Page 1

In Memory: Bernard Rapoport p.2

Message from the Chair p.3

Student News pp.6-7

Faculty Research p.8

Alumni Profile: Jorge Atalla pp.9-10

New Faculty Profiles p.11

T   exonomics


DOES MEDICARE PART D DELIVER? Research by UT professor reveals fast learning by seniors in the face of plan complexity. p.4


calls Rapoport “one of the best friends that the College of Liberal Arts has

this spring as Bernard Rapoport passed away on April 5, 2012 at 94

ever had. His incredible generosity in creating faculty endowments and

years of age. Rapoport graduated with a bachelor’s degree in econom-

funding the Rapoport Scholars Program helped to transform the College.

ics in 1939 and went on to found the American Life Insurance Company

We will miss him greatly.”

in Waco, TX. Rapoport described himself as a “capitalist with a conscience,” a

On October 22, 1998, in honor of Rapoport’s many contributions to our campus, the former economics building became the Bernard and

moniker that made its way into the title of his 2002 memoir, and that con-

Audre Rapoport Building. Though his business success and influence

science inspired a life of giving so notable that he was named to Fortune

were inspiring, the legacy left by Bernard Rapoport is not one of famed

magazine’s list of the 40 most generous Americans. The Bernard and

entrepreneur but of tireless philanthropist. The impact of his generosity

Audre Rapoport Foundation, established in 1987, has provided millions of

is felt all across campus, across Texas and beyond, but our Department

dollars to support education, arts and culture, health and human service,

of Economics students in particular are reminded of his generosity every

and civic participation. Much of that support made its way back to

time they step inside the doors of the Rapoport building and see his im-

Rapoport’s alma mater. Randy Diehl, Dean of the College of Liberal Arts,

age smiling, as if cheering them on, as they cross the threshold.


T E X O N O M I C S | FA L L 2 0 1 2





W Dear Alumni and Friends:

We received a lot of great feedback on last year’s inaugural issue of Texonomics. As we had hoped, our readers appreciated the opportunity to reconnect with the Department and to read news about our students, faculty, and alumni. Over the past year, I’ve had the pleasure of personally meeting many of our amazing alumni. I was invited to speak at last fall’s Liberal Arts Advisory Council, where I shared the Department’s vision for achieving excellence in undergraduate and graduate education. ¶ Last December, the Department was awarded a Course Transformation Program


grant from the University. We are using this grant over a three-year period to overhaul our “gateway” principles courses in microeconomics and macroeconomics. In line with the University’s goal of increasing graduation rates, we will create a learning environment where students are less likely to fail or drop out of these courses. We must meet the challenge of increasing student engagement and problem-solving experiences in a large-lecture format. Doing so will require a combination of new technologies, creative use of lecture time, and more individualized attention from teaching assistants and peer instructors. As we improve our introductory courses, we are also taking important steps to ensure that our students have job opportunities available to them after graduation. Our students are now required to acquire dataanalysis skills through our statistics and econometrics sequence, and we will continue to add more rigor to the major to make students attractive to today’s employers. In conjunction with the McCombs School of Business, last fall we created an option for students to receive a minor in Accounting or Finance. We are now considering the creation of a Master’s program that would be available to our best students after completion of their B.A. degree. The Department is also taking an active role in working with the undergraduate Texas Economics Association (TEA) to help promote and expand their Company Night recruiting event.

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Our ambitious initiatives for the future have been made possible by recent successes in faculty hiring. In the spring, the Department hired six outstanding new professors --- three newly graduated doctoral students and three experienced faculty members (from MIT, UCLA, and William & Mary). Our new additions solidify one of the nation’s best groups of scholars in applied microeconomics and econometrics. We will build on this momentum in the future to improve our faculty and, in turn, the product that we are able to provide to our students. We hope you enjoy this issue of Texonomics. We’ve provided synopses of our faculty’s recent research (p. 8), as well as an in-depth article on Professor Eugenio Miravete’s recent study of the Medicare Part D prescription program (p. 4). In addition to news about student and faculty achievements, we have included an alumni profile of 1991 graduate and economist-turned-filmmaker Jorge Atalla (p. 9). As always, we welcome any feedback or suggestions that you might have for Texonomics. Are there stories you would like to see? Do you have any ideas for alumni profiles? Please email us at to share your ideas and alumni news. We look forward to hearing from you! Sincerely, Jason Abrevaya CHAIRMAN, DEPARTMENT OF ECONOMICS



“America finally has a simple solution to our seniors’ prescription drug problems. A voluntary enrollment system of tiered formularies run by private interests in which drugs may be differently tiered and have different copays in any of the dozens of similar plans seniors may choose from depending on their home state, age and employment background. Voila!” 

