Minimum quality standards are used extensively to solve quality problems in markets su¤ering from... more Minimum quality standards are used extensively to solve quality problems in markets su¤ering from asymmetric information. Using a unique national panel over the 1996-2005 period, this paper estimates the impact of minimum sta¢ ng requirements on the United States nursing home market. To consistently identify the impact of regulatory policies, various speci…cations are employed and compared to provide comprehensive controls for unobserved heterogeneity across states and time. We …nd sig-ni…cant preference for the dynamic speci…cation as compared to the …xed e¤ect and the random trend speci…cation. Our result shows that given an increase of 0.5 hours of minimum sta¢ ng of licensed nurses, the quality of patient care is increased by 15 percent. Minimum sta¢ ng requirements for direct care nurses do not have any signi…cant e¤ect on quality. Detailed explanations for this lack of impact are also discussed. I am deeply indebted to Marc Rysman and Randall Ellis for their guidance in this paper. I also thank
State University, and Purdue University for useful discussion and comments. Noah Hammarlund provi... more State University, and Purdue University for useful discussion and comments. Noah Hammarlund provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
We study the relationship between competition and price discrimination through an empirical exami... more We study the relationship between competition and price discrimination through an empirical examination of hourly price schedules in the parking garage industry. We find that the degree of price schedule curvature decreases with competition, implying a greater proportionate drop in low-end prices than in high-end prices when competition intensifies. We provide an explanation for our findings using differences in search behaviors between short- and long-term customers.
This paper studies search and prices in the Medigap insurance market. Using data on market shares... more This paper studies search and prices in the Medigap insurance market. Using data on market shares, insurer characteristics, and plan prices, we estimate to what extent prices can be explained by search and product differentiation. In our model, consumers search across Medigap insurers for prices as well as plan types. Our estimates indicate search costs are substantial: the estimated median cost of searching for an insurer is $22. Using the estimated parameters we nd that eliminating search costs could result in price decreases of as much as 5 percent, along with increases in average consumer welfare of up to $321.
Differential financial incentives between hospitals and physicians, alongside the prevalence of p... more Differential financial incentives between hospitals and physicians, alongside the prevalence of physician agency problems, create an incentive and opportunity for hospitals to influence physician behaviors toward their own financial objectives; however, the extent to which hospitals can achieve this goal depends on its underlying relationship with its physicians.
This paper develops a method to estimate search frictions as well as preference parameters in dif... more This paper develops a method to estimate search frictions as well as preference parameters in differentiated product markets. Search costs are non-parametrically identified, which means our method can be used to estimate search costs in differentiated product markets that lack a suitable search cost shifter. We apply our model to the U.S. Medigap insurance market. We find that search costs are substantial: the estimated median cost of searching for an insurer is $30. Using the estimated parameters we find that eliminating search costs could result in price decreases of as much as $71 (or 4.7 percent), along with increases in average consumer welfare of up to $374.
Conferences for helpful comments and feedback. We are grateful to the RAND investigators for prov... more Conferences for helpful comments and feedback. We are grateful to the RAND investigators for providing publicly available, well documented replication data. Jordan Keener provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
The recent financial crisis and recession provide an opportunity to reexamine the dynamic versus ... more The recent financial crisis and recession provide an opportunity to reexamine the dynamic versus static efficiency tradeoff in antitrust enforcement policy. We examine implications of the optimal antitrust enforcement model when dynamic efficiency is incorporated. The "dynamic enforcement model" examined here provides a positive theory of Section 2 doctrine, some suggestions for modifying enforcement in light of its dynamic costs, and implies antitrust enforcers should put a greater weight on dynamic efficiency during recessions.
We study the relationship between competition and price discrimination through an empirical exami... more We study the relationship between competition and price discrimination through an empirical examination of hourly price schedules in the parking garage industry. We find that the degree of price schedule curvature decreases with competition, implying a greater proportionate drop in low‐end prices than in high‐end prices when competition intensifies. Our findings suggest that competition constrains a firm's capacity to exercise price discrimination, confirming the classic textbook theory. We also offer possible explanations for our findings, including a search cost explanation, for which we find some support in the data.
