Joshua Gottlieb

Associate Professor

I am an associate professor in the Vancouver School of Economics at the University of British Columbia, and Faculty Research Fellow in the National Bureau of Economic Research. My research interests are in applied microeconomics, public finance, health care, and labor economics. I am also a Visiting Scholar at the Federal Reserve Bank of San Francisco, and was a Visiting Assistant Professor at Stanford University (SIEPR) in 2015-16.

I completed my Ph.D. in economics at Harvard University in 2012. I won the 2015 Kenneth Arrow Award for best paper in health economics and the 2012 National Tax Association Dissertation Award for my research.

My work has been published in outlets such as the Journal of Political Economy, American Economic Review, and Journal of Labor Economics, and is funded by the Social Sciences and Humanities Research Council of Canada and the National Institute on Aging. My research has garnered extensive attention from policy makers and the media, with over 200 press mentions along with national and international radio and video coverage.

Please click on paper titles for abstracts and full text downloads.

WORKING PAPERS

Since the 1980s top income inequality has increased considerably within occupations as diverse as bankers, managers, doctors, lawyers and scientists. Such a broad pattern has led the literature to search for a common explanation. We show instead that increases in income inequality originating within a few occupations can “spill over” into others, driving broader changes in income inequality. We develop an assignment model where generalists with heterogeneous income buy services from doctors with heterogeneous ability. In equilibrium the highest-earning generalists match with the highest quality doctors. Increases in income inequality among the generalists feed directly into the doctors' income inequality. To test our theory, we identify occupations for which our consumption-driven theory predicts spillovers and occupations for which it does not. Using a Bartik-style instrument, we show that an increase in general income inequality causes higher income inequality for doctors, dentists and real estate agents; and in fact accounts for most of the increases in inequality within these occupations. Physician pricing and insurance network data support our mechanism.
[Paper (2017)] [citation (.bib)]

Do potential entrepreneurs remain in wage employment because of the danger that they will face worse job opportunities should their entrepreneurial ventures fail? Using a Canadian reform that extended job-protected leave to one year for women giving birth after a cutoff date, we study whether the option to return to a previous job increases entrepreneurship. A regression discontinuity design reveals that longer job-protected leave increases entrepreneurship by 1.8 percentage points. The results are driven by more educated entrepreneurs, starting firms that survive at least five years and hire paid employees, in industries where experimentation is more valuable.
[NBER (2016)] [Paper (2016)] [citation (.bib)]


PUBLICATIONS

One of private health insurers' main roles in the United States is to negotiate physician payment rates on their customers' behalf. Do private insurers' payment schedules differ meaningfully from that of Medicare, their public sector counterpart, or is the ostensibly prominent private sector a mirage? We investigate the frequency with which privately negotiated payments deviate from the public sector benchmark using two empirical approaches. The first exploits changes in Medicare's payment rates and the second exploits dramatic bunching in markups over Medicare rates. Although Medicare's rates are influential, we find that prices for 25 percent of physician services, representing 45 percent of spending, deviate from this benchmark. To understand private insurers' objectives, we examine heterogeneity in the pervasiveness and direction of deviations they make from the Medicare benchmark. We show that the Medicare-benchmarked share is high for services provided by small physician groups. It is low for capital-intensive care, for which Medicare's average-cost reimbursements deviate most from marginal cost. When relative prices deviate from Medicare's, they adjust towards the marginal costs of treatment. Our results suggest that providers and private insurers coordinate around Medicare's menu of relative payments for simplicity but–when the value at stake is sufficient–do indeed innovate.
[JHE (forthcoming)] [Paper (2017)] [NBER (2015)] [citation (.bib)]

We demonstrate Medicare's influence on private insurers' payments for physicians' services. Using a large administrative change in payments for surgical versus medical care, we find that private prices follow Medicare's lead. A $1 change in Medicare's fees moved private prices by $1.16. A second set of Medicare payment changes, which generated area-specific reimbursement shocks, had a similar effect on private sector prices. Medicare's influence is strongest in areas with concentrated insurers, small physician groups, and competitive physician markets. The public sector's influences on system-wide resource allocation and costs extend well beyond the share of health expenditures it finances directly.

[JPE (2017)] [Paper (2015)] [NBER (2013)] [citation (.bib)]
[Online Appendix (2015)]

A steady downward trend in health-care services price inflation over the past decade has been a major factor holding down core inflation. Much of this downward trend reflects lower payments from public insurance programs. Looking ahead, current legislative guidelines imply considerable restraint on future public insurance payment growth. Therefore, overall health-care services price inflation is unlikely to rebound and appears likely to continue to be a drag on inflation.

