inequality and polarisation in health systems responsiveness a cross country analysis the world health report 2000 proposed three fundamental goals for health systems encompassing population health health care finance and health systems responsiveness the goals incorporate both an efficiency and equity dimension while inequalities in population health and health care finance have motivated two important strands of research inequalities in responsiveness have received less attention in health economics this paper examines inequality and polarisation in responsiveness bridging this gap in the literature and contributing towards an integrated analysis of health systems performance it uses data from the world health survey to measure and compare inequalities in responsiveness across 25 european countries in order to respect the inherently ordinal nature of the responsiveness data median based measures of inequality and polarisation are employed the results suggest that in the face of wide differences in the health systems analysed there exists large variability in inequality in responsiveness across countries

the cyclical behavior of the department of justice s antitrust enforcement activity abstract we study the cyclical behavior of antitrust enforcement as measured by the number of cases initiated by the us department of justice the key result is that antitrust case activity is countercyclical this finding is robust across alternate indicators of economic activity which include stock prices corporate profits and business cycles and across different types of cases the finding of countercyclical case activity does not appear to lend support to interest group theories that predict greater regulatory protection towards producers during economic contractions one interpretation of our result would be that antitrust violations tend to increase during economic downturns leading to an increase in the number of cases initiated the broad implication being that the antitrust division primarily acts as an antitrust law enforcement agency our results show that politics as measured by the party of the president and the republican versus democrat composition of the house and senate does not have a clear impact on case activity finally the number of cases initiated are significantly affected by the extent of funding

an econometric analysis of the european commission s merger decisions abstract using a sample of 96 mergers notified to the european commission and logit regression techniques we analyse the commission s decision process we find that the probability of a phase 2 investigation and of a prohibition of the merger increases with the parties market shares the probabilities increase also when the commission finds high entry barriers or that the post merger market structure is conducive to collusion we do not find significant effects of political variables such as the nationality of the merging firms

lessons from the united states s antitrust history abstract the united states s antitrust policy spans more than 100 years for most of its history the united states has had the toughest antitrust laws and enforcement policies of any country in the world a shift to a more permissive attitude with regard to antitrust matters has occurred in recent years however this paper traces the changes in antitrust policy that have occurred and the concurrent shifts in thinking among economists on antitrust questions following this review the paper offers a critical appraisal of both the economic underpinning of the new learnings on antitrust matters and the changes in antitrust policy that have accompanied them it closes with a discussion of the implications of the analysis for european antitrust competition policy

a study of cartel stability the joint executive committee 1880 1886 this article employs weekly time series data on the joint executive committee railroad cartel from 1880 to 1886 to test empirically the proposition that observed prices reflected switches from collusive to noncooperative behavior an equilibrium model of dynamic oligopoly with asymmetric firms together with explicit functional form assumptions about costs and demand determines the estimating equations and stochastic structure of the econometric model the hypothesis that no switch took place so that price and quantity movements were solely attributable to exogenous shifts in the demand and cost functions is then tested against this alternative and rejected

strategic pricing models and interpretation of price war data abstract price wars cartel breakdowns and other seemingly disequilibrium pricing phenomena are examined questions of interest include when do breakdowns occur how long do they last what determines their severity and are they characterized by increased cross sectional price dispersion and or temporal price volatility the first half of the paper explains how the choice of punishment strategy the specification of the stochastic shocks to the system and the assumptions regarding observability determine the pricing dynamics implicit in several theoretical price war models theories are classified into imperfect monitoring models in which players actions cannot be observed learning models in which structural parameters are unknown to the players and cyclical models in which observability is perfect but business cycles affect the difficulty of colluding the second half in contrast examines data on prices actually set by firms in industries which are subject to periodic wars when the models are confronted with the data we can see how well oligopoly theory explains the behavior of the firms in these industries the object of the exercise is not to pick a winner instead the role of industry characteristics in determining pricing dynamics is assessed and the reasons why simple models may fail to explain complex pricing patterns are examined finally directions for future research are suggested by the empirical regularities which are uncovered

