the collateral channel how real estate shocks affect corporate investment abstract what is the impact of real estate prices on corporate investment in the presence of financing frictions firms use pledgeable assets as collateral to finance new projects through this collateral channel shocks to the value of real estate can have a large impact on aggregate investment to compute the sensitivity of investment to collateral value we use local variations in real estate prices as shocks to the collateral value of firms that own real estate over the 1993 2007 period the representative us corporation invests 0 06 out of each 1 of collateral jel d22 g31 r30

housing prices and the savings of renters abstract this paper studies the effects of housing prices on the net worth of young households because prospective homeowners must accumulate down payments a change in housing prices can change their savings patterns theoretically the effect of increases in house prices on savings is ambiguous because households can increase their saving to afford the larger down payment or decrease their saving because they have chosen to delay or forego purchasing a house using data from the 1984 panel study of income dynamics 27 i show that empirically the effect of increased housing prices on saving is positive and quite large relative to the savings of young households young renter households living in cities with high housing prices have more net worth than those living in cities with lowering housing prices controlling for both the income of the households as well as the per capita income of the city in which they live

physician induced demand for surgery following up the earlier findings by fuchs on surgeon induced demand this paper makes numerous data and econometric improvements in conducting a test of neoclassical and inducement theories a simultaneous equation model is used to estimate physician demand and equilibrium fees for surgery from a sample of 350 psus over the 1969 76 period the results provide definite support for the notion of competitive market failure particularly in large metropolitan areas other things equal fees and utilization are higher in surgeon rich areas although our estimated shift elasticities were only about one third those found by fuchs a statistically significant albeit small price elasticity of demand for surgery was also obtained in contrast to fuchs increasing monopoly and disequilibrium models are also tested without altering the basic findings where surgeons were in short supply their availability significantly affected surgery rates although a small supply effect was found in plentiful areas as well

the demand for physician services evidence from a natural experiment this study exploits a natural experiment in belgium to estimate the effect of copayment increases on the demand for physician services it shows how a differences in differences dd estimator of the price effects can be decomposed into effects induced by the common average proportional price increase income effects and by the change in relative prices substitution effects the price elasticity of a uniform proportional price increase is relatively small 0 13 for men and 0 03 for women substitution effects are large especially for women but imprecisely estimated despite the substantial price increases the efficiency gain of the reform if any is modest

theories of the price and quantity of physician services a synthesis and critique abstract in the traditional neoclassical model of supply and demand prices determine the allocation of economic resources the difficulty in applying this model to physician services is the rationing of resources directly by physicians themselves eliminating the allocative function of prices welfare consequences are appropriately judged in terms of efficiency and equity not departures from the structural relationships implied by supply and demand as interpreted here both competitive theories and target income theories of this market imply that physicians consider both their own welfare and the welfare of their patients in their decision making all consumer benefits and all producer costs are internalized by physicians they consequently have an incentive to obtain the maximum possible social benefit from the resources at their disposal to the extent that they are implicitly allowed to share in the resulting social gains the distributions of gains between patients and physicians is determined by professional ethics within bounds imposed by competitive forces

the income effect and supplier induced demand evidence from primary physician services in norway a much debated issue within the health economic literature is whether physicians can induce demand for their services the relationship between physicians nonpractice income and supply of primary physician services in norway is examined it is argued that if inducement exists physicians with a low nonpractice income who work in municipalities where competition for patients is high compensate for lack of patients by inducing demand this model is adapted to the institutional setting of the norwegian primary physician services where there is a fixed fee schedule the analyses were performed on a large set of data encompassing all primary care physicians in norway who are remunerated per item of treatment data on output in practice were merged with information about nonpractice income from the tax forms of the physician and her his spouse in municipalities with high physician density nonpractice income had no effect on the number of consultations per physician or on the number of treatment items

selfish bakers caring nurses a model of work motivation abstract work contributes to people s self image in important ways we propose a model in which effort is unobservable and where individuals have a preference for being important to others this gives the following predictions 1 if a worker s effort is paid by his marginal productivity bakers effort is just like in the standard model 2 if a worker s wage is unaffected by his effort nurses more effort is provided than in the standard model 3 to prevent that shirkers become nurses nurses wages must be kept strictly lower than bakers income at this wage level there will be too few nurses 4 overinvestment in nursing equipment can be justified as a means to attract motivated nurses 5 even with full income compensation both nurses and bakers may experience a net utility loss when losing their job 6 similarly both nurses and bakers may prefer work to welfare even with full income compensation

the determinants of health expenditures evidence from us state level data most macro studies of what determines health expenditures have used the same panel of oecd country level data based on a more homogeneous panel data set of us states we constructed this note applies the model selection procedure to identify the determinants of health expenditures at the state level we find that the four key factors are gross state products the proportion of the population over the age of 65 the degree of urbanization and the number of hospital beds the cross section income elasticity of health care is around 0 7 implying that health care is a necessity rather than a luxury good at the state level the relative price of health care varies significantly across states but does not appear to have real effects on the amount of resources measured in real dollars a state devotes to health care

house prices home equity based borrowing and the u s household leverage crisis us household leverage sharply increased in the years preceding the 2007 eco nomic recession the top panel of figure 1 shows the steady rise in household debt since 1975 which accelerated beginning in 2002 in just five years the household sector doubled its debt balance in comparison the contemporaneous increase in corporate debt was modest the middle panel shows that the increase in household debt from 2002 to 2007 translated into a striking rise in household leverage as mea sured by the debt to income ratio during the same time period corporate leverage declined the dramatic absolute and relative rise in us household leverage from 2002 to 2007 is unprecedented compared to the last 25 years one reason for the rapid expansion in household leverage during this period is that mortgage credit became more easily available to new home buyers mian and sufi 2009 strong house price appreciation from 2002 to 2006 however which may have been fueled by the availability of mortgage credit to a riskier set of new home buyers could also have had an important feedback effect on household lever age through existing homeowners given that 65 percent of us households already owned their primary residence before the acceleration in house prices the feedback from house prices to borrowing may be an important source of the rapid rise in household leverage that preceded the economic downturn our central goals in this study are to estimate how homeowner borrowing responded to the increase in house prices and to identify which homeowners responded most aggressively we examine this home equity based borrowing channel using a dataset consisting of anonymous individual credit files of a national consumer credit bureau agency we follow a random sample of over 74 000 us homeowners who owned their homes as of 1997 at an annual frequency from the end of 1997 until the end of 2008 the bottom panel of figure 1 plots the growth in debt of 1997 homeowners over time and shows that existing homeowners borrow significantly more debt as their house prices appreciate from 2002 to 2006 while the aggregate trend is suggestive

