Michael D. Makowsky

More Tickets, Fewer Accidents: How Cash-Strapped Towns Make for Safer Roads

Traffic accidents are one of the leading causes of injury and death in the U.S. The role of traffic law enforcement in the reduction of accidents has been studied by relatively few papers and with mixed results that may be due to a simultaneity problem. Traffic law enforcement may reduce accidents, but police are also likely to be stricter in accident-prone areas. We use municipal budgetary shortfalls as an instrumental variable to identify the effect of traffic citations on traffic safety and show that budgetary shortfalls lead to more frequent issuance of tickets to drivers. Using a panel of municipalities in Massachusetts, we show that increases in the number of tickets written reduce motor vehicle accidents and accident related injuries, and that tickets issued to younger drivers have a larger effect in reducing accidents. The findings show that failure to control for endogeneity results in a significant underestimation of the positive impact of law enforcement on traffic safety.

The Evolution of Power and the Divergence of Cooperative Norms

We consider a model of multilevel selection and the evolution of institutions that distribute power in the form of influence in a groups collective interactions with other groups. In the absence of direct group-level interactions, groups with the most cooperative members will outcompete less cooperative groups, while within any group the least cooperative members will be the most successful. Introducing group-level interactions, however, such as raiding or warfare, changes the selective landscape for groups. Our model suggests that as the global population becomes more integrated and the rate of intergroup conflict increases, selection increasingly favors unequally distributed power structures, where individual influence is weighted by acquired resources. The advantage to less democratic groups rests in their ability to facilitate selection for cooperative strategies – involving cooperation both among themselves and with outsiders – in order to produce the resources necessary to fuel their success in inter-group conflicts, while simultaneously selecting for leaders (and corresponding collective behavior) who are unburdened with those same prosocial norms. The coevolution of cooperative social norms and institutions of power facilitates the emergence of a leadership class of the selfish and has implications for theories of inequality, structures of governance, non-cooperative personality traits, and hierarchy. Our findings suggest an amendment to the well-known doctrine of multilevel selection that “Selfishness beats altruism within groups. Altruistic groups beat selfish groups.” In an interconnected world, altruistic groups led by selfish individuals can beat them both.

The Effect of Medicaid Expansion on Utilization in Maryland Emergency Departments

Study objective: A proposed benefit of expanding Medicaid eligibility under the Patient Protection and Affordable Care Act (ACA) was a reduction in emergency department (ED) utilization for primary care needs. Pre‐ACA studies found that new Medicaid enrollees increased their ED utilization rates, but the effect on system‐level ED visits was less clear. Our objective was to estimate the effect of Medicaid expansion on aggregate and individual‐based ED utilization patterns within Maryland. Methods: We performed a retrospective cross‐sectional study of ED utilization patterns across Maryland, using data from Maryland’s Health Services Cost Review Commission. We also analyzed utilization differences between pre‐ACA (July 2012 to December 2013) uninsured patients who returned post‐ACA (July 2014 to December 2015). Results: The total number of ED visits in Maryland decreased by 36,531 (–1.2%) between the 6 quarters pre‐ACA and the 6 quarters post‐ACA. Medicaid‐covered ED visits increased from 23.3% to 28.9% (159,004 additional visits), whereas uninsured patient visits decreased from 16.3% to 10.4% (181,607 fewer visits). Coverage by other insurance types remained largely stable between periods. We found no significant relationship between Medicaid expansion and changes in ED volume by hospital. For patients uninsured pre‐ACA who returned post‐ACA, the adjusted visits per person during 6 quarters was 2.38 (95% confidence interval 2.35 to 2.40) for those newly enrolled in Medicaid post‐ACA compared with 1.66 (95% confidence interval 1.64 to 1.68) for those remaining uninsured. Conclusion: There was a substantial increase in patients covered by Medicaid in the post‐ACA period, but this did not significantly affect total ED volume. Returning patients newly enrolled in Medicaid visited the ED more than their uninsured counterparts; however, this cohort accounted for only a small percentage of total ED visits in Maryland.