This paper revisits the relationship between nurse staffing and quality of care in nursing homes ... more This paper revisits the relationship between nurse staffing and quality of care in nursing homes using an instrumental variables approach. Most prior studies rely on cross-sectional evidence, which renders causal inference problematic and policy recommendations inappropriate. We exploit legislation changes regarding minimum staffing requirements in eight states between 2000 and 2001 as exogenous shocks to nurse staffing levels. We find that registered nurse staffing has a large and significant impact on quality of care, and that there is no evidence of a significant association between nurse aide staffing and quality of care. A comparison of the IV estimation to the OLS estimation of the first-difference model suggests that ignoring endogeneity would lead to an underestimation of how nurse staffing affects quality of care in nursing homes.
This paper focuses on the differences between Article 82 and Section 2, reflecting largely on the... more This paper focuses on the differences between Article 82 and Section 2, reflecting largely on the American experience. We start with a discussion of the American experience and use that as a background from which to examine the European law on monopolies. American law is more conservative (less interventionist), reflecting the error cost analysis that is increasingly common in American courts. The second half of this paper provides an empirical comparison of the American and European regimes. Although a preliminary empirical examination suggests that the scope of a country’s monopolization law is inversely related to its degree of trade dependence, the actual relationship between trade dependence and the scope of monopolization law appears to be an inverted U.
The Graphite Isotope Ratio Method (GIRM) is a technique used to estimate the total plutonium prod... more The Graphite Isotope Ratio Method (GIRM) is a technique used to estimate the total plutonium production in a graphite-moderated reactor. The cumulative plutonium production in that reactor can be accurately determined by measuring neutron irradiation induced isotopic ratio changes in certain impurity elements within the graphite moderator. The method does not require detailed knowledge of a reactor's operating history, although that knowledge can decrease the uncertainty of the production estimate. The basic premise of the GIRM is that the fluence in non-fuel core components is directly related to the cumulative plutonium production in the nuclear fuel . This report provides a basic description of the physical basis and practical implementation of the Graphite Isotope Ratio Method. iii Glossary Burnup -The burnup is the total energy released by a given quantity of nuclear fuel in units of megawatt-days/metric ton (MWd/MT). Cross-Section -The total neutron cross-section is defined as the probability per unit path length traveled that a neutron will interact with a nucleus in the background media. There are specific cross sections for different reactions including scattering, capture, and fission. Cross-sections are typically denoted with the symbol Σ, and have units of inverse length (cm -1 ). In general, cross sections are complex functions of the neutron energy and the composition of the background media. See reaction rate and mean free path. Fissile -A fissile nuclide, such as U 235 or Pu 239 , can undergo fission following the absorption of a zeroenergy neutron. Fluence -The fluence is the time integral of the scalar flux in units of neutrons/cm 2 . If the flux is constant in time, the fluence is simply the product of the flux and time. Flux -The flux is the product of the neutron density and the neutron speed with units of neutrons/cm 2second. The flux is often a very complex function of position (and energy). The mean distance a neutron can be expected to travel between collisions with the background media. The mfp is equal to the inverse of the total cross-section (1/Σ). Moderator -Neutrons are produced in fission with very high energies. Fission cross-sections, however, are typically much larger at low neutron energies. Therefore, many nuclear reactors contain low atomic mass materials that serve to decrease average neutron energy through collisions. This material is referred to as moderator. Graphite, light water, and heavy water are frequently used as moderators. Reaction Rate -A reaction rate is the rate at which neutrons interact with the nuclei in the background media in units of reactions/cm 3 -sec. It is the product the scalar flux and the cross-section for the reaction of interest. v
This paper modifies the optimal punishment analysis by incorporating investment incentives with e... more This paper modifies the optimal punishment analysis by incorporating investment incentives with external benefits. In the models examined, the recommendation that the optimal penalty should internalize the marginal social harm is no longer valid as a general rule. We focus on antitrust applications. In light of the benefits from innovation, the optimal policy will punish monopolizing firms more leniently than suggested in the standard static model. It may be optimal not to punish the monopolizing firm at all, or to reward the firm rather than punish it. We examine the precise balance between penalty and reward in the optimal punishment scheme.