[Economic Letter (2016)] [citation (.bib)]

There are persistent differences in self-reported subjective well-being across U.S. metropolitan areas, and residents of declining cities appear less happy than other Americans. Newer residents of these cities appear to be as unhappy as longer term residents, and yet some people continue to move to these areas. While the historical data on happiness are limited, the available facts suggest that cities that are now declining were also unhappy in their more prosperous past. One interpretation of these facts is that individuals do not aim to maximize self-reported well-being, or happiness, as measured in surveys, and they willingly endure less happiness in exchange for higher incomes or lower housing costs. In this view, subjective well-being is better viewed as one of many arguments of the utility function, rather than the utility function itself, and individuals make trade-offs among competing objectives, including but not limited to happiness.

[JOLE (2016)] [NBER (2014)] [citation (.bib)]

Background: Excessive antibiotic use in cold and flu season is costly and contributes to antibiotic resistance. The study objective was to develop an index of excessive antibiotic use in cold and flu season and determine its correlation with other indicators of prescribing quality.

Methods and Findings: We included Medicare beneficiaries in the 40% random sample denominator file continuously enrolled in fee-for-service benefits for 2010 or 2011 (7,961,201 person-years) and extracted data on prescription fills for oral antibiotics that treat respiratory pathogens. We collapsed the data to the state level so they could be merged with monthly flu activity data from the Centers for Disease Control and Prevention. Linear regression, adjusted for state-specific mean antibiotic use and demographic characteristics, was used to estimate how antibiotic prescribing responded to state-specific flu activity. Flu-activity associated antibiotic use varied substantially across states—lowest in Vermont and Connecticut, highest in Mississippi and Florida. There was a robust positive correlation between flu-activity associated prescribing and use of medications that often cause adverse events in the elderly (0.755; P<0.001), whereas there was a strong negative correlation with beta-blocker use after a myocardial infarction (−0.413; P=0.003).

Conclusions: Adjusted flu-activity associated antibiotic use was positively correlated with prescribing high-risk medications to the elderly and negatively correlated with beta-blocker use after myocardial infarction. These findings suggest that excessive antibiotic use reflects low-quality prescribing. They imply that practice and policy solutions should go beyond narrow, antibiotic specific, approaches to encourage evidence-based prescribing for the elderly Medicare population.

[Medical Care (2015)] [citation (.bib)]

Because the health sector makes up a large share of the U.S. economy, widespread price changes for medical services can impact overall inflation significantly. Cuts to public health-care spending spill over directly and indirectly to private spending. A recent estimate suggests the full effect of the Medicare payment cuts from the 2011 Budget Control Act resulted in a decline of 0.24 percentage point in the overall personal consumption expenditures price index. This is over twice the expected drop if private-sector spillovers are not included.

[Economic Letter (2014)] [citation (.bib)]

We investigate whether physicians' financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which it adjusts physician payments, generating area-specific price shocks. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 3 percent increase in care provision. Elective procedures such as cataract surgery respond much more strongly than less discretionary services. Non-radiologists expand their provision of MRIs, suggesting effects on technology adoption. We estimate economically small health impacts, albeit with limited precision.

[AER (2014)] [SIEPR (2013)] [citation (.bib)]

Between 1996 and 2006, real housing prices rose by 53 percent according to the Federal Housing Finance Agency price index. One explanation of this boom is that it was caused by easy credit in the form of low real interest rates, high loan-to-value levels and permissive mortgage approvals. We revisit the standard user cost model of housing prices and conclude that the predicted impact of interest rates on prices is much lower once the model is generalized to include mean-reverting interest rates, mobility, prepayment, elastic housing supply, and credit-constrained home buyers. The modest predicted impact of interest rates on prices is in line with empirical estimates, and it suggests that lower real rates can explain only one-fifth of the rise in prices from 1996 to 2006. We also find no convincing evidence that changes in approval rates or loan-to-value levels can explain the bulk of the changes in house prices, but definitive judgments on those mechanisms cannot be made without better corrections for the endogeneity of borrowers' decisions to apply for mortgages.

[chapter (2013)] [NBER (2010)] [book info] [amazon] [citation (.bib)]

Popular discussions often treat the great housing boom of the 1996-2006 period as if it were a national phenomenon with similar impacts across locales, but across metropolitan areas, price growth was dramatically higher in warmer, less educated cities with less initial density and higher initial housing values. Within metropolitan areas, price growth was faster in neighborhoods closer to the city center. The centralization of price growth during the boom was particularly dramatic in those metropolitan areas where income is higher away from the city center. We consider four different explanations for why city centers grew more quickly when wealth was more suburbanized: (1) gentrification, which brings rapid price growth, is more common in areas with centralized poverty; (2) areas with centralized poverty had more employment concentration which led to faster centralized price growth; (3) areas with centralized poverty had the weakest supply response to the boom in prices in the city center; and (4) poverty is centralized in cities with assets, like public transit, at the city center that became more valuable over the boom. We find some support for several of these hypotheses, but taken together they explain less than half of the overall connection between centralized poverty and centralized price growth.

