Adaptive Estimation and Uniform Confidence Bands for Nonparametric Structural Functions and Elasticities 4 March 2024 Xiaohong Chen, Timothy Christensen, and Sid KankanalaWe introduce two data-driven procedures for optimal estimation and inference in nonparametric models using instrumental variables. The first is a data-driven choice of sieve dimension for a popular class of sieve two-stage least squares estimators. When implemented with this choice, estimators of both the structural function h0 and its derivatives (such as elasticities) converge at the fastest possible (i.e., minimax) rates in sup-norm. The second is for constructing uniform confidence bands (UCBs) for h0 and its derivatives.
Private Sector Provision as an Escape Valve: The Mexico Diabetes Experiment 26 February 2024 Ari Bronsoler, Jonathan Gruber, and Enrique SeiraPublic health systems are dominant in much of the world, but often face fiscal constraints that lead to rationing of care. As a result, private sector healthcare providers could in theory beneficially supplement public systems, but evaluating the benefits of private alternatives has been challenging. We evaluate a private supplement to the free public health system for one of the world’s deadliest health problems, diabetes. We estimate enormous impacts of the private supplement, increasing the share of those treated who are under control by 69%.
Surviving Competition: Neighborhood Shops vs. Convenience Chains 26 February 2024 Miguel Angel Talamas MarcosHundreds of millions of microenterprises in emerging economies face increased competition from the entry and expansion of large firms that offer similar products. This paper examines the impacts of the opening of chain-run convenience stores on one of the world’s most ubiquitous microenterprises: owner-operated shops. To address endogeneity in time and location of chains’ opening, I pair two-way fixed effects with a novel instrument that shifts the profitability of chains but not of shops at the neighborhood level. Expanding the number of chain outlets from zero to the neighborhood average of 6.7 stores reduces the number of shops by 15%, a decline driven not by increased shop exits but by decreased shop entries.
Partially Linear Models under Data Combination 26 February 2024 Xavier D'Haultfoeuille, Christophe Gaillac, and Arnaud MaurelWe study partially linear models when the outcome of interest and some of the covariates are observed in two different datasets that cannot be linked. This type of data combination problem arises very frequently in empirical microeconomics. Using recent tools from optimal transport theory, we derive a constructive characterization of the sharp identified set. We then build on this result and develop a novel inference method that exploits the specific geometric properties of the identified set.
Reservation Raises: The Aggregate Labor Supply Curve at the Extensive Margin 26 February 2024 Preston Mui and Benjamin SchoeferWe measure desired labor supply at the extensive (employment) margin in two representative surveys of the U.S. and German populations. We elicit reservation raises: the percent wage change that renders a given individual indifferent between employment and nonemployment. It is equal to her reservation wage divided by her actual, or potential, wage. The reservation raise distribution is the nonparametric aggregate labor supply curve.
Estimating Equilibrium in Health Insurance Exchanges: Price Competition and Subsidy Design under the ACA 18 February 2024 Pietro TebaldiRegulations to design private yet publicly sponsored health insurance markets are increasingly adopted in many OECD countries. Here I combine data and economic theory to analyze the interaction between insurers’ competition and the design of premium subsidies in determining equilibrium outcomes. My empirical model includes adverse selection, rich heterogeneity in preferences for vertically and horizontally differentiated plans and accommodates alternative assumptions on pricing conduct.
The Causal Impact of Socio-Emotional Skills Training on Educational Success 18 February 2024 Giuseppe Sorrenti, Ulf Zölitz, Denis Ribeaud, and Manuel EisnerWe study the long-term effects of a randomized intervention targeting children’s socio-emotional skills. The classroom-based intervention for primary school children has positive impacts that persist for over a decade. Treated children become more likely to complete academic high school and enroll in university. Two mechanisms drive these results.
Information Spillovers and Sovereign Debt: Theory Meets the Eurozone Crisis 18 February 2024 Harold L. Cole, Daniel Neuhann, and Guillermo OrdonezWe develop a theory of information spillovers in sovereign bond markets in which investors can learn about default risk before trading in primary and secondary markets. If primary markets are structured as multi-unit discriminatory-price auctions, an endogenous winner’s curse leads to strategic complementarities in information acquisition.
