Economics Works

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    Households, auctioneers, and aggregation
    (Elsevier, 2022) Chipeniuk, Karsten O.; Katz, Nets Hawk; Walker, Todd B.; Economics, School of Liberal Arts
    We examine aggregation in the neoclassical growth model with aggregate shocks and uninsurable employment risk, as well as related environments. We introduce a Walrasian auctioneer whose job is to report to households all possible state-contingent future prices. Households take these as given when forming expectations and making optimal consumption/savings decisions, and the auctioneer adjusts her forecasts until markets clear. This natural dichotomy between the households and the auctioneer allows us to study each problem in isolation as well as to discuss the intersection. On the household side, we separate an explicit expression for the linear permanent income component of savings from a well-behaved nonlinear adjustment arising from precautionary behavior and incomplete markets. Equipped with this decomposition, we then study how economies aggregate in the presence of various auctioneer types that are popular in the literature. The steady-state auctioneer of Huggett (1997) and Aiyagari (1994) offers a paper-and-pencil analysis of aggregation that provides a bound on more complex environments. We provide an economic interpretation of the regression coefficients and explain the lack of time variation in the auctioneer of Krusell and Smith (1998). We also introduce a new numerical method which uses the empirical distribution of auctioneer forecasts to substantially improve solution accuracy in cases where the standard coefficient of determination and other well-known statistics prove to be misleading.
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    Vertical Relationships with Hidden Interactions
    (MDPI, 2023-10) Kim, Jaesoo; Shin, Dongsoo; Economics, School of Liberal Arts
    In an agency model with adverse selection, we study how hidden interactions between agents affect the optimal contract. The principal employs two agents who learn their task environments through their involvement. The principal cannot observe the task environments. It is important to note that hidden interactions, such as acts of sabotage or help between the agents, have the potential to alter each other’s task environments. Our analysis encompasses two distinct organizational structures: competition and cooperation. Without hidden interactions, the competitive structure is optimal because the cooperative structure only provides the agents with more flexibility to collusively misrepresent their task environments. With hidden interactions, however, the cooperative structure induces the agents to help each other to improve the task environments while removing sabotaging incentives at no cost once collusion is deterred. As a result, the cooperative structure can be optimal in such a case. We discuss the link between production technology and organizational structure, finding that complementarity in production favors cooperative structures.
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    Tracking Public and Private Responses to the Covid-19 Epidemic: Evidence from State and Local Government Actions
    (University of Chicago Press, 2021) Gupta, Sumedha; Nguyen, Thuy Dieu; Lozano-Rojas, Felipe; Raman, Shyam; Lee, Byungkyu; Bento, Ana; Simon, Kosali Ilayperuma; Wing, Coady; Economics, School of Liberal Arts
    This paper examines the determinants of social distancing during the shutdown phase of the COVID-19 epidemic. We classify state and local government actions, and we study multiple proxies for social distancing based on data from smart devices. Mobility fell substantially in all states, even ones that did not adopt major distancing mandates. Most of the fall in mobility occurred prior to the most stringent sanctions against movement, such as stay-at-home laws. However, we find evidence suggesting that state and local policies did have an independent effect on mobility even after the large initial reductions occurred. Event studies show that early and information-focused actions such as first case announcements, emergency declarations, and school closures reduced mobility by 1–5 percent after five days. Between March 1 and April 14, average time spent at home grew from 9.1 hours to 13.9 hours. We find, for example, that without state emergency declarations, hours at home would have been 11.3 hours in April, suggesting that 55 percent of the growth is associated with policy and 45 percent is associated with (non-policy) trends. State and local government actions induced changes in mobility on top of a large and private response across all states to the prevailing knowledge of public health risks.
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    Vaccinations Against COVID-19 May Have Averted up to 140,000 Deaths in the United States
    (Project HOPE, 2021) Gupta, Sumedha; Cantor, Jonathan; Simon, Kosali I.; Bento, Ana I.; Wing, Coady; Whaley, Christopher M.; Economics, School of Liberal Arts
    COVID-19 vaccination campaigns continue in the United States, with the expectation that vaccines will slow transmission of the virus, save lives, and enable a return to normal life in due course. However, the extent to which faster vaccine administration has affected COVID-19-related deaths is unknown. We assessed the association between US state-level vaccination rates and COVID-19 deaths during the first five months of vaccine availability. We estimated that by May 9, 2021, the US vaccination campaign was associated with a reduction of 139,393 COVID-19 deaths. The association varied in different states. In New York, for example, vaccinations led to an estimated 11.7 fewer COVID-19 deaths per 10,000, whereas Hawaii observed the smallest reduction, with an estimated 1.1 fewer deaths per 10,000. Overall, our analysis suggests that the early COVID-19 vaccination campaign was associated with reductions in COVID-19 deaths. As of May 9, 2021, reductions in COVID-19 deaths associated with vaccines had translated to value of statistical life benefit ranging between $625 billion and $1.4 trillion.