house prices bank instability and economic growth evidence from the threshold model abstract this paper examines the effects of house prices on bank instability when gauged at various levels of income growth bank stability may respond differently to house price changes or deviations from fundamental values in an economic boom environment than in a bust circumstance a threshold estimation technique developed by hansen 1999 is applied to a panel of 286 u s metropolitan statistical areas msas over the period 1990q1 2010q4 we consider two house price indicators the house price changes and the house price deviations from long run equilibrium the results suggest the existence of income growth threshold effects in the relationship between house prices and bank instability specifically there are two income growth thresholds when using the house price changes and one income growth threshold when the house price deviations are applied robustness results using the non msas sample from 1995q1 to 2010q4 provide further evidence of income growth threshold effects

patients trust and the quality of physicians patients are uncertain of physicians quality but learn about the quality of particular physicians through experience in treatment patients come to trust physicians who have served them well this paper explores the economic consequences of patients learning and trust within a model of the market for physicians services in a market equilibrium there are too many incompetent physicians in practice surprisingly even the more competent physicians have an interest in preventing patients from judging quality except through experience as we show all physicians including the most competent may oppose steps to inform patients of physicians quality

a re examination of the meaning and importance of supplier induced demand abstract despite twenty years of work on supplier induced demand sid there has been little discussion or investigation of how inducement affects the health of patients we develop a conceptual framework for sid which includes the clinical effectiveness of the health services utilized as well as the effectiveness of the agency relationship between the physician and the patient the framework is used to identify several conceptually distinct types of utilization each with its own policy implications which have been intermingled in the sid literature after examining each type of utilization we conclude that a continued focus by health economists on the phenomenon of inducement even within an extended conceptual framework may be too limited for the development of policies regarding health service utilization

does the stock market predict real activity time series evidence from the g 7 countries this paper extends one aspect of the us stock market study of fama 1990 and schwert 1990 we examine the relationship between industrial production ip growth rates and lagged real stock returns for the g 7 countries using both in sample cointegration and error correction models and the out of sample forecast evaluation procedure of ashley et al 1980 the cointegration tests show a long run equilibrium relationship between the log levels of ip and real stock prices while the error correction models indicate a correlation between ip growth and lagged real stock returns for all countries except italy the out of sample tests show that in several sub periods the us uk japanese and canadian stock markets enhance predictions of future ip 1999 elsevier science b v all rights reserved

oil price shocks and real gdp growth empirical evidence for some oecd countries this study assesses empirically the effects of oil price shocks on the real economic activity of the main industrialized countries multivariate var analysis is carried out using both linear and non linear models the latter category includes three approaches employed in the literature namely the asymmetric scaled and net specifications evidence of a non linear impact of oil prices on real gdp is found in particular oil price increases are found to have an impact on gdp growth of a larger magnitude than that of oil price declines with the latter being statistically insignificant in most cases among oil importing countries oil price increases are found to have a negative impact on economic activity in all cases but japan moreover the effect of oil shocks on gdp growth differs between the two oil exporting countries in the sample with the uk being negatively affected by an oil price increase and norway benefiting from it

medical interventions among pregnant women in fee for service and managed care insurance a propensity score analysis this paper extends earlier research on the effect of managed care on the receipt of four medical interventions for pregnant women ultrasound induction stimulation of birth electronic fetal monitor and caesarean delivery propensity score methods are used to account for sample selection issues regarding insurance choice managed care enrollees are more likely to receive an ultrasound which may be indicative of receiving better prenatal care managed care plans reduce the rate of caesarean deliveries but such limitations may be beneficial given the substantial medical evidence that caesarean deliveries are over utilized the results indicate that insurance coverage does influence treatment intensity but that utilization controls and provider financial incentives do not adversely affect care for pregnant women

commentary on the interpretation of temporal inflation parameters in stochastic models of judgment and choice the implications of salisbury and feinberg s 2010 paper salisbury l c f m feinberg 2010 alleviating the constant stochastic variance assumption in decision research theory measurement and experimental test marketing sci 29 1 1 17 for the process of model development and testing in the field of intertemporal choice analysis is explored although supporting the overall thrust of salisbury and feinberg s critique of previous empirical work in the area we also see their paper as illustrating the dangers of drawing strong inferences about the behavioral interpretation of statistical model parameters without seeking convergent empirical evidence in particular we are skeptical about the extent to which the reported effects of temporal distance on the estimated scale parameter c are uniquely or even primarily due to unobserved error inflation that reflects consumer s uncertainty about future utility this interpretation is brought into question by several lines of reasoning conceptually we note that uncertainty is different from error and that for choice data the error inflation model is mathematically identical to a model in which the scale parameter is a deterministic function of the temporal discount rate empirically a reanalysis of data from previously published experiments does not consistently support temporal error inflation temporal convergence of choice shares or the scale parameter as an explanation of variety seeking in choice sequences in our opinion the cumulative results of research on intertemporal choice require models in which the attributes of choice alternatives are differentially discounted over time despite these findings we advocate that choice researchers should indeed follow salisbury and feinberg s advice to not assume that error variances will be unaffected by experimental manipulations and such effects should be explicitly modeled we also agree that uncovering effects on error variance is just the first step and the ultimate goal should be to rigorously explain the reasons for such effects

identification of supplier induced demand in the health care sector this paper explores the issues and pitfalls encountered when attempting to test empirically the hypothesis that physician hospital or any other input supply level induces increasing demand for health services in the strict sense of demand shift and through that increased demand for the input in question evidence is presented which suggests that an empirical test of the supplier induced demand sid hypothesis of the type traditionally performed may not in fact be feasible with cross sectional aggregate data such as is usually used

what do not for profit hospitals maximize abstract massive structural change is occurring in health care provision in the united states significantly reducing the number of not for profit suppliers this trend is fueled in part by government policies to evaluate these policies one must know about the motives of not for profit health care providers the theory of not for profit hospitals suggests buyers may prefer dealing with sellers who are not acting out of avarice yet this theory does not imply the absence of rent seeking motives we formulate a test of not for profit hospitals goals and apply it to hospitals in virginia modeling average revenues as a function of caseload private medicare medicaid charity we identify prices as latent variables by analyzing the response of the estimated private price to exogenous differences in medicare medicaid and charity caseload we reject the hypothesis that not for profit hospitals maximize profits i e maximize rents for a set of agents who control the hospital we also reject pure welfare output maximization these results combined with other evidence we discuss are consistent with the hypothesis that these hospitals consider both profits and output as objectives current us government policies treat all not for profit hospitals as if they were profit maximizers these policies appear to be biased towards reenforcing the trend towards less health care provision from not for profits and our results suggest that this may not be entirely beneficial to consumers

