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Jason Abrevaya, Chair 2225 Speedway, Stop C3100, Austin, TX 78712 • Admin: 512-471-3211 & Advising: 512-471-2973

Stephen Ryan

Associate Professor Ph.D., Duke University

Stephen Ryan



Professor Ryan earned undergraduate degrees in economics and chemistry at Virginia Tech before attending Duke University. After graduating with his PhD in economics in 2005, he worked for seven years in the Economics Department at MIT.

Professor Ryan’s research background is in industrial organization, with a focus on the application of structural methods at the intersection of public policy, economic theory, and econometrics. His work spans a range of topics, ranging from the estimation of the labor supply of teachers in rural India to modeling the health insurance plan choices and utilization of workers in the aluminum industry. Two recently published papers highlight the constructive role that theory can play in describing the world and providing policy guidance.

The first paper (Selection on Moral Hazard in Health Insurance, joint with Amy Finkelstein, Liran Einav, Paul Schrimpf, and Mark Cullen) examines the health insurance plan choices, and subsequent health care utilization, of workers at Alcoa. While adverse selection and moral hazard have long been recognized as potentially important determinants of how workers may sort into insurance plans and how much medical care they consume once insured, much of the previous literature tended to treat the two concepts in isolation. We relaxed this assumption, allowing workers in our model to select their plans based on private information about both their anticipated level of spending (adverse selection), and their expected response in medical usage to shocks in their health status (moral hazard). Our findings suggest that selection on moral hazard was as equally an important component of worker’s insurance decisions as expected spending. While our estimates are specific to a given firm, they nonetheless suggest the importance of accounting for the interaction of moral hazard and adverse selection when modeling insurance choices.

The second paper (Incentives Work: Getting Teachers to Come to School, with Esther Duflo and Rema Hanna) illustrates the usefulness of economic theory, especially when combined with the attractive identification properties of a randomized field experiment. In this paper, we examined the role that financial and monitoring incentives played in reducing teacher absenteeism in rural India. Among the one-room, one-teacher non-formal education centers of our sample, teacher absenteeism was nearly 50 percent per day in the baseline study. We ran a randomized field experiment where half of the teachers were given cameras to document their presence in the classroom twice a day. We combined this monitoring incentive with a financial one: for every day over 10 that a teacher worked in the month, they were given a 50 Rupee bonus. Teachers in the treatment group subsequently had absenteeism rates that were half of those in the control group. To explain whether this was due to monitoring or financial incentives, we estimated dynamic programming model of teacher labor supply. Our findings strongly suggest that monitoring only played a minor role in reducing absenteeism, and therefore the financial incentives were responsible for the increased attendance. This paper also illustrates the usefulness of theory in making policy, as our model allowed us to calculate the menu of cost-minimizing contracts that could be offered to teachers; these counterfactuals were subsequently adopted by the organization running the schools with great success.

In ongoing work, Professor Ryan is examining the impacts of cap-and-trade regulations on firms in California, and using personnel data from the US Army to estimate the value of statistical life.

ECO 328 • Industrial Organization

34350 • Spring 2013
Meets TTH 930am-1100am CLA 1.104
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Industrial Organization is the study of imperfectly competitive markets. In this course, we will analyze the behavior on economic agents (consumers and firms) in such settings, as well as policy issues that arise therein. Topics we will cover include monopoly, oligopoly, product differentiation, entry deterrence, and the role of asymmetric information. Calculus and game theory will be our primary analytical tools. The goal of the course is to develop your understanding of the forces at work in many kinds of market interactions, as well as to foster your ability to think critically.If more information is needed contact instructor.

ECO 384K • Industrial Organization

34360 • Fall 2012
Meets MW 1100am-1230pm BRB 1.120
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This course is a graduate-level introduction to classical and current research themes and papers in the areas of antitrust and regulation. The first section of the class will cover three classic areas of antitrust: price fixing, merger analysis, and vertical restraint. The second section of the class will cover topics in regulation, including theoretical basics of regulation in the presence of asymmetric information; the political economy of regulation; regulation of several specific sectors, such as telecommunications, cable, and electricity; environmental regulation; and other topics in regulation.


"Market-Based Emissions Regulation and Industry Dynamics" with Meredith Fowlie and Mar Reguant.  April 2014.  Forthcoming, Journal of Political Economy. [PDF] [Appendix


"Selection on Moral Hazard in Health Insurance", with Liran Einav, Amy Finkelstein, Paul Schrimpf, and Mark Cullen.  American Economic Review, Volume 103, Issue 1, February 2013, pp. 178-219.


"Incentives Work: Getting Teachers to Come to School", with Esther Duflo and Rema Hanna.  American Economic Review, Volume 102, Issue 4, June 2012, pp. 1241-78.


"The Costs of Environmental Regulation in a Concentrated Industry," Econometrica, Volume 80, Issue 3, May 2012, p. 1019-1062.


"The Random Coefficients Model is Identified," with Patrick Bajari, Jeremy Fox, and Kyoo-il Kim, Journal of Econometrics, Volume 166, Number 2, February 2012, pp. 204-212.


"Heterogeneity and the Dynamics of Technology Adoption," with Catherine Tucker, Quantitative Marketing and Economics, Volume 10, Issue 1, 2012, pp. 63-109.


"A Simple Estimator for the Distribution of Random Coefficients," with Patrick Bajari, Jeremy Fox, and Kyoo-il Kim, Quantitative Economics, Volume 2, Number 3, 2011, pp. 381-418.


"Identification and Estimation of a Discrete Game of Complete Information," with Patrick Bajari and Han Hong, Econometrica, Volume 78, Number 5, September 2010, p. 1529-1568.


"Evaluating Wireless Consolidation Using Semiparametric Demand Estimation," with Patrick Bajari and Jeremy Fox, Quantitative Marketing and Economics, Volume 6, Number 4, December 2008, pp. 299-338.


"Linear Regression Estimation of Discrete Choice Models with Nonparametric Distributions of Random Coefficients," with Patrick Bajari and Jeremy Fox, American Economic Review: Papers and Proceedings, Volume 97, Number 2, May 2007, pp. 459-463.


Working Papers

The Value of a Statistical Life: Evidence from Military Retention Incentives and Occupation-Specific Mortality Hazards

with Michael Greenstone and Michael Yankovich.  Updated paper coming summer 2014.

The Welfare Effects of Supply Side Regulations in Medicare Part D

with Franesco Decarolis and Maria Polykova.  Paper coming summer 2014.

Expanding Educational Opportunities in Remote Parts of the World: Evidence from a RCT of a Public-Private Partnership in Pakistan

with Felipe Barrera-Osorio, David S. Blakeslee, Matthew Hoover, Leigh L. Linden, and Dhushyanth Raju.  Paper coming summer 2014.


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