Research Interests:
Macroeconomics, Financial Economics, Industrial Organization, Behavioral Economics
Publication:
Quality vs Quantity When Time is Scarce (Journal of Economic Behavior & Organization 2026)
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.
Working Papers:
Vigilance, Risk Vulnerability and The Precautionary Augment (With Miles Kimball, NBER working paper 36001)
Abstract:
Risk raises the expected marginal utility of a prudent agent. We define this proportional change as the precautionary augment. The precautionary augment measures the risk-induced shifts in the marginal value of saving, the Lucas Tree risk-free rate, and asset prices in a model where market-state securities provide incomplete coverage against idiosyncratic risk. One agent is said to be more vigilant than another if their precautionary augment is larger for all unfair risks. We develop a geometric approach to the diffidence theorem to derive bivariate necessary and sufficient, and univariate sufficient conditions for vigilance. We show that risk vulnerability is equivalent to decreasing vigilance. Evaluating an agent against their less wealthy self, classic results of Gollier and Pratt (1996) emerge as corollaries.
Age-Dependent Risk and Time Preferences (With Miles Kimball and Giacomo Rondina)
Abstract:
We develop tools for analyzing decisions under uncertainty with age-dependent preferences, including a tractable extension of Epstein--Zin--Weil preferences. The central tractability condition is that preferences admit a constant-returns-to-scale (CRS) recursive representation and that the feasible problem respects the same scaling. For an expected-utility-based certainty equivalent, this implies (i) constant relative risk aversion at each date, where the coefficient of relative risk aversion may vary over time, and (ii) an intertemporal aggregator that is CRS and can vary over time. In a Merton portfolio problem, the CRS assumption alone is sufficient for a closed-form portfolio rule. Specifying constant-elasticity-of-intertemporal-substitution aggregation with age-dependent patience yields a closed-form expression for the consumption policy function. We consider various extensions, relevant for real-world applications, such as stochastic death, bequests, and an Ornstein--Uhlenbeck process on returns.
Dimension Reduction without Divine Revelation: A Symmetry Theorem for Dynamic Programming (With Miles Kimball)
Abstract:
Largely forgotten to the literature, the Boyd's Symmetry Theorem relates the structure of primitives of a dynamic program to its solution. This is the first step toward generalizing and formalizing the Method of Undetermined Coefficients, or ``divine revelation''. We take the next step. By recasting the abstract antecedents of his theorem into four explicit conditions, we provide a user-friendly framework to reduce problem dimensionality prior to optimization. We extend the theorem in several dimensions, covering a larger class of symmetries and encompassing virtually every class of dynamic program used in economics.
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.
For a permutation symmetric utility function with N varieties in the market, each consumed in equal proportion with total quantity C, the elasticity of substitution can be written as a function of C and N. What are the limits to that function given the monotonicity and quasi-concavity of the underlying utility function? We show constructively that any function of C and N that is continuous and differentiable with respect to C, and where the partial elasticity with respect to C is strictly bounded above, is permissible.
Select Works In Progress:
The Iterative Normalized Gradient 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)