RESEARCH

How do communication costs affect the production of new ideas and inventions? To answer this question, we study the introduction of the Uniform Penny Post in Great Britain in 1840. This reform replaced the previous system of expensive distance-based postage fees with a uniform low rate of one penny for sending letters anywhere in the country. The result was a large spatially-varied reduction in the cost of communicating across locations. We study the impact of this reform on the production of scientific knowledge using citation links constructed from a leading academic journal, the Philosophical Transactions and the impact on the development of new technology using patent data. Our results provide quantitative causal estimates showing how a fall in communication costs can increase the rate at which scientific knowledge is exchanged and new ideas and technologies are developed. This evidence lends direct empirical support to an extensive theoretical literature in economic growth and urban economics positing that more ideas can emerge from communication between individuals.

How does knowledge production respond to conflict-related changes in knowledge access? To answer this question, I exploit war-induced disruptions in postal services between Britain and the European continent during the pivotal two decades of scientific advancement that followed the 1687 publication of Isaac Newton's (1642-1727) Principia. In this period, the Nine Years' War (1688-1697) and the War of the Spanish Succession (1701-1714) interrupted the packet boat service across the English Channel that connected the British and the French postal systems and facilitated the bilateral exchange of ideas within a correspondence-based network of scholars called Republic of Letters. I reconstruct this network using citation links from the leading scientific journal of the time, the Philosophical Transactions. This allows me to interpret relative changes in citation counts as relative changes in the number of follow-on innovations. Considering each possible pair of post towns as a separate cross-sectional unit, aggregating the bilateral citation counts to this level, and comparing the pre- to post-period changes in the citation counts of unaffected and affected post-town pairs provides causal estimates showing how conflicts impact knowledge production.


Dynamic Network Formation with Degree Heterogeneity with Qi Xu

This paper generalizes a Generalized Method of Moments (GMM) approach for dynamic panel logit models with fixed effects to logit network formation models with degree heterogeneity. The proposed moment conditions do not depend on the degree heterogeneity parameters, making it possible to leave the distribution of these parameters unspecified. The approach is applicable to panel and cross-sectional network data, sparse or dense, directed or undirected networks and applies to a range of network formation models for which consistent and computationally feasible estimators were previously unavailable. The wide applicability comes at the price of a common distributional assumption in network formation models with degree heterogeneity. Conditional on the previous link structure, the exogenous regressors, and the degree heterogeneity parameters, the distribution of the error term is assumed to be i.i.d. standard logistic across dyads and over time. Consistency and asymptotic normality follow from standard GMM theory. Computationally inexpensive estimation is achieved by employing analytical derivates of the proposed moment conditions.