Santosh Anagol

Santosh Anagol
  • Associate Professor of Business Economics and Public Policy

Contact Information

  • office Address:

    1453 Steinberg-Dietrich Hall
    3620 Locust Walk
    Philadelphia, PA 19104

Research Interests: economic development, household finance

Links: CV


Santosh Anagol is an Associate Professor in the Business Economics and Public Policy Department at Wharton. His research focuses on financial market issues in emerging markets. One recent project studies how the regulation of fees has shaped the Indian mutual fund industry. Another project studies the behavior of life insurance agents and how they respond to changes in regulatory policy. His dissertation studied inefficiencies in the Indian market for dairy cows and buffaloes, which are commonly purchased by microfinance borrowers. His teaching focuses on the effects of economic regulation on business. He received his PhD from Yale University in 2009 and his undergraduate degree from Stanford in 2002, and was a Fulbright Scholar to India in 2002-2003.


Ph.D., Economics, Yale University, December 2009

M.Phil., Economics, Yale University, 2005

M.A., Economics, Yale University, 2004

B.A., Economics with Minor in Mathematics, Stanford University, 2002

Academic Employment

Associate Professor of Business Economics and Public Policy, The Wharton School, University of Pennsylvania, July 2017 – present

Assistant Professor of Business Economics and Public Policy, The Wharton School, University of Pennsylvania, July 2009 – present

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  • Santosh Anagol and Ankur Pareek (2018), Should Business Groups be in Finance? Evidence from Indian Mutual Funds, forthcoming, Journal of Development Economics. .

    Abstract: A primary risk associated with business groups entering the financial sector is that groups will misallocate capital to own group firms, hurting investors and economic development. We study this issue in the context of business group owned mutual funds in India, where business groups have been present for over twenty years, and we can observe capital allocation decisions monthly. Business-group owned funds do not over-weight member firms, nor do they prop up member firm stocks or earn excess returns on their member firm investments. Business-group funds have an advantage when they focus on industries where the group operates, although we cannot distinguish whether this is due to insider trading versus (legal) specialization. Current regulations appear sufficient to prevent capital misallocation in member firms, but monitoring of investments in related sectors seems warranted.

  • Santosh Anagol, Vimal Balasubramaniam, Tarun Ramadorai (2018), Learning from Noise: Evidence from India’s IPO Lotteries, revise and resubmit, Journal of Financial Economics.

    Abstract: We study a natural experiment in which 1.5 million investors participate in allocation lotteries for Indian IPO stocks. Randomized IPO gains cause winning investors to increase applications to future IPOs and substantially increase portfolio trading volume in non-IPO stocks relative to lottery losers; the effects are symmetrically negative for experienced losses. Investors who have received multiple past IPO allocations show smaller responses, suggesting learning/selection moderates responses to noise shocks. The evidence is most consistent with investors learning about their own ability from experienced noise, drawing inferences about their skill from luck.

  • Santosh Anagol, Tarun Ramadorai, Vimal Balasubramaniam (2018), Endowment Effects in the Field: Evidence from India’s IPO Lotteries, Review of Economic Studies, forthcoming.

  • Santosh Anagol, Vijay Marisetty, Renuka Sane, Eshwar Venugopal (2017), On the Impact of Regulating Commissions: Evidence from the Indian Mutual Funds Market, World Bank Economic Review, 31, pp. 241-270.

    Abstract: Commissions-motivated agents have historically helped the development of many markets, but research suggests brokers motivated by commissions sometimes steer consumers towards inappropriate products. This issue is particularly important in household financial markets where consumers may be unable to evaluate products on their own. While reforms attempting to limit commission payments have been undertaken worldwide, little research has evaluated the impact of these reforms. We study a major Indian investor protection reform that attempted to reduce commissions tied to mutual fund sales by banning the distribution fees that mutual funds had previously earmarked for commissions. We analyze the policy impact by comparing funds charging high versus low distribution fees pre-reform and find no evidence that the reform itself reduced fund flows. We argue that the most plausible explanation is that the Indian asset management industry maintained substantial commissions to brokers through other revenue sources apart from the banned distribution fees.