consumer health information and the demand for medical care this paper is an empirical investigation of consumer health information using a new direct measure of information the econometric approach treats both information and physician visits as endogenous variables when estimating the demand for medical care the results show that information increases the probability that a consumer uses medical care but that conditional on use the quantity of care consumed is not related to information the results contradict specific implications of models where physicians can create or induce demand for their own services several results suggest that poorly informed consumers tend to underestimate the productivity of medical care in treating illness copyright 1990 by mit press

technology and health expenditures a demand approach applied to a process innovation there is controversy among economists as to whether the diffusion of new medical technologies has been a contributing factor to rising health expenditures the economic literature is critically reviewed and another approach is advocated this alternative approach rests on the distinction between product and process innovations it is argued that the relationship between process innovations and health expenditures can be illuminated by determining if the process innovation and the original procedure are utilized as substitutes the empirical results provide no indication that alternative technologies for diagnosing diseases conditions of the upper gastrointestinal tract have been utilized as substitutes by australian medical practitioners operating on a fee for service basis this study finds no evidence to indicate that the process innovation of fibre optic endoscopy has reduced health expenditures associated with diagnosis of diseases conditions of the upper gastrointestinal tract

international commodity prices growth and the outbreak of civil war in sub saharan africa to learn more about the effect of economic conditions on civil war we examine whether sub saharan civil wars are more likely to start following downturns in the international price of countries main export commodities the data show a robust effect of commodity price downturns on the outbreak of civil wars we also find that sub saharan countries are more likely to see civil wars following economic downturns in their main oecd export destinations

a theory of physician behavior with supplier induced demand the health care crisis of the 1960 s and 1970 s fueled unprecedented efforts by the congress to control costs and at the same time improve access to care as a basis for policy the economics literature offers confusing direction consisting of alternative theories of demand 9 13 theories of market structure 12 5 11 10 and theories of physician behavior and supply response 4 1 at the most fundamental levels of controversy economists have not resolved the issues of demand creation satisficing behavior and targeted income in the modelling of the physician firm the notion that health care markets may be dominated by the health care provider s ability to create demand was introduced formally in newhouse 12 evans parish and sully 4 green 8 and fuchs 6 all offer further refinement of the supplier induced model however as yet no formal presentation of such a theory exists to a large extent an analytical framework that incorporates the physician s decision making processes is absent and remains implicit in the empirical results found in the literature this paper presents a theoretical framework for a supplier induced model of physician behavior whereby we may compare and contrast its implications with those of the standard neoclassical model 1 the acknowledged strength of the supplier induced theory is its ability to explain empirical evidence which stands at odds with more traditional approaches in particular a number of studies have reported a direct association between physician density and physicians fees 12 7 2 that is as the stock of physicians increases the price of medi

health care expenditures and gdp panel data unit root test results abstract this short paper presents unit root test results for time series on per capita national health care expenditures and gross domestic product in the oecd unlike the country by country test used by hansen p king a 1996 the determinants of health care expenditure a cointegration approach j health econ 15 127 137 the test we employ exploits the panel nature of the oecd data using this approach we are able to reject the null hypothesis that these series contain unit roots no single test is likely to be definitive in this rapidly evolving area of econometric research however our results help to mitigate concern that panel data analyses of national health care expenditures are misspecified

decision making under uncertainty capturing dynamic brand choice processes in turbulent consumer goods markets we construct two models of the behavior of consumers in an environment where there is uncertainty about brand attributes in our models both usage experience and advertising exposure give consumers noisy signals about brand attributes consumers use these signals to update their expectations of brand attributes in a bayesian manner the two models are 1 a dynamic model with immediate utility maximization and 2 a dynamic forward looking model in which consumers maximize the expected present value of utility over a planning horizon given this theoretical framework we derive from the bayesian learning framework how brand choice probabilities depend on past usage experience and advertising exposures we then form likelihood functions for the models and estimate them on nielsen scanner data for detergent we find that the functional forms for experience and advertising effects that we derive from the bayesian learning framework fit the data very well relative to flexible ad hoc functional forms such as exponential smoothing and also perform better at out of sample prediction another finding is that in the context of consumer learning of product attributes although the forward looking model fits the data statistically better at conventional significance levels both models produce similar parameter estimates and policy implications our estimates indicate that consumers are risk averse with respect to variation in brand attributes which discourages them from buying unfamiliar brands using the estimated behavioral models we perform various scenario evaluations to find how changes in marketing strategy affect brand choice both in the short and long run a key finding obtained from the policy experiments is that advertising intensity has only weak short run effects but a strong cumulative effect in the long run the substantive content of the paper is potentially of interest to academics in marketing economics and decision sciences as well as product managers marketing research managers and analysts interested in studying the effectiveness of marketing mix strategies our paper will be of particular interest to those interested in the long run effects of advertising note that our estimation strategy requires us to specify explicit behavioral models of consumer choice behavior derive the implied relationships among choice probabilities past purchases and marketing mix variables and then estimate the behavioral parameters of each model such an estimation strategy is referred to as structural estimation and econometric models that are based explicitly on the consumer s maximization problem and whose parameters are parameters of the consumers utility functions or of their constraints are referred to as structural models a key benefit of the structural approach is its potential usefulness for policy evaluation the parameters of structural models are invariant to policy that is they do not change due to a change in the policy in contrast the parameters of reduced form brand choice models are in general functions of marketing strategy variables e g consumer response to price may depend on pricing policy as a result the predictions of reduced form models for the outcomes of policy experiments may be unreliable because in making the prediction one must assume that the model parameters are unaffected by the policy change since the agents in our models choose among many alternative brands their choice probabilities take the form of higher order integrals we employ monte carlo methods to approximate these integrals and estimate our models using simulated maximum likelihood estimation of the dynamic forward looking model also requires that a dynamic programming problem be solved in order to form the likelihood function for this we use a new approximation method based on simulation and interpolation techniques these estimation techniques may be of interest to researchers and policy makers in many fields where dynamic choice among discrete alternatives is important such as marketing decision sciences labor and health economics and industrial organization

testing the three roles of equity markets in developing countries the case of china abstract the role of equity markets in economic development has been increasingly recognized in recent years yet few studies have analyzed the transmission mechanisms between them this paper looks at this missing agenda by indirectly assessing whether the equity markets fulfill the following roles a financing firms investment b improving firms corporate governance and hence performance and c signaling information regarding issuers to public investors through stock prices all of which are essential in achieving economic growth for developing countries this paper assesses the development stages of china s equity markets by testing whether the above three roles are fulfilled