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    Substitution of Nonpharmacologic Therapy With Opioid Prescribing for Pain During the COVID-19 Pandemic
    (American Medical Association, 2021) Lee, Byungkyu; Yang, Kai-Cheng; Kaminski, Patrick; Peng, Siyun; Odabas, Meltem; Gupta, Sumedha; Green, Harold D., Jr.; Ahn, Yong-Yeol; Perry, Brea L.; Economics, School of Liberal Arts
    Importance: During the pandemic, access to medical care unrelated to COVID-19 was limited because of concerns about viral spread and corresponding policies. It is critical to assess how these conditions affected modes of pain treatment, given the addiction risks of prescription opioids. Objective: To assess the trends in opioid prescription and nonpharmacologic therapy (ie, physical therapy and complementary medicine) for pain management during the COVID-19 pandemic in 2020 compared with the patterns in 2019. Design, setting, and participants: This retrospective, cross-sectional study used weekly claims data from 24 million US patients in a nationwide commercial insurance database (Optum's deidentified Clinformatics Data Mart Database) from January 1, 2019, to September 31, 2020. Among patients with diagnoses of limb, extremity, or joint pain, back pain, and neck pain for each week, patterns of treatment use were identified and evaluated. Data analysis was performed from April 1, 2021, to September 31, 2021. Main outcomes and measures: The main outcomes of interest were weekly rates of opioid prescriptions, the strength and duration of related opioid prescriptions, and the use of nonpharmacologic therapy. Transition rates between different treatment options before the outbreak and during the early months of the pandemic were also assessed. Results: A total of 21 430 339 patients (mean [SD] age, 48.6 [24.0] years; 10 960 507 [51.1%] female; 909 061 [4.2%] Asian, 1 688 690 [7.9%] Black, 2 276 075 [10.6%] Hispanic, 11 192 789 [52.2%] White, and 5 363 724 [25.0%] unknown) were enrolled during the first 3 quarters in 2019 and 20 759 788 (mean [SD] age, 47.0 [23.8] years; 10 695 690 [51.5%] female; 798 037 [3.8%] Asian; 1 508 023 [7.3%] Black, 1 976 248 [9.5%] Hispanic, 10 059 597 [48.5%] White, and 6 417 883 [30.9%] unknown) in the first 3 quarters of 2020. During the COVID-19 pandemic, the proportion of patients receiving a pain diagnosis was smaller than that for the same period in 2019 (mean difference, -15.9%; 95% CI, -16.1% to -15.8%). Patients with pain were more likely to receive opioids (mean difference, 3.5%; 95% CI, 3.3%-3.7%) and less likely to receive nonpharmacologic therapy (mean difference, -6.0%; 95% CI, -6.3% to -5.8%), and opioid prescriptions were longer and more potent during the early pandemic in 2020 relative to 2019 (mean difference, 1.07 days; 95% CI, 1.02-1.17 days; mean difference, 0.96 morphine milligram equivalents; 95% CI, 0.76-1.20). Analysis of individuals' transitions between treatment options for pain found that patients were more likely to transition out of nonpharmacologic therapy, replacing it with opioid prescriptions for pain management during the COVID-19 pandemic than in the year before. Conclusions and relevance: Nonpharmacologic therapy is a benign treatment for pain often recommended instead of opioid therapy. The decrease in nonpharmacologic therapy and increase in opioid prescription during the COVID-19 pandemic found in this cross-sectional study, especially given longer days of prescription and more potent doses, may exacerbate the US opioid epidemic. These findings suggest that it is imperative to investigate the implications of limited medical access on treatment substitution, which may increase patient risk, and implement policies and guidelines to prevent those substitutions.
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    Lift and Shift: The Effect of Fundraising Interventions in Charity Space and Time
    (American Economic Association, 2022) Scharf, Kimberley; Smith, Sarah; Ottoni-Wilhelm, Mark; Economics, School of Liberal Arts
    Fundraising interventions may lift donations and/or shift their composition and timing. Using data rich in both the charity space and time dimensions, we find that major fundraising appeals lift donations to the appeal charity and that this increase is not offset by lower donations later in time. Strikingly, major appeals also forward-shift donations to other (nonappeal) charities that are offset by lower donations later. To understand these response patterns, we introduce a two-period, two-charity "lift-shift" model. The model indicates that the observed response patterns are possible only if warm glow is substitutable, both intertemporally and between charities.
