To design premium subsidies in a health insurance market it is necessary to estimate consumer demand, cost, and study how different subsidy schemes affect insurer's incentives. I combine data on household-level enrollment and plan-level claims from the California Affordable Care Act insurance exchange with a model of insurance demand and insurers' competition to assess equilibrium outcomes under alternative subsidy designs. I estimate that younger households are significantly more price sensitive and cheaper to cover.
L51: Economics of Regulation
In order to work legally, 29% of U.S. workers require an occupational license. We show that occupational licensing reduces the racial wage gap between white and black men by 43%, and the gender wage gap between women and white men by 36%-40%. For black men, a license is a positive indicator of non-felony status that aids in firm screening of workers, whereas women experience differentially higher returns to the human capital that is bundled with occupational licenses.
I examine how firms strategically bundle news reports to offset the negative effects of a privacy breach disclosure. Using a complete dataset of privacy breaches from 2005 to 2014, I find that firms experience a small and significant 0.27% decrease in their stock price on average following the breaking news disclosure of the privacy breach.
Consumer review websites such as Yelp.com leverage the wisdom of the crowd, with each product being reviewed many times (some with more than 1000 reviews). Because of this, the way in which information is aggregated is a central decision faced by consumer review websites. Given a set of reviews, what is the optimal way to construct an average rating?
We study the impact of the announcement of enforcement of financial and securities regulation by the UK‘s Financial Services Authority and London Stock Exchange on the market price of penalized firms. Prior literature on reputational penalties has suffered from the existence of a number of confounding factors that render it hard to disentangle reputational from other losses. In the UK, the FSA and LSE only make the investigation (and its result) public if and when the firm is found to have breached the rules and incurs a fine and/or an order to pay compensation.