Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2001. / Includes bibliographical references (leaves 94-97). / In 1999 the Federal Communications Commission decided to relax its prohibition against one firm owning two television stations in the same market. Although joint ownership was prohibited prior to 1999, evidence on the effects of joint operation is provided by local marketing agreements, contractual arrangements that allow one station to operate another station in the same market. Chapter 1 studies the effect of joint operation on costs by estimating a model of television station entry decisions from 1993 to 1998. Using the method of simulated moments to estimate the entry model, I find that stations operated under local marketing agreements are significantly more likely to enter. Controlling for the endogeneity of local marketing agreements and the competition-reducing effects of local marketing agreements does not affect the conclusion that joint operation reduces costs. Chapter 2 uses the experience with local marketing agreements to study the effects of joint operation on markets for advertising and programming. Using panel data on over 160 markets from 1993 to 1998, I find that most mergers do not increase the price of advertising. However, mergers between stations that are likely to be close substitutes (as measured by their network affiliation) can lead to significant price increases. / (cont.) In the programming market I find that the ratings of merging stations increase, suggesting that mergers increase the quality and variety of programming. During the 1990s the broadcast television industry also experienced significant consolidation at the national level. This consolidation was spurred in part by the Telecommunications Act of 1996, which relaxed restrictions on the number of television stations a firm can own nationwide. Chapter 3 studies the effect of group ownership on viewers by using ratings data for 750 television stations in 1993 and 1998. I find that the increase in group ownership led to small increases in ratings. / by Mark Christopher Rainey. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2017. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This thesis consists of three empirical essays in pharmaceutical economics, which explore the role regulation plays in influencing firm behavior. In the first chapter I examine competition in the neglected disease submarket of the biopharmaceutical industry. Using a combination of novel panel data sources that cover both pharmaceutical firms innovation activities as well as the approved product market behavior, I estimate the causal effect of the introduction of the United States 2002 Rare Disease Act, and the European Union 2000 Orphan Drug Act on the equilibrium flow rate of new orphan drug candidate entry into the pharmaceutical research and development pipeline. I further implement new methods in robustness analysis including specification curve analysis and meta-regression. In the second chapter I examine competition in the research and development-intensive biopharmaceutical industry. Using a combination of novel data sources that cover both upstream pharmaceutical innovation and downstream products, I estimate the causal effect of final market size on each stage of the innovation process. I further propose and test a network model of therapy markets to study how firms endogenously reallocate within technology space in response to the negative market shock of generic penetration. In the third chapter I analyze the forces that shaped generic entry and competition in the United States pharmaceutical market over the last decade. Specifically, I find evidence that market size, payer type, distribution channel, and particular characteristics of the disease category all contribute to the ultimate amount of entry in a market. I further document evidence on the nature of competition among generic entrants, including some evidence of a first mover advantage as well as persistent price dispersion among generic entrants. Finally, I employ an instrumental variables approach to estimate the effect of marginal generic entry on price and generic diffusion within the market. / by Stephen J. Murphy / Chapter 1. Regulatory incentives for innovation in the orphan drug market -- chapter 2. Market size and innovation in research and development intensive industries -- chapter 3. Entry dynamics of the generic pharmaceutical industry. / Ph. D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2017. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 185-193). / 1 IsoLATEing: Identifying Counterfactual-specific Treatment Effects with Crossstratum Comparisons -- 2. Leveraging Lotteries for School Value-added: Testing and Estimation -- 3. Estimating Hospital Quality with Quasi-experimental Data. / This thesis develops and applies instrumental variable (IV) techniques to estimate average causal effects in settings with multiple unordered treatments. When an instrument shifts individuals across several distinct margins, classical estimators may not recover causally-interpretable parameters, particularly when effects are heterogeneous and there are fewer instruments than treatment choices. The first chapter of this thesis establishes minimal effect heterogeneity restrictions that permit IV identification of multiple local average treatment effects (LATEs) in such scenarios, using interactions of the instrument and stratifying controls. Under weaker conditional homogeneity assumptions, a novel non-parametric weighting scheme identifies these LATEs. I use this framework to estimate the economic returns to GED certification in a sample that includes individuals who would otherwise obtain a traditional high school diploma, as well as those who would otherwise drop out. The theoretical results may also offer a solution to endogenous attrition bias in randomized trials; I