When Does Regulation Distort Costs? Lessons from Fuel Procurement in US Electricity Generation

By Steve Cicala

American Economic Review, January 2015

This paper evaluates changes in fuel procurement practices by coal and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantia...

When Does Regulation Distort Costs? Lessons from Fuel Procurement in US Electricity Generation: Comment

By Jin Soo Han, Jean-François Houde, Arthur A. van Benthem, and Jose Miguel Abito

American Economic Review, April 2021

We revisit one of the results in Cicala (2015) and show that the previously estimated large and significant effects of US electricity restructuring on fuel procurement are not robust to the presence of outliers. Using methodologies from the robust statist...

When Does Regulation Distort Costs? Lessons from Fuel Procurement in US Electricity Generation: Reply

By Steve Cicala

American Economic Review, April 2021

The average effect of deregulatory policies on fuel prices at coal-fired power plants is strongly influenced by plants that were initially paying the highest prices for fuel. Primary sources document that these plants were locked into long-term, high-cost...

Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Reply

By James Feyrer, Erin Mansur, and Bruce Sacerdote

American Economic Review, June 2020

Measuring the geographic spillovers from an economic shock remains a challenging econometric problem. In Feyrer, Mansur, and Sacerdote (2017) we study the propagation of positive shocks from the recent boom in oil and gas production in the United States...

Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment

By Alexander G. James and Brock Smith

American Economic Review, June 2020

Feyrer, Mansur, and Sacerdote (2017) estimates the spatial dispersion of the effects of the recent shale-energy boom by unconditionally regressing income and employment on energy production at various levels of geographic aggregation. However, producing c...

Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution

By James Feyrer, Erin T. Mansur, and Bruce Sacerdote

American Economic Review, April 2017

We track the geographic and temporal propagation of local economic shocks from new oil and gas production generated by hydrofracturing. Each million dollars of new production produces $80,000 in wage income and $132,000 in royalty and business income with...

Call For Papers: Coevolution of Financial and Technological Innovations

[News]

May 26, 2023

Call for Papers: The Coevolution of Financial and Technological Innovations, Research Policy Special Issue .

Detecting Potential Overbilling in Medicare Reimbursement via Hours Worked

By Hanming Fang and Qing Gong

American Economic Review, February 2017

We propose a novel and easy-to-implement approach to detect potential overbilling based on the hours worked implied by the service codes which physicians submit to Medicare. Using the Medicare Part B Fee-for-Service (FFS) Physician Utilization and Payment...

Detecting Potential Overbilling in Medicare Reimbursement via Hours Worked: Comment

By Brett Matsumoto

American Economic Review, December 2020

Fang and Gong (2017) develop a procedure to detect potential overbilling of Medicare by physicians. In their empirical analysis, they use aggregated claims data that can overstate the number of services performed due to features of Medicare billing. In th...

Detecting Potential Overbilling in Medicare Reimbursement via Hours Worked: Reply

By Hanming Fang and Qing Gong

American Economic Review, December 2020

Matsumoto (2020) pointed out data and coding errors in Fang and Gong (2017). We show that these errors have limited impacts: all qualitative findings remain after correcting them. Matsumoto also discussed potential service overcounting in the aggregated u...

Steering the Climate System: Using Inertia to Lower the Cost of Policy

By Derek Lemoine and Ivan Rudik

American Economic Review, October 2017

Common views hold that the efficient way to limit warming to a chosen level is to price carbon emissions at a rate that increases exponentially. We show that this Hotelling tax on carbon emissions is actually inefficient. The least-cost policy path takes ...

Steering the Climate System: Using Inertia to Lower the Cost of Policy: Comment

By Linus Mattauch, H. Damon Matthews, Richard Millar, Armon Rezai, Susan Solomon, and Frank Venmans

American Economic Review, April 2020

Lemoine and Rudik (2017) argues that it is efficient to delay reducing carbon emissions, due to supposed inertia in the climate system's response to emissions. This conclusion rests upon misunderstanding the relevant earth system modeling: there is no sub...

Steering the Climate System: Using Inertia to Lower the Cost of Policy: Reply

By Derek Lemoine and Ivan Rudik

American Economic Review, April 2020

Mattauch et al. (2020) claims that the quantitative conclusions in Lemoine and Rudik (2017)—henceforth, LR17—are not robust to using a climate model consistent with recent scientific results. We observe that LR17 in fact analyzes an extension to a mor...

Real Effects of Markets on Politics: Evidence from US Presidential Elections

By Alan D. Crane, Andrew Koch, and Leming Lin

American Economic Review: Insights, March 2024

Despite the economic importance of the US stock market, there is strikingly little evidence of its impact on elections. Using county-level variation in stock market participation, we document the impact of market returns on election outcomes. High-partici...

Race and the Mismeasure of School Quality

By Joshua Angrist, Peter Hull, Parag A. Pathak, and Christopher R. Walters

American Economic Review: Insights, March 2024

In large urban districts, schools enrolling more White students tend to have higher performance ratings. We use an instrumental variables strategy leveraging centralized school assignment to explore this relationship. Estimates from Denver and New York Ci...

Interest Rates and the Spatial Polarization of Housing Markets

By Francisco Amaral, Martin Dohmen, Sebastian Kohl, and Moritz Schularick

American Economic Review: Insights, March 2024

Rising within-country differences in house values are a much-debated trend in the United States and internationally. Using new long-run regional data for 15 advanced economies, we show that standard explanations linking growing price dispersion to rent di...

Wage Garnishment in the United States: New Facts from Administrative Payroll Records

By Anthony A. DeFusco, Brandon Enriquez, and Maggie Yellen

American Economic Review: Insights, March 2024

Wage garnishment allows creditors to deduct money from workers' paychecks to repay defaulted debts. We document new facts about wage garnishment between 2014 and 2019 using data from a large payroll processor that distributes paychecks to approximately 20...

Can Financial Incentives to Firms Improve Apprenticeship Training? Experimental Evidence from Ghana

By Gabriel Brown, Morgan Hardy, Isaac Mbiti, Jamie McCasland, and Isabelle Salcher

American Economic Review: Insights, March 2024

We use a field experiment to test whether financial incentives can improve the quality of apprenticeship training. Trainers (firm owners) in the treatment group participated in a tournament incentive scheme where they received a payment based on their app...

The Irrelevance of Fee Structures for Certification

By Martin Pollrich and Roland Strausz

American Economic Review: Insights, March 2024

In models of certification, possible restrictions on the nature of the fee structures are commonly analyzed. We show that they are irrelevant for the certifier's ability to maximize profits and trade efficiency. Our results establish that certification sc...

Steady-State Social Distancing and Vaccination

By Christopher Avery, Frederick Chen, and David McAdams

American Economic Review: Insights, March 2024

This paper analyzes an economic-epidemiological model of infectious disease where it is possible to become infected more than once and individual agents make endogenous choices of social distancing and vaccine adoption. Protective actions adopted by any o...