Economics Insights @ CBS

Firms often finance their inventory through debt and subsequently sell it to generate profits and service the debt. Pricing of products is consequently driven by both inventory and debt servicing considerations. In the present paper, we analyze how debt distorts dynamic pricing decisions and reduces generated sales revenues. We show that debt induces sellers to always price higher than the revenue-maximizing price.

Selecting more productive employees among a pool of job applicants can be a cost-effective means of improving organizational performance and may be particularly important in the public sector. We study the relationship among applicant characteristics, hiring outcomes, and job performance for teachers in the Washington DC Public Schools. Applicants' academic background (e.g., undergraduate GPA) is essentially uncorrelated with hiring.

This article provides evidence about the impact that public and private research had on premature mortality and hospitalization due to cancer in the United States during the period 1999-2013. We estimate difference-in-differences models based on longitudinal, cancer-site-level data to determine whether the cancer sites about which more research-supported articles were published had larger subsequent reductions in premature mortality and hospitalization during the period 1999 to 2013, controlling for the change in the number of people diagnosed.

This study provides econometric evidence about the impact that new chemical entity (NCE) launches had on premature mortality from 17 diseases in 9 Middle Eastern and African countries during the period 2007–2015.

The greater the relative number of NCEs for a disease launched in a country, the greater the subsequent relative decline in premature mortality from that disease, controlling for the average rate of mortality decline in each country and from each disease.