a new test for supplier inducement and application to the canadian market for dental care abstract the hypothesis that dentists do not induce demand for their services is tested using reduced form estimates of the price elasticity of demand if demand is autonomous shifts in supply for whatever reason should generate equivalent estimates provided access costs change proportionately with shifts in supply if demand inducement is present demand can appear to be very elastic or very inelastic depending on what is causing the shift in supply each of three applications of this test conducted in the context of jointly estimated fee and quantity equations using annual canadian data for 1956 1989 rejects the no inducement hypothesis

dynamics of oil price precious metal prices and exchange rate this study examines the co movements and information transmission among the spot prices of four precious metals gold silver platinum and palladium oil price and the us dollar euro exchange rate we find evidence of a weak long run equilibrium relationship but strong feedbacks in the short run the spot precious metal markets respond significantly but temporarily to a shock in any of the prices of the other metal prices and the exchange rate furthermore we discover some evidence of market overreactions in the palladium and platinum cases as well as in the exchange rate market in conclusion whether there are overreactions and re adjustments or not investors may diversify at least a portion of the risk away by investing in precious metals oil and the euro policy implications are provided

style of practice and assortative mating a recursive probit analysis of cesarean section scheduling in italy we study practice variation in scheduling of caesarean section cs delivery across public and private hospitals in italy adopting a novel perspective we look at the role played by patients preferences for the treatment the recursive probit model is revisited as a useful tool to assess the presence of assortative mating of patients and provider driven by style of practice according to our evidence the propensity to schedule a cs is codetermined with patient self sorting into hospital types we measure a significantly higher inclination to practice cs scheduling in private hospitals and conclude that assortative mating is of minor relevance in our case even if we cannot exclude it to be present

supplier induced demand a disequilibrium test this paper tests the hypothesis of market disequilibrium and supplier induced demand in the market for physicians services using canadian data from the period prior to the introduction of national health insurance the results support the hypothesis of disequilibrium with rapid upward adjustment of fees in the face of excess demand and extremely slow downward adjustment of fees in response to excess supply they do not support the hypothesis that physicians induced demand in the face of an excess supply of services

health care expenditure and integration in the countries of the european union national health care differs between the member states of the european union in the quality and quantity demanded and supplied reflecting different economic structures and health care organization and delivery systems since health care expenditure depends primarily on the level of economic development and the structure of the population only convergence in economic performance and the standards of living can lead to convergence of health expenditure standards

complexity effects in choice experiment based models abstract many firms rely on choice experiment based models to evaluate future marketing actions under various market conditions this research investigates choice complexity i e number of alternatives number of attributes and utility similarity between the most attractive alternatives and individual differences in decision time as key factors that affect the predictive performance of models based on choice experiments both within and between complexity conditions the results show that complexity and individual decision time not only affect the error in consumer choice models but also consumers decision strategy and systematic utilities the authors introduce a complexity adjusted mixed logit cam logit model to capture the various influences of complexity in choice experiment based models they illustrate the consequences of complexity on choice behavior with market share predictions of the cam logit model for different complexity conditions

modeling multiple sources of state dependence in random utility models a distributed lag approach we propose a utility theoretic brand choice model that accounts for four different sources of state dependence 1 effects of lagged choices structural state dependence 2 effects of serially correlated error terms in the random utility function habit persistence type 1 3 effects of serial correlations between utility maximizing alternatives on successive purchase occasions of a household habit persistence type 2 and 4 effects of lagged marketing variables carryover effects our proposed model also allows habit persistence to be a function of lagged marketing variables while accommodating the effects of unobserved heterogeneity in household choice parameters this model is more flexible than existing state dependence models in marketing and labor econometrics using scanner panel data we find structural state dependence to be the most important source of state dependence marketing mix elasticities are systematically understated if state dependence effects are incompletely accounted for the seetharaman and chintagunta 1998 model is shown to recover spurious variety seeking effects while overstating habit persistence effects ignoring habit persistence type 1 leads to an underestimation while ignoring habit persistence type 2 leads to an overestimation of structural state dependence effects we find lagged promotions to have carryover effects on habit persistence ignoring one or more sources of state dependence underestimates the total incremental impact of a sales promotion we draw implications for manufacturer pricing

aggregate health care expenditure in the united states evidence from cointegration tests unlike recent studies that are based on international cross sectional series this paper attempts to quantify the role of the determinants of aggregate health care expenditure per capita using time series data for the period of 1960 87 for the united states the paper applies the relatively new procedures of unit root testing cointegration and error correction modelling the evidence supports cointegration although the results indicate that per capita income age of the population number of practising physicians and public financing of health care are important determinants the age structure of the population and number of practising physicians emerge as the major determinants of aggregate health care expenditure in the united states

the market for physicians services theoretical implications and an empirical test of the target income hypothesis over the period 1965 to 1977 expenditure for health care in the united states increased from 181 per capita to 697 per capita the share of gnp composed of health care expenditures grew from 5 9 in 1965 to 8 8 in 1977 over this same period the number of physicians in the u s increased from 153 physicians per 100 000 population to 194 physicians per 100 000 such startling figures have generated much interest in the economics of health care with special concern about physician behavior and its effects upon health care costs the frequent empirical finding of a positive partial correlation between physicians fees or earnings and the number of physicians per capita have led many observers to eschew standard supply and demand models in favor of models that allow physicians themselves to significantly affect the demand for their services an assumption that physicians influence demand can not by itself differentiate a model from standard microeconomic models a profit maximizing doctor possessing costless demand shifting powers would shift demand to the greatest possible extent and then choose price and quantity to maximize profits subject to that shifted demand function a demand shifting model can yield results which are qualitatively different from those predicted by a standard model only with a behavioral assumption other than profit maximization the assumption of satisficing behavior on the part of physicians is a common substitute numerous empirical findings have been cited as evidence of the validity of the satisficing with demand shifting models much of this evidence however has been obtained as a by product of estimates of the demand for physician services rather than as the result of the estimation of a supply induced demand with satisficing model this lack

the linkage between oil price shocks and economic growth with inflation in the presence of technological advances a cge model abstract this study examines whether oil price shocks are inflationary in the us we increase the price of oil in the year 2000 in a manner consistent with the oil price shock of 1973 74 and let the economy experience a hicksian technological change then using a dynamic computable general equilibrium cge model we conduct our analyses under two separate cases 1 regular economic growth and 2 low economic growth we also run three technological scenarios 1 no technology change 2 technological advances in the manufacturing and refining sectors and 3 technological advances in the manufacturing refining chemical and service sectors the effects of these changes are analyzed over the next 20 years until the year 2020 our results suggest that while a shock of the magnitude experienced in the 1970s will have a fairly severe effect on such things as gasoline and refinery prices the aggregate price changes will be largely dissipated over time at the aggregate level furthermore the aggregate level of prices cpi and ppi will fall over time as the level of technological advances rise under both growth scenarios there are several reasons why we would obtain such results first of all the structure of the us economy has changed remarkably since the early 1970s rather than being a manufacturing based economy the us is largely a service based economy today and hence it is more protected form raw materials shortages second the economy has had a steady history of strong growth and the faster an economy grows the quicker disruptions to that economy are dissipated finally our economy is experiencing rapid technological advances in information systems which have served to reduce costs and maintain output in a wide number of economic sectors

