New NBER Working Papers on Homocide Laws

Using Audit Studies to Test for Physician Induced Demand: The Case of Antibiotic Abuse in China
Janet Currie, Wanchuan Lin, Juanjuan Meng

NBER Working Paper No. 18153
Issued in June 2012
NBER Program(s):   HC   HE

The overuse of medical services including antibiotics is often blamed on Physician Induced Demand. But since this theory is about physician motivations, it is difficult to test. We conduct an audit study in which physician financial incentives, beliefs about what patients want, and desires to reciprocate for a small gift are systematically varied. We find that all of these treatments reduce antibiotics prescriptions, suggesting that antibiotics abuse in China is not driven by patients actively demanding antibiotics, by physicians believing that patients want antibiotics, or by physicians believing that antibiotics are in the best interests of their patients, but is largely driven by financial incentives. Our results also show that physician behavior can be significantly influenced by the receipt of a token gift, such as a pen.

Ungated Version

Stand Your Ground Laws and Homicides
Chandler B. McClellan, Erdal Tekin

NBER Working Paper No. 18187
Issued in June 2012
NBER Program(s):   HE   LE

Since 2005, eighteen states have passed legislation that has extended the right to self-defense, with no duty to retreat, to places a person has a legal right to be, and several other states are debating to introduce similar legislation. The controversies surrounding these laws have captured the nation’s attention recently. Despite significant implications that they may have on public safety, there has been little empirical investigation of the impact of these laws on crime and victimization. In this paper, we examine how Stand Your Ground laws that extend the right to self-defense to areas outside the home affect homicides using monthly data from the U.S. Vital Statistics. We identify the impact of these laws by exploiting the variation in the effective date of these laws across states. Our results indicate that Stand Your Ground laws are associated with a significant increase in the number of homicides among whites, especially white males. According to our estimates, between 4.39 and 7.44 additional white males are killed each month as a result of these laws. We find no evidence to suggest that these laws increase homicides among blacks. Our results are robust to a number of specifications and unlikely to be driven entirely by the killings of assailants. Taken together, our findings raise serious doubts against the argument that Stand Your Ground laws make America safer.

The Economics of Tobacco: The Market for Cigarettes in Ireland

A recent report from the Revenue Commissioners Research and Analytics Branch examines "The Economics of Tobacco: Modelling the Market for Cigarettes in Ireland" (Padraic Reidy and Keith Walsh; February 2011). Highlights from the executive summary are below.

"Numerous explanatory variables of cigarette consumption are explored but the only factors that are found to be statistically significant in the most efficient econometric regression are: price, income, the introduction of the smoking ban, EU enlargement and the point of sale advertising ban. Of these, the most important effect is from price.

The model suggests a price elasticity of -3.6, i.e., a 1 per cent increase in price results in a 3.6 per cent reduction in cigarette consumption. This price elasticity is extremely high compared to other estimates for the Irish market, most suggest a figure of between 0.5 and 1. A price elasticity of -3.6 is too high to be realistic, for example it would imply that a 10 per cent increase in price reduces smoking by 36 per cent... Therefore another factor must be at play.

...The price elasticity estimated refers to taxed cigarettes: a 1 per cent increase in price leads to a 3.6 decrease in consumption of taxed cigarettes. The most reasonable theory to explain such a large decrease in taxed consumption is that only part of the reduction is caused by lower smoking levels, the remainder must be caused by smokers switching to substitute cigarettes. The most likely substitutes in the case of taxed cigarettes are non-Irish taxed cigarettes...

...Revenue estimates that currently around 20 per cent of cigarettes consumed in Ireland are not Irish taxed and this figure has been increasing in recent years... Further analysis finds some evidence that cigarette tax levels have moved beyond a critical point at which increases in tax rates lead to lower, rather than higher, tax revenue. Further tax (price) rises will reduce smoking somewhat but they will also greatly encourage more untaxed consumption.

Increasing the taxation of cigarettes in Ireland no longer carries the combined benefits of better public health and higher revenue for the public finances... This suggests that taxation increases are no longer the optimum tool for reducing smoking in Ireland. This is further supported by the significance in the model results of the effect of the smoking ban. Such non-price measures are shown to reduce taxed consumption and do not carry the same incentive to switch to untaxed cigarettes as higher rates of taxation."