Browsing by Subject "Demand"
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Item Open Access Essays in Firm Responses to Demand and Competition Shocks(2016) Medina Quispe, Pamela MilagrosThe aim of this dissertation is to examine, model and estimate firm responses to
demand shocks by focusing on specific industries where demand shocks are well
identified. Combining reduced-form evidence and structural analysis, this dissertation
extends the economic literature by focusing on within-firm responses of firms
to two important demand shocks that are identifiable in empirical settings. First,
I focus on how firms respond to a decrease in effective demand due to competition
shocks coming from globalization. By considering China's accession to the World
Trade Organization in 2001 and its impact on the apparel industry, the aim of these
chapters is to answer how firms react to the increase in Chinese import competition,
what is the mechanism behind these responses, and how important they are in explaining
the survival of the Peruvian apparel industry. Second, I study how suppliers'
survival probability relates to the sudden disruption of their main customer-supplier
relationships with downstream manufacturers, conditional on suppliers' own idiosyncratic
characteristics such as physical productivity.
Item Open Access Essays on Innovation, Competition and Regulation in the Pharmaceutical Industry(2014) Taylor, YairMy dissertation explores the interactions between the various agents in the pharmaceutical industry and how they are affected by changes in health care policy. In my work, I examine innovation and competition among new brand drugs and the value of prescription drug insurance after patent expiration.
The second chapter of my dissertation empirically assesses the trade-off between patent breadth and patent length, a topic that has attracted significant theoretical but little empirical attention. I estimate a model of pharmaceutical demand and supply that incorporates insurance and advertising for the antidepressant market. Using these estimates, I consider the potential welfare effects of giving some of the most important product innovations broader but shorter patents, which increases the market power that these innovators have in the short-run but also allows for more rapid entry by generics. My results indicate that in this setting broader patents could increase total welfare by more than 9%, mostly through savings in insurer expenditures. These results are robust to endogenizing the entry of other branded drugs.
In the third chapter, which stems from research done jointly with Peter Arcidiacono, Paul Ellickson, and David Ridley, I use data from the pharmaceutical industry to estimate demand and supply for prescription drugs across both insured and uninsured consumers, allowing for consumer preferences organized into discrete types. I account for an important characteristic of health care markets: the price paid by insured consumers (copayment) is typically much smaller than the price received by the manufacturer. This analysis highlights how generic-drug availability differentially affects insured and uninsured consumers. In particular, generic entry disproportionately benefits insured consumers, at least in the first year to two years.
The fourth chapter in my dissertation extends the analysis in Chapter 2 to allow for a more generalized framework. In Chapter 2, the first pharmaceutical product innovation that enters a therapeutic class is assumed to be high-value while those innovations that follow are assumed to provide relatively little, if any, added therapeutic value beyond the first. Using the same data and demand model estimates, I consider the potential welfare effects of allowing these later to be considered high-value products and providing them with greater patent breadth and shorter patent length. My results indicate that in this setting, the modified patent policy could still increase total welfare by more than 8%, mostly through savings in insurer expenditures. These results are also robust to endogenizing the entry of other branded products.
Item Open Access The Future of Coffee Production in a Changing Climate – Will Demand Outpace Supply?(2021-04-28) Corwin, Garrett; Feng, Phoenix; Johnson, Kathryn; Naghavi, SaraThe coffee sector is valued at $102 billion, but its future growth is at risk of a supply deficit due to climate change. Conservation International (CI) is a global environmental nonprofit organization dedicated to preserving forested and protected land from future coffee expansion. To achieve CI’s goal, a methodology was developed to project coffee supply into 2050, considering changing bioclimatic and social conditions for Brazil and Vietnam’s coffee industries. Estimated supply was forecasted based on quantifiable variables. For variables that were only qualifiable, their influence on production was analyzed using magnitude and direction. Results show numerous bioclimatic and social parameters negatively affect coffee production, the most profound being increases in atmospheric temperature. Our work will continue to be augmented with additional research to understand the interaction and quantifiable effects of these variables on future production and forest/protected land encroachment. This project additionally outlines high-level management and investment recommendations to incentivize industry action.