measurement of horizontal inequity in health care utilisation using european panel data measurement of inequity in health care delivery has focused on the extent to which health care utilisation is or is not distributed according to need irrespective of income studies using cross sectional data have proposed various ways of measuring and standardizing for need but inevitably much of the inter individual variation in needs remains unobserved in cross sections this paper exploits panel data methods to improve the measurement by including the time invariant part of unobserved heterogeneity into the need standardization procedure using latent class hurdle models for gp and specialist visits estimated on 8 annual waves of the european community household panel we compute indices of horizontal equity that partition total income related variation in use into a need and a non need related part not only for the observed but also for the unobserved but time invariant component we also propose and compare a more conservative index of horizontal inequity to the conventional statistic we find that many of the cross country comparative results appear fairly robust to the panel data test although the panel based methods lead to significantly higher estimates of horizontal inequity for most countries this confirms that better estimation and control for need often reveals more pro rich distributions of doctor utilisation

measuring socioeconomic inequality in health health care and health financing by means of rank dependent indices a recipe for good practice the tools to be used and other choices to be made when measuring socioeconomic inequalities with rank dependent inequality indices have recently been debated in this journal this paper adds to this debate by stressing the importance of the measurement scale by providing formal proofs of several issues in the debate and by lifting the curtain on the confusing debate between adherents of absolute versus relative health differences we end this paper with a matrix that provides guidelines on the usefulness of several rank dependent inequality indices under varying circumstances

theories of cartel stability and the joint executive committee this article reexamines the experience of the joint executive committee an 1880s railroad cartel to assess the applicability of the green and porter 1984 and rotemberg and saloner 1986 theories of price wars after discussing necessary modifications to the theories i estimate a number of dynamic models to explore the causes of price wars the cyclical nature of pricing and the possibility that secret price cuts may have been given the estimates provide some support for the predictions of the first theory

growth oriented adjustment programs a statistical analysis after the fall in average per capita gdp growth that took place in the 1980s adjustment lending programs supported by the international monetary fund imf and the world bank wb were launched in response to the deteriorating external environment the purpose of this paper is to evaluate and to assess statistically the extent to which adjustment programs supported by the imf and the wb have restored growth the evaluation relied on a large sample of countries 93 and controls for some of the statistical difficulties associated with measuring the effectiveness of adjustment programs the paper reviews the environment under which imf wb lending took place the rationale for adjustment lending and the distribution of adjustment loans through time the results of the statistical evaluation suggest that after controlling for external factors and for initial conditions growth is not higher in countries that receive imf wb funds but that investment was significantly lower than for non recipient countries the paper also examines further long term growth prospects

measurement of inequity in health care with heterogeneous response of use to need we propose a method of measuring and decomposing inequity in health care utilisation that allows for heterogeneity in the use need relationship this makes explicit inequity that derives from unequal treatment response to variation in need as well as that due to differential effects of non need determinants under plausible conditions concerning heterogeneity in the use need relationship and the distribution of need existing methods that impose homogeneity will underestimate pro rich inequity this prediction is confirmed for four middle income asian countries in those countries around one half of the observed socioeconomic inequality is due to utilisation being more responsive to need among the higher wealth and urban dwelling individuals

capital accumulation and the growth of aggregate agricultural production abstract this report empirically examines the role which capital accumulation plays in the growth of agricultural production potential the report assumes that the degree towhich available technology can be implemented in a nation s agricultural sector depends on accumulated investments that have been made in the sector results from estimating aggregate agricultural production functions show the primary importance of rural labor in accounting for agricultural gdp and crop production capital accumulation is the dominant explainer of livestock production estimation results support the conjecture that capital tends to save scarce land resources substitute relationship and use rural labor complementarity relationship output supply elasticities derived from the estimated equations tend to be large the large elasticities imply that price distortions have had large impacts on resource use and production

differences in agricultural returns an empirical test of efficiency in factor input allocation using vietnamese data we study whether rural households in vietnam allocate their factor inputs efficiently factor returns and technical rates of substitution trs between production activities are compared we estimate two translog production functions and conduct three tests first we test the equality of bootstrapped returns second we use a bootstrapped t test comparing the equality of trs finally we derive a set of nonlinear restrictions on our estimated parameters which if held would imply that we cannot reject efficiency the article concentrates on the allocation of factors between the cultivation of the two most important agricultural crops sugar cane and rice we cannot reject the possibility that households are efficient in their input allocation these results are consistent and stable over different estimation techniques and support the assumption of profit maximization