  • Santosh Anagol (2017), Adverse Selection in Asset Markets: Theory and Evidence from the Indian Market for Cows, Journal of Development Economics, 129, pp. 58-72.

  • Santosh Anagol, Shawn Cole, Shayak Sarkar (2017), Understanding the Advice of Commissions-Motivated Agents: Evidence from the Indian Life Insurance Market, The Review of Economics and Statistics, 99 (1), pp. 1-15.

    Abstract: We conduct a series of field experiments to evaluate the quality of advice provided by life insurance agents in India. Agents overwhelmingly recommend unsuitable, strictly dominated products that provide high commissions to the agent. Agents cater to the beliefs of uninformed consumers, even when those beliefs are wrong. We also find that agents appear to focus on maximizing the amount of premiums (and therefore their commissions) that customers pay, as opposed to focusing on how much insurance coverage customers need. A natural experiment requiring disclosure of commissions for a specific product results in agents recommending alternative products with high commissions but no disclosure requirement. A follow-up agent survey sheds light on the extent to which poor advice reflects both the commission incentives and agents’ limited product knowledge.

  • Santosh Anagol, Dean Karlan, Alvin Etang (2017), Continued Existence of Cows Disproves Central Tenets of Capitalism?, Economic Development and Cultural Change, 65, pp. 583-618.

    Abstract: We examine the returns from owning cows and buffaloes in rural India. With labor valued at market wages, households earn large, negative median annual returns from holding cows and buffaloes, at −293% and −65%, respectively. Making the stark assumption of labor valued at zero, median returns are then −7% for cows and +17% for buffaloes (with 51% and 45% of households earning negative returns for cows and buffaloes, respectively). Why do households continue to invest in livestock if economic returns are negative, or are these estimates wrong? We discuss reasons why we may be underestimating returns and also, if the estimates are accurate, reasons why labor and milk market failures and social norms may still lead to persistent livestock investments.

  • Santosh Anagol and Thomas Fujiwara (2015), The Runner-Up Effect, Journal of Political Economy, 124.

    Abstract: Exploiting regression discontinuity designs in Brazilian, Indian, and Canadian first-past-the-post elections, we document that second-place candidates are substantially more likely than close third-place candidates to run in, and win, subsequent elections. Since both candidates lost the election and had similar electoral performance, this is the effect of being labeled the runner-up. Selection into candidacy is unlikely to explain the effect on winning subsequent elections, and we find no effect of finishing in third place versus fourth place. We develop a simple model of strategic coordination by voters that rationalizes the results and provides further predictions that are supported by the data.

  • Santosh Anagol, Shawn Cole, Shayak Sarkar, Comparative Regulation of Market Intermediaries: Insights from the Indian Life Insurance Market. In Modernizing Insurance Regulation, edited by, (Wiley, 2014)

    Abstract: This chapter considers regulation of the sales of insurance as a means for reducing the amount of misselling that occurs. After providing background information on the life insurance markets in India and the United States, the chapter focuses on the regulation of commissions disclosure in the two countries. The chapter analyzes the more general issue of regulation of advice, focusing on the three tiers of legal duty (caveat emptor, suitability, and fiduciary) present in U.S. law. It summarizes the discussion of quality of advice in the U.S. and India, and discusses two examples of intermediaries, agents and brokers, which typically refer to slightly different relationships in the American context. The chapter presents experimental evidence on how quality of advice responded to consumer sophistication, preferences, and needs, in addition to market competition. The evidence is used for presenting the recommendations regarding the emerging Indian standards.

  • Santosh Anagol and Keith Gamble (2013), How Segregated Framing of Portfolio Results by Asset Affects Investors’ Decisions: Evidence from a Lab Experiment, Journal of Behavioral Finance, 14 (4).

