Assistant Professor of Economics and Public Service
295 Lafayette Street
New York, NY 10012
Tatiana Homonoff is an Assistant Professor of Economics and Public Policy at NYU’s Robert F. Wagner School of Public Service.
Her research focuses on identifying areas in which behavioral economics can improve public policy, primarily in the areas of tax policy, program participation, and consumer finance. Prior to joining NYU, she was an Assistant Professor in the Department of Policy Analysis and Management at Cornell University. She served as a Faculty Fellow at the White House Social and Behavioral Sciences Team (SBST) in 2016. She is a Faculty Research Fellow at the National Bureau of Economic Research.
Homonoff received a Bachelor’s from Brown University and a Ph.D. in Economics from Princeton University.
Standard economic theory assumes that individuals are fully rational decision-makers; however, that is often not the case in the real world. Behavioral economics uses findings from lab and field experiments to advance existing economic models by identifying ways in which individuals are systematically irrational. This course gives an overview of key insights from behavioral science and identifies ways in which these findings have been used to advance policies on education, health, energy, taxation, and more. Additionally, this course will review how government agencies and nonprofit organizations have used behavioral insights to improve social policy.
Public economics uses the tools of microeconomics and empirical analysis to study the impact of government policies on economic behavior and the distribution of resources in the economy. The course begins with a review of market failures and preferences for income redistribution to answer questions such as: When should the government intervene in the economy? How might the government intervene? And, what are the effects of those interventions on economic outcomes? Topics include issues related to revenue spending (e.g., education, means-tested programs, social insurance) and revenue raising (e.g., tax incidence, tax efficiency, personal income taxes).
One in five consumer credit accounts incur late fees each quarter. Evidence on the efficacy of regulations to improve behavior through enhanced disclosure of financial product attributes is mixed. We test a novel form of disclosure that provides borrowers with a personalized measure of their creditworthiness. In a field experiment with over 400,000 student loan borrowers, treatment group members received communications about the availability of their FICO Score. The intervention significantly reduced late payments and increased borrowers’ FICO Scores. Survey data show treatment group members were less likely to overestimate their FICO Scores, suggesting the intervention may correct for overoptimism.
Regulation of goods associated with negative environmental externalities may decrease consumption of the targeted product, but may be ineffective at reducing the externality itself if close substitutes are left unregulated. We find evidence that plastic bag bans, the most common disposable bag regulation in the US, led retailers to circumvent the regulation by providing free thicker plastic bags which are not covered by the ban. In contrast, a regulation change that replaced the ban with a small tax on all disposable bags generated large decreases in disposable bag use and overall environmental costs. Our results suggest that narrowly-defined regulations (like plastic bag bans) may be less effective than policies that target a more comprehensive set of products, even in the case when the policy instrument itself (a tax rather than a ban) is not as strict.
Many safety-net programs issue benefits as monthly lump-sum payments. We investigate how the timing of Supplemental Nutrition Assistance Program (SNAP) benefit issuance affects food purchases and the incidence of the transfer. Using retail scanner data from a large sample of grocery stores and state and time variation in SNAP issuance schedules, we document large, SNAP-induced intra-month cycles in food expenditures. However, we find that retailers do not adjust prices based on these predictable patterns of demand. Our results therefore suggest that reforming issuance schedules reduce costs from SNAP-induced demand surges but are unlikely to affect the incidence of SNAP benefits.
Regulation of single-use plastic products is at the center of much policy debate. Currently, there are over 400 laws in the US aimed at curbing disposable shopping bag use. Some regulators opt for command-and-control policies that ban disposable plastic bags, while others use market-based incentives like taxes on disposable bags or rewards for reusable bag use—choices that may greatly impact the policy’s effectiveness. In this paper, we review the evidence on the effectiveness of these policy design choices through a behavioral economics lens and highlight best practices for policymakers considering similar legislation.
Participants in means-tested programs must periodically document eligibility through a recertification process. If all cases that fail recertification are ineligible, the exact timing of this process should be irrelevant. We find that later recertification interview assignments for the Supplemental Nutrition Assistance Program (SNAP), which leave less time to reschedule missed interviews, decrease recertification success by 22 percent. The consequences of not recertifying due to later interviews are highly skewed: most cases quickly re-enroll, while one quarter remain off SNAP for over a year. The marginal disenrolled case is as needy as the average participant, suggesting inefficient screening from late interviews.
Deciding how much to save for retirement can be complicated. Drawing on a field experiment conducted with the Department of Defense, we study whether such complexity depresses participation in an employer-sponsored retirement saving plan. We find that simplifying one dimension of the enrollment decision, by highlighting a potential rate at which non-participants might contribute, increases participation in the plan. Similar communications that did not include a highlighted rate yield smaller effects. The results highlight how reducing complexity on the intensive margin of a decision (how much to contribute) can affect extensive margin behavior (whether to contribute at all) in a setting of policy interest.
