Working Papers

Increasing Returns to Scale in Estimation of Markups

I estimate the aggregate and industry-specific elasticities of scale and markups for the U.S. economy over the period from the 1980s to 2019 using data on publicly traded companies. I apply Olley-Pakes and Ackerberg-Caves-Frazer estimation methods and find that the aggregate elasticity of scale for the U.S. economy is 1.1 and has been rising. Elasticity of scale in turn serves as an input for calculating industry markups. Increasing returns to scale help explain observed increases in markups over the last decades for broad sectors of the economy. My estimate of 1.2 for the aggregate markup is significantly lower than the estimate of 1.6 found in recent literature. The large disparity in markup estimates stems from differences in the treatment of fixed and variable costs and the methodological approach to the calculation of markups.

Price Trends in Classic Car Auctions

I advance and test a theory that in sequential auctions price rises with the number of bidders. I allow for stochastically arriving and departing bidders, so the number of bidders changes with every auction round both endogenously through the winner of the previous round dropping from future rounds and exogenously through the bidders’ stochastic arrival and departure. I test the theory on the Mecum auctions for collectible cars using the instrumental variables method. The timing of the car going to auction affects price only through the number of bidders present at the time and the number of cars still left to auction. This allows me to instrument time for the number of bidders. The empirical test shows support for the theory and provides a missing explanation for the declining price anomaly prevalent in sequential auctions.

Monitoring of Bureaucracy as a Public Good

with Dr. Thomas Stratmann

We model and empirically test the effects of citizen monitoring of services provided by bureaucrats. Monitoring by citizens is a public good. Because of collective action problems, monitoring is underprovided, allowing bureaucrats to shirk on efforts to provide services. Our model shows that collective action problems in monitoring activities are associated with sub-optimal bureaucratic output. Bureaucratic output is predicted to change with the number of citizens affected and the distribution of bureaucracy-generated benefits. Utilizing income data from leases under the purview of the Bureau of Indian Affairs (BIA), we find broad support for our hypothesis that bureaucratic output is inversely related to collective action challenges of bureaucrats’ clients. These collective action problems vary with the number of owners, interests of the largest shareholder, and variations in monitoring costs due to private vs. institutional ownership.

Teaching

GEORGE MASON UNIVERSITY, Fairfax, VA

Graduate Lecturer

• Introductory Econometrics (Jan 2022 – May 2022)
• Intermediate Microeconomics (Aug 2022 – Dec 2022)
• Intermediate Microeconomics (Jan 2023 – May 2023)

Teaching Assistant to Dr. Thomas Stratmann (Aug 2020 – Dec 2021)

• Econometrics I (graduate)
• Introductory Econometrics (undergraduate)
• Public Economics / Public Choice (graduate)
• Causal Inference (graduate)

Online Course Developer with Dr. Stratmann (Jan 2021 – Aug 2021)

• Public Economics / Public Choice (graduate)
• Causal Inference (graduate)

Teaching Philosophy

In economics as in other sciences, it is important to never lose sight of the fundamentals. It is impossible to truly master something new if it is not built on top of a strong foundation of first-order principles and concepts. That’s why I emphasize fundamental concepts in my class, so we proceed in learning starting from the same basic understanding. I tailor the review of these concepts to the level of knowledge required for the class, because “fundamental” does not need to mean “simple.” This approach empowers my students, regardless of their individual backgrounds, to participate in the future learning with confidence, and gives them a common platform to stand on.

The second principle I hold dear is active learning. I believe that it is only through the act of doing that we truly learn. Seeing a formula derived on a slide will not have the same effect as deriving it yourself, so I engage my students in active participation in the learning process by having them do derivations and calculations in class, share their results, and teach each other.

Lastly, I believe that the most effective way to understand and remember theory is through application. With that in mind, I schedule dedicated time in my class for working through examples in Stata. We work with real data sets and test how theories we learn apply in practice. Not only does it deepen the students’ understanding of theory but gives them practical technical skills they will likely need to succeed in their future careers.

Core Principles:

1. Emphasis on the fundamentals
2. Active learning
3. Repeated application of theory