— Stephen Colbert, The Colbert Report (2006)


UT research looks at effects of the “donut hole” and other Medicare Part D complexities on seniors’ choices


For Eugenio Miravete, Associate Professor in the Department of Economics, the seemingly messy Medicare Part D program was an ideal environment to study the economic implications of consumer learning and pricing services through menus of pricing options. Together with researchers from Arizona State University, Cornell University, and University of Maryland, Miravete followed over half a million senior citizens’ Medicare D plan choices from 2006 to 2007. In “Sinking, Swimming, or Learning to


Swim in Medicare Part D,” a paper forthcoming in The American Economic Review, Miravete and his colleagues revealed that seniors adjusted better than many expected to the array of plan choices. Studying the rate of overpayment, or the difference between what individuals actually pay and the very least amount of any of the 50 or so plan alternatives, Miravete’s team found that Medicare Part D participants were substantially reducing overpayments by the second year of the program.

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When the Medicare Prescription Drug, Improvement, and Modernization Act went into effect in 2006, it did so amid heavy criticism of the plan’s complicated structure. Senior citizens, critics claimed, would never be able to select the most affordable option for their specific prescription drug needs from a program that offered some 50 different plans, each with its own combination of annual premium, deductible, and drug coverage formulary. Adding in the issues of age, dementia, and illness, many predicted that senior citizens would not be able to navigate the unwieldy system and would end up overpaying for their prescription coverage.



Overall, payments were reduced by about $300 per person from 2006 to 2007, and less than 2% of the sample group overpaid significantly by their second year of enrollment. Miravete explains that these results “run against the belief that consumers, and in particular elders, are unable to choose wisely. True, people make mistakes but they tend to self-correct over time, and that should be a relief for policy makers as no corrective policy or regulation of these contracts appears to be necessary.” The main source of this improvement in overpayment was switching from one plan to another during the enrollment period for participants’ second year of coverage. Reductions averaged 40-54% after just one year of participation in the program, and the more beneficiaries overspent in their first year, the larger their reduction tended to be for the second year. Though initial doubts about the Medicare Part D program often centered around the performance of seniors with additional difficulties, such as advanced age, mental illness, and Alzheimer’s disease, the findings showed that these groups improved their overspending by as much as the average beneficiary. Though trial and error certainly contributed to seniors’ ability to control overspending, Miravete also points to an increase in information and support available for the 2007 plan year. Government sponsored websites allowed seniors to search and compare the cost of various plans, doctors and pharmacies helped provide patients with personalized advice, and family members or caretakers stepped in to help with the selection process. In cases of advanced age and dementia, family assistance has likely been a key player in reducing overpayment. The infamous “donut hole,” another highly debated aspect of the Medicare Part D program, may have also contributed to seniors’ fast learning curve. This coverage gap required seniors to pay 100% out of pocket for their medications once they reached a certain threshold of spending (approximately $2,500 - $5,000 in 2007). Above the threshold, coverage resumed with only a 5% cost to the plan holder. Miravete says the donut hole, though an unpopular concept, “is the reason why elders have an incentive to search for the least expensive plan.” The donut hole was designed to help suppress the cost of the program by encouraging seniors to choose their coverage plan wisely and to opt for generic drugs whenever possible, as well as by preventing pharmaceutical companies from raising prices unchecked. As Medicare Part D has cost taxpayers 30% less than originally budgeted, the donut hole seems to have been a successful cost saving tool. Under the Patient Protection Affordable Care Act, however, the donut hole will be phased out gradually and completely removed by 2020. Based on his research, Miravete notes that the removal of the donut hole will “reduce the incentive for consumers to search [for the best

