Essays in Applied Macroeconomics

This dissertation combines micro-level empirical analyses and general equilibrium structural models to study shock propagation mechanisms and business cycles dynamics, with a particular emphasis on the role played by firms. In the first chapter, we study how regional shocks spill over across U.S. local markets through intra-firm market networks and explore how such spillovers reshape household welfare across regions. We link data on barcode-region-level prices and quantities with producer-level information to exploit variation in firms' initial exposure to differential drops in local house prices in the 2007-09 recession. We show that a firm's local sales decrease in response to not only direct negative local demand shock but also indirect negative local demand shocks originating in its other markets. Intra-firm cross-market spillover effects arise mainly from product creation and destruction, whereas direct local shock operates through the sales of continuing products. Spillover effects occur because (i) firms replace products that have higher value---sales per product, unit price, and organic sales share---with lower-value ones in response to negative demand shocks, and (ii) such product replacements are synchronized across many markets within each firm. Counterfactual analysis using an estimated multi-region model with endogenous quality adjustments shows that our channel works as a novel inter-regional shock transmission mechanism and generates an implicit regional redistribution effect. Such effect is economically sizable and is comparable to the size of transfer policies implemented during the Great Recession. In the second chapter, we investigate a role of supply chain network in transmitting housing market disruptions during the Great Recession. We build up a unique micro-level data that combines local housing market condition, firms' sales in each local market, and firm-level supply chain network information. Exploiting firm-specific demand shock stemming from cross-market variation in house price changes and an initial difference in firms' local sales, we find that such shock not only affects downstream firms but also transmits to their suppliers. The estimated supplier-level elasticity is quantitatively large, reflecting larger role of downstream firms with higher elasticity in the network structure. To quantify such propagation at the aggregate level, we build up a parsimonious network model calibrated to match the micro-level data. Our counterfactual analysis shows that approximately 18\% of the observed drop in the aggregate output can be attributed to the propagating role of the supply chain network. In the third chapter, we study the business cycle with a Translog production function. We empirically identify a complementarity between labor and energy that leads to procyclical returns to scale, which is not compatible with the tightly parameterized production function commonly used in the literature (Cobb-Douglas and CES). Therefore, we propose a flexible Translog production function that not only features complementarity-induced procyclical returns to scale but is also consistent with a balanced growth path. A simple calibrated business cycle model with the proposed production function generates strikingly data-consistent dynamics following demand shocks without relying on either nominal rigidities or countercyclical markups

Independent Evaluation of Phase 1 of the Affordable Medicines Facility - malaria (AMFm), Multi-Country Independent Evaluation Final Report

The success of malaria control efforts depends on a high level of coverage in the use of effective antimalarials such as artemisinin-based combination therapies (ACTs). Although these anti-malarials have been procured in large amounts by countries, evidence suggests that ACT use still remains far below target levels. In response to this issue, the Affordable Medicines Facility – malaria (AMFm) hosted by the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) was set up. AMFm comprises three key elements: (i) price reductions through negotiations with ACT manufacturers; (ii) a buyer subsidy through a ‘co-payment’ for ACTs at the top of the global supply chain; and (iii) supporting interventions to promote appropriate use of ACTs. Examples of these supporting interventions include training providers and outreach to communities to promote ACT use. All ACTs subsidized through AMFm bear a green leaf logo on their packaging. The four main objectives of AMFm are to: (i) increase ACT affordability; (ii) increase ACT availability; (iii) increase ACT use, including among vulnerable groups; and (iv) “crowd out” oral artemisinin monotherapies, chloroquine and sulfadoxine-pyrimethamine (SP) by increasing the market share for ACTs

Government Price Control

Thesis (M.A.)--Boston University, 1945. This item was digitized by the Internet Archive

Availability, Affordability, and Pricing of Anti-cancer Medicines in Selected Low and Middle-Income Countries in Africa

Introduction: Cancer is a leading cause of morbidity and mortality in Low-and Middle-Income Countries (LMICs). Health outcomes may improve with early detection and treatment. In several African countries including Ghana and South Africa, due to the absence of a clear medicine pricing policy, cancer medicines have high price variations due to forex fluctuations, and import tariffs, which impact access. Aim: This research aimed to assess the availability, affordability, prices, and price components of cancer medicines in South Africa and Ghana. Method: A systematic literature review was undertaken on the availability, pricing, affordability, and access to cancer medicines in LMICs. An adapted World Health Organization (WHO) and Health Action International (HAI) methodology was used to determine the availability, prices, and affordability of cancer medicines in South Africa and Ghana, including a case study to assess the price components in the Ghana distribution chain. Also, affordability according to the impoverishment of the population after procuring cancer medicines in South Africa was determined. Results: The literature review showed that in LMICs, there are wide differences in cancer medicine availability and prices amongst medicine brands in different countries, with low-income earners abandoning treatment because of unaffordability. This research showed similar findings of very low availability of cancer medicines beneath the WHO target of 80%, substantial differences in the prices of different cancer medicine brands due to high markups for both generics and branded medicines in all sectors, originator brands having higher markups than generic products, high medicine prices in private facilities compared to the public facilities and unaffordability of cancer medicines by low-income earners with some impoverished after buying cancer medicines. Conclusion: This research contributes to academic knowledge and the findings can support quality pricing data, comprehensive policies, regulations, and innovative interventions by governments and stakeholders to improve affordable access to cancer medicines

