Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

The Environmental Protection Agency (EPA) provides access to information on a variety of topics related to the environment and strives to inform citizens of health risks. The EPA also has an extensive library network that consists of 26 libraries throughout the United States, which provide access to a plethora of information to EPA employees, scientists, and researchers. The EPA implemented a reorganization project to digitize their materials so they would be more accessible to a wider range of users, but this plan was drastically accelerated when the EPA was threatened with a budget cut. It chose to close and reduce the hours and services of some of their libraries. As a result, the agency was accused of denying users the “right to know” by making information unavailable, not providing an adequate strategic plan, and discarding vital materials. This case study explores the background of the digitization project, the practices implemented, and the critiques of the project.

/pdf/the-environmental-protection-agency-3gx4opzrjm.pdf

The Environmental Protection Agency

The paper provides a road map to the burgeoning literature on two-sided markets and presents new results. It identifies two-sided markets with markets in which the structure, and not only the level of prices charged by platforms matters. The failure of the Coase theorem is necessary but not sufficient for two-sidedness. The paper builds a model integrating usage and membership externalities, that unifies two hitherto disparate strands of the literature emphasizing either form of externality, and obtains new results on the mix of membership and usage charges when price setting or bargaining determine payments between end-users.

/pdf/two-sided-markets-a-progress-report-40yp4ugn2p.pdf

Two-sided markets: a progress report

1. Type 1 diabetes (due to b-cell destruction, usually leading to absolute insulin deficiency) 2. Type 2 diabetes (due to a progressive insulin secretory defect on the background of insulin resistance) 3. Gestational diabetes mellitus (GDM) (diabetes diagnosed in the second or third trimester of pregnancy that is not clearly overt diabetes) 4. Specific types of diabetes due to other causes, e.g., monogenic diabetes syndromes (such as neonatal diabetes and maturity-onset diabetes of the young [MODY]), diseases of the exocrine pancreas (such as cystic fibrosis), and drugor chemical-induced diabetes (such as in the treatment of HIV/AIDS or after organ transplantation)

Classification and diagnosis of diabetes

http://people.stern.nyu.edu/wgreene/Lugano2013/Terza_J-Basu_A-Rathouz_P-ResidualInclusion.pdf

Two-stage residual inclusion estimation: Addressing endogeneity in health econometric modeling

In recent years, many hospitals have merged, in part to gain bargaining leverage with managed care organizations (MCOs). We investigate the price impact of hospital mergers by formulating and estimating an equilibrium bargaining model between hospital systems and managed care health insurers over prices for inpatient services. We estimate the parameters of the model using claims and discharge data from Northern Virginia. In 2006, Inova Health System proposed to acquire Prince William Hospital. We nd that this merger would have raised prices signicantly and that the remedy of separate bargaining imposed by the FTC in a separate hospital case would have resulted in a larger price increase.

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Mergers when prices are negotiated: Evidence from the hospital industry

Most new consumer durable goods experience rapid declines in prices and improvements in qual- ity, suggesting the importance of modeling dynamics. This paper estimates a dynamic model of consumer preferences for new durable goods with persistent heterogeneous consumer tastes, rational expectations and repeat purchases over time. We estimate the model on the digital camcorder in- dustry using panel data on prices, sales and characteristics. We nd that standard COLIs overstate welfare gain in later periods due to a changing composition of buyers. The one-year industry elas- ticity in response to a transitory industry-wide price shock is about 25% less than the one-month elasticity.

Dynamics of Consumer Demand for New Durable Goods

I develop a dynamic model of mergers, where mergers, investment, entry, and exit are endogenous variables rationally chosen by firms to maximize expected future profits. This model differs from previous analyses in that it incorporates dynamics and endogenizes the merger process. The model generates reasonable predictions: allowing for mergers has the expected effect on entry, exit, investment, and surpluses; changes in tastes and technologies affect industry equilibrium in plausible ways. The results demonstrate that this type of analysis is feasible and can potentially be used as a tool for antitrust policy analysis.

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A dynamic model of endogenous horizontal mergers

We seek to analyze the extent and sources of network externalities for the automated clearinghouse (ACH) electronic payments system using a quarterly panel data set on individual bank adoption and usage of ACH. We provide three methods to identify network externalities using this panel data. The first method identifies network externalities from the clustering of ACH adoption. The second method identifies them by examining whether banks in areas with higher market concentration or larger competitors are more likely to adopt ACH. The third method identifies them by examining whether the ACH adoption by small branches of large banks affects the adoption by local competitors. Using fixed effects and panel data these methods separately identify network externalities from technological advancement, peer-group effects, economies of scale and market power. We find evidence that the network externalities are moderately large.

/pdf/network-externalities-and-technology-adoption-lessons-from-b4ucjjit66.pdf

Network Externalities and Technology Adoption: Lessons from Electronic Payments

A key problem with solar energy is intermittency: solar generators produce only when the sun is shining, adding to social costs and requiring electricity system operators to reoptimize key decisions. We develop a method to quantify the economic value of large-scale renewable energy. We estimate the model for southeastern Arizona. Not accounting for offset carbon dioxide, we find social costs of $138.40 per megawatt hour for 20 percent solar generation, of which unforecastable intermittency accounts for $6.10 and intermittency overall for $46.00. With solar installation costs of $1.52 per watt and carbon dioxide social costs of $39.00 per ton, 20 percent solar would be welfare neutral.

/pdf/intermittency-and-the-value-of-renewable-energy-1d777vjf2l.pdf

Gautam Gowrisankaran

Papers

Mergers when prices are negotiated: Evidence from the hospital industry

Dynamics of Consumer Demand for New Durable Goods

A dynamic model of endogenous horizontal mergers

Network Externalities and Technology Adoption: Lessons from Electronic Payments

Intermittency and the value of renewable energy