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switched MEDICARE PART D prescription plan from 2006 to 2007 FOR PLAN SWITCHERS

plan], and it is very likely that overpayment will increase” and the total amount of government subsidy will skyrocket. Regardless of the changes in store, Miravete’s Medicare Part D research remains a powerful illustration of market forces at work on a large scale. “Medicare is an important market,” Miravete says. “People care about it, and data is abundant and of great quality. I cannot imagine a better application to test and debate the implications of learning and consumer pricing. If old, not very wealthy, and sick customers do not make systematic mistakes on something that matters a lot to them, we should expect that the same will happen among the general population on issues that matters to them.”  –LIZ MYRICK Eugenio Miravete is an Associate Professor in The Department of Economics. Miravete’s co-authors are Jonathan Ketcham from Arizona State University, Claudio Lucarelli from Cornell University and M. Christopher Roebuck from the University of Maryland.


Average overspent on prescriptions in 2006


Average overspent on prescriptions in 2007 FOR NON-SWITCHERS


Average overspent on prescriptions in 2006


Average overspent on prescriptions in 2007 NOTE: Amount “overspent” is the amount that would have been saved by choosing the cheapest plan available.



JUMPING INTO RESEARCH Economics Students Attend Largest Economics Undergraduate Research Conference

Office of Assessment study of 13,120 STUDENTS


of undergrads and


of seniors participate in some type of research while at UT

ABOVE: Steve Karson listens intently to a presentation at the conference.



In the pursuit of becoming what President William Powers, Jr. calls the “research university of the future,” The University of Texas at Austin is promoting research at all levels. While faculty and graduate students have always been expected to engage in research, undergraduates are being encouraged more than ever to jump into research. ¶ In March, the Department of Economics sponsored a trip by 29 students to the Economics Scholars Program (ESP) Undergraduate Research Conference, held at the Federal Reserve Bank in Dallas, TX. Visiting professor Enrique Martinez-Garcia, who accompanied the students to the T E X O N O M I C S | FA L L 2 0 1 2


Students engaged in research have higher grade point averages and are more likely to both graduate in four years and attend graduate school.

N EWS & EV E N TS conference, notes that “we need to dispel the view that research is something that one does alone in a library corner or a little office outside the view of the rest of the world… In order for our research and our ideas to have an impact on society and build up human knowledge, one has to be brave enough to put his own research to the test of an audience of his peers. In that sense, the ESP Conference is a great venue for these young scholars to debate their best ideas and challenge us.” The annual ESP conference, which began in 2007, is the largest conference for undergraduate research in economics. This year’s edition included undergraduate students and faculty mentors from 35 different schools across 19 states, with UTAustin having the largest contingent. Several UT students served as paper discussants and session moderators. Two students, Affonso Reis and Steve Karson, presented work based on research they had conducted with Associate Professor H. Shelton Brown, III from the UT School of Public Health. The study by Karson and Brown, “Cigarette quitlines, taxes and tobacco control policies: a state level analysis,” is now forthcoming in Health Economics, a highly respected peer-review journal.

The experience was invaluable for student attendees. According to Reis, the ESP conference “gives you a picture of what the competition is working on. For those who have never engaged in research, it’s a great opportunity to see what exactly you can do as an undergraduate.” Shuoyo Li, a discussant at the conference, plans on collaborating with the author whose paper he critiqued, as the two researchers realized that they face similar challenges in their work.

ABOVE: A large contingent of Economics undergraduates attended the conference.


STUDENT AND STAFF AWARDS AND HONORS established by recent graduate Sahil

careful approach and sophisti-


cated methodology in answering a

was given to Affonso Reis in March.

the computational economics course

complex question. In particular, they

Reis was awarded for his paper

with Professor David Kendrick.

complimented her on the balance

“Agent-based modeling in MATLAB:

between theoretical and empirical

Demographic simulations with power

Sarah McKay, a Senior Academic

strategies in her thesis. According

competition, combat-fearing agents,

Advisor who joined the department

to Sharanya, “The senior thesis

reallocation costs and finite natural

in March, has been awarded the

gave me a chance to combine skills

resources.” The Jain award was


economics. The selection committee was impressed with Sharanya’s

Jain, who wanted to give back to the department after learning so much in

learned in several different classes


THE 2012 SENIOR THESIS PRIZE was awarded to Sharanya

while proving to be one of my biggest


challenges in college. This made it a

ING. This national award honors

Rajan for her honors thesis titled

unique experience, whose success

excellence in an advising role for

“Missing women in education: Does

was made possible by my supervis-

staff members who have held an

the existence of son preference

ing professor [Professor Stephen

academic advising position for no

among Asian immigrants influence

Trejo] and my friends in the class.

more than three years. Sarah will re-

parents’ education decisions?”