Perfecting Patent Prizes

A number of commentators in recent years have suggested permitting holders of intellectual property rights to give up these rights in exchange for cash prizes from the government. In this Article, Professor Abramowicz shows that each of the proposals has significant flaws that would make implementation impractical and argues that no single perfect formula or algorithm for determining the size of prizes exists. A prize system is nonetheless worth pursuing because it could increase social welfare significantly by eliminating deadweight loss. Professor Abramowicz recommends a relatively simple approach that would complement rather than replace the patent system. The proposal is to establish an agency to distribute a fund that would be used to reward corporate efforts to reduce the monopoly effects of patent rights. As long as there is a substantial delay between the activities reducing deadweight loss and the granting of prizes, and as long as the rights to future prizes are tradable, granting of wide agency discretion has significant advantages and few drawbacks. Even assuming the agency is likely to do a poor job of distributing prizes, the system will be efficient if no biases in granting prizes are predictable. After addressing a variety of issues concerning the design of a prize system, Professor Abramowicz offers several potential applications for patent, copyright, an

Essays On the Empirical Analysis of Grocery Retailing and Consumer Shopping behavior

Cette thèse est composée de trois essaies portant sur l'analyse empirique de la grande distribution et le comportement d'achat des consommateurs. Le premier chapitre est dédié à l'étude des programmes de fidélité des supermarchés et leur impact sur la demande de marques de distributeur (MDD). Souvent les supermarchés lient les avantages fidélité à l'achat en marques de distributeurs, quelles sont les motivations des supermarchés à faire cela? C'est la question que cette étude cherche à répondre d'un point de vue empirique. Je travaille sur des données extraites d'un panel représentatif des consommateurs concernant les achats des ménages français, et l'utilisation d'une méthode structurelle d'estimation de demande. Les résultats sont conformes aux faits: les MDD sont des produits moins préférés vis-à-vis les marques nationales (MN) de même qualité. Cependant, la carte fidélité a, en effet, un impact positif sur le choix du consommateur: ceux qui portent une carte fidélité ont une probabilité supérieure de choisir des MDD que ceux qui ne l'ont pas. Par ailleurs, l'impact d'un programme de fidélité sur la demande des MDD est moins important chez les détenteurs de plusieurs cartes. Le deuxième chapitre, co-écrit avec Daniel Herrera Araujo, vise à mesurer les coûts d'achat des consommateurs à partir des données de panel concernant les achats des ménages en France. Quand l'analyse économique tient compte des coûts d'achat, que rationalisent l'hétérogénéité observée en nombre des enseignes visitées par les consommateurs, les conclusions de politique publique peuvent changer remarquablement. Nous identifions les coûts d'achat du consommateur dans le cadre d'un modèle structurel de demande en plusieurs enseignes ainsi qu'en plusieurs produits, qui lie le choix optimale du nombre de supermarchés à visiter (un seule ou plusieurs) aux coûts d'achat. Nous estimons les paramètres du modèle et mesurons le coût d'achat total moyen en 18,7 € par enseigne visitée. Deux quantités y sont comprises: le coût fixe moyen, 1,53 € et le coût de transport moyen 17,1 € par visite. Le troisième chapitre porte sur l'analyse empirique du rôle des tarifs binômes et la fixation du prix de vente (RPM, d'après l'expression anglo-saxonne Resale Price Maintenance) dans la stabilité des prix de vente. Il est largement reconnu dans la littérature économique que la transmission incomplète des chocs de coûts aux prix de vente est expliquée par l'ajustement des marges ainsi que les coûts d'ajustement des prix. Les relations entre fournisseurs et distributeurs et le RPM peuvent renforcer la rigidité des prix. Je présente un modèle structurel de relations verticales dont des tarifs binômes peuvent être adoptées ainsi que le RPM. Ce modèle tient compte de la rigidité des prix de vente à travers des coûts fixes d'ajustement des prix qui sont ajoutés au profit du détaillant. En utilisant des données concernant les ventes de marques de céréales pour le petit déjeuner dans une grande chaîne des supermarchés au Chicago, j'estime la demande, récupère les marges et calcule les limites supérieure et inférieure de l'intervalle que contiennent les vrais coûts d'ajustement. Les résultats obtenus montrent que ces coûts représentent en moyenne entre 1,6% et 3% des revenus totales du distributeur par an.This dissertation consists of three essays on the empirical analysis of grocery retailing and consumer shopping behavior. The first chapter focuses on supermarket loyalty programs and their impact on the demand for private labels. Supermarkets often link loyalty rewards to private label purchases, What are supermarkets' motivations to do this? This empirically examines this link using scanner data on grocery purchases of French households and structural methods of demand estimation. Results are consistent with the industry lore: private labels are less valued products relative to quality-equivalent national brands. However, members of loyalty programs have a larger valuation of private labels than non-members. Moreover, the more prone to subscribe to LPs a customer is, the larger her sensitivity to a price increase and the weaker the expected effects on the demand for private labels. The second chapter, joint with Daniel Herrera Araujo, is inspired by a number of theory papers showing that when shopping costs, that rationalize the observed heterogeneity in consumer shopping patterns, are introduced in economic analysis, policy conclusions can change dramatically. We structurally identify consumer shopping costs using scanner data on grocery purchases of French households. We present a model of demand for multiple stores and products consisting of an optimal stopping problem in terms of individual shopping costs. This rule determines whether to visit one or multiple stores at a shopping period. We then estimate the parameters of the model and recover the distribution of shopping costs. We quantify the total shopping cost in 18.7 € per store sourced on average. This cost has two components, namely, the mean fixed shopping cost, 1.53 € and mean total transport cost of 17.1 € per trip. The third chapter empirically examines the role of nonlinear contracts between manufacturers and retail stores, and Resale Price Maintenance (RPM) on nominal price stability. According to the literature the incomplete transmission of costs shocks into retail prices is explained by the existence of markup adjustment and price adjustment costs. The vertical conduct of the industry and the use of RPM can introduce further price stickiness or reinforce it. I present a structural model of vertical relations allowing for two-part tariffs and RPM, and accounting explicitly for retail price rigidity by including fixed costs of price adjustment in retailer's profit function. Using micro data on sales of breakfast cereals from a large supermarket chain in Chicago, I estimate demand, retrieve margins, and compute bounds for retail price adjustment costs. I find that these costs lie between 1.6% and 3% of its total revenue a year, on average

