University of Illinois at Urbana-Champaign
College of Business
515 East Gregory Drive
Champaign, IL 61820
Information about this author at RePEc
NBER Working Papers and Publications
|June 2017||The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation|
with Tatyana Deryugina, Alexander MacKay: w23483
Economic theory suggests that demand is more elastic in the long run relative to the short run, but evidence on the empirical relevance of this phenomenon is scarce. We study the dynamics of residential electricity demand by exploiting price variation arising from a natural experiment: the introduction of an Illinois policy that enabled communities to select electricity suppliers on behalf of their residents. Using a flexible difference-in-differences matching approach, we estimate a one-year price elasticity of -0.16 and three-year elasticity of -0.27. We also present evidence that consumers increased usage ahead of these announced price changes. Finally, we project that the price elasticity converges to a value between -0.30 and -0.35 after ten years. Our findings highlight the importanc...
|November 2016||The Mortality and Medical Costs of Air Pollution: Evidence from Changes in Wind Direction|
with Tatyana Deryugina, Garth Heutel, Nolan H. Miller, David Molitor: w22796
We estimate the effect of acute fine particulate matter (PM 2.5) exposure on mortality and health care utilization among the US elderly, using a novel instrument for air pollution: changes in the local wind direction. We find that increases in daily PM 2.5 concentrations raise three-day county-level mortality, hospitalizations, and inpatient spending. We then develop a new methodology that uses machine learning to estimate the number of life-years lost due to PM 2.5. Our estimate is much smaller than one calculated using traditional methods, which do not adequately account for the relatively low life expectancy of those killed by pollution.
|March 2015||The 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 ...
Published: Darius Lakdawalla, Anup Malani and Julian Reif, “The insurance value of medical innovation,” Journal of Public Economics 145 (2017) 94–102. citation courtesy of
|December 2010||Accounting 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.
Published: Anup Malani and Julian Reif. Interpreting Pre-trends as Anticipation: Impact on Estimated Treatment Effects from Tort Reform, Journal of Public Economics, doi: 10.1016/j.jpubeco.2015.01.001, 124: 1-17 (January 2015)