Research
Publications
- “Estimating Switching Costs for Telecommunication Services and Bundles”* (with Hyunchul Kim), Applied Economics 54(37) (2022): 4356-4373., working paper version
Working Papers
Abstract
This paper provides the first empirical evidence for the impact of the entry of chain pharmacies on competition, market structure, and pharmacy access in rural towns. Using a detailed panel dataset spanning 2000-2019 in the Midwestern United States, I document that the entries of new chain pharmacies in urban towns have led to a large decline in the number of independent pharmacies from nearby rural towns. These industry shifts contribute to a decrease in pharmacy access in rural towns, especially in towns where over 20 percent of the population is aged 65 or older. To decompose the competition effects from chain pharmacies and rival independent pharmacies, I utilize existing static game models. To allow for a data-driven selection of many market characteristics in pharmacy profits, I incorporate double/debiased machine learning (DML) into the estimation of static games and provide valid inferences. By leveraging the predictive performance of machine learning estimators, I find that the impact of a rival independent pharmacy on profit is 50 percent greater than that implied by existing models. In rural towns with a high elderly population ratio, the estimated model shows that chain pharmacy entries could explain 40 percent of the closures of independent pharmacies between 2000 and 2019. A subsidy policy counterfactual simulation shows that 16 percent of rural towns previously identified as having limited pharmacy access would no longer be categorized as such.
- “Horizontal Merger and Post-Entry Market Structure: Evidence from Acquisition in the Retail Pharmacy Market” (with Arie Beresteanu)
Works in Progress
* Pre-Ph.D. work