PUBLICATION
with Ricard Gil, Chun-Yu Ho, and Li Xu, Journal of Law and Economics
This paper investigates the impact of vertical integration and market foreclosure in media markets. Using theater-movie-day-level data from China, we show that integrated theaters charge lower prices, enjoy higher attendance, allocate more screenings, and run their own movies longer than movies of other distributors. Despite these differences, there is no evidence consistent with anticompetitive input and customer foreclosure in integrated theaters. On the one hand, integrated and independent theaters screen the same share of integrated and independent movies. On the other hand, revenue differences between continued theater-owned movies and discontinued independent movies are inconsistent with customer-market-foreclosure motives given existing differences in distribution incentives between integrated and nonintegrated structures. Finally, we estimate a random-coefficient discrete-choice model of movie demand and show that integrated theaters deliver a higher level of utility with integrated movies than with independent movies through the direct effects of lower prices and more screenings.
WORKING PAPERS
In Sickness and in Health Insurance: Gender in Household Benefit Plan Choice
Presentations: ASHEcon 2024 San Diego, SEHO 2024 Singapore, AMES 2023 Singapore, 15th Workshop on the Economics of Health and Wellbeing 2024 Hepburn Springs (Best Presentation Award)
In the United States, employer-sponsored health insurance is the primary source of coverage for most households. I document that households are more likely to choose health plans offered by the husband’s employer rather than the wife’s. This gap may be attributed to gender disparities in employment status, plan quality, or an inherent gender effect. Using a novel identification strategy that holds plan quality and employment status fixed, I find that the gender effect increases the likelihood of selecting the husband’s plan by 6.3%, which accounts for 29% of the gender gap in family plan subscriptions. By estimating a structural model of household health insurance choices, I quantify that the gender effect results in an average loss of $247 per household per year, representing around one-third of the total welfare loss in household health insurance decisions.
Distributional Effect of Insurer Concentration on Premiums: Evidence from the Employer-Sponsored Health Insurance Market
with Haizhen Lin, revisions requested at RAND Journal of Economics
We study how insurer competition affects premiums for fully-insured plans in the employer-sponsored health insurance market. By utilizing quasi-experimental variations induced by mergers among national insurers, we show that enhanced insurer concentration leads to higher premiums, but there exists substantial heterogeneity. In particular, we find that a 10% increase in insurer concentration increases premiums for mid-sized firms by 1.2% but reduces premiums for large firms by 3.5%. We further explore heterogeneity to shed light on the underlying mechanisms. Lastly, we study other market outcomes and draw policy implications.
Insurer Switching and Broker Incentives in Employer-Sponsored Health Insurance
Presentations: ASHEcon 2021, IIOC 2020 (canceled due to Covid)
with Haizhen Lin
We study employers' insurer switching behaviors and brokers' incentives in this process. We find that premiums grow steadily at a rate of $40 per person as a plan ages, although an abnormally large increase occurs at a plan age of two. Such patterns of premium increase cannot be explained by an overall change in health care costs, plan generosity, or market environment. Instead, they suggests an insurer's bait and switch strategy, which is further supported by our event study where we find a premium saving of more than $400 per person immediately after switching, but the cost saving quickly dissipates over time. On the broker side, increasing premiums does not warrant increasing commission revenues due to a steady decrease in the commission ratio as a plan ages. However, brokers do witness an increase in commission revenue post switching. As such, we present evidence suggesting that brokers' financial incentives play an important role in insurer switching. In particular, we find that broker concentration reduces switching, reflecting that a higher profit margin lowers brokers' incentives to nudge employers to switch. We also find that brokers experiencing negative profitability shocks induce more switching, consistent with them using switching to recoup their losses.
WORK IN PROGRESS
The Effect of Broker Consolidations on the Health Insurance Market
with Haizhen Lin, Shan Ge
Choking under Pressure: Evidence from Shooting Sports