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Assistant Professor
Department of Economics
UNC at Chapel Hill
101 Gardner Hall, CB 3305
Chapel Hill, NC 27599

andres.hincapie@unc.edu

Primary fields: Labor, Health, Entrepreneurship

Secondary Fields: Structural Microeconometrics, Innovation

CV

 


Recent work:

Most individuals do not start a business and, if they do, they start well into their thirties. In the paper Entrepreneurship over the Life Cycle: Where are the Young Entrepreneurs? I use the Panel Study of Income Dynamics to estimate a dynamic Roy model with accumulation of experience, risk aversion, and imperfect information about ability. Risk aversion reduces entrepreneurship by up to 40%, and 5 years of white collar experience reduce uncertainty about entrepreneurial ability by up to 30%. The gap in first entry ages between paid employment and entrepreneurship results mainly from entry costs and information frictions. I study counterfactual policies (subsidies and education) that target these barriers to young entrepreneurship.

In the joint paper entitled Innovation and Diffusion of Medical Treatment, we introduce an empirical framework to capture how aggregate consumer demand affects innovation in medical treatment along multiple dimensions of quality. Our framework estimates a distribution that describes the size and direction of innovations, and embeds this distribution into a structural model of dynamic demand. In the model, forward-looking consumers make choices after forming expectations about the characteristics of future products. Externalities arise because aggregate consumer behavior changes the path of innovation, and hence dynamic payoffs. We apply this framework to data from the Multicenter AIDS Cohort Study, analyzing consumer choices and the realized path of innovations in the market for HIV treatments. Results suggest that consumer preferences towards experimentation can slow down technological progress.

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