Works in Progress

Demand and Pricing Design for Weight-Loss Drugs 

Link to full paper.

Abstract

As demand for weight-management (WM) therapies grow, so does the need for the empirical characterization of this market. This paper models patients’ demand for WM pharmacotherapy using the Berry-Levinsohn-Pakes framework, accounting for patient-level heterogeneity. The model reveals that own-price elasticity magnitudes are largest for Lomaira at -7.74, Adipex-P at -6.86, and Xenical at -5.85. The lowest elasticity magnitudes are found for naltrexone/bupropion at -1.10, liraglutide at -0.62, and Wegovy at -0.47, with the remaining medications ranging from -2.02 to -4.21. Cross-price elasticities and diversion ratios indicate relatively strong within-class substitution among WM-indicated GLP-1s and among phentermine-based appetite suppressants, with lower prices for generic phentermine diverting demand away from brand-name medications. With price perturbations, all medications, including GLP-1s, gain most of their market share from the outside option. Moreover, income and the presence of diabetes are statistically significant determinants of preferences for GLP-1 medications, indicating higher valuations among these patient segments. Income is also found to moderate price disutility. There is limited evidence of unobserved heterogeneity in price sensitivity. Additionally, willingness-to-pay (WTP) for GLP-1s increases with income, with the steepest marginal increase in WTP occurring at the 90th percentile. These results have immediate implications for pricing design in the weight-loss drug market. The own-price elasticity results imply that rebates are effective in stimulating demand, especially along the extensive margin, and for non-GLP-1 medications. Strong within-class substitution implies that price differentials or repositioning from a non-preferred to a preferred tier within a class can have a significant effect on plan spending. For manufacturers, targeted discounts and negotiations aimed at securing preferred access within a class can be profitable. From a competition-policy perspective, high pairwise diversion within classes implies that consolidation among pharmaceutical firms producing medications within the same class can generate pronounced unilateral pricing incentives. Accounting for payor contribution, welfare-maximizing pricing benchmark is observed at the 20th percentile, on which the copayment design is built and translated to 2025 prices to provide current pricing reference.

The Effects of Gentrification on Student Achievements

Link to full paper.

Abstract

Gentrification is an increasingly common phenomenon in US urban areas. This paper examines the effects of gentrification on student achievement in Pennsylvania public schools using propensity score matching,  difference-in-difference (PSM-DiD) models. Using income growth and compositional changes in tract-level population, gentrified census tracts are identified, and matched to pulic schools in the entire state of Pennsylvania. Using PSM, schools are matched based on a rich set of linked census tract characteristics. The estimates indicate that gentrification causes a 1.28 percentage point increase in the share of students performing at the Below Basic achievement level, accompanied by declines of 0.48 and 1.38 percentage points in the shares performing at the Basic and Proficient levels, respectively, in the Pennsylvania System of School Assessment (PSSA). Albeit positive, the estimated effect on Advanced proficiency is not statistically significant. Heterogeneity analyses reveal that these effects are concentrated among students in grades 3 through 5 and in ELA and Mathematics.  There is no significant difference in estimated effects between schools in census tracts with large growth in school-age population and those with low growth. This provides suggestive evidence that the effects are not operating through education production at the school-level, and may be associated with larger neighborhood effects.

Assessing the Impact of Medicare on Cancer Detection

Abstract

This paper evaluates the impact of Medicare eligibility on cancer screening and detection. Using the Surveillance, Epidemiology, and End Results (SEER) data from 2000 to 2017, and leveraging a regression discontinuity design around the Medicare eligibility age of 65, this study estimates causal effects on cancer diagnoses and early detection. Results reveal heterogeneous effects across cancer sites and demographics. Medicare eligibility increased breast and rectal cancer detection for White and Native individuals. Additionally, the policy improved early detection for breast and colorectal cancers. These findings underscore the role of insurance coverage in improving public health outcomes, offering empirical support for the effectiveness of such policies.