rejoinder temporal stochastic inflation in choice based research we examine the specification and interpretation of discrete choice models used in behavioral theory testing with a focus on separating coefficient scale from error scale particularly over time numerous issues raised in the thoughtful commentaries of louviere and swait louviere j j swait 2010 discussion of alleviating the constant stochastic variance assumption in decision research theory measurement and experimental test marketing sci 29 1 18 22 and hutchinson zauberman and meyer hzm hutchinson j w g zauberman r meyer 2010 on the interpretation of temporal inflation parameters in stochastic models of judgment and choice marketing sci 29 1 23 31 are addressed specifically the roles of response scaling preference covariates actual versus hypothetical consumption immediacy and heterogeneity as well as key differences between the experimental setup in salisbury and feinberg salisbury l c f m feinberg 2010 alleviating the constant stochastic variance assumption in decision research theory measurement and experimental test marketing sci 29 1 1 17 and those typifying intertemporal choice and construal level theory we strongly concur with most of the general conclusions put forth by the commentary authors but we also emphasize a central point made in our research that may have been lost that the temporal inflation effects observed in our empirical analysis could be attributed to stochastic effects deterministic influences or an amalgam appropriate inferences depend on the nature of one s data and stimuli we also report on further analyses of our data as well as a meta analysis of hzm s table 1 that is consistent with our original findings implications for and dimensions relevant to future research on temporal stochastic inflation and its role in choice based research are discussed

medical care costs how much welfare loss hardly a week goes by without a front page newspaper article on rising health care costs and the uninsured in this article i focus mainly on costs arguing that the issue has been somewhat misconceived while the level of medical care spending in the u s is a cause for concern the welfare losses associated with rises in that level of spending may not be as large as the public rhetoric can make them seem in fact cost containment may not be as urgent as is widely supposed and some proposed cost containment policies may result in welfare losses for the insured and even increase the number of uninsured

aggregate health care expenditures and national income is health care a luxury good it is well known that a strong relationship exists between national expenditures on health care and national income this has been used to suggest that health care is a luxury good and that factors such as the type of health care delivery system in a country are of little importance in determining expenditure levels this paper argues that these implications rely upon the application of microeconomic analysis to macroeconomic data and that this is not appropriate as well as raising questions about the inferences drawn from previous studies new empirical evidence is presented which casts some doubts on previous findings international comparisons are based on purchasing power parity rather than exchange rate conversions underlining the importance of prices as well as quantities in the relationship and leading to the conclusion that the aggregate data show health care to be if anything a necessity rather than a luxury good

pricing profits and technological progress in the pharmaceutical industry the decades old debate over pharmaceutical industry prices profits and innovation has again intensified a number of events coalesced to refocus public interest on pharmaceuticals contributing to public concern were bureau of labor statistics price index increases for pharmaceuticals far outpacing those for the products of other industries another prominent characteristic of the pharmaceutical industry has been its extraordinarily high reported profitability this article examines the phenomena that precipitated the current pharmaceuticals debate their historical antecedents and the principal questions at issue in the author s considered judgment a pell mell march toward regulation of pharmaceutical industry pricing could seriously impair the industry s incentives for investment in new products

physicians choices of specialty location and mode a reexamination within an interdependent decision framework in this paper physicians decisions regarding the specialty community size and mode of their first practices are analyzed in a simultaneous decision model using a nested logit specification physicians face a choice set consisting of eight specialties seven community sizes and three practice settings data come from the longitudinal survey of the class of 1960 income is found to be statistically significant and the average income elasticity is 1 05 which is considerably larger than previous estimates however the elasticity estimate is very sensitive to the assumed decision process a series of policy simulations are then performed to estimate the effect of specified income based policies on the predicted distribution of physicians across specialties community sizes and modes

commodity prices and growth an empirical investigation whereas empirical evidence on the effect of higher commodity prices on the long run growth of commodity exporters is ambiguous time series analyses using vector autoregressive var models have found that commodity booms raise income in the short run in this paper we adopt panel error correction methodology to analyze global data for 1963 to 2008 to disentangle the short and long run effects of international commodity prices on output per capita our results show that commodity booms have unconditional positive short term effects on output but non agricultural booms in countries with poor governance have adverse long term effects which dominate the short run gains our findings have important implications for non agricultural commodity exporters with poor governance especially in light of the recent wave of resource discoveries in low income countries

future preference uncertainty and diversification the role of temporal stochastic inflation consumers choices tend to display greater variety when made for future versus immediate consumption previous accounts of such diversification differences suggested that they are driven primarily by deterministic shifts in underlying preference through a series of simulation studies we propose and assess an alternative contributory mechanism temporal stochastic inflation the greater uncertainty typifying choices made for the future we find effect sizes to be strongly influenced by relative brand attractiveness brand attractiveness uncertainty and degree of stochastic inflation although not preference heterogeneity moreover effect sizes are consistent with prior studies that attributed diversification differences to underlying preference shifts alone

income elasticities of household expenditures a us cross section perspective two linear engel functions are estimated for household total expenditure and for 15 aggregated classifications of consumer durable non durable and service expenditures one model contains only income as the regressor variable the second model incorporating a broad range of household demographic variables introduces three new regressors number of earners in the household self employment status of the reference person and value of household financial assets utilizing cross section data on annual expenditures income elasticities are derived and compared across models the expanded engel model dramatically strengthens estimates for all expenditure categories and generates income elasticities generally lower than those derived from the simpler engel function

health economics and econometrics it seems worthwhile to pause occasionally and take stock of the balance of trade between economics and health economics martin feldstein 1974 did this fourteen years ago at the assa meetings and sufficient time has lapsed to bring up the issue again here however i undertake only a fragment of the task confining the discussion to some remarks about econometrics and health economics if one were writing about economic theory and health economics one might focus on the importance for health economics of both uncertainty and the physician s dual role as supplier and patient agent in discussing econometrics and health economics however other features of health economics are relevant