economic growth and the defense burden in africa and latin america simulations from a dynamic model since e benoit first provided evidence of a link between the rate of economic growth and defense spending a number of scholars have reported their research on the subject their results have been varied some concluding the relationship is positive others concluding the opposite recently some have argued that no general and significant link exists for less developed countries ldcs and have suggested that the varied results are due primarily to varied specifications sample periods and differences among countries 2 s chan goes further by suggesting that researchers deemphasize the search for universal links and concentrate on time series as opposed to cross section analysis he also recommends that explanations of the defense spendingeconomic growth link take into account among other things a country s capacity utilization total foreign receipts and fiscal and monetary policies 3 the point of departure for the research reported here is a paper by r faini p annez and l taylor hereafter faanta 4 their analysis concludes that higher defense burdens are associated with lower growth rates across countries however i will argue that they have either misstated or misinterpreted their primary result and furthermore that there are some serious problems with their analysis and the underlying model these problems aside the faanta model either already includes or can be respecified to include most of the features recommended by chan therefore i will estimate a significantly modified version of their model for african and latin american countries after attempting to replicate their results for these two regions simulations of my model lead to the conclusion that maintaining a larger defense

the spillover effect of antitrust enforcement we address the question of how the threat of antitrust enforcement spills over from one industrial submarket to another we build a formal model describing the technology through which an initial antitrust indictment can reveal evidence of additional infractions in the same industry our approach is organized around the belief that the flow of information on antitrust violations is closely linked to commodity flows as it turns out our method proves able to explain the differential response of highway construction cartels in various states to recent changes in the severity of antitrust sanctions

estimation of a macroeconomic model with rational expectations and capital controls for developing countries abstract in many developing countries financial repression and capital controls have implied that the only domestic market determined interests rates have been those in informal markets the absence of data on such interest rates complicates the estimation of key macroeconomic interest rate elasticities this paper describes an econometric technique for extracting representative values of such elasticities from developing country panel data under such constraints and with the maintained assumption that agents form expectations rationally our results confirm the empirical relevance in developing countries of the standard intertemporal and intratemporal substitution assumptions underlying policy prescriptions to get prices right

unfair inequalities in health and health care inequalities in health and health care are caused by different factors measuring unfair inequalities implies that a distinction is introduced between causal variables leading to ethically legitimate inequalities and causal variables leading to ethically illegitimate inequalities an example of the former could be life style choices an example of the latter is social background we show how to derive measures of unfair inequalities in health and in health care delivery from a structural model of health care and health production direct unfairness linked to the variations in medical expenditures and health in the hypothetical distribution in which all legitimate sources of variation are kept constant fairness gap linked to the differences between the actual distribution and the hypothetical distribution in which all illegitimate sources of variation have been removed these two approaches are related to the theory of fair allocation in general they lead to different results we propose to analyse the resulting distributions with the traditional apparatus of lorenz curves and inequality measures we compare our proposal to the more common approach using concentration curves and analyse the relationship with the methods of direct and indirect standardization we discuss how inequalities in health care can be integrated in an overall evaluation of social inequality

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

collusive pricing with capacity constraints in the presence of demand uncertainty we explore the response of collusive prices to changing demand conditions when firms operate under capacity constraints in the presence of demand uncertainty we find support for the conventional view that periods of low demand lead through the emergence of excess capacity to a breakdown of collusive pricing we also find that the nature of price wars depends on the degree of excess capacity in the industry while small amounts of excess capacity can lead firms to engage in mild price wars characterized by uniform price reductions and market share stability more severe price wars characterized by price undercutting and market share instability can emerge if excess capacity is sufficiently great finally our results lend support to the view that market share instability is a symptom of ineffective collusion

when are cartels stable contracts why do some industry cartels survive for decades while others are quickly undermined by price wars and entry variation in cartels longevity can be explained by differences in their costs of self enforcement and service value to members analyzing legal cartel contracts formed under the webb pomerene export trade act i find that longer lived cartels tended to export to small buyers to have wide industry coverage to operate in periods of stable prices and growing demand and to sell under side agreements with foreign competitors contracts in which the cartel centralized its control through a common sales agency tended to be more stable however cartels usually grew less stable with age and when there was a recent and long history of cartelization in the industry finally cartels whose primary rationale was to fix price tended to be particularly unstable because these contracts invited fringe competition and entry

real versus nominal specification of the demand for money function this paper re examines the issue of real versus nominal specification of the money demand function and presents evidence in favor of the nominal specification a series of experiments with u s quarterly data show that the money demand function specified in nominal terms is more stable and generates more accurate forecasts than that specified in real terms the case of the missing money also is discussed

