Research
Publication
Cigarette Taxes, Smoking, and Health in the Long-Run
with Andrew Friedson, Katherine Meckel, Daniel Rees, and Daniel W. Sacks
Journal of Public Economics, 2023
Abstract: Medical experts have argued forcefully that using cigarettes harms health, prompting the adoption of myriad anti-smoking policies. The association between smoking and mortality may, however, be influenced by unobserved factors, making it difficult to discern the underlying long-term causal relationship. In this study, we explore the effects of cigarette taxes experienced as a teenager, which are arguably exogenous, on adult smoking participation and mortality. A one-dollar increase in cigarette taxes experienced at ages 14-17 is associated with an 8 percent reduction in adult smoking participation and a 4 percent reduction in mortality. Mortality effects are most pronounced for heart disease and lung cancer.
Working Papers
with Haizhen Lin and George Ball
Abstract: Medical device startups are a pivotal dimension of new product innovation in the U.S. healthcare industry. Numerous innovative medical devices originate from startups that rely on two primary sources of external funding: independent venture capital (IVC) and corporate venture capital (CVC). CVC firms bring unique industry knowledge and incentives to startups that may impact startup’s operational performance outcomes. Using difference-in-difference models and an instrumental variable strategy, we study the effect of CVCs on the operational outcomes of medical device startups. We find that CVCs foster more startup product approvals, but once launched, these products experience worse product quality, indicating a double-edged sword to CVC funding. Post-hoc analyses reveal that this negative quality effect for startups is accentuated when CVC firms lack prior experience in the startups’ product market, and when CVC firms have their own product quality problems.
Exposure to Cigarette Taxes as a Teenager and the Persistence of Smoking into Adulthood
with Andrew Friedson, Katherine Meckel, Daniel Rees, and Daniel W. Sacks
NBER Working Paper 29325, Revisions Requested, Health Economics
Abstract: Are teenage and adult smoking causally related? Recent anti-tobacco policy is predicated on the assumption that preventing teenagers from smoking will ensure that fewer adults smoke, but direct evidence in support of this assumption is scant. Using data from three nationally representative sources and instrumenting for teenage smoking with cigarette taxes experienced at ages 14-17, we document a strong positive relationship between teenage and adult smoking: deterring 10 teenagers from smoking through raising cigarette taxes roughly translates into 5 fewer adult smokers. We conclude that efforts to reduce teenage smoking can have important, long-lasting consequences on smoking participation and, presumably, health.
with Vivek Astvansh, Niket Jindal, and Wenqian Ni
Abstract: A large number of products that have various levels of value to their parent firm are recalled each year. However, little is known as to how this value affects the firm’s stock price when the product is recalled. The authors reason that a product’s prior value induces cognitive dissonance for the firm’s investors when they learn that the firm has recalled the focal product. They cope with the dissonance by disregarding the new and inconsistent information. Consequently, the product’s prior value buffers the drop in the firm value when the product is subsequently occurred. The authors test their hypothesis in the empirical context of 3,161 medical devices recalled in the United States from 2005 to 2019. Specifically, they show that a medical device’s prior value to its parent firm, measured by the firm’s stock return when the device received regulatory approval, is positively associated with the firm’s stock price when the device is subsequently recalled. The authors further document that whereas the firm’s advertising weakens the positive effect of the product’s prior value, the company’s R&D strengthens it. The findings shed light on how a product’s prior value affects the investor reaction to the product’s subsequent recall. They inform managers how their management actions shape this association.
Work in Progress
Genealogical and Network Analysis on Medical Device Product Failures
with Jason Fletcher
Acquisition and Med-Tech Firm Performance
With Haizhen Lin