Using Form 990 data reported by public charities, we document significant bunching of nonprofits at near-zero net assets, the threshold for insolvency. Bunching occurs despite the fact that creditors cannot force insolvent nonprofits into involuntary bankruptcy. We show that the extent of bunching is greater among organizations that rely more heavily on contribution revenue, and that by inflating their net assets, bunching organizations are able to increase their contribution revenue relative to firms that report negative net assets. Charitable donors appear to use the net assets threshold as a heuristic for a charity's financial health; nonprofit managers, in turn, respond to the preferences of their donors.
We analyze a large field experiment conducted with the Colorado Department of Revenue to study the presentation of financial incentives and social norms in tax delinquency notices. We find that notices that highlight and provide information about financial penalties modestly raise the payment rate among delinquent taxpayers, with larger effects for notices providing greater detail. In contrast, we find no payment effect from highlighting social norms for timely payment. Our results suggest that attention to seemingly minor decisions about the wording of notices sent by tax authorities can increase tax payments and reduce administrative costs associated with taxpayer delinquency.
A rich experimental literature demonstrates positive effects of pay-per-visit fitness incentives. However, most insurance plans that provide fitness incentives follow a different structure, offering membership reimbursements conditional on meeting a specific attendance threshold. We provide the first evidence in the literature on gym incentives of this structure, exploiting the introduction and subsequent discontinuation of a large-scale wellness program at a major American university. Our analysis leverages individual-level administrative data on gym attendance for the universe of students over a five-year period: the three years that the policy was in place, one year before implementation, and one year after termination. This provides us with 100,000 student-year observations and 1.5 million gym visits. Using bunching methods and difference-in-difference designs, we provide four empirical results. First, we document that the policy led to significant bunching at the attendance threshold. Second, we show that the program increased average gym visits by almost five visits per semester, a 20% increase from the mean. Third, we find that the policy not only motivated students who were previously near the threshold, but rather increased attendance across the entire visit distribution. Finally, we show that approximately 50% of the effect persists a year after program termination. Taken together, these results suggest that rebate-framed incentives with a high attendance threshold can induce healthy behaviors in the short-term, and that these positive behaviors persist even after the incentives have been removed.
This paper examines a simple element of financial incentive design – whether the incentive takes the form of a fee for bad behavior or a reward for good behavior – to determine if the framing of the incentive influences the policy's effectiveness. I investigate the effect of two similar policies aimed at reducing disposable bag use: a five-cent tax on disposable bag use and a five-cent bonus for reusable bag use. While the tax decreased disposable bag use by over forty percentage points, the bonus generated virtually no effect on behavior. These results are consistent with a model of loss aversion.
Recent evidence suggests consumers fail to account for taxes that are excluded from a good’s displayed price. What is less understood is whether and how such “salience effects” depend on the magnitude of the tax. We conduct a laboratory shopping experiment with real stakes to study the effect of tax size on salience. We find no evidence that salience effects decline as the tax rate increases; we document a statistically significant salience effect at a tax rate that is considerably larger than the tax rates at which such effects have been previously documented. In fact, our results are more consistent with the hypothesis that higher taxes make consumers less attentive (at least for the range of taxes we consider). This result can be explained by a confirmation bias theory of salience: consumers tend to disregard information (like a tax) that does not align with their intention to purchase an item, and this lack of alignment increases in the size of the tax.
Simple interventions like changing the default or sending a short message can induce individuals to save more for retirement. However, messages that emphasize high savings rates may increase the amount that savings plan participants save while reducing the total number of plan participants. We study this possibility in the context of a field experiment designed to increase retirement savings by U.S. military service-members. We find that service-members who received a message emphasizing a low contribution rate were more likely to participate in a savings plan than were service-members whose message emphasized a high contribution rate, or no rate at all.
High-interest payday loans have proliferated in recent years; so too have efforts to regulate them. Yet how borrowers respond to such regulations remains largely unknown. Drawing on both administrative and survey data, we exploit variation in payday-lending laws to study the effect of payday loan restrictions on consumer borrowing. We find that although such policies are effective at reducing payday lending, consumers respond by shifting to other forms of high-interest credit (for example, pawnshop loans) rather than traditional credit instruments (for example, credit cards). Such shifting is present, but less pronounced, for the lowest-income payday loan users. Our results suggest that policies that target payday lending in isolation may be ineffective at reducing consumers’ reliance on high-interest credit.
Recent evidence suggests consumers pay less attention to commodity taxes levied at the register than to taxes included in a good's posted price. If this attention gap is larger for high-income consumers than for low-income consumers, policymakers can manipulate a tax's regressivity by altering the fraction of the tax imposed at the register. We investigate income differences in attentiveness to cigarette taxes, exploiting state and time variation in cigarette excise and sales tax rates. Whereas all consumers respond to taxes that appear in cigarettes' posted price, our results suggest that only low-income consumers respond to taxes levied at the register.