Aside from seeing the development

ceive her Certificate of Merit during a

The award, established in 2010,

of an idea, my favorite aspect was

special awards reception in October

recognizes the most outstanding

the variety of ideas presented by

at the NACADA Annual Conference in

undergraduate honors thesis in

other students at the end of the year.”

Nashville, TN.

T E X O N O M I C S | FA L L 2 0 1 2



Highlights of recently published or forthcoming articles from our faculty.

curve for housing. The study examines two different

attendance goals.

housing markets, San Francisco and Atlanta, and

Unfortunately, almost

finds divergent results; the consumption nature of

all of these programs

housing dominates in San Francisco (where demand

are based exclusively on

declines as prices increase), whereas the capital-

documentation provided

Online auction sites like

gains aspect dominates in Atlanta (where demand

by teachers. In a paper

eBay have become promi-

increases as prices increase). These findings

forthcoming in the Jour-

nent over the last decade.

are relevant to recent concerns about “housing

nal of Development Eco-

An important feature of

bubbles,” as unsustainable price increases are driven

such sites is that auctions

by the expectation of future price increases.

“Last-minute bidding in sequential auctions with unobserved, stochastic entry”

nomics, Assistant Professor Leigh Linden examines the perverse incentives

for identical products are

associated with teacher documentation of student at-

held repeatedly, with many

tendance. Using unique data that includes reports of

auctions overlapping and closing one after another.


both teachers and external attendance monitors, the study analyzes an enrollment subsidization program in Bombay, India in which families were provided with

can bid again in a later one. In a paper published this

“Total work and gender: facts and possible explanations”

year in the Review of Industrial Organization, Associate

In a study in the Journal of Population Economics,

the days in a given month. The study finds that teach-

Professor Tom Wiseman explores how the option to bid

Professor Daniel Hamermesh takes a detailed look

ers manipulate student attendance records and do so

again (after losing) can affect bids, the timing of bids,

at gender differences in

differentially, with teachers inflating attendance more

and prices in repeated auctions of homogenous goods.

time worked, considering

for girls, better students, and lower-caste students.

An auction model suggests that the availability of later

both work for pay and

auctions drives bidders to submit their bids at the last

work in the household.

minute. Since expected prices for future auctions are

The study uses data from

higher in the presence of many bidders, bidders are

people in 27 countries

pushed to bid more aggressively in the current auction.

who have recorded how

Moreover, a bidder prefers not to reveal his presence at

much time they spend

“Second mover advantage and entry timing”

each day on different

Economists have long been interested in the factors

Consequently, bidders who are outbid in one auction

the auction until it is too late for others to respond: the result is last-minute bidding.

activities. As expected, men spend more time work-

free grain if their children attend at least 80 percent of


affecting new entry in markets. They often focus on

ing for pay, whereas women spend more time on

the “first-mover advan-

household tasks (child care, cooking, cleaning, etc.).

tage,” in which firms strive

The study’s finding is that total work, which includes

to be first to market for a

paid and houshold work, is roughly the same for

new product. However,

“Household housing demand: empirical analysis and theoretical reconciliation”

men and women in rich non-Catholic countries. One

there are also advantages

explanation is that, in rich countries, social norms

to being late to market,

Housing is both a consumption good and an

require equal work time between the sexes. Surveys

as the first mover incurs

investment asset. As a consumption good, it follows

of international differences in attitudes show that

costs or makes mistakes

RICHARD DUSANSKY the Law of Demand: an

total work by gender is more equal in countries where

increase in the price

attitudes towards gender roles in the labor market

avoid. Apple is a prime example. Neither the iPod nor

per square foot leads

suggest more equality.

