Three Essays in Applied Economics

Citation

Zhang, Shiyu (2022) Three Essays in Applied Economics. Dissertation (Ph.D.), California Institute of Technology. doi:10.7907/ahsc-p250. https://resolver.caltech.edu/CaltechTHESIS:08102021-053655419

Abstract

This thesis consists of three papers, two studying the effectiveness of policy interventions curbing the opioid crisis, and one studying the value of network ties in the Chinese bureaucracy. The two chapters on the opioid crisis are coauthored with Daniel Guth, a fellow Caltech graduate student.

The first chapter studies the effectiveness of the OxyContin reformulation in reducing opioid misuse and overdose. Purdue Pharma reformulated OxyContin in 2010 to make it more difficult to abuse. Previous research argued that OxyContin misuse fell dramatically and OxyContin users switched directly to heroin. Using a novel and fine-grained source of all oxycodone sales from 2006-2014, we show that the reformulation led users to substitute from OxyContin to generic oxycodone and the reformulation had no overall impact on opioid or heroin mortality. In addition, the chapter finds that generic oxycodone, instead of OxyContin, was the driving factor in the transition to heroin in recent years. These findings highlight the important role generic oxycodone played in the opioid epidemic and the limited effectiveness of a partial supply-side intervention.

The second chapter studies the spatial spillover effect of Prescription Drug Monitoring Programs (PDMPs). PDMPs seek to potentially reduce opioid misuse by restricting the sale of opioids in a state. This chapter examines discontinuities along state borders, where one side may have a PDMP and the other side may not. We find that electronic PDMP implementation, whereby doctors and pharmacists can observe a patient's opioid purchase history, reduces a state's opioid sales but increases opioid sales in neighboring counties on the other side of the state border. We also find systematic differences in opioid sales and mortality between border counties and interior counties. These differences decrease when neighboring states both have PDMPs, which is consistent with the hypothesis that the differences were caused by cross-border opioid shopping. Our work highlights the importance of understanding the opioid market as connected across counties or states, as we show that states are affected by the opioid policies of their neighbors.

The third chapter examines the value of patronage ties at lower levels of Chinese bureaucracy. A growing literature shows that connection with the right higher-level politicians is beneficial for advancements in the Communist Party of China. In this chapter, I use a self-collected data set to examine the value of patronage ties in the city committees, a previously overlooked but important level of the Chinese government. I present empirical evidence that the party secretaries are involved in the appointment of committee members. But upon departure, the party secretaries' career success does not improve the committee members' future promotion likelihood. This work highlights that the value of interpersonal connection in China is highly dependent on which level of the government is under inspection.

Thesis Files