utero in landfall counties to those who had no fetal exposure to severe typhoons. We find that the likelihood of mental disorders in adulthood resulting from fetal exposure to severe typhoons increased by 12%. The incidence of mood disorder (e.g. depression) and the use of antidepressant increased by more than 40%. The effects are more prominent for women.

Beggar-Thy-Women: Domestic Responses to Foreign Bride Competition, the Case of Taiwan (with Lena Edlund and Jin-Tan Liu)

In 2003, one in four marriages in Taiwan involved a bride from a foreign, and often substantially poorer, country. In this paper we examine the impact of foreign brides on native women using the administrative data covering the period 1998 to 2006. Our identification strategy exploits a policy reversal in 2003 tightening visa requirements combined with the observation that rural or poorly educated men used foreign brides more extensively. Using a difference-in-differences method, we find that domestic women responded to foreign brides by increasing fertility. We also find that domestic marriages were less likely to dissolve, an at first glance counter-intuitive finding but one consistent with the presence of young children stabilizing marriage.

A Meta-Analysis of the Estimates of Returns to Schooling in China (With Shu Zhang)

This paper performs a meta-analysis to investigate how changes over time, model specifications, differences in data sets, and variable definitions could contribute to the differences in estimates of returns to education in China. The results show that approximately 10 percent of the variation can be explained by changes in labor market over time, while the other 45 percent can be explained by differences in samples used and empirical methods. Return to education has increased approximately 0.2 percentage points a year since the economic reform, and increases more quickly as the reform progresses; however, this accelerating trend has reached a stop in the last few years when the global recession hit China. We also find that returns to education for rural-to-urban migrant workers are 2.3 percentage points lower than that of urban workers. We conclude that the increasing reward for human capital accumulation over time signals that China is moving toward a well functioning labor market.


Works in Progress

The Relationship between Single Parenthood and Risk Preference (With Anya Samek)

Ingroup Bias among Children (With Sharon Xuejing Zuo)

The Long Term Impact of Interaction between Children from a Matrilineal and a Patriarchal Culture on Gender Norms (With Sharon Xuejing Zuo)

Land Property Rights Protection and the Agricultural Machinery Subsidy Policy in China (With Zihan Hu and Peng Wang)

Acclimating to Air Pollution (With Wei Huang and Junjie Hong)

Permanent Working Paper

Urban Ethnic Minority Disadvantages in China Labour Market? Evidence from Coastal Provinces (With Reza Hasmath and Benjamin Ho)