the effect of time price on the demand for medical care services this paper analyzes the effect of time price on medical care demand and describes use of a reservation wage question from a household survey to develop a measure of time price for obtaining medical care a comprehensive three equation model of the demand for female medical care services examines choice of provider entry demand and the demand for physician visits results show that provider choice is based primarily on economic factors and that an expected high time price discourages women from choosing a public provider and from seeking gynecological maternal health or family planning services during the year yet does not influence the number of visits made once care is used the estimated model shows that medical care demand equations should control for the type of provider chosen and the opportunity cost of time for alternative activities when testing for a negative time price effect of obtaining medical care

dynamic cyclical comovements between oil prices and us gdp a wavelet perspective abstract in this paper we use wavelet analysis to investigate the cyclical comovements between crude oil prices and us gdp taking into account the decline in the volatility of us gdp growth that has occurred since the mid 1980s our main findings suggest that before 1984 q1 the crude oil prices were leading the us gdp cycle by 3 quarters and granger cause us gdp in contrast after 1984 q1 the crude oil prices were lagging the us business cycle and a reverse causality is found to run from us gdp to oil prices the multiscale granger causality tests globally corroborate theses results

stock returns and output growth in emerging and advanced economies abstract this paper studies the correlation between output growth and lagged stock returns in a panel of emerging market economies and advanced economies it finds that the proportion of countries in which this correlation is significant is the same for emerging market economies as it is for advanced economies using yearly data and somewhat lower using quarterly data asset prices therefore seem to contain valuable information to forecast output also in emerging market economies moreover the paper finds that the strength of the correlation between output growth and lagged stock returns is significantly related to a number of stock market characteristics such as a high market capitalization to gdp ratio and less robustly english legal origin and the number of listed domestic companies and initial public offerings

the physician labor market in a managed care dominated environment i introduction health maintenance organizations hmos and other managed care arrangements are rapidly growing alternatives to fee for service ffs insurance in the united states hmo enrollment has grown from under 3 million in 1970 interstudy 1986 to over 46 million by early 1995 interstudy 1995 little is known about how these changes in health care financing will ultimately affect physicians incomes but managed care is undoubtedly altering the economic environment of medical practice the shift from ffs to salaried or capitated payment reduces physicians incentives to overtreat 1 further managed care plans control physicians access to their enrollees by monitoring practice patterns and removing overly aggressive doctors from their panels hmos also employ a different physician mix with fewer specialists than the mix that characterizes the ffs environment thus a hypothesized consequence of rising hmo market share is reduced demand for specialists wennberg et al 1993 estimate potential surpluses ranging from 10 for emergency medicine to 210 in pathology surpluses of these magnitudes would be expected to reduce earnings however until recently physicians have enjoyed stable or rising incomes simon and born 1996 this may be explained by asymmetric information between patients and physicians if patients are poorly informed about the effectiveness of treatment options doctors may be able to protect their incomes from the loss of patients to managed care by prescribing more aggressive treatment to their remaining ffs patients despite mixed evidence on the extent of supplier induced demand sid e g fuchs 1978 newhouse et al 1982 dranove and wehner 1994 rizzo and blumenthal 1996 this hypothesis remains popular among policymakers the proponents of quotas for the size and mix of the health workforce argue that the supply side of the health sector is simply impervious to signals from the demand side i t is widely believed that physicians enjoy almost total discretion in dictating the volume and composition of health care they render allow ing physicians to extract very high target incomes virtually regardless of the local physician to population ratio reinhardt 1994 interest in physician incomes arises in part from the central role that incomes play in sending appropriate signals about changing supply and demand conditions if ffs physicians can maintain their incomes as the ffs patient pool shrinks decisions about specialty location and hmos staffing patterns would have little reason to change alternatively if ffs incomes are sensitive to managed care penetration we would expect doctors to increasingly practice in areas and specialties in which employment opportunities have become relatively favorable pursue nonclinical positions or retire likewise hmos would reduce substitution towards non physician providers and away from specialist physicians the consensus among health workforce experts is that the u s has too many physicians and too many specialists relative to primary care physicians and that market adjustments will be insufficient to restructure the physician supply thus many health workforce experts and medical organizations have called for centralized workforce planning e g mitka 1997 committee on the u s physician supply 1996 pew 1995 cohen and todd 1994 schroeder 1994 wennberg et al 1993 proposals include limits on the number and specialty composition of residency positions restrictions on medical school class sizes and immigration by international medical graduates and incentive payments for early retirement retraining or diversion of physicians into non clinical positions before advocating interventions in the medical labor market it is worth exploring the potential for market forces to generate the desired physician supply changes many supporters of workforce policies presume that the failures of a ffs dominated physician services market would persist even in a radically different context

financial integration housing and economic volatility abstract the great recession illustrates the sensitivity of the economy to housing this paper shows that financial integration fostered by securitization and nationwide branching amplified the positive effect of housing price shocks on the economy during the 1994 2006 period we exploit variation in credit supply subsidies across local markets from government sponsored enterprises to measure housing price changes unrelated to fundamentals using this instrument we find that house price shocks spur economic growth the effect is larger in localities more financially integrated through both secondary loan market and bank branch networks financial integration thus raised the effect of collateral shocks on local economies increasing economic volatility

alleviating the constant stochastic variance assumption in decision research theory measurement and experimental test analysts often rely on methods that presume constant stochastic variance even though its degree can differ markedly across experimental and field settings this reliance can lead to misestimation of effect sizes or unjustified theoretical or behavioral inferences classic utility based discrete choice theory makes sharp testable predictions about how observed choice patterns should change when stochastic variance differs across items brands or conditions we derive and examine the implications of assuming constant stochastic variance for choices made under different conditions or at different times in particular whether substantive effects can arise purely as artifacts these implications are tested via an experiment designed to isolate the effects of stochastic variation in choice behavior results strongly suggest that the stochastic component should be carefully modeled to differ across both available brands and temporal conditions and that its variance may be relatively greater for choices made for the future the experimental design controls for several alternative mechanisms e g flexibility seeking and a series of related models suggest that several econometrically detectable explanations like correlated error state dependence and variety seeking add no explanatory power a series of simulations argues for appropriate flexibility in discrete choice specification when attempting to detect temporal stochastic inflation effects

projecting long term medical spending growth we present a dynamic general equilibrium model of the u s economy and the medical sector in which the adoption of new medical treatments is endogenous and the demand for medical services is conditional on the state of technology we use this model to prepare 75 year medical spending forecasts and a projection of the medicare actuarial balance and we compare our results to those obtained from a method that has been used by government actuaries our baseline forecast predicts slower health spending growth in the long run and a lower medicare actuarial deficit relative to the previous projection methodology