We present a new model of negligence and causation and examine the influence of the causation tes... more We present a new model of negligence and causation and examine the influence of the causation test on the level of care under negligence. In this model, the injurer's decision to take care reduces the likelihood of an accident only in the event that some nondeterministic intervention occurs. The effects of the causation test depend on the information available to the court, and the manner in which the test is implemented. The key effect of the causation test is to induce actors to take into account the distribution of the intervention probability as well as its expected value. In the most plausible scenariowhere courts have limited information -the causation test generally leads to socially excessive care.
This paper studies search and prices in the Medigap insurance market. Using data on market shares... more This paper studies search and prices in the Medigap insurance market. Using data on market shares, insurer characteristics, and plan prices, we estimate to what extent prices can be explained by search and product differentiation. In our model, consumers search across Medigap insurers for prices as well as plan types. Our estimates indicate search costs are substantial: the estimated median cost of searching for an insurer is $22. Using the estimated parameters we find that eliminating search costs could result in price decreases of as much as 5 percent, along with increases in average consumer welfare of up to $321.
This article estimates the impact of minimum sta¢ ng requirements on the nursing home market usin... more This article estimates the impact of minimum sta¢ ng requirements on the nursing home market using a unique national panel over the 1996-2005 period. This study reveals that, given a half-hour increase in the minimum nursing hours per resident day for licensed nurses, quality of patient care increases by 25 percent. This qualityincreasing e¤ect is mainly driven by low-quality nursing homes increasing their quality of care to meet the new standards. By contrast, minimum sta¢ ng requirements for direct-care nurses do not have any signi…cant impact on quality. This lack of impact may be explained by nursing home providers circumventing this regulation by hiring less expensive and less skilled laborers as substitutes for direct-care nurses.
Minimum quality standards are used extensively to solve quality problems in markets su¤ering from... more Minimum quality standards are used extensively to solve quality problems in markets su¤ering from asymmetric information. Using a unique national panel over the 1996-2005 period, this paper estimates the impact of minimum sta¢ ng requirements on the United States nursing home market. To consistently identify the impact of regulatory policies, various speci…cations are employed and compared to provide comprehensive controls for unobserved heterogeneity across states and time. We …nd sig-ni…cant preference for the dynamic speci…cation as compared to the …xed e¤ect and the random trend speci…cation. Our result shows that given an increase of 0.5 hours of minimum sta¢ ng of licensed nurses, the quality of patient care is increased by 15 percent. Minimum sta¢ ng requirements for direct care nurses do not have any signi…cant e¤ect on quality. Detailed explanations for this lack of impact are also discussed. I am deeply indebted to Marc Rysman and Randall Ellis for their guidance in this paper. I also thank
State University, and Purdue University for useful discussion and comments. Noah Hammarlund provi... more State University, and Purdue University for useful discussion and comments. Noah Hammarlund provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
We study the relationship between competition and price discrimination through an empirical exami... more We study the relationship between competition and price discrimination through an empirical examination of hourly price schedules in the parking garage industry. We find that the degree of price schedule curvature decreases with competition, implying a greater proportionate drop in low-end prices than in high-end prices when competition intensifies. We provide an explanation for our findings using differences in search behaviors between short- and long-term customers.
This paper studies search and prices in the Medigap insurance market. Using data on market shares... more This paper studies search and prices in the Medigap insurance market. Using data on market shares, insurer characteristics, and plan prices, we estimate to what extent prices can be explained by search and product differentiation. In our model, consumers search across Medigap insurers for prices as well as plan types. Our estimates indicate search costs are substantial: the estimated median cost of searching for an insurer is $22. Using the estimated parameters we nd that eliminating search costs could result in price decreases of as much as 5 percent, along with increases in average consumer welfare of up to $321.