[AER P&P (2012)] [NBER (2012)] [citation (.bib)]

Empirical research on cities starts with a spatial equilibrium condition: workers and firms are assumed to be indifferent across space. This condition implies that research on cities is different from research on countries, and that work on places within countries needs to consider population, income and housing prices simultaneously. Housing supply elasticity will determine whether urban success shows up in more people or higher incomes. Urban economists generally accept the existence of agglomeration economies, which exist when productivity rises with density, but estimating the magnitude of those economies is difficult. Some manufacturing firms cluster to reduce the costs of moving goods, but this force no longer appears to be important in driving urban success. Instead, modern cities are far more dependent on the role that density can play in speeding the flow of ideas. Finally, urban economics has some insights to offer related topics such as growth theory, national income accounts, public economics and housing prices.

[JEL (2009)] [NBER (2009)] [citation (.bib)]

Objectives: This study was conducted to evaluate whether brain (B-type) natriuretic peptide (BNP) changes during sleep are associated with the frequency and severity of apneic/hypopneic episodes, intermittent arousals, and hypoxia.

Background: Sleep apnea is strongly associated with heart failure (HF) and could conceivably worsen HF through increased sympathetic activity, hemodynamic stress, hypoxemia, and oxidative stress. If apneic activity does cause acute stress in HF, it should increase BNP.

Methods: Sixty-four HF patients with New York Heart Association functional class II and III HF and ejection fraction <40% underwent a baseline sleep study. Five patients with no sleep apnea and 12 with severe sleep apnea underwent repeat sleep studies, during which blood was collected every 20 min for the measurement of BNP. Patients with severe sleep apnea also underwent a third sleep study with frequent BNP measurements while they were administered oxygen. This provided 643 observations with which to relate apnea to BNP. The association of log BNP with each of 6 markers of apnea severity was evaluated with repeated measures regression models.

Results: There was no relationship between BNP and the number of apneic/hypopneic episodes or the number of arousals. However, the burden of hypoxemia (the time spent with oxygen saturation <90%) significantly predicted BNP concentrations; each 10% increase in duration of hypoxemia increased BNP by 9.6% (95% confidence interval: 1.5% to 17.7%, p = 0.02).

Conclusions: Hypoxemia appears to be an important factor that underlies the impact of sleep abnormalities on hemodynamic stress in patients with HF. Prevention of hypoxia might be especially important for these patients.

[JACC (2009)] [JCF (2009)] [citation (.bib)]

Should the national government undertake policies aimed at strengthening the economies of particular localities or regions? Agglomeration economies and human capital spillovers suggest that such policies could enhance welfare. However, the mere existence of agglomeration externalities does not indicate which places should be subsidized. Without a better understanding of nonlinearities in these externalities, any government spatial policy is as likely to reduce as to increase welfare. Transportation spending has historically done much to make or break particular places, but current transportation spending subsidizes low-income, low-density places where agglomeration effects are likely to be weakest. Most large-scale place-oriented policies have had little discernable impact. Some targeted policies such as Empowerment Zones seem to have an effect but are expensive relative to their achievements. The greatest promise for a national place-based policy lies in impeding the tendency of highly productive areas to restrict their own growth through restrictions on land use.

[BPEA (2008)] [NBER (2008)] [working paper (2008)] [citation (.bib)]

Cities make it easier for humans to interact, and one of the main advantages of dense, urban areas is that they facilitate social interactions. This paper provides evidence for the US suggesting that the resurgence of big cities in the 1990s is due, in part, to the increased demand for these interactions and due to the reduction in big city crime, which had made it difficult for urban residents to enjoy these social amenities. However, while density is correlated with consumer amenities, we show that it is not correlated with social capital and that there is no evidence that sprawl has hurt civic engagement.

[Urban Studies (2006)] [working paper (2006)] [citation (.bib)]

OTHER ESSAYS

Book review of: Housing Markets and the Economy: Risk, Regulation, and Policy: Essays in Honor of Karl E. Case. Edited by Edward L. Glaeser and John M. Quigley. Cambridge, MA: Lincoln Institute of Land Policy, 2009. Pp. xiv, 417. Paper. ISBN 978-1-55844-184-2, pbk.
[JEL (2015)] [citation (.bib)]

OP-ED

Winter 2017

ECON301 Intermediate Microeconomic Analysis I Sections

Consumer behaviour, producer theory, exchange, monopoly, oligopoly, externalities, public goods, general equilibrium and welfare economics. Credit will be granted for only one of ECON 201, ECON 204, ECON 301, ECON 304, COMM 295 or FRE 295.

Winter 2017

ECON562 Research Design and Policy Evaluation in Economics Sections

EXTERNAL LINKS

A selection of press mentions is available here.
Press coverage for the B.C. Housing Affordability Fund proposal is here.
My Globe and Mail op-ed on BCHAF is here.

Visit the B.C. Housing Affordability Fund site for information on our proposal to shift the tax base in B.C. towards property and away from income.
See my Globe and Mail op-ed on the proposal here.