“Gas prices matter decades after you learn how to drive.”

Arthur van Benthem, Wharton business economics and public policy associate professor, is co-author of a paper showing how dramatic gas-price changes lead people who experience them in formative years to drive less later on. For example, according to the paper, “Those who came of driving age during the oil crises of the 1970s [drove] less in the year 2000.”


Ten point two percent.
Device failures were this much more common among cell phones made by a Chinese manufacturer in weeks of high turnover among workers, compared with ones produced in the lowest-turnover weeks.

Researchers including Wharton operations, information, and decisions assistant professor Ken Moon tracked failures — defined as a device needing repair or replacement — for nearly 50 million of the company’s cell phones over four years of consumer use. “You may be able to replace people easily and quickly, but a team is still more than the sum of its parts,” Moon says of the researchers’ findings, which link worker turnover directly to product reliability.



The Mind-Altering Effects of On-Demand Pay

Wharton assistant marketing professor Wendy De La Rosa was enjoying dinner with family when her cousin started raving about a new arrangement with his employer that lets him access his wages each day through an app, rather than waiting for payday. More businesses are offering this type of pay as a benefit to lure workers, especially in today’s tight labor market. Walmart, McDonald’s, and Wendy’s are among the retailers and restaurants that have adopted on-demand pay, but even some professional firms are joining in. For De La Rosa, that conversation with her cousin sparked several questions about spending and saving patterns for workers who are paid more frequently. In a co-authored study, De La Rosa found that those workers tend to spend more because their perception of their wealth changes; they think they have more money than they actually do. “When you get paid every day, you have less uncertainty about whether or not you’re going to make it through the month,” she says.

The study, published in the Journal of Consumer Research, is titled “The Impact of Payment Frequency on Consumer Spending and Subjective Wealth Perceptions” and is written with Stephanie Tully, assistant marketing professor at the University of Southern California’s Marshall School of Business. Throughout their research, the professors found a consistent correlation between higher spending and higher pay frequency. The correlation was stronger among lower-paid workers than higher-paid ones. “If we take somebody who gets paid once a month and give them their pay every weekday, our data would suggest that they would end up spending over $250 more throughout the year, which is more than double what the average American spends on books, newspapers, and magazines combined,” De La Rosa says.

De La Rosa doesn’t malign the practice of on-demand pay, pointing out that it’s helpful for people with real-life liquidity constraints. But humans aren’t “completely rational machines” who lack an emotional relationship with money. Getting paid daily leads to a false sense of wealth, which can fundamentally change spending. That’s why she and Tully advocate for interventions to encourage better saving. One example would be limiting instant access to several times a month. De La Rosa says the wealth subjectivity they found in their research is a good reminder that “we have to recognize the beauty of our brains,” which excel at creating all sorts of biases, shortcuts, and rationalizations to get through life. —Angie Basiouny


The jump in taxes owed by U.S. households in 2022 compared with pre-pandemic years

Households owed more than $500 billion in taxes when they filed their returns this year, vs. just over $300 billion owed annually in the years before the pandemic, according to a report from the Penn Wharton Budget Model. That large tax liability is most likely because of a surge in capital gains and other income from financial assets in 2021, the report noted.



“The ethos I had was, ‘The way you prove yourself is by doing the work well.’”

In a conversation about her groundbreaking work in economics and public policy, Wharton professor emeritus Anita Summers discusses how she overcame gender discrimination throughout her career. The talk with Dean Erika James was the first in a new Knowledge at Wharton series, titled “What I’ve Learned,” that puts the spotlight on Wharton faculty who have made lasting impacts on their fields.


Seven point two trillion dollars.
Assets under management among U.S. exchange-traded funds at the end of 2021

A new paper by Wharton assistant finance professor Yao Zeng and other researchers reveals that many ETFs going by the moniker “passive” are in fact remarkably active in managing their portfolios. Specifically, they make adjustments in pursuit of liquidity that cause them to “deviate substantially” from their underlying index, according to the researchers. Investors, said Zeng, “should be aware of that when they think about their returns.”


(Illustrations: Car — FrankRamspott; Cloud dollar sign — cenkerdem; Phones — PaperFox; Calendar and dollar bill — Devita ayu Silvianingtyas)

Published as “Data” in the Fall/Winter 2022 issue of Wharton Magazine.