    Abstract: We examine how the presentation of investment results affects risk taking using an experiment in which participants view results either asset by asset or aggregated into a portfolio result. Our experiment examines the investment choices of a nationwide sample of 249 participants in a simulation of investing for retirement. Segregating investment results by asset decreases subsequent risk taking. Those presented segregated results lower their equity proportion by 4.21% and their portfolio volatility by 0.88%. Both decreases are 8% of the mean levels of risk taking, 50.59% and 10.85%, respectively. At the beginning of the simulation, we present historical results of the investment options either asset by asset or aggregated into portfolios. Among the small number of participants who spend a significant amount of time studying these historic results, segregating results lowers their equity proportion by 9.81%. Our results are a challenge to fully rational theories of investment choice but are consistent with a combination of three aspects of prospect theory based models: loss aversion, narrow framing of individual-asset results, and diminishing sensitivity to aggregated gains and losses. Our experiment never varies the presentation of investment results across time, thus our results are distinct from the effect of myopic loss aversion.


Past Courses


    This course examines the non-market components of business and the broader political, regulatory, and civil context in which companies function. This course addresses how businesses interact with political and regulatory institutions, as well as the general public, with a focus on the global economy. The first portion examines the realities associated with political economy and the actual making of laws and regulations by imperfect politicians and regulators. The second portion analyzes the economic rationale for legislation and regulation in the presence of market failures. The course covers specific market failures and potential solutions including government regulation.


    This course will examine how and when data can be used specifically to infer whether there is a causal relationship between two variables. We will emphasize (a) the critical role of an underlying economic theory of behavior in interpreting data and guiding analysis, as well as (b) a range of advanced techniques for inferring causality from data, such as randomized controlled trials, regression discontinuity, difference-in-difference, audit study (mystery shopping) approaches and stock-market event studies. The issue of causality, and the relevance of thinking about models and methods for inferring causality, is just as central and important for "Big Data" as it is when working with traditional data sets in business and public policy. The emphasis will not be on proofs and derivations but rather on understanding the underlying concepts, the practical use, implications and limitations of techniques. Students will work intensively with data, drawing from examples in business and public policy, to develop the skills to use data analysis to make better decisions. All analysis will be conducted using R. The goals of the course are for students to become expert consumers able to interpret and evaluate empirical studies as well as expert producers of convincing empirical analysis themselves.


    Of the many ways that doctoral students typically learn how to do research, two that are important are watching others give seminar presentations (as in Applied Economics Seminars) and presenting one's own research. The BEPP 900 course provides a venue for the latter. Wharton doctoral students enrolled in this course present applied economics research. Presentations both of papers assigned for other classes and of research leading toward a dissertation are appropriate in BEPP 900. This course aims to help students further develop a hands-on understanding of the research process. All doctoral students with applied microeconomic interests are encouraged to attend and present. Second and third year Applied Economic Ph.D. students are required to enroll in BEPP 900 and receive one-semester credit per year of participation.


    This course will cover current microeconomic issues of developikng countries including poverty, risk, savings, human capital, and institutions. We will also explore the causes and consequences of market failures that are common in many developing countries with a focus on credit, land, and labor markets. The course is designed to introduce recent research with focus on empirical methods and testing theories with data.

In the News

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Latest Research

Santosh Anagol and Ankur Pareek (2018), Should Business Groups be in Finance? Evidence from Indian Mutual Funds, forthcoming, Journal of Development Economics. .
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In the News

How Ignoring the Fine Print Caused Indian Investors to Pay More for Less

For years, researchers have tried to determine if mutual fund investors pay attention to -- or simply ignore -- fees when choosing where to put their money. Recent policy experimentation in the Indian mutual funds market provided data that sheds light on this question. Wharton professor Santosh Anagol and PhD student Hoikwang Kim analyze what happened, finding that most investors don't read the fine print on fees when choosing a fund -- a decision that often ends up hurting them financially.

Knowledge @ Wharton - 2010/11/10
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