Browsing by Subject "Insurance"

This dissertation focuses on how economic markets provide channels for influence over government policy. Specifically, I examine three levels of analysis: the household, the financial security, and the foreign state. Economic constraints on government policy are particularly salient in today's financialized economy. Understanding these dynamics helps us forecast what will happen in the future. Getting these forecasts right is important because taxpayers, governments, and investors all have skin in the game of effective use of government resources. To paint a picture of these constraints, my dissertation contains three papers. The first argues that individuals with access to economic insurance are less likely to protest than those without. Using macroeconomic and survey data, I find evidence supporting my theoretical expectations. The second paper turns from household economics to the financial markets for government debt securities. Although the literature shows how governments make certain choices in debt issuance and the pricing dynamics of government bonds, it remains unclear how the ownership structure of debt affects yields. I argue that government bonds with more concentrated ownership structures have higher price volatility, which should incur volatility risk premium as a result. I find evidence supporting my theoretical expectations. This paper speaks to the relationship between debt ownership and power; it matters because governments with more concentrated debt ownership could see higher debt service payments over time. The third paper considers how state actors can use foreign investment as a policy tool. I argue that Chinese actors increase investment in target countries when future policy is more uncertain because investments act as a hedge against the possibility of unfavorable future policy. This runs counter to the traditional narrative, which suggests that foreign investment is more likely when policy is stable. Using a novel cross-national, high-frequency, machine-coded event data set, I find evidence supporting my expectations. My dissertation paints a picture of the breadth of ways that economic markets influence government policy. Governments contend with the economic interests of constituents who can demonstrate publicly, investors who can affect the price of their debt, and other states that can use investment to secure influence over future policy.

My 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.

This dissertation examines the extent of different forms of informal insurance provided by both co-resident and non-co-resident family members. Primarily relying on the Panel Study of Income Dynamics, a unique, longitudinal survey dataset from the United States, this dissertation provides new insight on the importance and unique motives that may drive interactions between family members. These two essays investigate the different forms of assistance that the family uses in two different contexts: in response to unemployment and health conditions. The results in this paper provide new insight into the role that informal interactions can have on decisions and behavior. This research suggests new direction for future economic models dealing with the family, networks, risk, unemployment, health, and location decisions. The overarching theme is that decisions are made jointly across households, not just within a household.