This paper introduces a mechanism that, contrary to standard reasoning, may lead segre-gation in ... more This paper introduces a mechanism that, contrary to standard reasoning, may lead segre-gation in U.S. cities to increase as racial inequality narrows. Specifically, when the proportion of highly educated blacks rises holding white education fixed, new middle-class black neighbor-hoods can emerge, and these are attractive to blacks, resulting in increases in segregation as households re-sort. To examine the importance of this ‘neighborhood formation ’ mechanism in practice, we propose a new two-part research design, yielding distinctive cross-sectional and time-series predictions. In cross section, if our mechanism is important, inequality and segre-gation should be negatively related for older blacks, which is what we find using both the 1990 and 2000 Censuses. Then in time series, an analogous negative relationship should be apparent, especially for older blacks. Here, controlling for white education, we show that increased black educational attainment in a city between 1990 and 20...
Each state has a set number of geographic “rating areas,” typically made up of counties, that all... more Each state has a set number of geographic “rating areas,” typically made up of counties, that all insurers participating in the state’s ACA Marketplace must uniformly use as the geographic unit for varying premiums. This paper shows that it is quite common for insurers to not sell any plans in certain counties, while serving other counties in the same rating area. We provide empirical evidence that risk screening and provider network setup costs are the main mechanisms driving these selective entry patterns. We find no evidence that insurers limit their service area to avoid competition.
This paper introduces a mechanism that, contrary to standard reasoning, may lead segre-gation in ... more This paper introduces a mechanism that, contrary to standard reasoning, may lead segre-gation in U.S. cities to increase as racial inequality narrows. Specifically, when the proportion of highly educated blacks rises holding white education fixed, new middle-class black neighbor-hoods can emerge, and these are attractive to blacks, resulting in increases in segregation as households re-sort. To examine the importance of this ‘neighborhood formation ’ mechanism in practice, we propose a new two-part research design, yielding distinctive cross-sectional and time-series predictions. In cross section, if our mechanism is important, inequality and segre-gation should be negatively related for older blacks, which is what we find using both the 1990 and 2000 Censuses. Then in time series, an analogous negative relationship should be apparent, especially for older blacks. Here, controlling for white education, we show that increased black educational attainment in a city between 1990 and 20...
Each state has a set number of geographic “rating areas,” typically made up of counties, that all... more Each state has a set number of geographic “rating areas,” typically made up of counties, that all insurers participating in the state’s ACA Marketplace must uniformly use as the geographic unit for varying premiums. This paper shows that it is quite common for insurers to not sell any plans in certain counties, while serving other counties in the same rating area. We provide empirical evidence that risk screening and provider network setup costs are the main mechanisms driving these selective entry patterns. We find no evidence that insurers limit their service area to avoid competition.
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Papers by Hanming Fang