Working papers

"What Do Workplace Wellness Programs Do? Evidence from the Illinois Workplace Wellness Study" (with Damon Jones and David Molitor) (forthcoming, Quarterly Journal of Economics) [Study website]
Media coverage: [NBER Digest] [New York Times] [Washington Post]
Workplace wellness programs cover over 50 million US workers and are intended to reduce medical spending, increase productivity, and improve well-being. Yet, limited evidence exists to support these claims. We designed and implemented a comprehensive workplace wellness program for a large employer and randomly assigned program eligibility and financial incentives at the individual level for nearly 5,000 employees. We find strong patterns of selection: during the year prior to the intervention, program participants had lower medical expenditures and healthier behaviors than nonparticipants. The program persistently increased health screening rates, but we do not find significant causal effects of treatment on total medical expenditures, other health behaviors, employee productivity, or self-reported health status after more than two years. Our 95 percent confidence intervals rule out 84 percent of previous estimates on medical spending and absenteeism.

"The Mortality and Medical Costs of Air Pollution: Evidence from Changes in Wind Direction" (with Tatyana Deryugina, Garth Heutel, Nolan Miller, and David Molitor) (forthcoming, American Economic Review)
We estimate the causal effects of acute fine particulate matter exposure on mortality, health care use, and medical costs among the US elderly using Medicare data. We instrument for air pollution using changes in local wind direction and develop a new approach that uses machine learning to estimate the life-years lost due to pollution exposure. Finally, we characterize treatment effect heterogeneity using both life expectancy and generic machine learning inference. Both approaches find that mortality effects are concentrated in about 25 percent of the elderly population.

"Mortality Risk, Insurance, and the Value of Life" (with Daniel Bauer and Darius Lakdawalla) (under review) [Data and code]
We develop a new framework for valuing health and longevity improvements that departs from conventional but unrealistic assumptions of full annuitization and deterministic health. Our framework can value the prevention of mortality and of illness, and it can quantify the effects of retirement policies on the value of life. We apply the framework to life-cycle data and generate new insights absent from the conventional approach. First, treatment is up to five times more valuable than prevention, even when both extend life equally. This asymmetry helps explain low observed investment in preventive care. Second, severe illness can significantly increase the value of statistical life, helping to reconcile theory with empirical findings that consumers value life-extension more in bleaker health states. Third, retirement annuities boost aggregate demand for life-extension. We calculate that Social Security adds $10.6 trillion (11 percent) to the value of post-1940 longevity gains and would add $127 billion to the value of a one percent decline in future mortality.

"The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation" (with Tatyana Deryugina and Alex MacKay) (forthcoming, American Economic Journal: Applied Economics) [Data and code]
We study the dynamics of residential electricity demand by exploiting a natural experiment that produced large and long-lasting price changes in over 250 Illinois communities. Using a flexible difference-in-differences matching approach that accounts for the effect of current, past, and future price changes on current demand, we estimate a one-year price elasticity of $-0.16$, a two-year elasticity of $-0.22$, and a long-run elasticity between $-0.31$ and $-0.35$. We also provide compelling evidence that consumers increased electricity usage ahead of these announced price changes. Our findings highlight the importance of accounting for consumption dynamics when evaluating energy policy.


"A Model of Addiction and Social Interactions". Economic Inquiry, April 2019, 57(2): 759-773. [Pre-publication PDF] [Data and code]
Many consumer behaviors are both addictive and social. Understanding how these two phenomena interact informs basic models of human behavior, and matters for policymakers when the behavior is regulated. I develop a new model of demand that incorporates both addiction and social interactions and show that, under certain conditions, social interactions reinforce the effects of addiction. I also show how the dynamics introduced by addiction can solve the pernicious problem of identifying the causal effects of social interactions. I then use the model to illustrate a new and important identification problem for studies of social interactions: existing estimates cannot be used to draw welfare conclusions or even to deduce whether social interactions increase aggregate demand. Finally, I develop a method which allows researchers to distinguish between two common forms of social interactions and draw welfare conclusions.

"Did Medicare Part D Reduce Mortality?" (with Jason Huh). Journal of Health Economics, May 2017, 53: 17-37. [Pre-publication PDF] [Data and code]
We investigate the implementation of Medicare Part D and estimate that this prescription drug benefit program reduced elderly mortality by 2.2 percent annually. This was driven primarily by a reduction in cardiovascular mortality, the leading cause of death for the elderly. There was no effect on deaths due to cancer, a condition whose drug treatments are covered under Medicare Part B. We validate these results by demonstrating that the changes in drug utilization following the implementation of Medicare Part D match the mortality patterns we observe. We calculate that the value of the mortality reduction is equal to $5 billion per year.

"The Insurance Value of Medical Innovation" (with Darius Lakdawalla and Anup Malani). Journal of Public Economics, January 2017, 145: 94-102. [Pre-publication PDF] [Data and code]
Economists think of medical innovation as a valuable but risky good, producing health benefits but increasing financial risk for consumers and healthcare payers. This perspective overlooks how innovation can lower physical risks borne by healthy patients facing the prospect of future disease. We present an alternative framework that accounts for all these sources of value and links them to the value of healthcare insurance. We show that any innovation worth buying reduces overall risk and generates positive insurance value on its own. We conduct a stylized numerical exercise to assess the potential empirical significance of our insights. Our calculations suggest that conventional methods meaningfully understate the value of historical health gains and disproportionately undervalue treatments for the most severe illnesses, where physical risk to consumers is the costliest. These calculations also suggest that the value of physical insurance from new technologies may exceed the financial spending risk that they pose.

