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Lucy Msall

(last name pronounced ‘muh-sal’)

I am a PhD candidate in Economics at the University of Chicago’s Booth School of Business and a recent Master of Legal Studies graduate from the University of Chicago Law School.

My research interests are in Public Economics (especially Taxation), Household Finance & Innovation. Prior to graduate school, I worked as a political campaign staffer, government employee, and NBER Research Assistant.

I can be reached via email at

Working Papers

Sex, Drugs, and R&D: Missing Innovation from Regulating Female Enrollment in Clinical Trials with Valerie Michelman

Abstract: This paper considers the consequences of unequal representation in research. From 1977-1993, the U.S. Food and Drug Administration (FDA) issued guidance that “women of childbearing potential” should not be included as human subjects in early stage clinical trials. We study how the pharmaceutical industry’s response to that guidance shaped the course of innovation serving men and women. We develop a model of drug development which predicts that the guidance leads to less innovation for female-focused drugs. Compliance with the guidance decreases the informativeness of early clinical trials for drugs intended to treat predominantly female diseases, resulting in higher expected costs. To bring our theory to the data, we link biomedical patents, commercial data on drug development, and FDA records of approved drugs. By exploiting the contrast between male- and female-focused drug patents and drug and non-drug biomedical patents, we estimate that the guidance resulted in approximately 200 to 850 missing female drug patents and 10 to 45 fewer approved female drugs.

Presentations*: NBER SI Innovation (2022), Eastern Economic Association (2022), University of Nebraska England-Clark Conference (2022), Royal Economic Society (2023)

*Not including presentations by co-author.

Consumer-Financed Fiscal Stimulus: Evidence from Digital Coupons in China with Jing Ding, Lei Jiang & Matthew Notowidigdo

Abstract: Beginning in 2020, local governments in China issued digital coupons to stimulate spending in targeted categories such as restaurants and supermarkets. We study this new form of fiscal stimulus using detailed data from a large e-commerce platform and a bunching estimation approach, and we find that the coupons caused large increases in spending of 3.5-3.6 yuan per yuan spent by the government. We find no evidence that the large spending effects come from substantial substitution away from non-targeted spending categories or short-run intertemporal substitution. To rationalize these results, we develop a dynamic consumption model to show how the coupon’s minimum spending thresholds (i.e., “spend at least ¥X, get ¥Y off”) create temporary notches that lead to large behavioral responses. In the model, the increased spending caused by the coupons is partially “consumer-financed”, since consumers use their own money to push their spending above the coupon thresholds. Calibrating the model to match our empirical results, we find that coupons generate about half of the increase in consumer welfare as an equivalent amount of government spending distributed as cash, but that coupons are a much more cost-effective form of targeted fiscal stimulus.

Online Appendix

Presentations*: NBER SI Public Economics (2023), Becker Friedman Institute China Research Conference (2022)

*Not including presentations by co-author.

Work in Progress

The Taxation of Capital Gains at Death with Ole-Andreas Næss

Do Corporate Insiders “Buy-Borrow-Die”? Searching for Individual Tax Avoidance in Public Company Filings


Pre-Doctoral Publications

Decreases In Readmissions Credited To Medicare’s Program To Reduce Hospital Readmissions Have Been Overstated with Christopher Ody, Leemore Dafny, David Grabowski & David Cutler. Health Affairs, January 2019. Vol. 38, Issue 1.

Abstract: Medicare’s Hospital Readmissions Reduction Program (HRRP) has been credited with lowering risk-adjusted readmission rates for targeted conditions at general acute care hospitals. However, these reductions appear to be illusory or overstated. This is because a concurrent change in electronic transaction standards allowed hospitals to document a larger number of diagnoses per claim, which had the effect of reducing risk-adjusted patient readmission rates. Prior studies of the HRRP relied upon control groups’ having lower baseline readmission rates, which could falsely create the appearance that readmission rates are changing more in the treatment than in the control group. Accounting for the revised standards reduced the decline in risk-adjusted readmission rates for targeted conditions by 48 percent. After further adjusting for differences in pre-HRRP readmission rates across samples, we found that declines for targeted conditions at general acute care hospitals were statistically indistinguishable from declines in two control samples. Either the HRRP had no effect on readmissions, or it led to a systemwide reduction in readmissions that was roughly half as large as prior estimates have suggested.

Popular Press Coverage: The New York Times, Chicago Booth Review.