NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Julian Reif

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Working Papers

March 2015The Insurance Value of Medical Innovation
with Darius Lakdawalla, Anup Malani: w21015
Economists think of medical innovation as a valuable but risky good, producing health benefits but increasing financial risk. This perspective overlooks how innovation can lower physical risks borne by healthy patients facing the prospect of future disease. We present an alternative framework that accounts for all these aspects of value and links them to the value of health insurance. We show that any innovation worth buying reduces overall risk, thereby generating positive insurance value on its own. We conduct two empirical exercises to assess the significance of our insights. First, we calculate that conventional methods underestimate the value of historical health gains by 30-80%. Second, we examine a large set of medical technologies and calculate that insurance value on average adds ...
December 2010Accounting for Anticipation Effects: An Application to Medical Malpractice Tort Reform
with Anup Malani: w16593
While conducting empirical work, researchers sometimes observe changes in outcomes before adoption of a new treatment program. The conventional diagnosis is that treatment is endogenous. Observing changes in outcomes prior to treatment is also consistent, however, with anticipation effects. This paper provides a framework for comparing the different methods for estimating anticipation effects and proposes a new set of instrumental variables that can address the problem that subjects' expectations are unobservable. The paper uses this framework to analyze the effect of tort reform on physician supply and finds that accounting for anticipation effects doubles the estimated effect of tort reform.

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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