illustrate this in a re-analysis of the 2008 Oregon Health Insurance Experiment. Identification via stratifying interactions may be less feasible with a large number of treatments, though in such settings a researcher may be willing to forego unbiased estimation in favor of a low mean squared error (MSE) across the set of causal estimates. Indeed, policymakers, particularly in the spheres of education and healthcare, often make such trade-offs in forming observational measures of the average effectiveness, or "quality," of the public institutions they regulate. Conventional school value-added models (VAMs), for example, use empirical Bayes methods to shrink school-average test scores towards their grand mean after regression-adjusting for student demographics and past achievement. Under a standard selection-on-observables assumption, these VAMs produce minimum-MSE predictions of true school quality - predictions that increasingly drive school accountability and restructuring policies. The second chapter of this thesis (joint with Joshua Angrist, Parag Pathak, and Christopher Walters), shows how school admission lottery instruments can be used to test VAM validity, quantify the effects of selection bias, and improve conventional school quality predictions. In doing so, we provide a general framework for optimally combining observational and quasi-experimental estimators of multiple treatment effects. An application to Boston middle school quality suggests a failure of selection-on-observables and systematic bias in typical VAM estimates. Nevertheless, we find that the relative magnitude of this selection bias is modest, and policy decisions based on these VAMs are still likely to generate substantial achievement gains. Hybrid quality estimates that incorporate lottery information lead to further reductions in MSE and generate larger gains to students. / by Peter D. Hull. / Ph. D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references. / by Kaivan D. Munshi. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2006. / "September 2006." / Includes bibliographical references. / This dissertation consists of three essays in the intersection of International Trade and Institutions. The first essay looks at the effect of trade opening on the efficiency of institutions. I argue that part of the reason why some developing economies have not experienced a boost in economic performance despite increasing trade openness may be related to the interaction between weak institutions and trade. In particular, I construct a model in which trade opening in societies with weak political institutions may lead to worse economic policies. The reason is that general equilibrium price effects of taxation and expropriation in closed economies also hurt the elites, and this puts a natural barrier against inefficient policies. Trade openness removes this barrier and enables groups with political power to exercise this power in more inefficient ways. In the second essay, I analyze how the inefficiency of weak political regimes is shaped by the elites' factor endowments, and how those inefficiencies alter standard predictions about international trade and capital flows. Elites always distort sectors that use intensively factors they own on a larger share less, irrespective of the endowment of the economy. / (cont.) This implies that, with trade opening, predictions about factor content of trade can be reversed if the elites' factor endowments differ from that of the economy. A capitalist elite will distort capital-intensive sectors less than others, which may more than compensate for the scarcity of that factor, and make the country a net exporter of capital-intensive goods. Also, when opening to international capital markets, the direction of capital flows can be reverted. The elites will distort capital-intensive sectors less, which may more than compensate for the abundance of capital, and drive its return above that on the rest world. The third essay provides econometric evidence that the model in the first essay is consistent with the data. Using a panel of 92 countries and 17 years, I show that non-democratic regimes that trade more experience more expropriation, while this is not the case for democratic regimes. The results are robust to different econometric specifications and different sets of controls. / by Rubén Segura-Cayuela. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2010. / Cataloged from PDF version of thesis. / Includes bibliographical references. / Essay 1: The Effect of Political Alignment on Transfers to Portuguese Municipalities. In this paper, I use financial data of Portuguese municipalities (1992-2005) to investigate if political alignment between the central government and a local government brings financial benefit to local governments. I use a regression discontinuity design, in order to distinguish between generally partisan transfers (larger transfers to municipalities where the party in power has larger vote share), and the effect of political alignment per se, between the national government and the municipal chamber president. The benefit of pure alignment is substantial. Estimates imply that municipalities aligned with the central government receive 19% more targetable transfers than do municipalities where the party in power nearly won the local elections. I test an electoral motivation for this bias in transfers: extra transfers prove to increase the vote share of PSD incumbents, but not the vote share of PS incumbents; however, municipal incumbency does not lead to better results in national elections. Essay 2: Local Government Fiscal Policies: Left-wing vs. Right-wing Portuguese Municipalities. In this paper, I use financial data from Portuguese municipalities (from 2003 to 2007) to investigate if the ideology of the local government incumbent influences local fiscal policies. Regression discontinuity design