Although undergraduate economic students at Cal probably best know Ted Keeler as the health economics professor, his first research interests where in seemingly unrelated fields.  He began his research looking at industries, such as railroads, where he thought productivity gains could be made from changes in policies and deregulation.  In the railroad industry he found that a great amount of excess capacity was present.  The financial healthiness of the industry could be improved by changing government policies allowing abandonment of this excess capacity.  His accomplishments in these areas encouraged him to move into health economics where he saw similar situations.  In parallel with the previously mentioned research, Keeler found that there was a very costly amount of excess bed capacity in hospitals, and state and local government policies were encouraging this excess capacity.

Another area of research that Professor Keeler is interested in is the socioeconomic determinants of health, with the desire to answer the question: Why do people engage in unhealthy behavior?  His research in this area has focused on cigarette consumption and traffic behavior.  In this research he has found, even when controlling for such variables as social stigmas on cigarette smoking, that increasing education has a strong effect on reducing cigarette consumption and decreasing traffic accidents.

 In researching such varied topics, Professor Keeler has used many different sources to find data. For many topics Federal and California State government agencies, such as the Service Transportation Board (formerly the ICC) and the California Tobacco Survey, have been particularly valuable sources.  Not all data has been easily accessible, and sometimes colleagues have been useful in locating missing data.  Professor Keeler sometimes has to take data from many different sources and piece it together to create his own data sets, especially when working with cigarette consumption data.

 While interviewing Professor Keeler, I was amazed by the amount and variety of research he has performed.  His ability to see the overall themes in seemingly unrelated topics was quite intriguing.  Professor Keeler sought out fields where he believed his research would be useful in changing policies that were hurting the industries.   He also used his research in various areas to answer broader questions.  Professor Keeler is definitely not just a professor of health economics.
 

    Even before he began to study economics, Professor Keeler sensed that something was wrong in the transportation industry--it was not operating as  efficiently as possible.  Freight rates were not optimally priced, the services offered were inefficient, and airline fares were much higher than they needed to be.  The inefficiencies became even more apparent to him as he began to study the economics of transportation, focusing his research on the airline, railroad, and highway sectors.  Professor Keeler devoted the first part of his career to analyzing transportation costs and the way in which the markets operated.  He was among the first to push for deregulation of the airline and railroad industries.

    During the early 1980s many of the policy changes Professor Keeler advocated had occurred.  By the late 1980s Professor Keeler began to focus his research efforts on applying microeconomic theory to the health care sector.  He found that attitudes were similar in the transportation and health care markets.  Just as railroads had been expected to provide transit at a financial loss, hospitals are expected to serve the public and use any profits to cross-subsidize care for indigent patients.  Finding these deeply seeded attitudes erroneous, Keeler points out that subsidization cannot occur if hospitals (and railroads) are forced into bankruptcy.

    Some of Professor Keeler's most recent work examines cigarette consumption and the price elasticity of demand for cigarettes.  One of his papers looks at the effects of the 1998 tobacco settlement, which raised the price of cigarettes by a dollar per pack, on the demand for cigarettes.  While casually observing magazine advertisements, he noticed that tobacco companies increased their advertisements dramatically after the settlement.  Using data from the FTC, Keeler found that 30% of the ecrease in demand that would have occurred as a result of the settlement was offset by the increase in demand due to advertising.

    Because he uses micro-theory and statistics to find out why certain markets do not seem to be working and to determine potential remedies, locating data is important to Professor Keeler's work.  He admits that the perfect data is not always out there, but he assumes the attitude of "Where there's a will, there's a way."  He's willing to scour every corner of the earth to gather data, even if it requires spending hours on the Internet or in the library, making phone calls to get a hold of unpublished data, or making trips to government offices to speak with authorities in-person.  Patience is the key.