Markets, Interventions and Externalities: Four Essays in Applied Economics

Academic dissertation for the Degree of Doctor of Economics

Author(s): Sara Fogelberg Lövgren
Year: 2015Pages: 112Publisher: Department of Economics, Stockholm UniversityCity: Stockholm
ISBN: 978-91-7649-229-1

Markets, Interventions and Externalities: Four Essays in Applied Economics Sara Fogelberg Lövgren

Supervisors: Mårten Palme and Mikael Priks


This Ph.D. thesis contains four independent essays summarized as follows.

Effects of Competition between Healthcare Providers on Prescription of Antibiotics

The introduction of antibiotics as a medical treatment after World War II helped to dramatically increase life expectancy in the industrialized world. However, over-prescription of antibiotics during the last few decades has led to a sharp increase in multi-resistant bacteria, disarming once powerful anti-pathogens. This paper investigates the effects of increased competition between healthcare providers on prescription of antibiotics. The analysis makes use of a competition-inducing reform implemented in different counties in Sweden at different points in time between 2007 and 2010 for a difference-in-differences approach. Since the dataset contains monthly data on all prescribed antibiotics in Sweden it is possible to estimate the effects on all antibiotics prescribed, as well as on different subcategories of antibiotics. The results show that increased competition had a positive and significant effect on prescription of antibiotics. This increase in prescription of antibiotics was not associated with a reduction in sick leave.

Effects of Introducing an HPV Vaccination Program for Daughters on Maternal Participation in Cervical Screening

Previous literature has established that there is a positive correlation between maternal participation in screening against cervical cancer and having a daughter vaccinated against types of HPV that can cause cervical cancer. In this paper, we investigate the causal impact of introducing HPV vaccination for girls in a general child vaccination program on maternal participation in screening against cervical cancer. We use a difference-in-differences design and estimate the effect on both general cervical screening participation and heterogeneous effects for women with different levels of education.

Strategic Withholding through Production Failures

Anecdotal evidence indicates that electricity producers use production failures to disguise strategic reductions of capacity in order to influence prices, but systematic evidence is lacking. We use an instrumental variable approach and data from the Swedish electricity market to examine such behavior. In a market without strategic withholding, reported production failures should not depend directly on the market price. We show that marginal producers in part base their decision to report a failure on prices, which indicates that production failures are a result of economic incentives as well as of technical problems.

Wind Power Volatility and its Impact on Production Failures in the Nordic Electricity Market

Wind power generation of electricity has gained popular support because of its low environmental impact and its low costs relative to other renewable energy sources. However, concerns have been raised in the power sector that wind power generation will come at the price of increased damage to other power generators. Wind power generation is naturally volatile which requires other power sources to start up and shut down in accordance with weather conditions, which for instance coal or gas generators are not built for. The previous literature has used simulations to show that the damage done and the associated costs can be substantial. We use a dataset containing all reported failures in the Nordic electricity market Nord Pool and data for Danish wind power generation. The analysis shows that for both Denmark and the rest of Nord Pool the short-term costs associated with the volatility of wind power generation are non-significant.


Fogelberg Lövgren, Sara (2015). Markets, Interventions and Externalities: Four Essays in Applied Economics. Doctoral Dissertation in Economics. Stockholm: Department of Economics, Stockholm University.

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