Essays on the economics of digitization and innovation
- This dissertation comprises three chapters. The first chapter examines the extent to which smartphones have substituted other digital devices and expanded overall digital consumption, and I estimate the newly generated consumer surplus. To do so, I use newly available Korean panel survey data on individuals' digital device ownership and detailed usage. During the 2010-2014 observation period, smartphone penetration in Korea grew from less than 10% to over 70%. I begin by documenting the effect of smartphone adoption on device ownership and time use using a difference-in-differences strategy. I then develop and estimate a model of consumer demand for digital activities, allowing the set of activities to change as a function of the individual's smartphone ownership and physical location. The model allows me to quantify the overall consumer surplus from smartphones, how it varies across demographic groups, and how much of it results from substitution---using a smartphone for activities previously done on other devices---or expansion---using a smartphone for digital activities that were previously inconvenient or difficult. I find that the average monthly consumer surplus per person is $41, where $23 is the surplus from expansion, such as checking emails or searching for information online while commuting. The value is highest for individuals aged 20-30, who indeed constitute the group that adopted smartphones the most. Overall, the total consumer surplus from smartphones in Korea is approximately $49 million per day. I explore the market and policy implications of my estimates through counterfactual exercises. I find that providing free WiFi at public transportation locations in Seoul increases consumer surplus by $117 million per year, which substantially exceeds the annual budget allocated by the government to provide the service. The second chapter examines whether bundling of telecommunications services makes individuals less likely to switch their service provider because of increased switching costs. Using a detailed survey dataset from the Korea Information Society Development Institute (KISDI), I find that Internet subscribers who previously bundled are less likely to switch their Internet service provider than are those who did not bundle. The results are robust to correction for the potential selection problem through the use of an endogenous treatment model. The finding that bundling reduces the probability of switching service providers and locks-in existing users can have important implications for market competitiveness and consumer welfare. The third chapter is co-authored with Liran Einav and Jonathan Levin. We evaluate the impact of a novel wellness program of a large US employer. Workplace wellness programs have become increasingly common in the United States, although there is not yet consensus regarding the ability of such programs to improve employees' health and reduce healthcare costs. In this paper, we study a program offered by a large US employer that provides substantial financial incentives directly tied to employees' health. The program has a high participation rate among eligible employees, around 80%, and we analyze data on the first four years of the program, linked to healthcare claims. We document robust improvements in employee health, and a correlation between certain health improvements and reductions in healthcare cost. Despite the latter association, we cannot find direct evidence causally linking program participation to reduced healthcare costs, although it seems plausible that such a relationship will arise over longer horizons.
|Type of resource
|electronic; electronic resource; remote
|1 online resource.
|Stanford University, Department of Economics.
|Bresnahan, Timothy F
|Bresnahan, Timothy F
|Statement of responsibility
|Submitted to the Department of Economics.
|Thesis (Ph.D.)--Stanford University, 2017.
- © 2017 by Stephanie Lee
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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