Runjing Lu

Ph.D. Candidate - Department of Economics

Working Papers

"From Fear to Hate: How the Covid-19 Pandemic Sparks Racial Animus in the United States"   (w/ Yanying Sheng)

We estimate the effect of the Coronavirus (Covid-19) pandemic on racial animus, as measured by Google searches and Twitter posts including a commonly used anti-Asian racial slur. Our empirical strategy exploits the plausibly exogenous variation in the timing of the first Covid-19 diagnosis across regions in the U.S. We find that the first local diagnosis leads to an immediate increase in racist Google searches and Twitter posts, with the latter mainly coming from existing Twitter users posting the slur for the first time. Moreover, we find that the rise in the animosity is directed at Asians rather than other minority groups and is stronger on days when the connection between the disease and Asians is more salient. In contrast, the negative economic impact of the pandemic plays little role in the initial increase in racial animus. 


"Stale Information in the Spotlight: The Effects of Attention Shocks on Equity Markets"   (w/ Siyu Chen)
SWFA Best Doctoral Paper in Financial Markets. Presented at SWFA, AFA poster, FMA PhD Session, ABFE, SFA (scheduled), IBEFA (scheduled)

We exploit a novel natural experiment to provide causal evidence on how asset prices change when the media draws investor attention to stale information. We find that, shortly after the announcements of a high-profile financial analyst award, the stocks with pre-existing recommendations from analysts receiving heightened media exposure due to winning the award experience higher abnormal return than those recommended by analysts barely missing the award. Attention trading rather than ability signaling drives the difference in returns, and speculative trading based on the leaked award list also plays a role. The award also changes the behavior of brokerages and analysts, leaving long-lasting effects on equity markets.


"Symbolic Awards at Work: A Regression Discontinuity Design"  (PDF) (w/ Teng Li, under review)
Presented at SOLE, COPE, EMCON, Warwick PhD conference, ACLEC poster

This paper studies the effects of a non-pecuniary symbolic award on winners, losers, and their peers, using a regression discontinuity design. Our main finding is that barely winners of a quarterly "Best Rookie" award perform worse than barely losers in the quarter following the award designation. Interestingly, the performance difference is driven by winners performing worse rather than losers' performing better. Peer sabotage on winners triggered by the award designation is a driving force for winners' performance decreases. We find no evidence for spillover effects of the award designation on the teammates of winners or losers.


"When Weed is Legalized Next Door: How Colorado's Recreational Marijuana Legalization Affects Neighboring States"   [Appendix]  

I examine the effect of the Recreational Marijuana Legalization (RML) in Colorado on the illegal marijuana possession in its neighboring states. I use a difference-in-differences design with distance to Colorado border as treatment intensity. I find that regions in the neighboring states that are closer to the border experienced higher increase in illegal marijuana possession offenses and arrests among adult males than did regions farther away from the border. Evidence suggests that marijuana possession offenses shifted to locations near highways and roads. The amount of marijuana seized in these locations also increased, whereas that seized in other locations did not.