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Anna Russo

Job Market Candidate

Research Fields

Environmental Economics, Public Economics, Industrial Organization

Contact Information

Job Market Paper

Additionality and Asymmetric Information in Environmental Markets: Evidence from Conservation Auctions with Karl M. Aspelund. January 2024. 

Market mechanisms aim to deliver environmental services at low cost. However, this objective is undermined by participants whose conservation actions are not marginal to the incentive — or “additional” — as the lowest cost providers of environmental services may not be the highest social value. We investigate this potential market failure in the world’s largest auction mechanism for ecosystem services, the Conservation Reserve Program, with a dataset linking bids in the program’s scoring auction to satellite-derived land use. We use a regression discontinuity design to show that three of four marginal winners of the auction are not additional. Moreover, we find that the heterogeneity in counterfactual land use introduces adverse selection in the market. We then develop and estimate a joint model of multi-dimensional bidding and land use to quantify the implications of this market failure for the performance of environmental procurement mechanisms and competitive offset markets. We design alternative auctions with scoring rules that incorporate the expected impact of the auction on bidders’ land use. These auctions increase efficiency by using bids and observed characteristics to select participants based on both costs and expected additionality.

Working Papers

Waiting or Paying for Healthcare: Evidence from the Veterans Health Administration. October 2023.

Healthcare is often allocated without prices, sacrificing efficiency in the interest of equity. Wait times then typically serve as a substitute rationing mechanism, creating their own distinct efficiency and distributional consequences. I study these issues in the context of the Veterans Health Administration (VA) healthcare system, which provides healthcare that is largely free but congested, and the Choice Act, a large-scale policy intervention that subsidized access to non-VA providers to reduce this congestion. Using variation in Choice Act eligibility in both patient-level and clinic-level difference-in-differences designs, I find that the price reduction for eligible veterans led to substitution away from the VA, an increase in overall healthcare utilization and spending, and reduced wait times at VA clinics in equilibrium. I then use the policy-induced price and wait time variation to estimate the joint distribution of patients’ willingness-to-pay and willingness-to-wait. I find that rationing via wait times redistributes access to healthcare to lower socioeconomic status veterans, but at a large efficiency cost (-24%). This equity-efficiency trade-off is steep: rationing by wait times is an inefficient form of redistribution across a range of equity objectives. By contrast, I find that a coarsely targeted, modest increase in copayments increases consumer surplus by more than the Choice Act, at lower cost to the VA, while disproportionately benefitting low-income veterans.

The Effects of Floodplain Regulation on Housing Markets with Abigail Ostriker. July 2023. 

We investigate the effects of housing regulations designed to correct a wedge between privately- and socially-optimal construction in areas at risk of flooding in Florida. Using a spatial regression discontinuity around regulatory boundaries and an event study around the policy’s introduction, we document that floodplain regulation reduces new construction in high-risk areas and increases the share of newly-built houses that are elevated. Embedding these effects in a model of residential choices with elastic housing supply, we find that the policy reduces expected flood damages by 60%. One-quarter of this reduction is driven by relocation of new construction to lower-risk areas, and three-quarters is driven by elevation of houses remaining in risky areas. However, this second-best policy achieves at best about one-tenth of possible welfare gains because of poor targeting. It overcorrects in many areas, inducing more consumers to elevate and relocate than is socially-optimal, while still allowing inefficiently-high construction in the riskiest places. By contrast, a flexible corrective tax on flood risk would achieve substantial welfare gains of more than $2,700 per newly-developed house.