Differential financial incentives between hospitals and physicians, alongside the prevalence of p... more Differential financial incentives between hospitals and physicians, alongside the prevalence of physician agency problems, create an incentive and opportunity for hospitals to influence physician behaviors toward their own financial objectives; however, the extent to which hospitals can achieve this goal depends on its underlying relationship with its physicians.
This paper develops a method to estimate search frictions as well as preference parameters in dif... more This paper develops a method to estimate search frictions as well as preference parameters in differentiated product markets. Search costs are non-parametrically identified, which means our method can be used to estimate search costs in differentiated product markets that lack a suitable search cost shifter. We apply our model to the U.S. Medigap insurance market. We find that search costs are substantial: the estimated median cost of searching for an insurer is $30. Using the estimated parameters we find that eliminating search costs could result in price decreases of as much as $71 (or 4.7 percent), along with increases in average consumer welfare of up to $374.
Conferences for helpful comments and feedback. We are grateful to the RAND investigators for prov... more Conferences for helpful comments and feedback. We are grateful to the RAND investigators for providing publicly available, well documented replication data. Jordan Keener provided excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
The recent financial crisis and recession provide an opportunity to reexamine the dynamic versus ... more The recent financial crisis and recession provide an opportunity to reexamine the dynamic versus static efficiency tradeoff in antitrust enforcement policy. We examine implications of the optimal antitrust enforcement model when dynamic efficiency is incorporated. The "dynamic enforcement model" examined here provides a positive theory of Section 2 doctrine, some suggestions for modifying enforcement in light of its dynamic costs, and implies antitrust enforcers should put a greater weight on dynamic efficiency during recessions.
We study the relationship between competition and price discrimination through an empirical exami... more We study the relationship between competition and price discrimination through an empirical examination of hourly price schedules in the parking garage industry. We find that the degree of price schedule curvature decreases with competition, implying a greater proportionate drop in low‐end prices than in high‐end prices when competition intensifies. Our findings suggest that competition constrains a firm's capacity to exercise price discrimination, confirming the classic textbook theory. We also offer possible explanations for our findings, including a search cost explanation, for which we find some support in the data.
This paper revisits the relationship between nurse staffing and quality of care in nursing homes ... more This paper revisits the relationship between nurse staffing and quality of care in nursing homes using an instrumental variables approach. Most prior studies rely on cross-sectional evidence, which renders causal inference problematic and policy recommendations inappropriate. We exploit legislation changes regarding minimum staffing requirements in eight states between 2000 and 2001 as exogenous shocks to nurse staffing levels. We find that registered nurse staffing has a large and significant impact on quality of care, and that there is no evidence of a significant association between nurse aide staffing and quality of care. A comparison of the IV estimation to the OLS estimation of the first-difference model suggests that ignoring endogeneity would lead to an underestimation of how nurse staffing affects quality of care in nursing homes.
This paper focuses on the differences between Article 82 and Section 2, reflecting largely on the... more This paper focuses on the differences between Article 82 and Section 2, reflecting largely on the American experience. We start with a discussion of the American experience and use that as a background from which to examine the European law on monopolies. American law is more conservative (less interventionist), reflecting the error cost analysis that is increasingly common in American courts. The second half of this paper provides an empirical comparison of the American and European regimes. Although a preliminary empirical examination suggests that the scope of a country’s monopolization law is inversely related to its degree of trade dependence, the actual relationship between trade dependence and the scope of monopolization law appears to be an inverted U.