profit or patients health benefit exploring the heterogeneity in physician altruism abstract this paper investigates physician altruism toward patients health benefit using behavioral data from hennig schmidt et al s 2011 laboratory experiment in the experiment medical students in the role of physicians decide on the provision of medical services the experimental setup allows us to identify the influence of profits and patients health benefit on the choice of medical treatment we estimate physician altruism the weight individuals attach to patients health benefit by fitting mixed logit and multinomial logit regression models to the experimental data estimation results provide evidence for physician altruism we find however substantial variation in the degree of physician altruism we also discuss some implications of our results for the design of physician payment schemes in the light of the theoretical literature

natural resources education and economic development economic growth since 1965 has varied inversely with the share of natural capital in national wealth across countries four main channels of transmission from abundant natural resources to stunted economic development are discussed a the dutch disease b rent seeking c overconfidence and d neglect of education public expenditure on education relative to national income expected years of schooling for girls and gross secondary school enrolment are all shown to be inversely related to the share of natural capital in national wealth across countries natural capital appears to crowd out human capital thereby slowing down the pace of economic development

a model of physician behaviour with demand inducement we present a model of the physician patient relationship extending on the model by farley farley p j 1986 theories of the price and quantity of physician services journal of health economics 5 315 333 of supplier induced demand sid first we make a case for the way this model specifies professional ethics physician competition and sid itself second we derive predictions from this model and confront them with the neoclassical model finally we stress the importance of considering how sid affects patient welfare in providing an example where physicians ability to induce makes patients better off to evaluate patient welfare we derive approximations of the patients welfare loss due to physician market power in both the neoclassical model and the inducement model

forward shifting of the personal income tax by self employed canadian dentists in this paper two tests are conducted of the null hypothesis that self employed canadian dentists do not shift the burden of their personal income tax forward to their patients by charging higher real dental fees the first test using ordinary least squares estimation of a reduced form dental fee equation is based on an exogenous tax variable the second test uses two stage least squares estimation of a reduced form dental fee equation with an endogenous tax variable both tests reject the null hypothesis of no forward shifting and fail to reject the hypothesis that self employed canadian dentists shift forward 100 percent of their personal income tax burden

elasticity estimates from a dynamic model of interrelated demands for private and public acute health care this paper investigates the private public mix in acute health care provision in the uk it uses an interrelated shares model derived from a translog function combined with dynamic adjustment using prices for public care constructed from nhs waiting lists the insurance cost of private care and the retain price index impact intermediate and long run elasticities of demand for private and public care are obtained the role of hospital consultants and of an aging population are also considered

exogenous oil supply shocks how big are they and how much do they matter for the u s economy abstract the paper proposes a new measure of exogenous oil supply shocks the timing the magnitude and the sign of this measure may differ greatly from current state of the art estimates it is shown that only a small fraction of the observed oil price increases during oil crisis periods can be attributed to exogenous oil production disruptions exogenous oil supply shocks cause a sharp drop of u s real gdp growth after five quarters rather than an immediate and sustained reduction in economic growth and a spike in cpi inflation after three quarters overall exogenous oil supply shocks made remarkably little difference for the evolution of the u s economy since the 1970s although they did matter for some historical episodes

physician induced demand for childbirths a controversial technique for testing the hypothesis that physicians induce demand involves two stage least squares tsls regression analysis of cross section data on physician supply and utilization this paper tests the power of tsls by applying it where there is at most only a trivial amount of demand inducement the demand for childbirths we find evidence of inducement of childbirths calling into question the validity of the tsls approach this unlikely finding may be traced to at least two factors the first stage regression is not identified and the second stage regression does not adequately address border crossing

the dynamic causality between commodity prices inflation and output in china a bootstrap rolling window approach in this article we empirically study the time varying bilateral causality between commodity prices inflation and output in china we first perform a series of parameter stability tests and find s

on the determination of the us aggregate health care expenditure per capita real health care expenditure is examined against three major groups of explanatory variables economic demographic and health stock and it is found that the three groups of variables have an impact on real health care spending other subcategories such as real private and government health care pharmaceutical dental home nursing ambulatory personal medical consumption and in patient expenditures have also been examined and have been found to be affected by the explanatory variables for several subcomponents there is evidence of supplier inducement of the demographic group of variables the ageing population had an impact only on the per capita real overall and private health care outlay and pharmaceutical spending also cointegrating relationships were found and consistent estimators of the elasticities found

oil and energy price volatility it is commonly believed that since the 1973 oil crisis oil and energy prices have been more volatile than other commodity prices this study examines monthly producer prices for thousands of products over the period january 1945 through august 2005 the results show that crude oil refined petroleum and natural gas prices are more volatile than prices for about 95 of products sold by domestic producers relative to crude commodities however crude oil prices are currently more volatile than about 65 of other products and oil price volatility first exceeded the median for crude commodities following the 1986 drop in oil prices

the intertemporal dynamics of consumer lock in this article examines how dynamic changes in information cost structure and time preferences affect consumers search and switching behavior over time and lead to lock in the information cost structure is conceptualized as a trade off of initial setup costs and ongoing usage costs lock in is defined as consumers decreased propensity to search and switch after an initial investment which is determined both by a preference to minimize immediate costs and by an inability to anticipate the impact of future switching costs the results of three experiments support the proposed mechanism experiment 1 shows that a small initial investment is sufficient to produce lock in experiment 2 shows that the results of a prior investment on lock in are not due to psychological commitment but to a shift in relative costs of incumbent and new options experiment 3 shows that respondents fail to anticipate how their prior investment will lock them in

the time varying characteristics of the chinese financial cycle and impact from the united states abstractalthough there have been many empirical studies about the financial cycle since the financial crisis of 2008 few have analysed the structural changes in the chinese financial cycle over ti