the iPhone were the first to market, but both came


to dominate their respective markets. In a study in

to a decrease in the amount of square feet purchased. However,

that late entrants can

the Journal of Industrial Economics, Professor David Sibley investigates this type of “second-mover advan-

“Identifying agent discretion: exaggerating student attendance in response to a conditional school nutrition program”

tage” whereby there is an incentive for firms to delay

can lead to an increase in the amount of square

Policymakers in many developed and developing

entry in the market. If the number of firms is fixed, a

feet purchased when prices increase. In a recently

countries have focused on programs that provide

large market induces entry sooner than a small one,

published study in the Journal of Real Estate Finance

direct financial incentives to students and families

but the opposite can be true when the number of

and Economics, Professor Richard Dusansky

to improve educational outcomes. Many programs

firms is very large (the free entry case). The study

examines whether the capital-gains effect can

provide either cash or other valuable items (like cell

provides the first statistical test of its kind to deter-

dominate and lead to an upward sloping demand

phones) if students meet specific academic or

mine which case is consistent with the data.

as an investment asset, the expectation of further price increases


entry. The theoretical model predicts different entry behavior depending on whether or not there is free

T E X O N O M I C S | FA L L 2 0 1 2






Jorge Atalla received his B.A. in economics from The University of Texas in 1991, never guessing that 10 years later he would be accepting a very different accolade, that of Best Director. His first feature length documentary, In Cane for Life (A Vide em Cana), was invited to screen at 56 film festivals and won 16 Best Documentary Awards. His second film, Sequestro, would take him on a harrowing seven year journey into the heart of Brazil’s booming kidnapping business. ¶ For Jorge Atalla, the plan was always to attend university in America. Born in São Paulo, Brazil, Atalla was already traveling


abroad for summer school in New York, Scotland, and Switzerland by the age of thirteen. Following in the footsteps of his father, a petroleum engineer who graduated from the University of Tulsa, Atalla came to the U.S. for his bachelor’s degree in 1987. When Atalla’s father returned home to Brazil after his time at an American university, he did so as Brazil’s first petroleum engineer. Responsible for building the Cubatão oil refinery, one of the first oil refineries in Brazil, Atalla’s father would later to build his own successful business, a family controlled conglomerate of sugar, ethanol, coffee and cement industries. Atalla came to UT knowing that his father intended him to get a degree that would prepare him to step into the family business. Atalla fond memories of his time at UT—riding his bike to class, attending football games, and making friends he has kept for over two decades. Though he took a few film courses at UT, Atalla

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focused on finding a major that would prepare him for his future in business. “Being the eldest and only son raised in a family agri-business environment,” he explains, “it was hard for me to pursue my dream of becoming a filmmaker at the age of 18. I never even mentioned it to my father at the time.” In economics, Atalla discovered a field that both fascinated him and satisfied his father’s expectations. His training in economics would also help Atalla understand Brazil’s complex and, at the time, struggling economy. After his time in Austin, Atalla traveled the world, living for a time in Spain, studying at La Sorboune in Paris, learning Japanese in Tokyo, and finally settling in Switzerland long enough to earn a MBA from Business School Lausanne. After almost ten years abroad, Atalla returned home to work in the family business. It was during this time, after splitting a year between work at the family’s sugar


ABOVE: Chief Inspectors Artur Dian (L) and Rafael Lodi (R) of the Sao Paulo anti-kidnapping police division worked alongside Jorge Atalla for his documentary film Sequestro.

