“The Determinants of Physicians’ Location Choice: Understanding the Rural Shortage” (JMP, Slides

A long-standing challenge in the US health care system is the provision of medical services to rural areas, where 25% of the population live, but only 10% of physicians operate. This paper develops a model of physicians' location choices and uses it to explore the impact of policy changes (loan forgiveness and salary incentives) on the geographical distribution of physicians. I build a structural spatial equilibrium model in which physicians are heterogeneous along their specialty, demographics, and skill. Identification of the parameters of interest is challenged by the possible correlation between unobserved characteristics of location and wages, as offered wages are higher where amenities are fewer. To overcome this issue, I collect micro-level data from physicians' directories on doctors' medical school, residency, and first job choices. This wealth of information and structural methods of demand à la Berry, Levinsohn, and Pakes (1995) allow me to back up the unobserved characteristics and be exactly identified. I allow individuals the preference to remain close to their residency location and let each medical resident's job choice set depend on his or her skill. I find that all residents display a strong retention preference and that primary care physicians in particular are 3.5 times more likely to pick a job within the same state and 4 times more likely to pick a job within the same area as their residency. I then use the model to analyze the performance of current policies targeted at bringing physicians to rural areas. I find that current policies have led to a 1.2% increase in the number of physicians choosing rural areas. Policies aimed at using the current spending on loan forgiveness for higher salary incentives for rural employment would lead to almost 6 times more primary care physicians choosing rural areas. Finally, the average quality of physicians attracted to rural areas would be higher under salary incentives than loan forgiveness.

“The Consequences of Medicare Pricing: An Explanation of Treatment Choice” (Draft, Slides)

This paper provides evidence for a supply-induced demand mechanism that is compatible with the increasing trend in healthcare spending in the US. Using data on the Medicare universe of physicians (therefore excluding hospitals) and the BLP (1995) algorithm, controlling for demographic and regional variation, I analyze physicians’ responses to financial incentives and how they can impact demand by carrying out more lucrative treatments. This research estimates a degree of overutilization of specialized (more remunerative) procedures equal to 8-18% across all specialties and urbanity levels. It also finds that primary care physicians are able to take on more specialist services in less urban areas, where they gain higher market shares due to the lower number of specialists in close proximity. In particular, the increase in the weight of the primary care physicians’ financial interests in the consumer utility ranges between 7-16% compared to physicians in large metropolitan areas, at the expense of specialists. Small metropolitan areas (population>50,000) and very rural areas (population<10,000) are the most affected. This paper also shows from a reduced-form perspective that primary care doctors react strongly to increases in the reimbursement units. An increase of one unit in the reimbursement factor (equal to a salary increase shy of $36) leads to 57 more services provided by primary care in the more remunerative procedure and a 45% higher chance that they will increase the number of specialist services provided.

“Public Policies to Alleviate the Housing Crisis,” with James A. Schmitz, Jr. (Rough Draft)

This work takes into consideration the fact that different technologies can be used in housing production, and that factory-built housing, as the most efficient production technology, should be used for the provision of affordable housing. However, due to high levels of regulations, its production is negligible. In this paper, we analyze different policies and their effect on the population in need of affordable housing. To be able to quantitatively measure the cost and savings across the two types of housing, we use micro-level data provided by R.S. Means to be able to price housing components exactly. Finally, we measure the welfare gains that could be obtained by switching to the more efficient production solution.

“A Thorough Analysis of Norwegian Cement Cartel Experience,” (Rough Draft)

The Norwegian cement market has experienced two events which are of particular interest to economists: its cartel period, from 1921 to 1968, and its subsequent monopoly period. The legality of both arrangements provides us with data on the price collusion and decision making of the companies affected unlike other industries where cartel periods happened illegally. This has of course attracted the attention of economists in the past. Röller, Steen, and Sørgard have all shown interest in this phenomenon and they have all provided some explanation of the move from a cartel to a monopoly, reaching the conclusion that the monopoly was actually highly welfare improving under some assumptions. This paper seeks to relax all of these assumptions and shows that the move to a monopoly was not actually as welfare improving as previously shown. Moreover, the improvement is actually due to the increase in prices, and is not welfare improving for consumers. To do so, I go back to the baseline model and increasingly relax more and more assumptions, showing the end change in results. In particular, starting from the baseline model, I make export prices depend on the quantity of cement exported. Then, I let marginal costs increase in time. I further show two generalizations: first, the case in which the export price is below marginal cost; second, the case in which marginal costs are company-specific. I conclude by taking the generalized version and calculate the effect of the change in welfare.

“Corporate Valuation: Measuring the Value of Companies in Turbulent Times” (Wiley 2016)

Buy the textbook I edited and contributed to here!

Other Work in Progress:

“An NP a Day Keeps the Doctor Away,” in progress.

In this paper, I analyze the effect of independent practice of nurse practitioners. In states where nurse practitioners can work independently (currently 23 out of 50), they tend to be more present in places where primary care physicians are lacking. By doing so, they can carry out more of those visits that physicians would normally carry out in cities. The location choice of nurse practitioners is therefore influenced by this margin when they are free to operate without supervision. First, I show that independent practices of nurse practitioners are particularly prevalent in rural areas and in health professional shortage areas in states where their independent practices are allowed. In states where this is not the case, nurse practitioners are concentrated in cities, as they are subject to physicians’ supervision. Because of this, policy changes that allow nurse practitioners to operate independently can be beneficial as they increase the provision of health care to areas which are not covered by physicians. However, the presence of nurse practitioners can subsequently deters physicians’ entry. Due to nurse practitioners’ more limited scope of practice compared to primary care physicians, the number of types of procedures carried out can in fact decrease. I conclude by analyzing which of these two effects is the strongest.



Older Work (Pre-PhD):

“High Product Complexity with Low Financial Literacy in a World of Rationally Bounded Individuals,” MSc Thesis, July 2015, Bocconi University (Draft)

This thesis combines the concepts of bounded rationality, product complexity, obfuscation, and trust to build a theoretical model which attempts to answer the following question: why do financially illiterate individuals hold highly complex financial products? In my thesis, investors have different degrees of sophistication, with unsophisticated investors being rationally bounded; financial institutions are able to exploit these differences to maximize their profits leading to discriminatory pricing of those product characteristics unobserved by unsophisticated individuals. Having to deal with the possibility of contamination between the two groups, financial institutions solve for the optimal time to reshuffle their product offerings, resetting the proportion of unsophisticated individuals back to the original one. Trust, proxied by the number of years the consumer has been dealing with the same financial intermediary, leads to high switching costs for unsophisticated investors. The latter are then eager to pay a higher price than the fair one, even after learning has occurred. If investors trust financial institutions, the latter are able to earn positive profits in equilibrium without the use of obfuscation (the absence of reshuffling of their products to eliminate the benefits unsophisticated investors obtain from learning). Limiting myself to a Bertrand setting, I can solve for equilibrium prices and consumers’ and financial institutions’ behavior when the complexity of products is not too high. Despite this restriction, the results found can be interesting if applied to products which can be easily compared across institutions, such as mortgages.