Essays on Industrial Organization

We study the question of whether women, on average, pay a price premium — a so-called“pink tax”—for the products they buy. A particular concern facing policy makers is whether\nsuch differences are a form of gender based price discrimination. Using scanner data, we find\nthat averaged across the entire retail grocery consumption basket, women pay 4% more per\nunit for goods in the same product-by-location market as do men. This price differential is\ngenerated by a 15% higher average per unit price paid by women on explicitly gendered products,\nlike personal care items, as well as a 3.8% higher average per unit price paid by women\non ungendered products, like packaged food items. Higher prices paid by women could be\nthe result of differences in demand elasticity, competitive structure, or sorting into goods\nwith differing marginal costs. To disentangle these mechanisms, we estimate demand differences\nbetween men and women and structurally decompose price differences into markups\nand marginal costs. We find that women are, on average, more price elastic consumers than\nmen, suggesting that as a consumer base women are not likely to be charged higher markups\nunder price discrimination. Overall, we find that the pink tax is not sustained by higher\nmarkups charged to women, but by women sorting into goods with higher marginal costs\nand lower markups.\nMedical provider price transparency is often touted as a key policy for efficiently lowering\nhealth care spending, which is nearly 20% of GDP. Despite its many proponents, the impact\nof price transparency is theoretically ambiguous: it could lower health care spending via\nincreased consumer price shopping or improved insurer bargaining position but could instead\nraise health care prices via improved provider bargaining or either tacit or explicit provider\ncollusion. We conduct a randomized-controlled trial to examine the impact of a state-wide\nmedical charge transparency tool in outpatient provider markets in the state of New York.\nIn the experiment, individual providers’ billed charges (list prices) were released randomly\nat the procedure X geozip level. We use a comprehensive commercial claims database to\nassess the impact of this intervention and find that the intervention causes a small increase\nin overall billed charges (+1%) but a relatively lower increase in the charges for procedures\nwith many out-of-network claims (-2%). We find no evidence for quantity effects. We find\nlarger charge increases for specific categories that are almost always insured and less elective\nin nature, e.g. MRI (+6%) and radiology (+3%) and charge decreases for categories that\nare less often insured and more elective in nature, e.g. psychology (-2%) and chiropractor\n(-3%) services. Taken together, these results are consistent with our intervention having\na minimal effect on consumer price shopping but a meaningful effect driving increases in\nproviders’ charges, especially for less elective services that are almost always covered by\ninsurance, potentially reflecting perverse price effects resulting from tacit collusion or reduced\ninformation asymmetries.

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