Faculty & Research

Neale Mahoney

Assistant Professor of Economics and Robert King Steel Faculty Fellow

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5807 South Woodlawn Avenue
Chicago, IL 60637

Neale Mahoney is an Assistant Professor of Economics and Robert King Steel Faculty Fellow at the University of Chicago Booth School of Business and a Faculty Research Fellow at the National Bureau of Economic Research.

Professor Mahoney is an applied microeconomist with an interest in health insurance and consumer credit markets. His research has been published in the American Economic Review and has received coverage in the New York Times and Wall Street Journal. He has been awarded a National Tax Association Outstanding Doctoral Dissertation Award (first runner-up) and the Lamport Prize for the best undergraduate thesis in Economics at Brown University.

Before joining Chicago Booth, Mahoney was a Robert Wood Johnson Fellow in Health Policy Research at Harvard University. He received a Ph.D. and M.A. in Economics from Stanford University and a Sc.B. in Applied Mathematics-Economics from Brown University. He has worked as an Associate at McKinsey & Company and on Health Care Reform for the Obama Administration.


2013 - 2014 Course Schedule

Number Name Quarter
42001 Competitive Strategy 2013 (Fall)

REVISION: Regulating Consumer Financial Products: Evidence from Credit Cards
Date Posted: Jan  27, 2014
We analyze the effectiveness of consumer financial regulation by considering the 2009 Credit Card Accountability Responsibility and Disclosure (CARD) Act in the United States. Using a difference-in-difference research design and a unique panel data set covering over 150 million credit card accounts, we find that regulatory limits on credit card fees reduced overall borrowing costs to consumers by an annualized 1.7% of average daily balances, with a decline of more than 5.5% for consumers with the lowest FICO scores. Consistent with a model of low fee salience and limited market competition, we find no evidence of an offsetting increase in interest charges or reduction in volume of credit. Taken together, we estimate that the CARD Act fee reductions have saved U.S. consumers $12.6 billion per year. We also analyze the CARD Act requirement to disclose the interest savings from paying off balances in 36 months rather than only making minimum payments. We find that this "nudge" increased ...

REVISION: Imperfect Competition in Selection Markets
Date Posted: Dec  30, 2013
Many standard intuitions about the distortions created by market power and selection are reversed when these forces co-exist. Adverse selection may be socially beneficial under monopoly, for example, and market power may be beneficial in the presence of advantageous selection. We develop a simple, but quite general, model of symmetric imperfect competition in selection markets that parameterizes the degree of both market power and selection. We derive basic comparative statics verbally and illustrate them graphically to build intuition. We emphasize the relevance of the most counterintuitive effects with a calibrated model of the insurance market and empirical results from the credit card industry. Among other policy insights, we show that in selection markets four core principles of the United States Horizontal Merger Guidelines are reversed.

New: Externalities and Taxation of Supplemental Insurance: A Study of Medicare and Medigap
Date Posted: Dec  27, 2013
Most health insurance policies use cost-sharing to reduce excess utilization. The purchase of supplemental insurance can blunt the impact of this cost-sharing, potentially increasing utilization and exerting a negative externality on the primary insurance provider. This paper estimates the effect of private Medigap supplemental insurance on public Medicare spending using Medigap premium discontinuities in local medical markets that span state boundaries. Using administrative data on the universe of Medicare beneficiaries, we estimate that Medigap increases an individual’s Medicare spending by 22.2%. We find that the take-up of Medigap is price sensitive with an estimated demand elasticity of -1.8. Using these estimates, we calculate that a 15% tax on Medigap premiums would generate combined tax revenue and cost savings of $12.9 billion annually. A Pigouvian tax would generate combined annual savings of $31.6 billion.

New: Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement
Date Posted: Sep  27, 2013
Many organizations have budgets that expire at the end of the fiscal year. Faced with uncertainty over future spending demands, these organizations have an incentive to build up a rainy day fund over the first part of the year. If demand does not materialize, they must rush to spend these resources on low quality projects at the end of the year. We test these predictions using data on procurement spending by the U.S. federal government. Using contract-level data on a near-universe of federal contracts, we document that spending in the last week of the year is 4.9 times higher than the rest-of-the-year weekly average. Using a newly available dataset that tracks the quality of $130 billion in information technology (I.T.) projects, we show that quality scores for year-end projects are 2.2 to 5.6 times more likely to be below the central value. Allowing agencies to roll over unused funding into the subsequent year can improve efficiency. We calibrate a dynamic model of spending and show ...

New: Bankruptcy as Implicit Health Insurance
Date Posted: Sep  23, 2013
This paper examines the implicit health insurance households receive from the ability to declare bankruptcy. Exploiting cross-state and within-state variation in asset exemption law, I show that uninsured households with greater seizable assets make higher out-of-pocket medical payments, conditional on the amount of care received. In turn, I find that households with greater wealth-at-risk are more likely to hold health insurance. The implicit insurance from bankruptcy distorts the insurance coverage decision. Using a microsimulation model, I calculate that the optimal Pigovian penalties are similar on average to the penalties under the Affordable Care Act (ACA).

New: Pricing and Welfare in Health Plan Choice
Date Posted: Aug  18, 2008
Prices in government and employer-sponsored health insurance markets only partially reflect insurers' expected costs of coverage for different enrollees. This can create inefficient distortions when consumers self-select into plans. We develop a simple model to study this problem and estimate it using new data on small employers. In the markets we observe, the welfare loss compared to the feasible efficient benchmark is around 2-11% of coverage costs. Three-quarters of this is due to restriction