internal cartel stability with time dependent detection probabilities abstract to account for the illegal nature of price fixing agreements per period detection probabilities that can vary over time are introduced in a dynamic oligopoly the resulting iccs for internal cartel stability indicate that for discount factors up to 10 per period detection probabilities of 5 are needed to reduce the number of cartel members by 50 for the special case of stationary supergames with constant per period detection probabilities p elegant rules emerge internal cartel stability requires the discount factor to increase with 100 p 1 p percent while a fixed fine of 100 1 p p percent of incremental cartel profits is required for making the icc always binding

the consequences of the us doj s antitrust activities a macroeconomic perspective do the antitrust law enforcement activities of the us department of justice act as exogenous technology shocks or as markup shocks limiting market power and promoting economic growth we analyze annual time series data from 1947 to 2003 on three measures of federal antitrust intervention the ratio of the antitrust division s budgetary expenditures to gdp as well as the numbers of civil and criminal antitrust cases instituted we find that changes in the levels of these policy variables act like negative technology shocks and that the negative effects are transitory antitrust policy generates no subsequent offsetting increases in productivity

simultaneous estimation of production functions and capital stocks for developing countries estimation of production functions is important for both forecasting and planning purposes in developing countries the lack of data especially on capital stocks hampers econometric work and leads to the use of crude methods in the estimation of production functions in this paper we propose a method equally useful for the estimation of production functions when there are no data on capital stock and for the recovery of capital stock from the estimated production function a simulation analysis demonstrates the optimal properties of the technique which is subsequently applied to the estimation of aggregate production functions for a number of countries at different stages of development

strategic leniency and cartel enforcement the cornerstone of cartel enforcement in the united states and elsewhere is a commitment to the lenient prosecution of early confessors a burgeoning game theoretical literature is ambiguous regarding the impacts of leniency i develop a theoretical model of cartel behavior that provides empirical predictions and moment conditions and apply the model to the complete set of indictments and information reports issued over a 20 year span statistical tests are consistent with the notion that leniency enhances deterrence and detection capabilities the results have implications for market efficiency and enforcement efforts against cartels and other forms of organized crime jel d43 l12 l13 k21 in 1993 the department of justice doj introduced a new leniency program with the intent of destabilizing existing cartels and deterring new cartels the program commits the doj to the lenient prosecution of early confessors in particular it guarantees complete amnesty from federal prosecution to the first confessor from each cartel provided that an investigation into the confes sor s cartel is not already underway it also offers discretionary penalty reductions to conspirators who confess when an investigation is already ongoing the new leniency program has become the cornerstone of cartel enforcement efforts in the united states e g scott d hammond 2004 and recently has inspired antitrust authorities in australia canada the european union japan south korea and elsewhere to introduce similar programs oecd 2002 2003 this paper tests the efficacy of the new leniency program the results have implications for market efficiency and enforcement efforts against cartels and other forms of organized crime a burgeoning game theoretical literature is ambiguous regarding the impacts of leniency a common finding is that leniency may destabilize cartels because conspirators can simultane

stock market dispersion and unemployment abstract the sectoral shifts hypothesis advanced by lilien 1982 and davis 1987 suggests that unemployment is in part the result of resources being reallocated from declining to expanding sectors of the economy using u s data from 1931 to 1987 we test this hypothesis by constructing an index measuring the dispersion among stock prices from different industries we find that lagged values of this index significantly affect unemployment we show that the stock market dispersion index is less contaminated by aggregate demand influences than lilien s employment dispersion index which makes our test less vulnerable to the abraham and katz 1986 critique

employers discriminatory behavior and the estimation of wage discrimination this paper considers the linkage of empirical estimates of wage discrimination between two groups introduced by oaxaca 1973 to a theoretical model of employers discriminatory behavior it is shown that conditional on different assumptions about employers discriminatory tastes oaxaca s estimators of wage discrimination can be derived that the approach is more generally useful is demonstrated by deriving an alternative estimator of wage discrimination based on the assumption that within each type of labor e g unskilled skilled the utility function capturing employers discriminatory tastes is homogeneous of degree zero with respect to labor inputs from each of the two groups the estimators are compared empirically in an application to male female wage differentials