is employed to ensure proper identification of the ideology effect on fiscal policies. Left-wing control of municipal presidency showed a significant effect on the likelihood of adopting a municipal corporate tax. Left-wing municipalities also proved more likely to invest in social infrastructure. On the other hand, right-wing municipalities were shown to be more likely to grant subsidies to families, as well as to offer more generous compensation to their municipal workers. Finally, left-wing municipalities were less likely to resort to high levels of debt than their right-wing counterparts. Essay 3: Political Alignment and Federal Transfers to the US States. In this paper, I use financial data regarding transfers from the US federal government to US States (1982-2001) to investigate if political alignment, defined as a state governor and the US President belonging to the same political party, influences the level of federal transfers received by a state. Regression discontinuity design is used to ensure proper identification of the alignment effect. Total federal transfers to aligned states are significantly larger, with the most trustworthy estimates in the neighborhood of 3%. Most of this advantage comes from significantly larger defense transfers to aligned states (the most credible estimates indicate a 13% advantage). Finally, other types of federal transfers are not significantly affected by political alignment, namely entitlements, salaries and, perhaps surprisingly, project grants. / by Marco Migueis. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references (leaves 114-116). / by Paul Schulstad. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references. / by Beth Anne Wilson. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2004. / Includes bibliographical references. / (cont.) the auctioneer are analyzed. / This thesis consists of three essays in auction and market design. Chapter 1 studies sequential auctions with potential entry between rounds. In a simple model with two rounds, two initial bidders and one potential entrant, it is shown that every symmetric equilibrium first round bidding function must feature some degree of pooling. In one such equilibrium, the symmetric bidding function is a step function, reflecting the desire of present bidders to hide information from the potential entrant in order to deter entry. Extensions of the simple model to multiple incumbents and uncertain presence of the entrant are discussed. Chapter 2 studies the choice between two modes of trade: selling at a posted price or bargaining. It is shown that the choice of one of the regimes may serve as a signal of quality of the good, otherwise unobservable to buyers. The main result of this chapter is that both modes can coexist on the same market. This result holds both when sellers can choose the quality is given exogenously and when they can not. Chapter 3 examines origins of rules restricting the set of auction formats available to the seller in an auction. While wider set of possible auction formats available to the seller may increase his expected revenue, choice of one of the formats discloses seller's private information; the seller may want to commit to an auction format ex ante to avoid this disclosure. The value of commitment is analyzed in the context of announced versus hidden reservation value choice. A policy of conditional disclosure is introduced, which generates revenue higher than that generated by either of the unconditional policies. In the context of public procurement auctions, implications of expected and unexpected favoritism on the part of / by Andrei Bremzen. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2013. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 167-174). / This thesis examines the impact of terms of trade shocks on commodity-exporting small, open economies. The first chapter examines whether households, firms and policymakers in these economies can distinguish between temporary and permanent commodity price shocks. I find that they are largely unable to do so. In fact, my model suggests that the expected future path of commodity prices following a temporary price shock is almost identical to the expected future path of commodity prices following a permanent price shock. However, I also find that these information frictions reduce the magnitude of business cycle fluctuations, contrary to popular belief. In the second chapter I describe optimal monetary policy in an environment where agents cannot directly observe whether commodity price shocks are temporary or permanent and where an economy's non-commodity sector features a learning-by-doing externality. I find that under optimal monetary policy the non-commodity sector contracts by more during a transitory commodity price boom under incomplete information than it does under full information, but by less during a permanent boom. I also examine the performance of simple monetary policy rules. A policy of responding strongly to deviations of home-produced goods inflation from target with a modest response to changes in the nominal exchange rate comes close to replicating the welfare outcomes of optimal policy. In contrast, an exchange rate peg generally produces large welfare losses. The third chapter, co-authored with my classmate Patricia Gomez-Gonzales, examines the consequences of changes in the volatility of commodity price shocks on commodity exporters. We first demonstrate the existence of time-varying volatility in the terms of trade of a selection of commodity-exporting small open economies. We then show empirically that increases in terms of trade volatility trigger a contraction in domestic consumption and investment and an improvement in the trade balance in these economies. Finally, we construct a theoretical model and demonstrate that it can replicate our empirical results. / by Daniel Morgan Rees. / Ph.D.