Elaine M. Liu

Associate Professor

Department of Economics

University of Houston

Ph.D. in Economics, Princeton University, 2008

NBER, Research Associate; IZA, Research Fellow



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

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

Relative Obesity and the Formation of Non-cognitive Abilities During Adolescence (With C. Andrew Zuppann)

We study the role relative childhood and adolescent obesity plays in the development of non-cognitive abilities. We employ a novel identification strategy: utilizing the fact that one's body size is a relative concept and that 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 becoming relatively heavier as a result of moving leads to increased behavioral problems. Overweight boys during adolescence have more externalizing problems when their relative weight increase.

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.

Maternal education, parental investment and non-cognitive characteristics in rural China (With Jessica Leight)

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 early in life. This paper evaluates the parental response to intrahousehold 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 lead to 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.

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.

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

Rural Property Rights, Returns to Scale and Contracts in China (with Shing-Yi Wang, Yongxiang Wang and Amalavoyal Chari ) - Funded by ESRC-DFID

Cultural Assimilation, Peer Effects and the Evolution of Gender Gap in Risk Attitudes (with Sharon Xuejing Zuo)

Permanent Working Paper

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