The Young Economist Award 2023 was awarded to three young scientists for their outstanding papers at the NOeG Annual Meeting. The award is sponsored by the Austrian National Bank (OeNB).
Marica Valente was recognized for the following paper she co-authored with Melissa Newham: "The Cost of Influence: How Gifts to Physicians Shape Prescriptions and Drug Costs”.
This paper analyses how gifts (either monetary or in-kind) from pharmaceutical companies to doctors affect the prescription behavior of physicians and the drug costs for patients. The authors combine unique physician-level data on antidiabetic prescriptions with data on payments by pharmaceutical companies and use machine learning methods to estimate causal effects. They show that gifts from pharmaceutical companies result in an increase of brand drug prescriptions and higher drug expenditures. The responses, however, differ widely across physicians, and a large part of the heterogeneity can be explained by patients’ out-of-pocket expenditures.
This paper makes crucial progress in understanding the mechanisms through which gifts from drug companies affect physicians' prescription behavior. The paper uses causal forests, a machine learning approach, to estimate the effects of interest, but also compares the results to more standard econometric techniques. Furthermore, the paper emphasizes its policy relevance by quantifying the cost savings of a gift ban in the state of Vermont.
The paper thus uses recent methodological advances and a credible identification strategy to provide new insights on an important topic and tackles an issue of central relevance to the cost-effectiveness of the healthcare sector.
The other two winners of the Young Economist Award 2023 are Maximilian Boeck of Bocconi University with Lorenzo Mori on "U.S. Monetary Policy and Globalization: A Time-Varying Perspective" and Lorenz Gschwent of the University of Duisburg-Essen with Marcel Caesmann, Janis Goldzycher, and Matteo Grigoletto on "The End that Justifies the Means: Censorship in Democracy."
On Marica Valente's paper:
The Cost of Influence: How Gifts to Physicians Shape Prescriptions and Drug Costs
Melissa Newham
ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich; KU Leuven
Marica Valente
University of Innsbruck; DIW Berlin