and ethanol refinery in the south of Brazil and the family’s cement business in the capital, that Atalla met and married his wife, Ecaterine. Atalla’s new wife encouraged him to pursue the love of film he’d had since he was a child, and together they moved to New York in December 1998 to enroll Atalla in a one-year intensive film program at the New York Film Academy. A few days after graduation, the inspiration for his first feature length film struck as Atalla wandered into the Angelica Theater for a screening of the Buena Vista Social Club. As he watched that documentary “about a group of Cuban musicians once famous, but later forgotten by society,” Attalla says, “it made me remember, as a child at our sugar plantations, the hundreds of sugar cane cutters and how hard they worked, an un-documented life. I went to 42nd Street Photo, purchased a camera, a microphone and 50 DVCam tapes, flew back to Brazil and started shooting.” For the next six months, Atalla followed the sugar cane workers employed by his family’s business, living as a peer, and recording their unseen lives. The story he captured revealed, in Atalla’s words, “wonderful people, with beautiful hearts and souls, with humble dreams, and with a vision of life much different from most of us.” After the completion of In Cane for Life, Atalla returned to the family business. At a 2001 film festival in Miami, when Atalla heard of the kidnapping of a famous Brazilian advertising executive, he knew that his next film would document the growing problem of kidnapping in his hometown of São Paulo.

FACULTY HONORS FACULTY HONORS Longtime faculty members Harry Cleaver and Alfred Norman retired this year. Both had taught at UT-Austin for over 35 years, and their presence in the classroom will be greatly missed. Professor Sandra Black has been named Editor of the Journal of Human Resources, the second highest ranked journal within the fields of Industrial Relations and Labor Economics. Professor Daniel Hamermesh has been awarded the prestigious HUMBOLDT RESEARCH AWARD from the Germany-based Alexander von Humboldt Foundation. The award honors researchers whose “fundamental discoveries, new theories, or insights have had a significant impact on their own discipline and who are expected to continue producing cutting-edge achievements in the future.” Professor Daniel Slesnick, who has been with the department since 1982, was


promoted to Senior Vice Provost in May. His duties include identifying funding for student success initiatives and strategies for academic facility usage. Professor Dale Stahl won an international competition for predicting behavior in twoperson, two-stage games. For his first-place algorithm, he was invited as a guest of honor at the Eramus-Technion Workshop on Decision and Predictions in January. Assistant professor Caroline Thomas was selected as a visiting scholar for the 2012-13 academic year at Princeton University’s Institute for Advanced Studies. Assistant professor Olivier Coibion was one of three Fellows chosen by the International Monetary Fund (IMF) from over 400 applications. According to the IMF, the new fellowship program “is aimed at attracting economists with a substantial research record in leading journals and a strong interest in the policy-relevant work conducted at the IMF.”

Knowing that his family would not approve of his new project, Atalla began preparing for Sequestro in secret. The violence in São Paulo had been growing steadily since Atalla left for UT in the late 1980’s; by 2002, there were some 500 official kidnapping cases a year and an equal number of disappearances in which kidnapping was suspected. Atalla faced the difficult task of convincing his family, and the kidnapping task force he hoped to follow, to get on board with his vision. Atalla’s plan was to become embedded with the anti-kidnapping division of the São Paulo police department, an elite force that did not allow film coverage of their delicate and often gruesome missions. Atalla began an all-out campaign to win the confidence of the 80 men and women in the unit. “It took a full year of daily persistence, conversations, negotiations and demonstration of trust,” Atalla admits, but finally he was allowed to begin shooting at the end of 2004. For the next four years, Atalla began the near impossible schedule of working all day in the family business, coming home to his wife and children in the evenings, and shooting Sequestro in the dead of night. By the time the film was done, the violence he witnessed on those late night shifts with the anti-kidnapping unit had begun to traumatize Atalla. The images he captured for Sequestro found him in his dreams, making sleep all but impossible. By the end, though he endured a disturbing and emotional journey in the process, Atalla had created a powerful work that documented both the tragedy of the crime and the heroic effort by a dedicated police force that helped bring about a drastic decrease in kidnapping in São Paulo. Atalla says that he would not trade the experience of either of his two documentaries, different though they were for the filmmaker. “The first was a beautiful emotional ride, full of wonderful stories, dreams, where I met wonderful people,” he says. “The second was a horrific emotional experience, but both of them were exactly what I wanted to document.” After finishing Sequestro, Atalla was asked to direct a feature film called In the Lion’s Den about a famous 2001 kidnapping in São Paulo, and for his next project he has been invited to direct a film shot in English but set in São Paulo. Reflecting on his path from economics student to filmmaker, Atalla attributes the education he received with teaching him the principles needed to successfully shoot, edit, and distribute his films. A filmmaker must be prepared for the financial implications of the entire process or a project can be stalled in the editing room, unable to be completed or distributed, which happens often in the independent market. The release of Sequestro, for instance, required special consideration as it was the only Brazilian film qualified to compete in the 2010 Oscars and the U.S. release would cost $40,000 more than the release into the Brazilian market. As Atalla points out, there is a reason everyone calls it the “Movie Industry.”  –LIZ MYRICK

