Research

A data intermediary acquires signals from individual consumers regarding their preferences. The intermediary resells the information in a product market wherein firms and consumers tailor their choices to the demand data. The social dimension of the individual data—whereby a consumer's data are predictive of others' behavior—generates a data externality that can reduce the intermediary's cost of acquiring the information. The intermediary optimally preserves the privacy of consumers' identities if and only if doing so increases social surplus. This policy enables the intermediary to capture the total value of the information as the number of consumers becomes large.

This paper documents differences across higher education courses in the coverage of frontier knowledge. Applying natural language processing (NLP) techniques to the text of 1.7M syl- labi and 20M academic articles, we construct the “education-innovation gap,” a syllabus’s rel- ative proximity to old and new knowledge. We show that courses differ greatly in the extent to which they cover frontier knowledge. Instructors play a big role in shaping course content; instructors who are active researchers teach more frontier knowledge. More selective and bet- ter funded schools, and those enrolling socio-economically advantaged students, teach more frontier knowledge. Students from these schools are more likely to complete a doctoral degree, produce more patents, and earn more after graduation.

We obtain a necessary and sufficient condition under which random-coefficient discrete choice models such as the mixed logit models are rich enough to approximate any nonparametric random utility models across choice sets. The condition turns out to be very simple and tractable. When the condition is not satisfied and, hence, there exists a random utility model that cannot be approximated by any random-coefficient discrete choice model, we provide algorithms to measure the approximation errors. After applying our theoretical results and the algorithms to real data, we find that the approximation errors can be large in practice.

This paper studies optimal second-best corrective regulation, when some agents/activities cannot be perfectly regulated. We show that policy elasticities and Pigouvian wedges are sufficient statistics to characterize the marginal welfare impact of regulatory policies in a large class of environments. We show that a subset of policy elasticities, leakage elasticities, determine optimal second-best policy, and characterize the marginal value of relaxing regulatory constraints. We apply our results to scenarios with unregulated agents/activities, uniform regulation across agents/activities, and costly regulation. We illustrate our results in applications to financial regulation with environmental externalities, shadow banking, behavioral distortions, asset substitution, and fire sales.

Incomplete vaccine uptake and limited vaccine availability for some segments of the population could lead policymakers to consider re-imposing restrictions to help reduce fatalities. Early in the pandemic, full business shutdowns were commonplace. Given this response, much of the literature on policy effectiveness has focused on full closures and their impact. But were complete closures necessary? Using a hand-collected database of partial business closures for all U.S. counties from March through December 2020, we examine the impact of capacity restrictions on COVID-19 fatality growth. For the restaurant and bar sector, we find that several combinations of partial capacity restrictions are as effective as full shutdowns. For example, point estimates indicate that, for the average county, limiting restaurants and bars to 25% of capacity reduces the fatality growth rate six weeks ahead by approximately 43%, while completely closing them reduces fatality growth by about 16%. The evidence is more mixed for the other sectors that we study. We find that full gym closures reduce the COVID-19 fatality growth rate, while partial closures may be counterproductive relative to leaving capacity unrestricted. Retail closures are ineffective, but 50% capacity limits reduce fatality growth. We find that restricting salons, other personal services and movie theaters is either ineffective or counterproductive.

We analyze whether receiving care from higher-priced hospitals leads to lower mortality. We overcome selection issues by using an instrumental variable approach which exploits that ambulance companies are quasi-randomly assigned to transport patients and have strong preferences for certain hospitals. Being admitted to a hospital with two standard deviations higher prices raises spending by 52% and lowers mortality by 1 percentage point (35%). However, the relationship between higher prices and lower mortality is only present at hospitals in less concentrated markets. Receiving care from an expensive hospital in a concentrated market increases spending but has no detectable effect on mortality.

What are the effects of school closures during the Covid-19 pandemic on children’s education? Online education is an imperfect substitute for in-person learning, particularly for children from low-income families. Peer effects also change: schools allow children from different socio-economic backgrounds to mix together, and this effect is lost when schools are closed. Another factor is the response of parents, some of whom compensate for the changed environment through their own efforts, while others are unable to do so. We examine the interaction of these factors with the aid of a structural model of skill formation. We find that school closures have a large, persistent, and unequal effect on human capital accumulation. High school students from low-income neighborhoods suffer a learning loss of 0.4 standard deviations after a one-year school closure, whereas children from high-income neighborhoods initially remain unscathed. The channels operating through schools, peers, and parents all contribute to growing educational inequality during the pandemic.

The COVID-19 pandemic led to a worldwide lockdown and school closures, which have placed a substantial mental health burden on children and college students. Through a systematic search of the literature on PubMed and Collabovid of studies published January 2020–July 2021, our findings of five studies on children and 16 studies on college students found that both groups reported feeling more anxious, depressed, fatigued, and distressed than prior to the pandemic. Several risk factors such as living in rural areas, low family socioeconomic status, and being a family member or friend to a healthcare worker were strongly associated with worse mental health outcomes. As schools and researchers discuss future strategies on how to combine on-site teaching with online courses, our results indicate the importance of considering social contacts in students’ mental health to support students at higher risk of social isolation during the COVID-19 pandemic.