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AN NBER PUBLICATION ISSUE: No. 7, July 2015

The Digest

A free monthly publication featuring non-technical summaries of research on topics of broad public interest
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Researchers estimate that falling U.S. natural gas prices between 2007 and 2013 generated consumer benefits of $74 billion in 2013 and reduced producer welfare by $26 billion annually. Advances in horizontal drilling and hydraulic fracturing have allowed U.S. natural gas producers to profitably extract gas from shale formations previously considered uneconomic. From 2007 to 2013, production grew by more than 25 percent, leading to a sharp drop in prices. From...

Research Summaries

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Article
Large down-payments and sharp recent increases in household income mean the housing frenzy in China is unlikely to trigger a national financial crisis. China's housing-price appreciation from 2003-13 has been enormous—stronger than during the recent U.S. housing bubble and more on the order of Japan's property boom in the 1980s, according to Demystifying the Chinese Housing Boom (NBER Working Paper No. 21112). Would a drop in house prices wreak havoc on China's...
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Article
Interventions that get youths to slow down and behave less automatically in high-stakes situations show positive results in three experiments. Disparities in youth outcomes in the United States are striking. For example, among 15-to-24 year olds, the male homicide rate in 2013 was 18 times higher for blacks than for whites. Black males lose more years of potential life before age 65 to homicide than to heart disease, America's leading overall killer. A large body...
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Total annual health spending on 5 million employees in firms offering consumer-directed plans was compared to spending on 8 million employees in firms offering traditional plans. In Do 'Consumer-Directed' Health Plans Bend the Cost Curve Over Time? (NBER Working Paper No. 21031), Amelia M. Haviland, Matthew D. Eisenberg, Ateev Mehrotra, Peter J. Huckfeldt, and Neeraj Sood found that total annual health spending fell by 6.6, 4.3, and 3.4 percent in the three years...
Article
Microprocessor unit (MPU) prices are declining faster than the Producer Price Index suggests, according to research into pricing practices over the last decade. After falling rapidly through the mid-2000s, the price of computer chips has declined very slowly in recent years according to the Producer Price Index (PPI). The slowdown is especially puzzling given the continuing rapid advances in semiconductor technology. In How Fast Are Semiconductor Prices...
Article
Inventors in densely populated areas relied on newer scientific breakthroughs more than their more-isolated peers until the middle of the 20th century, after which the disparity steadily narrowed. Nearly a century ago, the eminent economist Alfred Marshall hypothesized that ideas were more likely to germinate into useful inventions in large cities than in smaller ones. Innovators working in close proximity to other creative minds, he argued, had a greater...

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