the substitution bias of the laspeyres price index an analysis using estimated cost of living indexes the most commonly used measure of the cost of living the consumer price index cpi published by the bureau of labor statistics is essentially a laspeyres price index it is well known however that a laspeyres price index provides an upward biased estimate of the cost of living because in keeping the same base period basket of goods as weights it does not take into account substitution among commodities induced by relative price changes the magnitude of the bias is an empirical question which is the focus of this study an estimate of the substitution bias may be obtained by taking the difference between the laspeyres price index and an estimated true cost of living index the true cost of living index cli is based on the theory of consumer demand it is the ratio of the minimum expenditures under two different price regimes necessary to maintain a constant level of utility as opposed to the constant basket of goods in the laspeyres index the size of the bias depends on two factors 1 the size of consumption substitution elasticities if there is no commodity substitution then the cli and laspeyres index coincide regardless of changes in relative prices and 2 the magnitude of relative price changes if all prices move together then the cli and laspeyres index again coincide regardless of the size of substitution elasticities in order to compute a true cli it is necessary to specify a particular utility function and estimate the parameters of the resulting system of demand equations see for example louis phlips p 135 several estimates of the magnitude of the substitution bias have appeared in the literature but all previous studies suffer from a common weakness they are all based on a very small number of commodities essentially because of econometric problems involved in estimating large systems of demand equations in one group of studies demand models have been estimated using highly aggregated data in which total consumption is grouped into four to nine aggregate commodites such as housing durables or clothing arthur goldberger and theodore gamaletsos for example estimate the linear expenditure system les demand model using data on five aggregate goods for several european countries and compare the resulting cli for one of the countries greece to the corresponding laspeyres price index tran van hoa estimates costof living indexes for six australian provinces using data on nine aggregate goods phlips cites work by r sanz ferrer who computed a cli for belgium from data on eight aggregate commodities in such studies using highly aggregated data the estimate of the substitution bias may be understated because the aggregation obscures substitution in consumption within categories which is perhaps more prevalent than substitution between gross aggregates another shortcoming of these three aggregate studies is the fact that they use only a single demand system and hence do not explore the sensitivity of the cli to a priori u s bureau of labor statistics the groundwork for this study was my dissertation i would like to thank the chairman and members of my committee r robert russell llad phillips and robert deacon for their support and helpful suggestions and jack triplett robert pollak richard j mcdonald and a referee for valuable comments on an earlier version the views expressed are my own and do not necessarily reflect the policies of the bureau of labor statistics for a theoretical discussion of cost of living indexes see robert pollak 1971b and paul samuelson and subramanian swamy

an empirical model of the demand for health care in belgium the paper presents an empirical model of the demand of health care in belgium the analysis pertains to 17 categories of medical care and to two subgroups of health insurance beneficiaries namely the active and the widows orphans pensioners and invalids the estimation results show that income and relative prices matter in the demand for medical care supplier induced demand is also detected for a number of medical care categories other explanatory variables in the model include the size of the child population climatic conditions and a time trend representing technological advances in health care

welfare cost and health insurance a disaggregated approach using duality theory and australian data the present study draws on the fundamental duality between consumer expenditure and utility to provide a hicksian measure of the welfare cost or moral hazard arising from health insurance in australia the theoretical approach is empirically applied to a homogeneous set of medical services associated with diagnosis of the upper gastrointestinal tract viz barium meal radiology the empirical results indicate that the welfare loss represents 1 3 of the total expenditures and 1 5 of the health insurance rebates on barium meal radiology for the year 1984 85 sensitivity analysis indicates that the welfare loss in relatively invariant to changes in the coinsurance rate when the latter takes on values of less than 0 5

the normative economics of health care finance and provision whereas in many countries the crisis in medical care has been seen in terms of excess spending on health services in the uk it has been seen at least by most of those who manage and work in the nhs as a crisis of underfunding this has come about as the result of the government s successful attempts to restrain the rate of growth of real spending on the nhs which in turn reflects the government s belief that its principal effective weapon against what it perceives to be inefficiency in the nhs is to challenge management itself reformed and to some extent liberated by systematic financial squeezes the same concern has given rise to a host of proposals for reform of the nhs most of which involve a much greater role for private insurance private finance of other kinds such as out of pocket payments and private provision of health care itself

growth and oil price a study of causal relationships in small pacific island countries this paper investigates the nexus between economic growth and oil price in small pacific island countries pics except papua new guinea none of the 14 pics has fossil any fuel resources consequently the other 13 pics are totally dependent on oil imports for their economic activities since pics have limited foreign exchange earning capacities as they have a very narrow range of exports and are highly dependent on foreign aid high oil prices in recent months have seriously tested their economic resilience this paper applies the ardl bounds testing methodology to four selected pics samoa solomon islands tonga and vanuatu which have consistent and reliable time series of data with a view to assess the impact of oil price on economic growth the findings are that oil price gross domestic product and international reserve are cointegrated in all the four pics further both in the long and short runs we observe that there is a uni directional relationship as causality linkage runs only from oil price and international reserves to economic growth the paper makes some policy recommendations

the determinants and effects of health expenditure in developed countries previous studies of international differences in health spending have been restricted to the use of relatively small samples of cross sectional data our objective here is to re examine the results of previous work using a sample of 560 pooled time series and cross section observations results confirm the importance of gdp as a determinant of health spending with an estimated income elasticity at or around unity but also suggest that oecd countries should not be regarded as a single homogeneous group the importance of some non income variables is also confirmed although the direct effect of these factors appears to be small

physician response to fee changes with multiple payers this paper develops a general model of physician behavior with demand inducement encompassing the two benchmark cases of profit maximization and target income behavior it is shown that when income effects are absent physicians maximize profits and when income effects are very strong physicians seek a target income the model is used to derive own and cross price expressions for the response of physicians to fee changes in the realistic context of more than one payer under the alternative behavior assumptions of profit maximization and target income behavior the implications for public and private fee policy and empirical research on physician response to fees are discussed

time frequency relationship between u s output with commodity and asset prices abstractcommodity and asset prices have a well documented effect on economic growth as manifested through various channels at the same time the business cycle influences the commodity and asset prices whereas empirical evidence on the effect of commodity and asset prices on the long run economic growth is ambiguous most of the previous researches highlight a positive correlation in the short run the aim of this article is to disentangle the short and long run co movements between us historical business cycles and commodity and asset prices over the period 1859 2013 for this purpose we use a time frequency approach and we test the historical influence of oil gold housing and stock prices over the output growth in contrast to other studies we control for the effect of other prices and monetary conditions using the wavelet partial coherency in line with the previous works we discover that co movements between economic growth and commodity and assets prices manifest especially in the short run

the economics of health and health care what have we learned what have i learned victor fuchs and i have been talking with each other about the economics of health and health care since we met nearly 30 years ago i was pleased therefore when he asked me to organize this session of his american economic association annual meeting but then rather dismayed by his suggestion that as one of the papers in the session i offer an overview of what i have learned about the subject during those 30 years as a profession we have indeed learned a great deal in these three decades the rapid growth of health care spending that doubled its gdp share to one seventh of the economy and the 1966 medicare and medicaid programs that have made federal health care spending exceed the combined total of all domestic discretionary federal outlays have attracted a generation of researchers to a subject that had been largely neglected by economists before the 1960 s 1 econometric research and conceptual developments have been mutually reinforcing helped by advances in econometric theory and by the government s creation of a rich array of detailed data although there remains substantial controversy about many issues in this field as in most other parts of economics there is no doubt that anyone setting out to teach a course on health economics or to do policy analysis in this area would start from a very different base today than 30 years ago

the elusive curse of oil abstract our goal is to show that contrary to the claims made in several recent papers the effect of a large endowment of oil and other mineral resources on long term economic growth of countries has been on balance positive moreover the claims of a negative effect of oil and mineral wealth on the countries institutions are called into question