"Interpreting Pre-trends as Anticipation: Impact on Estimated Treatment Effects from Tort Reform" (with Anup Malani). Journal of Public Economics, April 2015, 124: 1-17. [Pre-publication PDF] [Data and code]
While conducting empirical work, researchers sometimes observe changes in outcomes before adoption of a new policy. The conventional diagnosis is that treatment is endogenous. This observation is also consistent, however, with anticipation effects that arise naturally out of many theoretical models. This paper illustrates that distinguishing endogeneity from anticipation matters greatly when estimating treatment effects. It provides a framework for comparing different methods for estimating anticipation effects and proposes a new set of instrumental variables to address the problem that subjects' expectations are unobservable. Finally, this paper examines a specific set of tort reforms that was not targeted at physicians but was likely anticipated by them. Interpreting pre-trends as evidence of anticipation increases the estimated effect of these reforms by a factor of two compared to a model that ignores anticipation.

"Incentives for Reporting Disease Outbreaks" (with Ramanan Laxminarayan and Anup Malani). PLOS ONE, March 2014, 9(3): e90290. [Pre-publication PDF] [Data and code]
Countries face conflicting incentives to report infectious disease outbreaks. Reports of outbreaks can prompt other countries to impose trade and travel restrictions, which has the potential to discourage reporting. However, reports can also bring medical assistance to contain the outbreak, including access to vaccines. We compiled data on reports of meningococcal meningitis from 54 African countries between 1966 and 2002, a period marked by two events: first, a large outbreak reported from many countries in 1987 associated with the Hajj that resulted in more stringent requirements for meningitis vaccination among pilgrims; and second, another large outbreak in Sub-Saharan Africa in 1996 that led to a new international mechanism to supply vaccines to countries reporting a meningitis outbreak. We find that the Hajj vaccination requirements started in 1988 were associated with reduced reporting, especially among countries with relatively fewer cases reported between 1966 and 1979. After the vaccine provision mechanism was in place in 1996, reporting among countries that had previously not reported meningitis outbreaks increased. These results indicate that countries may respond to changing incentives to report outbreaks when they can do so. In the long term, these incentives are likely to be more important than surveillance assistance in prompt reporting of outbreaks.

"The Relation Between Variance and Information Rent in Auctions" (with Brett Katzman and Jesse Schwartz). International Journal of Industrial Organization, March 2010, 28(2): 127-130. [Pre-publication PDF]
This paper examines the conventional wisdom, expressed in McAfee and McMillan's (1987) widely cited survey paper on auctions, that links increased variance of bidder values to increased information rent. We find that although the conventional wisdom does indeed hold in their (1986) model of a linear contract auction, this relationship is an artifact of that particular model and cannot be generalized. Using Samuelson's (1987) model, which is similar but allows for unobservable costs, we show that increased variance does not always imply increased information rent. Finally, we give the appropriate measure of dispersion (different from variance) that provides the link between the bidder value distribution and information rent.

Works in progress

"Peer Effects in the Workplace: Evidence from the Illinois Workplace Wellness Study" (with Damon Jones and David Molitor)

"Pollution and Mortality in the United States: Evidence from 1972-2015" (with Tatyana Deryugina)

"Teenage Driving, Mortality, and Risky Behaviors" (with Jason Huh)

"Does Medicare Improve Quality of Life?"

"Evasion or Stockpiling? The Effect of Anticipated Future Tax Changes on Gasoline Sales" (with Don Fullerton)

External grants

Investigator, "The Impact of Temperature and Pollution on Mortality, Morbidity, and Health Care Cost Among the Elderly" (with Tatyana Deryugina, Garth Heutel, Nolan Miller, and David Molitor), National Institute on Aging, R01 AG053350, 07/2016-06/2021, $1.6 million.

Principal Investigator, "The Illinois Workplace Wellness Study" (with Damon Jones, David Molitor, and Laura Payne), $2.1 million.
National Institute on Aging,  R01 AG050701,  08/2015-04/2019,  $1,230,680.
J-PAL North America,  5710004125,  07/2016-06/2018,  $321,990.
National Science Foundation,  1730546,  07/2017-06/2019,  $300,000.
Robert Wood Johnson Foundation,  73730,  07/2016-01/2018,  $200,000.

Upjohn Institute Early Career Research Award, "Worksite Wellness: A Field Experiment on Participation Incentives and Selection into Wellness Programs" (with David Molitor), 2017, $5,000.

Other selected publications

"Healthy, Body Weight, and Obesity" (with Darius Lakdawalla). Oxford Handbook of Economics and Human Biology, (Oxford University Press), 2016. [Pre-publication PDF]
The rise in obesity has generated enormous concern among policy makers and the general public. Economists have focused on explaining the causes of this rise, along with the attendant implications for public policy. This chapter summarizes the economic literature on the theory of weight determination, including the optimal determination of food intake and exercise, and the influence of prices and peer effects. In addition, the chapter reviews the empirical literature that tests a range of explanations for the rise in obesity, such as declining food prices, increasing price of exercise, rising income, peer effects, and the decline in cigarette consumption.

"The Complex Relationship Between Healthcare Reform and Innovation" (with Darius Lakdawalla and Anup Malani). The Future of Healthcare Reform in the United States, (University of Chicago Press), 2015. [Pre-publication PDF]
In this chapter we examine some of the interesting and important ways in which healthcare reform, particularly expansion of health insurance, affects innovation. We argue that the complexity and uncertainty of the relationship between insurance and innovation puts a premium on ability to experiment with alternative forms of healthcare reform.

"Tools to Address Illinois Revenue: Increasing Sin Taxes." State Tax Notes, June 2014, 707-711. [Pre-publication PDF]
In this report, I estimate the revenue that could be generated by increasing Illinois sin taxes on cigarettes, alcohol, and gambling. I discuss the efficiency and distributional effects of those taxes, as well as potential savings from a reduction in cigarette and alcohol consumption.