Research Interests:
Macroeconomics, Industrial Organization, The Economics of Risk and Time, Microeconomic theory
Working Papers:
This paper investigates the validity of firm-level markup estimation techniques, particularly the cost accounting (CA) approach—a straightforward, transparent, and data-thrifty alternative that sees minimal modern application. While the production function (PF) approach has quickly become a workhorse method, several biases challenge its validity. The trend in U.S. markups is qualitatively and quantitatively robust to CA, suggesting that it is not driven by biases. I develop a validation test utilizing Dorfman-Steiner's (1954) advertising equation. CA tends to outperform PF, dramatically so in some cross sections. CA’s data-thrifty nature enables use when alternatives are infeasible; I illustrate this with several applications.
Quality vs. Quantity When Time is Scarce [R&R at Journal of Economic Behavior and Organization]
Abstract:
How do consumers decide between quality and quantity, and what drives heterogeneity in quality choice? This paper introduces a tractable model of consumer choice in which quality sorting emerges endogenously from wage heterogeneity in the presence of time opportunity costs of consumption. Consumers must allocate more time to consume larger quantities, while quality allows consumers to increase utility without affecting their time budget constraints. The model predicts that higher-wage consumers choose higher quality while higher-wealth consumers choose higher quantity. This leads consumers to view quality and quantity as distinct concepts and offers a tractable alternative to discrete choice models, explicitly incorporating both dimensions.
Works In Progress:
Time Dependent Risk Aversion (With Miles Kimball and Giacomo Rondina)
Vigilance, Risk Vulnerability and The Precautionary Quotient (With Miles Kimball)
On the Limits to Elasticity of Substitution with Symmetry
The Iterative Normalized Gradient Method Addition Method (With Daniel Benjamin, Derek Lougee, Ori Heffetz, and Miles Kimball)
From Revenue to Production: Identification and Estimation (With Qingsong Pan and Lixue Zhou)