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A L U M N I S P O T L I G H T (continued)



Stephen earned undergraduate degrees in Economics and Chemistry at Virginia Tech before attending Duke University where he received his Ph.D. in Economics in 2005. He then worked for seven years in the Economics Department at MIT. He decided to come to UT for the excellent research environment, the great colleagues, and the opportunity to be part of a growing department, though he agrees the friendly people and warm climate of Texas are a nice bonus. In his spare time, he enjoys running, playing guitar, traveling with his wife Christina, and watching the WWE. Stephen’s research interests are in industrial organization, with a focus on the application of structural methods at the intersection of public policy, economic theory, and econometrics. His work spans a range of topics, from the estimation of teacher labor supply in rural India to modeling the health insurance plan choices and utilization of workers in the aluminum industry. Two recently published papers highlight the constructive role that theory can play in describing the world and providing policy guidance. In ongoing work, Stephen is examining the impacts of cap-and-trade regulations on firms in California and using personnel data from the US Army to estimate the value of a statistical life.

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ECONOMETRICS Sukjin received his Ph.D. at Yale University after completing his undergraduate studies in Economics at Seoul National University in Korea, where he was born and raised. He spent part of his youth in Europe and, while in his twenties, two years in the Korean army. As an econometrician, Sukjin is interested in the identification of nonlinear econometric models and, specifically, the situation where such models are only weakly identified. Whereas previous research has only provided solutions to the “weak instrument” problem in linear models, his research has proposed methodology for additional models often used by empirical researchers. Sukjin is interested in applied microeconomic questions, including the measurement of gains from educational programs so that policy can be better informed. Sukjin is also a devotee of arts and science in general, and of the integration of the two different branches of knowledge.

The Department The Department of Economics is of Economics pleased to welcome six new faculty is pleased to members. Our new recruits represent welcome four a broad new range of specialties and an facultyinfusion members of vitality and experience to its ranks. from across the globe.

where he completed his undergraduate studies and received an MA in economics. He received his Ph.D in economics from the University of California, Berkeley in 2008. Day enjoys how economics combines mathematical and statistical analyses to analyze policy relevant questions. He is a public finance economist with research focusing on social security and income taxation. In his research on social security, he has worked with coauthors to analyze how social security annuity payments and lump-sum retirement benefits affect retirement decisions. This research led to further work to examine labor supply responses to wage changes and gain some general insights for macro-

economic models. In a current project, Day is researching how an increase in the early retirement age affects individuals’ retirement decisions and firms’ hiring decisions. In his spare time, he enjoys working out, reading, and a variety of outdoor activities.


Brendan recently graduated from Northwestern University with a Ph.D. in Economics, having completed his undergraduate studies in Mathematics and Economics at Iowa State University. His research is

primarily in theoretical econometrics, the field of economics concerned with the development of statistical methods. His recent work focuses the estimation and testing of models from microeconomic theory, including game theory. These methods are potentially applicable to many areas of economics and the social sciences more generally; for example, these methods can be used to help predict how companies would respond to government regulation. He is also interested in labor economics, where his research has focused on the interaction between economic outcomes and health outcomes.


PUBLIC FINANCE Day was born and raised in Milwaukee, where he developed an early interest in economics while attending high school. He attended the University of Chicago


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is aa publication publication of of The The University University of ofTexas Texas at atAustin Austin is Department of of Economics Economics Department

Chairman Chairman Jason Jason Abrevaya Abrevaya

Visit us at Visit us at

Editors Editors Liz LizMyrick, Myrick, Joanna JoannaDrake Drake

HOW TO CONNECT Giving to Dept. of Economics

UT Austin Economics Alumni

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Texonomics Fall 2012  
Texonomics Fall 2012  

The magazine for the department of economics at The University of Texas at Austin. Fall 2012 edition.