Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1993. / Includes bibliographical references. / by Elaine Karen Buckberg. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2005. / Includes bibliographical references. / In this dissertation, I present three empirical essays that encompass topics in industrial organization. The first essay examines the degree of competition and spatial differentiation in the retail industry by exploiting a unique dataset that describes a consumer's choice of store, product of purchase, item price, and demographics. I estimate a consumer's choice of retailer in the sales market for DVDs among online, mass merchant, electronics, video specialty, and music stores, and I allow for unobserved heterogeneity in preferences for store types and disutility of travel. A consumer's traveling cost varies by income, and substitution occurs proportionately more among stores of the same type. The second essay investigates an intriguing puzzle in the movie industry: "why do studios cluster their big theatrical hits during the July 4th weekend?" A series of recent papers by Einav (2002) indicate that although the underlying demand for theatrical movies remains high around Labor Day, studios tend to release their high quality movies at the beginning of the summer. I employ data from the home video industry to provide more evidence on whether booms in theatrical revenues are supply- or demand-driven and to investigate why firms might cluster their releases as they do. / (cont.) The third essay presents examples based on actual and synthetic datasets to illustrate how simulation methods can often mask identification problems in the estimation of mixed logit models. Typically, simulation methods approximate an integral (that does not have a closed form) by taking draws from the underlying distribution of the random variable of integration. The examples reveal how a "low" number of draws can generate estimates that appear identified, but in fact, are either not theoretically identified by the model or not empirically identified by the data. The number of draws required to reveal the identification problem will depend on the data, model, and type of draws used. These examples emphasize the importance of checking the stability of the estimates with respect to the number of draws. / by Lesley C. Chiou. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2012. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 113-120). / This thesis consists of three independent chapters on the Macroeconomics of Liquidity and Taxation. The first chapter studies how concerns about future funding difficulties and liquidity dry ups influence investment decisions. In an environment with financial frictions, investors need to take liquidity management into account when deciding between different investment alternatives and when designing financial arrangements with other fund providers. Their decisions affect both idiosyncratic and aggregate exposure to shocks and fluctuations. When shocks occur to external liquidity sources, such as changes in the cash-flows that support mortgage-backed securities or other non-corporate assets, these are transmitted through financial arrangements towards the real sector. The anticipation of these shocks and its reflection in asset prices influence project selection and change the pattern of fluctuations, creating additional comovement across sectors of economy and different assets. Likewise, the anticipation of variations in the internal liquidity of firms, resulting from shocks to their productivity, changes their choice of projects. For moderate liquidity scarcity, the effect through project choice is shown to lead to the dampening of these underlying productivity shocks; while for more severe shortages, amplification emerges. Despite the possibility of excess exposure to risk being generated endogenously, equilibrium allocations are constrained efficient. Policy implications are then discussed in light of this result. The second chapter focuses on the auxiliary role of taxes in helping smooth income fluctuations. From a mechanism design perspective, it studies the characterization of the constrained optimal allocation in an economy with endowment fluctuations which are private information, where agents are also able to trade assets unobservably. In this environment, production and aggregate savings can be manipulated by a planner through the use of capital taxation. Using this instrument, the planner is capable of affecting prices on the unobservable trades. In this environment, the constrained optimal allocation can be implemented in a simple decentralized way, which takes the form of a bond market economy with capital taxes. The chapter provides conditions ensuring that an untaxed economy would fail to achieve an efficient allocation. The essential element for a possible Pareto improvement is a wedge which is introduced between the returns on capital and the market return on bonds. Around the undistorted economy the sign of a welfare improving wedge depends centrally on the covariance of asset holdings and marginal utility in the cross-section of the population. The covariance term represents the redistributive impact of a combination of price changes and lump-sum revenue rebates: a bond price increase affects agents negatively in proportion to their asset holdings, while the rebate increases their individual welfare in proportion to average savings. A necessary condition for the optimal tax is also presented. This condition takes that redistributive effect into account, in addition to the combined consequences that each price change has on revenues across periods. The third paper is product of joint work with Plamen T. Nenov. Its central concern are the effects of increased uncertainty on financial stability. By studying a debt roll-over coordination game with dispersed information and a market-determined liquidity scenario, it describes conditions under which an improvement in the precision of individual information about financial institutions' fundamentals leads to greater financial stability. For the limiting case of arbitrarily precise private information, that condition obtains a simple form in terms of payoff elasticities. Conversely, we characterize when an increase in uncertainty leads to a higher frequency of debt runs and show how this deleterious effect is amplified through the deterioration of prices for liquidated assets. / by Felipe Saraiva Iachan. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2014. