Leveling the playing field: The distributional impact of salary caps on player compensation
Draft available upon request. Revisions requested.
How does a salary cap impact (i) superstar compensation and (ii) the distribution of player compensation across a league? Using ticket price data from the NBA, I estimate player market values based on observed talent and compare them to their observed salaries. First, I find that players receive a significantly smaller share of league revenues than the sum of their market values. Next, the ratio of actual to expected salary is 1-21% for the most talented players, primarily resulting from a maximum contract threshold. This results in the top 20th percentile of talented players subsidizing the bottom 80%. The findings have important implications for the structure of compensation in professional sports leagues as well as bargaining among players and between players and team governors.
Impact of US sugar-sweetened beverage taxes on prices and purchases: evidence from a multi-city synthetic control analysis
(with Justin White, Sanjay Basu, Kristine Madsen, Dean Schillinger, and Sofia B. Villas Boas). Submitted.
Sugar-sweetened beverage (SSB) excise taxes are promoted as a key policy to reduce cardiometabolic diseases and other conditions, but comprehensive analyses of US SSB taxes have been difficult due to the absence of suitable methodologies to account for confounding factors. We use new quasi-experimental methods to estimate the overall effect of SSB taxes implemented in five large cities in the US: Boulder, Philadelphia, Oakland, Seattle, and San Francisco. We evaluated changes in SSB prices and volume purchased in these cities in the two years following tax implementation, compared to control groups constructed from other cities. We find prices of SSB products increased by an average of 33.1% (95% CI: 14.0%,52.2%; p<0.001) over the 2 years following tax implementation, corresponding to an average price increase of 1.3 cents per ounce and a price pass-through rate of 92% from distributors to consumers. SSB purchases in total volume declined by an average of 33.0% (95% CI: -2.2%,-63.8%; p=0.035) following tax implementation, corresponding to a price elasticity of demand of -1.00. Both effects were immediate and sustained, and we found no evidence of increased cross-border purchases following tax implementation. Scaling SSB taxes nationally could yield significant public health benefits.
Preferences and demand for information that entertains
(with Oskar Zorrilla). Previously circulated under the title "Entertainment Utility from Skill and Thrill" and "Entertainment Demand from Expectations."
The fear of first strike: quantitative theory of delayed punishments
(with Diego Gebhardt and Jacek Rothert).
Are consumers willing to pay to avoid price uncertainty? Evidence from the vehicle leasing market
(with Andy Hultgren and Derek Wolfson).