The Graphite Isotope Ratio Method (GIRM) is a technique used to estimate the total plutonium prod... more The Graphite Isotope Ratio Method (GIRM) is a technique used to estimate the total plutonium production in a graphite-moderated reactor. The cumulative plutonium production in that reactor can be accurately determined by measuring neutron irradiation induced isotopic ratio changes in certain impurity elements within the graphite moderator. The method does not require detailed knowledge of a reactor's operating history, although that knowledge can decrease the uncertainty of the production estimate. The basic premise of the GIRM is that the fluence in non-fuel core components is directly related to the cumulative plutonium production in the nuclear fuel . This report provides a basic description of the physical basis and practical implementation of the Graphite Isotope Ratio Method. iii Glossary Burnup -The burnup is the total energy released by a given quantity of nuclear fuel in units of megawatt-days/metric ton (MWd/MT). Cross-Section -The total neutron cross-section is defined as the probability per unit path length traveled that a neutron will interact with a nucleus in the background media. There are specific cross sections for different reactions including scattering, capture, and fission. Cross-sections are typically denoted with the symbol Σ, and have units of inverse length (cm -1 ). In general, cross sections are complex functions of the neutron energy and the composition of the background media. See reaction rate and mean free path. Fissile -A fissile nuclide, such as U 235 or Pu 239 , can undergo fission following the absorption of a zeroenergy neutron. Fluence -The fluence is the time integral of the scalar flux in units of neutrons/cm 2 . If the flux is constant in time, the fluence is simply the product of the flux and time. Flux -The flux is the product of the neutron density and the neutron speed with units of neutrons/cm 2second. The flux is often a very complex function of position (and energy). The mean distance a neutron can be expected to travel between collisions with the background media. The mfp is equal to the inverse of the total cross-section (1/Σ). Moderator -Neutrons are produced in fission with very high energies. Fission cross-sections, however, are typically much larger at low neutron energies. Therefore, many nuclear reactors contain low atomic mass materials that serve to decrease average neutron energy through collisions. This material is referred to as moderator. Graphite, light water, and heavy water are frequently used as moderators. Reaction Rate -A reaction rate is the rate at which neutrons interact with the nuclei in the background media in units of reactions/cm 3 -sec. It is the product the scalar flux and the cross-section for the reaction of interest. v
This paper modifies the optimal punishment analysis by incorporating investment incentives with e... more This paper modifies the optimal punishment analysis by incorporating investment incentives with external benefits. In the models examined, the recommendation that the optimal penalty should internalize the marginal social harm is no longer valid as a general rule. We focus on antitrust applications. In light of the benefits from innovation, the optimal policy will punish monopolizing firms more leniently than suggested in the standard static model. It may be optimal not to punish the monopolizing firm at all, or to reward the firm rather than punish it. We examine the precise balance between penalty and reward in the optimal punishment scheme.
We present a new model of negligence and causation and examine the influence of the causation tes... more We present a new model of negligence and causation and examine the influence of the causation test on the level of care under negligence. In this model, the injurer's decision to take care reduces the likelihood of an accident only in the event that some nondeterministic intervention occurs. The effects of the causation test depend on the information available to the court, and the manner in which the test is implemented. The key effect of the causation test is to induce actors to take into account the distribution of the intervention probability as well as its expected value. In the most plausible scenariowhere courts have limited information -the causation test generally leads to socially excessive care.
This paper studies search and prices in the Medigap insurance market. Using data on market shares... more This paper studies search and prices in the Medigap insurance market. Using data on market shares, insurer characteristics, and plan prices, we estimate to what extent prices can be explained by search and product differentiation. In our model, consumers search across Medigap insurers for prices as well as plan types. Our estimates indicate search costs are substantial: the estimated median cost of searching for an insurer is $22. Using the estimated parameters we find that eliminating search costs could result in price decreases of as much as 5 percent, along with increases in average consumer welfare of up to $321.
This article estimates the impact of minimum sta¢ ng requirements on the nursing home market usin... more This article estimates the impact of minimum sta¢ ng requirements on the nursing home market using a unique national panel over the 1996-2005 period. This study reveals that, given a half-hour increase in the minimum nursing hours per resident day for licensed nurses, quality of patient care increases by 25 percent. This qualityincreasing e¤ect is mainly driven by low-quality nursing homes increasing their quality of care to meet the new standards. By contrast, minimum sta¢ ng requirements for direct-care nurses do not have any signi…cant impact on quality. This lack of impact may be explained by nursing home providers circumventing this regulation by hiring less expensive and less skilled laborers as substitutes for direct-care nurses.
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