The Effect of an Invention

Research Question Assignment 2: The Effect of an Invention
Due October 19 by 5pm. Upload via blackboard, preferably pdf-ed.
The Assignment
In class on October 9, we talked about innovation and inventions. In that class (and others: barbed wire),
we’ve seen a number of economic analyses of the effects of new technology or invention. How do papers like
those start? Let’s see.
Please pick an invention. This is an economic history class, so I want to encourage you to try and pick an
invention from before 1980. If you need an idea, check out a random chapter of Robert Gordon’s book, The
Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War.
Start your assignment with a paragraph describing the invention. Who invented it? When? Why? What was
new about the invention relative to what came before?
Once you have introduced your invention, the heart of the assignment begins. Identify an outcome or a price
that the invention changed or may have changed. Think carefully about why and trace through changes to
the supply and demand of various inputs (labor, capital) and outputs. Describe these potential changes (and
why) in your assignment. Think about this as the hypothesized effects of the invention you would test in a
full research project.
Finally, conclude with a description of what data and methods you would want to test your hypothesis. You
do not have to actually find the data, just describe what it might be generally (price data, sales data, patent
records, etc). For methods, think about the Hornbeck barbed wire paper and DD design: are there places or
people that are more or less treated by the new invention? Why? This is tough, so effort will be rewarded.
Please write one page maximum. Use at least 11 point font and 1.5 spacing.
An Example
The invention of the automobile.
• A bad example of a price that probably changed: the price of horse drawn wagons
– This price probably fell because because cars are substitutes. Sort of obvious.
• A good example: the wage of carriage repairers
– Did their wages—the price of labor—go up or down? It depends on whether or not carriage
repairers could retrain to fix cars.
• An even better example: the cost of land in a city
– Did more suburbanization happen because of faster transport?
– Or did the increase in the supply of city plots go up with horse stables eliminated?
– Which cities are more or less affected by the car?
Ambiguous predictions are fine, just be clear as to why the effects are ambiguous.
Examples from Our Syllabus
• Hornbeck (2010) on the introduction of barbed wire
• Olmstead and Rhode (2002) on the effect of new wheat seeds
• Alesina et al (2013) on the very long run effects of the invention of the plough
• Bailey (2006) and Goldin and Katz (2001) on the effects of the birth control pill