Michael E. Darden

Carey School of Business
Johns Hopkins University
100 International Dr.
Baltimore, MD 21202

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
NBER Program Affiliations: HE
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: Johns Hopkins University

NBER Working Papers and Publications

July 2020The Dynamics of the Smoking Wage Penalty
with Julie L. Hotchkiss, M. Melinda Pitts: w27567
Cigarette smokers earn significantly less than nonsmokers, but the magnitude of the smoking wage gap and the pathways by which it originates are unclear. Proposed mechanisms often focus on spot differences in employee productivity or employer preferences, neglecting the dynamic nature of human capital development and addiction. In this paper, we formulate a dynamic model of young workers as they transition from schooling to the labor market, a period in which the lifetime trajectory of wages is being developed. We estimate the model with data from the National Longitudinal Survey of Youth, 1997 Cohort, and we simulate the model under counterfactual scenarios that isolate the contemporaneous effects of smoking from dynamic differences in human capital accumulation and occupational select...
June 2020Cities and Smoking
In 1956, 52% of urban men and 42% of rural men smoked cigarettes. By 2010, the disparity had flipped: 24.7% of urban men and 30.6% of rural men smoked. Smoking remains the greatest preventable cause of mortality in the United States, and understanding the underlying causes of place-specific differences in behavior is crucial for policy aimed at reducing regional inequality. Using geocoded data from the National Longitudinal Survey of Youth, I estimate a dynamic model that captures smoking behavior, location decisions, and education over thirty years. Simulation of the estimated model demonstrates that selection on permanent unobserved variables that are correlated with smoking cessation, both in native populations and in those who migrate between rural and urban areas, explains 62.8$\%...
December 2018Rational Self-Medication
with Nicholas W. Papageorge: w25371
We develop a theory of rational self-medication. The idea is that forward-looking individuals, lacking access to better treatment options, attempt to manage the symptoms of mental and physical pain outside of formal medical care. They use substances that relieve symptoms in the short run but that may be harmful in the long run. For example, heavy drinking could alleviate current symptoms of depression but could also exacerbate future depression or lead to alcoholism. Rational self-medication suggests that, when presented with a safer, more effective treatment, individuals will substitute towards it. To investigate, we use forty years of longitudinal data from the Framingham Heart Study and leverage the exogenous introduction of selective serotonin reuptake inhibitors (SSRIs). We demon...
February 2018Who Pays in Pay for Performance? Evidence from Hospital Pricing
with Ian McCarthy, Eric Barrette: w24304
The Hospital Readmission Reduction Program (HRRP) and the Hospital Value Based Purchasing Program (HVBP), two components of the Affordable Care Act's cost containment measures, introduced potentially sizeable penalties to underperforming hospitals across a variety of metrics. To the extent that penalized hospitals subsequently changed their processes of care, such changes may translate into higher payments from commercial insurance patients. In this paper, we estimate the effects of these pay-for-performance programs on private hospital payments using data on commercial insurance payments from a large, multi-payer database. We find that nearly 70% of the costs of the HRRP and HVBP penalties are borne by private insurance patients in the form of higher private insurance payments to hospital...
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