Sweatfree Independent Monitoring Contract

This document is part of a digital collection provided by the Martin P. Catherwood Library, ILR School, Cornell University, pertaining to the effects of globalization on the workplace worldwide. Special emphasis is placed on labor rights, working conditions, labor market changes, and union organizing.ilrf_sweatfree_independent_monitoring_contract.pdf: 210 downloads, before Oct. 1, 2020

Acceptability of speed limits and other policy measures in German cities

An increasing number of German cities currently demand the Federal Government to empower cities to implement 30 kph speed limits at their own discretion. Setting area-wide 30 kph as the maximum speed, as already installed in many other European cities, could therefore soon become a viable policy option in Germany. This thesis conducts a stated choice (SC) experiment to determine the acceptability of such area-wide standard 30 kph speed limits compared to the acceptability of the expansion of shared space zones, costs for inner-city on-street car parking and public transport ticket fares. Combining the policies as attributes in an unlabeled experiment allows to juxtapose the policies in terms of their relative importance for the respondents’ choice decision. 129 adults from German cities with more than 100,000 inhabitants participated in an online survey during September 2022. The results show that respondents evaluate the introduction of standard 30 kph speed limit in the city center as utility increasing compared to the prevalent status quo with standard 50 kph. Setting a standard 30 kph speed limit in the whole city also has a positive parameter in the base model, but does not significantly influence the respondents’ utility. The expansion of shared space seems to have no relevant effect on the choice decision of respondents. Higher ticket fares for public transport show to be utility decreasing for respondents of this study, whereas an increase in car parking costs is assessed positively. Clear differences in the policy assessment of different subgroups of respondents can be observed. In line with literature, city-wide implementation of a standard 30 kph speed limit shows low acceptability among the group of frequent car users. In turn, voters of mayoral candidates for the Green Party (Bündnis 90/Die Grünen) or Left Party (Die Linke) expect a positive effect on their personal utility when a standard 30 kph speed limit is established in the whole city or in the city center only. Respondents’ gender does not seem to affect the assessment of 30 kph speed limit policy