Identifying the relationship between length of hospital stay and the probability of readmission

The length of patient stays in U.S. hospitals has been in steady decline since the advent of Medicare’s Prospective Payment System in 1983. This decline, incentivized by diagnosis-based flat fee reimbursements, has been found to be largely benign in its effect on patient outcomes by 30 years of medical research. The literature, however, has relied on analysis of broad aggregate trends in mortality and readmission rates concomitant with the decline in length of stay (LOS), unable to identify the effects of trends in LOS separately from advances in medicine and public health. Further, the reverse causal relationship between LOS and patient outcomes, via bias from omitted patient health characteristics, while given cursory acknowledgment, is never controlled for in patient level studies. We analyze the records of 395,828 adult patients with a primary diagnosis of heart failure hospitalized in California between 2005 and 2011 and estimate the effect of hospital LOS on probability of 30-day readmission, controlling for demographics, comorbidities, procedures, and medical complications. We use hospital occupancy rates and emergency vehicle diversions as instrumental variables to identify the effect of patient LOS on the probability of readmission within 30 days. We find a U-shaped relationship between LOS and the probability of hospital readmission. The average probability of readmission initially decreases with LOS, and does not begin to increase until LOS exceeds 9 days, relative to a mean LOS of 4.55 days. Our results suggest that studies that fail to control for omitted variable bias significantly underestimate the benefits from the early stages of a patient’s hospital stay. The endogenous relationship between LOS and readmission rates has implications for patient-care initiatives, such as Accountable Care Organizations under the Affordable Care Act, where reimbursement policies are tied to both metrics.

Innovation, Price Dispersion, and Emergent Increasing Returns to Scale

We present a model in which price dispersion allows long run increasing returns to scale to emerge from a competitive short run. The model hinges upon turnover in the productive technology-leading firm, price dispersion resultant of Stiglers logic of rational search and limited excludability of knowledge. Bankruptcy occurs in a form similar to the gamblers ruin, delayed by cash buffer stocks. The model requires no entry or replacement of failed firms. The number of active firms in a market reaches a stationarity increasing with, and contingent on, search costs.

The Minimum Wage, EITC, and Criminal Recidivism

For recently released prisoners, the minimum wage and the availability of state Earned Income Tax Credits (EITCs) can influence both their ability to find employment and their potential legal wages relative to illegal sources of income, in turn affecting the probability they return to prison. Using administrative prison release records from nearly six million o enders released between 2000 and 2014, we use a difference-in- differences strategy to identify the effect of over two hundred state and federal minimum wage increases, as well as 21 state EITC programs, on recidivism. We find that the average minimum wage increase of 8% reduces the probability that men and women return to prison within 1 year by 2%. This implies that on average the wage effect, drawing at least some ex-o enders into the legal labor market, dominates any reduced employment in this population due to the minimum wage. These reductions in reconvictions are observed for the potentially revenue generating crime categories of property and drug crimes; prison reentry for violent crimes are unchanged, supporting our framing that minimum wages affect crime that serves as a source of income. The availability of state EITCs also reduces recidivism, but only for women. Given that state EITCs are predominantly available to custodial parents of minor children, this asymmetry is not surprising. Framed within a simple model where earnings from criminal endeavors serve as a reservation wage for ex-o enders, our results suggest that the wages of crime are on average higher than comparable opportunities for low-skilled labor in the legal labor market.

Embezzlement, Whistleblowing, and Organizational Architecture: An Experimental Investigation

We investigate the optimal shape of organizations to reduce embezzlement. In a stylized synthesis of a common pool resource and ultimatum game, agents are activated sequentially within an organizational architecture wherein they can take a share of the available resources or choose to blow the whistle, an action that sets all payoffs to zero. The resources not taken will grow and benefit all agents. Six basic organizational architectures are tested, including horizontal, vertical, pyramid shaped, and inverted pyramid-shaped structures. Our results suggest that horizontal and pyramid structures are more effective at reducing embezzlement. Rates of embezzlement and whistleblowing increase with the number of levels in the structure. Holding the number of levels AC CE PT ED M AN US CR IP T

To Serve and Collect: The Fiscal and Racial Determinants of Law Enforcement

We exploit local deficits and state-level differences in tax and expenditure limits to estimate how incentives to raise revenues influence policing. In a national sample, we find that black drug arrests increase with local deficits when institutions allow officials to more easily retain fine and forfeiture revenues. Using a panel of Colorado jurisdictions, we find similar increases in black drug and DUI arrests. We also find increases in white drug arrests, but only for those who are not residents in the arresting jurisdiction. Our results show how revenue-driven law enforcement can distort police behavior and have systematically unequal racial effects.

Religion, Clubs, and Emergent Social Divides

Arguments regarding the existence of an American cultural divide are frequently placed in a religious context. This paper seeks to establish that, all politics aside, the American religious divide is real, that religious polarization is not a uniquely American phenomenon, and that religious divides can be understood as naturally emergent within the club theory of religion. Analysis of the survey data reveals a bimodal distribution of religious commitment in the U.S. International data reveals evidence of bimodal distributions in all twenty-nine surveyed countries. The club theory of religion, applied in an agent-based computational model, generates bimodal distributions of member commitment.