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    Quantitative Evaluation of the Economic Impact of Antimicrobial Resistance on the Treatment of Community-Acquired Acute Pyelonephritis in Korea
    (Korean Society of Infectious Diseases, 2022) Cheong, Taul; Ahn, Jungmo; Kim, Yun Seop; Pai, Hyunjoo; Kim, Bongyoung; Economics, School of Liberal Arts
    Background: The proportion of antimicrobial-resistant Enterobacteriales as a causative pathogen of community-acquired acute pyelonephritis (APN) has been increasing. The aim of this study was to quantitatively evaluate the impact of antimicrobial resistance on medical costs and length of hospital stay for the treatment of APN. Materials and methods: A single-center retrospective cohort study was conducted between January 2018 and December 2019. All hospitalized patients aged ≥19 years who were diagnosed with community-acquired APN were recruited, and those diagnosed with Enterobacteriales as a causative pathogen were included. Log-linear regression analysis was performed to determine the risk factors for medical costs and length of hospital stay. Results: A total of 241 patients participated in this study. Of these, 75 (31.1%) and 87 (36.1%) had extended-spectrum beta-lactamase (ESBL)-producing pathogens and ciprofloxacin-resistant pathogens as the causative pathogen, respectively. Based on the log-linear regression model, ESBL-producing Enterobacteriales is a causative pathogen that is, on average, 27.0%, or United States Dollar (USD) 1,211 (P = 0.026) more expensive than non-ESBL-producing Enterobacteriales. A patient who is a year older would incur USD 23 (P = 0.040) more, those having any structural problems in the urinary tract would incur USD 1,231 (P = 0.015) more, and those with a unit increase in the Pitt bacteremia score would incur USD 767 (P <0.001) more, with all other variables constant. Having a case in which ESBL-producing Enterobacteriales is a causative pathogen would explain staying 22.0% longer or 2 more days (P = 0.050) in the hospital than non-ESBL-producing Enterobacteriales. A patient who is 10 years older would, on average, would have to stay for half a day longer (P = 0.045). Any structural problems in the urinary tract explain a longer stay (2.4 days longer; P = 0.032), and moving from 0 to 5 on the Pitt bacteremia score would explain four more days (P = 0.038) in the hospital. Conclusion: Patients with community-acquired APN with ESBL-producing Enterobacteriale as the causative pathogen would incur, on average, 27.0% higher medical costs and 22.0% longer hospitalization days than patients detected with non-ESBL-producing pathogens.
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    Neighborhood socioeconomic status and low-value breast cancer care
    (Wiley, 2022) Chen, J. C.; Li, Yaming; Fisher, James L.; Bhattacharyya, Oindrila; Tsung, Allan; Obeng‐Gyasi, Samilia; Economics, School of Liberal Arts
    Background: The objective of this study is to examine the association between neighborhood socioeconomic status (nSES) and receipt of low-value breast cancer procedures. Methods: Patients with breast cancer diagnosed between 2010 and 2016 were identified in the Surveillance, Epidemiology, and End Results (SEER) Program. Low value procedures included: (1) axillary lymph node dissection (ALND) for patients with limited nodal disease receiving breast conservation therapy (BCT); (2) contralateral prophylactic mastectomies (CPM); and (3) sentinel lymph node biopsies (SLNB) in patients ≥70 years old with clinically node negative early-stage hormone-positive breast cancer. The cohort was divided by nSES. Univariable and multivariable logistic regression analysis compared the groups. Results: The study included 412 959 patients. Compared to patients in high nSES areas, residing in neighborhoods with low nSES (odd ratio [OR] 2.20, 95% confidence interval [CI] 2.0-2.42) and middle nSES (OR 1.42, 95% CI 1.20-1.56) was associated with a higher probability of undergoing low value ALND. Conversely, patients in low SES neighborhoods were less likely to receive low value SLNB (OR 0.89, 95% CI 0.85-0.94) or CPM than (low nSES OR 0.75, 95% CI 0.73-0.77); middle nSES OR 0.91 (0.89-0.92) those in high SES neighborhoods. Conclusion: In the SEER Program, low nSES was associated with a lower probability of low value procedures except for ALND utilization.
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    Adversity in Infancy and Childhood Cognitive Development: Evidence From Four Developing Countries
    (Frontiers, 2022-12-12) Manalew, W. Samuel; Tennekoon, Vidhura S.; Lee, Jusung; O'Connell, Bethesda; Quinn, Megan; Economics, School of Liberal Arts
    Objectives: We investigated whether adverse experiences at age 1 (AE-1) affect the level of and change in cognition during childhood using harmonized data from four developing countries. Methods: Data included children born in 2001/2002 and were followed longitudinally in 2006/2007 and in 2009/2010 by Young Lives study in Ethiopia, India, Peru, and Vietnam. Childhood cognition was measured using the Peabody Picture Vocabulary Test (PPVT) at ages 5 (PPVT-5) and 8 (PPVT-8). We also examined the effect on a change in cognition between age 5–8 (PPVT-Change). The AE-1 scores were constructed using survey responses at age 1. The ordinary least squares regression was used for estimation. Results: We found that children with higher adversities as infants had lower cognition scores at ages 5 and 8. The change in cognition between the two ages was also generally smaller for those with severe adversities at infancy. The negative association between adversities and childhood cognition was strongest for India. Conclusion: The results provide policy relevant information for mitigation of undesirable consequences of early life adversities through timely interventions.
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    What’s a bear market? An economist explains
    (The Conversation US, Inc., 2022-06-17) Tennekoon, Vidhura S.; Economics, School of Liberal Arts