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This dissertation comprises of three chapters, each exploring different issues in the industrial organization of the pharmaceutical industry. In the first chapter, I study the effects of television advertising of antidepressants using a novel method comparing households near the borders of television markets. I find that advertising has positive benefits on the market as a whole, including competitors. Using this information and a simple supply model, I consider the counterfactual whereby firms work together in a co-operative. In the co-operative equilibrium, firms advertise more than five times as much as is observed in competitive equilibrium and profits would increase by about twenty percent. In the second chapter, the documented phenomenon of strategic entry delay is analyzed in the sleep aid industry in order to measure the cost to consumers of that delay. With the Hatch-Waxman Act of 1984, the FDA included an unchallengeable exclusivity period for new approved drugs, independent of patents. This generates an incentive for firms to strategically delay the introduction of new versions of drugs until just before patent expiration of the originals in order to take market share away from new generics rather than its own original product in its time of FDA exclusivity. Using detailed prescribing and pricing data, I document that delay and estimate cost to consumers in the prescription sleep aid market at about $644 million over seven years. In the final chapter, we examine firm behavior following the loss of exclusivity (LOE) of six molecules between June 2009 and May 2013 that were among the 50 most prescribed molecules in May 2013. We analyze speed of generic firm entry, prices, generic and penetration separately by four payer types (cash, Medicare Part D, Medicaid, and other third party payer -TPP) and by age (under vs. over 65). We find modest price decreases following LOE but very rapid and complete penetration of generics. While on average molecule prices decrease, the branded versions continue to increase prices after LOE. Expansion of molecule sales is increasingly common. Generic penetration rates are typically highest and most rapid for TPPs, and lowest and slowest for Medicaid. Cash customers and seniors generally pay the highest prices, TPPs and those under 65 pay the lowest prices. The presence of an authorized generic is also analyzed and found to have effects that vary across molecule. / by Bradley T. Shapiro. / Ph. D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2015. / Title as it appears in MIT Commencement Exercises program, June 5, 2015: Essays on housing and credit markets. Chapter 2 co-authored by François Koulischer. Cataloged from PDF version of thesis. / Includes bibliographical references (pages 117-125). / This thesis consists of three chapters on housing and credit markets. Chapter 1 tests the "housing lock hypothesis": the conjecture that homeowners with limited or negative home equity, low levels of financial assets and restricted opportunities to borrow are unable to move. It employs unique, administrative population data on residential location, home-ownership, family structure, and household balance sheets from the Netherlands. The rapid rise in Dutch house prices during the 1995- 2008 period, and their substantial decline thereafter, has generated large variation in the home equity of buyers who bought homes a few years apart. Buyers in the cohorts that purchased homes around the peak have higher Loan-To-Value (LTV) ratios than earlier buyers, and also have much lower mobility rates in every year after purchase. A decline in home equity is associated with large and statistically significant reductions in household mobility. A rise in the LTV ratio from 90 to 115% is associated with a 30% decline in household mobility. The reduction in mobility is observed both within and across labor markets. The mobility effects of falling home equity are substantially larger for households with low financial asset holdings. These results emerge from comparisons of mobility rates from different purchase cohorts after removing time and region effects, as well as from an analysis of homebuyers whose purchase timing was determined by arguably exogenous changes in family structure. Since Dutch mortgages are full recourse, which rules out strategic default behavior, the findings provide new support for the "housing lock hypothesis". Chapter 2, co-authored with François Koulischer, studies the role of collateral in liquidity provision by central banks. Should central banks lend against low quality collateral? We characterize efficient central bank collateral policy in a model where a bank borrows from the interbank market or the central bank. Collateral has favorable incentive effects but is costly to transfer to lenders who value the collateral less because of imperfect collateral quality. We show that a fall in the quantity or the quality of the bank's collateral can increase interest rates in the economy even with a constant policy rate. A looser central bank collateral policy can reduce the spread, alleviate the credit crunch and increase output. Chapter 3 studies the effects of LTV limits, Payment-To-Income (PTI) limits and the mortgage interest deduction on mortgage debt exploiting a series of policy changes in the Netherlands. As intended, regulatory loan limits reduce mortgage leverage ratios and they also induce bunching at the loan limits. Loan limits and restrictions of the mortgage interest deduction trigger large declines in mortgage volumes. The leverage and volume responses are larger for young, borrowing-constrained households. The repeal of the mortgage interest deduction for non-amortizing mortgages decimates the market for non-amortizing mortgages. The PTI tightening is also associated with a substantial rise in the fraction of mortgages that have very short periods during which the interest rate is fixed. This unintended risk-shifting pattern to quasi- adjustable-rate mortgages (ARM) may increase income risk. The reform of the mortgage interest deduction, which boosts amortization, is also associated with a significant decline in principal amounts at origination. These findings highlight the distributional effects as well as the unintended potential consequences of macroprudential and fiscal policies aiming to reduce mortgage debt. This thesis tries to cast light on the effects of shocks to the value of housing and other types of collateral on the broader economy. This work suggests that the combination of imperfections in credit markets and shocks to asset prices can exert a substantial, non-linear and heterogeneous influence on household and firm outcomes, such as residential mobility (Chapter 1) and business investment (Chapter 2). This thesis also investigates the role for monetary, macroprudential and fiscal policies to alleviate or prevent the negative spill-over effects to the real economy, both before (Chapter 3) as well as after (Chapter 2) the occurrence of financial shocks. / by Daan Struyven. / Chapter 1. Chapter 2: Chapter 3. The Housing lock : Dutch evidence on the impact of negative home equity on household mobility -- Central Bank liquidity provision and collateral quality -- effects of macroprudential and fiscal policy on mortgage debt : evidence from the Netherlands. / Ph. D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1997. / Includes bibliographical references (leaves 87-88). / by Lorenza Martínez Trigueros. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1993. / Includes bibliographical references (leaves 126-127). / by Linda Tuyet-Mai Bui. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references (p. 129). / by Walter Toshihide Baily. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1989. / Includes bibliographical references. / by Leslie Ann Sundt. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references (leaves 99-100). / by Austan Dean Goolsbee. / Ph.D.