Miaoqing Jia - Working Papers

Working Papers

Antibiotic Resistance, Drug Prices, and Entry (Job Market Paper) with Ching-to Albert Ma

Antibiotic drug resistance is modeled by an increase in future drug cost (or equivalently a decrease in drug quality) due to current consumption. Competition in the medicine market leads to maximum consumption, and results in inefficiency. A single consumer cannot affect future drug cost, so might as well choose to consume; a free-riding, inefficient outcome. Drug plans with a centralized way to ration medicine can alleviate free riding. A monopoly will dampen the market failure because the monopolist internalizes cost increase. However, consumers may not benefit from a monopoly; prices remain high despite reduction of cost increase due to internalization. If innovation is possible, a potential entrant must consider competing with an incumbent upon entry. Under Cournot competition, entry deterrence occurs when the incumbent restricts consumption to reduce its own future cost so the entrant cannot earn enough post entry. Entry deterrence by the incumbent can happen; this results in lower drug consumption and reduces resistance. Entry accommodation may actually exacerbate drug resistance because the incumbent has less incentive to internalize the cost increase.

Addressing the Externalities of Medicine Overconsumption

I investigate the impact of inappropriate medicine usage on future healthcare costs in a multi-period model. The negative externality, any current medicine consumption raises future costs for the entire population, leads to market failures. This study includes forward-looking and myopic patients, with the former recognizing the long-term externalities of medicine consumption and the latter focusing solely on immediate benefits. The interaction between the two patient types exacerbates inefficiencies: forward-looking patients may reduce their consumption to limit future cost increases, but myopic patients tend to over-consume, disregarding future consequences. In a perfectly competitive market, marginal cost pricing results in inefficiency due to myopic patients' over-consumption. However, under a monopolistic market structure, pricing above marginal cost can mitigate overuse and improve social welfare by controlling future cost jumps. I further show that policy interventions, such as taxes or subsidies, can correct market inefficiencies and enhance healthcare outcomes.

Informal Gift Exchange in the Public Health Sector

I study informal gift exchange in the public health sector in China. In the public system, a physician receives a fixed salary and additional payments from patients. A guilt effect from violating professional norms limits the size of informal payments. In the private system, the guilt effect vanishes because of the legalization of informal payment. Without receiving the fixed salary, the physician in the private system abandons patients with low payments. The distribution of patients’ wealth levels and the physician’s outside option affect the relative welfare in both systems. If too many patients are left behind, the regulator will support the public system.

A New Trigger for Credit Card Misuse during Economic Downturns with Pengcheng Wang

Purpose – In this paper, we empirically investigate how crypto investments in times of economic downturn would affect credit card usage, a widely used payment method that has a significant impact on individual financial well-being.

Methodology – We carry out an ordinary least squares regression analysis and an instrumental variable design on data from the most recent National Financial Capability Study 2021 (NFCS 2021). The NFCS 2021 information about various and of U.S. adults.

Findings – We find that crypto investments are associated with a significantly higher likelihood of credit card misuse, as indicated by making only the minimum payments, late payments, and using credit cards for cash advances. Meanwhile, social media use is a strong predictor of crypto investments. Results from our analysis are robust after accounting for endogeneity concerns using an instrumental variable design.

Originality – Our findings provide new insights into the influence of emerging financial instruments on delinquent credit card behaviors, which can further intensify individual and household financial instability during periods of market stress. Furthermore, our findings underscore the necessity of improving individual awareness of the high-risk characteristics of cryptocurrencies, despite their increasing popularity in the financial marketplace in the current financial marketplace .

The Effectiveness of the Health System Reform on Affecting Self-Medication in China

Starting in 2010, the Chinese government implemented a series of national health care reforms to ensure accessible and affordable care. The Chinese government chose several pilot areas for system reforms, and there were staggered implementations. In this study, we use on going national survey data from the China Health and Retirement Longitudinal Study (CHARLS) to analyze the impact of reform on patients' self- treatment behavior and on the severity of antibiotic abuse in China. Through a combination of propensity score matching and difference- in- difference methods, we find that although reform effectively reduces average monthly medical expenditures for people living within pilot areas, it is ineffective in limiting people's self- medication on antibiotics. Surprisingly, people living in pilot areas are more likely to use antibiotics after reform.