Sophie Calder-Wang

Sophie Calder-Wang, Alex Bell, Stephen Billings, Shusheng Zhong, An Anti-IV Approach for Pricing Residential Amenities: Applications to Flood Risk.

Abstract: Understanding how markets price housing amenities is essential to addressing residential socioeconomic disparities. Traditional methods have struggled with unobserved quality, often producing wrong-signed estimates. This paper introduces a novel "anti-instrument" approach to estimating amenity prices amid unobserved quality. Our identification strategy relies on an "anti-instrumental" variable that is relevant to the unobserved quality, but conditionally independent from the amenity of interest, which are properties opposite of typical instruments for amenities. We apply this method to estimate the implicit price of flood risk using detailed housing transaction records and house-level flood risk measures. Household income, used as an anti-instrument, successfully recovers the negative price of flood risk. We find that being located in a FEMA-designated floodplain reduces home prices by 2.8% on average. Drawing on more granular measures of flood risk, we find increasing price discounts for homes with higher flood probabilities, with the most risky locations suffering a discount of nearly 5%. These price estimates are crucial for evaluating returns on investment in local public goods and environmental policies.

Sophie Calder-Wang and Gi Kim, Algorithmic Pricing in Multifamily Rentals: Efficiency Gains or Price Coordination?.

Abstract: This paper empirically evaluates the impact of algorithmic pricing on the U.S. multifamily rental market. We hand-collect data on management company adoption decisions of algorithmic pricing and combine it with a comprehensive database of building-level rents and occupancy from 2005 to 2019. We find strong evidence that algorithmic pricing helps building managers set prices that are more responsive to market conditions, with adopters lowering rents more rapidly than non-adopters during economic downturns. We also find that average rents are higher and average occupancies are lower in markets with greater algorithmic penetration during periods of economic recovery. Then, we estimate a structural model of housing demand to test for "algorithmic coordination." Compared to a model of own profit maximization, our pair-wise tests favor a model of joint profit maximization among adopters of the same software. We estimate that the coordination channel results in an average markup increase of $25 per unit per month, impacting about 4.2 million units nationwide. Our findings have important implications for regulators and policymakers concerned about the potential risks and trade-offs of algorithmic pricing.

Sophie Calder-Wang and Paul Gompers (2021), And the Children Shall Lead: Gender Diversity and Performance in Venture Capital, Journal of Financial Economics, 142 (1).

Abstract: Given the overall lack of gender diversity in the venture capital and entrepreneurship industry shown in Calder-Wang and Gompers (2017) we ask: What promotes greater gender diversity in hiring? Does diversity lead to better firm performance and higher investment returns? In this paper, using a unique dataset of the gender of venture capital partners’ children, we find strong evidence that when partners have more daughters, the propensity to hire female partners increases. Moreover, our instrumental variable results suggest that increased gender diversity improves deal and fund performance. Lastly, the effects are primarily driven by the gender of senior partners’ children.

Sophie Calder-Wang and Ariel Pakes (Under Review), Unobserved Heterogeneity, State Dependence, and Health Plan Choices.

Abstract: We provide a new method to analyze discrete choice models with state dependence and individual-by-product fixed effects and use it to analyze consumer choices in a policy-relevant environment (a subsidized health insurance exchange). Moment inequalities are used to infer state dependence from consumers’ switching choices in response to changes in product attributes. We infer much smaller switching costs on the health insurance exchange than is inferred from standard logit and/or random effects methods. A counterfactual policy evaluation illustrates that the policy implications of this difference can be substantive.

Sophie Calder-Wang (Working), The Distributional Impact of the Sharing Economy on the Housing Market.

Abstract: I estimate the welfare and distributional impact of the home-sharing platform Airbnb on New York City renters. I develop a structural model of an integrated housing market with two novel features. First, in addition to the traditional long-term rental market, absentee landlords can reallocate their housing units to the newly available short-term rental market. Second, residents can directly host short-term visitors, increasing housing utilization. Overall, renters in NYC suffer a welfare loss of $2.4 billion, where losses from increased rents dominate gains from hosting. Moreover, the increased rent burden falls most heavily on high-income, educated, and white renters. By characterizing winners and losers, this paper provides a framework for evaluating the impact of such technological innovations.

Sophie Calder-Wang and Paul Gompers (Working), Diversity and Performance in Entrepreneurial Teams.

Abstract: We study how diversity affects the performance of entrepreneurial teams by exploiting a unique experimental setting in which over 3,000 MBA students participated in a business course to build startups. First, we quantify how selection based on shared personal characteristics contributes to the lack of diversity. Next, when teams are formed through random assignment, we estimate that greater team diversity leads to poorer performances. However, when teams are formed voluntarily, the negative performance effect of diversity becomes greatly alleviated. Lastly, teams with more female members perform better when their faculty advisor is female. These findings suggest that policy interventions to improve diversity should consider the process by which teams are formed, as well as the role of mentoring, to achieve its intended performance goals.

Sophie Calder-Wang, Paul Gompers, Patrick Sweeney (Working), Venture Capital’s Me Too Moment.

Abstract: In this paper, we document the under-representation of women in the venture capital sector. We find that the high-profile Pao v. Kleiner Perkins gender discrimination trial likely had dramatic effects on the hiring of women in venture capital: firms with higher exposure to the trial, measured by their home states’ Google search interest in the trial and their network connectivity to Kleiner Perkins based on shared investments, experienced larger increases in the hiring of female venture capital investors. We provide additional evidence that the impact of the trial is concentrated on the venture capital sector, and that these changes do not appear correlated with other contemporaneous social movements. Lastly, we show that the fraction of venture-backed founders who are female also increased after the Pao trial, with both male and female venture capitalists increasing their investments in female founders. These findings are consistent with the notion that the Pao gender discrimination lawsuit has increased the awareness of gender issues in venture capital, leading to changing hiring practices and spillover changes in investment decisions.