correcting the concentration index a comment abstract in a recent article in this journal erreygers erreygers g 2008 correcting the concentration index journal of health economics has proposed a new measure of income related health inequality to overcome three shortcomings of the concentration index ci i think erreygers is absolutely right to probe on these issues and i welcome his generalization of my normalization which was specific to the case of a binary health indicator however i have misgivings about his paper his goal of correcting the ci so as to make it usable with interval scale variables seems misguided the ci reflects a commitment on the part of the analyst to measuring relative inequality armed only with an interval scale variable one simply has to accept that one can meaningfully measure only differences and therefore settle for measuring absolute inequality erreygers index inevitably ends up as a measure of absolute inequality his objection to my approach to getting round the bounds problem is that my normalization of the ci does not produce a measure of absolute inequality but that was never my intention in this comment i also show that somewhat paradoxically at first glance my index is also not a pure index of relative inequality this seems to be an inevitable consequence of tackling the bounds issue

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

the behavior of regulatory activity over the business cycle an empirical test this paper tests a prediction of the interest group theory of regulation which suggests that regulators generally will not force any one group to bear the full adjustment costs associated with variations in the business cycle that is the interest group model predicts that regulatory agencies will redistribute cyclical gains and losses by supplying more producer protection regulation during contractions and more consumer protection regulation during expansions i e regulatory activity which reduces consumer welfare will tend to be countercyclical intensifying when aggregate demand falls and abating as demand increases the empirical results show a countercyclical and statistically significant ceteris paribus relationship between federal trade commission enforcement efforts under the robinson patman act and several alternative measures of general business conditions since the robinson patman act is viewed widely as anti consumer the findings suggest that in cyclical downturns the commission moves to protect producers against losses by bringing more cases which limit the tendency for prices to fall this result may be rationalized under the view that during recessions the federal trade commission is in the business of transferring wealth from consumers either to protect small business or to bolster cartels on the other hand during business expansions the commission reduces its robinson patman case load and such a change in enforcement may serve to mitigate producer gains transferring wealth to consumers at the margin in any case the paper offers empirical support for the interest group model by providing evidence that the business cycle plays an important part in explaining the level and pattern of regulatory activity

antitrust public choice s antitrust legislation and enforcement has over the last few decades been increasingly informed by ever more sophisticated analysis while at the same time evidence has continued to mount that the results of antitrust remedies fall far short of the promises held out under still prevalent nirvana fallacy demsetz in journal of law and economics 12 1 1 22 1969 expectations i draw upon a recent supreme court decision as well as the results of young and shughart s public choice 2010 doi 10 1007 s11127 009 9531 y novel approach to the analysis of antitrust enforcement activities to discuss the extent to which public choice theory is vital in solving the puzzle regarding the unintended effects of antitrust public choices

state antitrust enforcement in the us and implications for small business entry and relocation this article examines the impact of the important yet little studied state level antitrust enforcement activity on entry and relocation behaviour by small us firms feinberg and husted 2011 have shown that this enforcement especially nonhorizontal cases may be viewed by potential entrants as a negative aspect of the state business climate however they did not pursue a more disaggregate analysis of small firm entry behaviour nor did they investigate different responses between manufacturing wholesaling and retailing firms another related issue is the extent to which state cases filed in tandem with federal investigations have the same impact on establishment entry as do purely independent cases these considerations are dealt with in this article the author uses annual state level data from the statistics of us business to examine entry and relocation reactions to state antitrust enforcement by firms within three small business categories 1 19 employees 20 99 employees 100 499 employees g

the impact of cyclical demand movements on collusive behavior recent work by rotemberg and saloner 1986 investigates the effect of the business cycle on optimal collusive pricing by specifying that demand is subject to i i d shocks an implication of the i i d assumption is that firms expectations on future demand are unrelated to the current level of demand we put forth a model that allows for both the level of current demand and firms expectations on future demand to change over time thus it captures two important properties of the business cycle our analysis reveals that while the gain to deviating from a collusive agreement is greatest during booms firms find it most difficult to collude during recessions as the forgone profits from inducing a price war are relatively low an implication of this effect for pricing behavior is that at the same level of demand price is lower when demand is declining than when demand is rising consistent with previous theoretical work we find that firms price countercyclically for a range of values for the discount factor however numerical simulations reveal a greater tendency for firms to price countercyclically during recessions than during booms

imperfect competition law enforcement competition policy is a subject of often heated debate competition authorities seeking to prevent or battle anticompetitive acts in complex cases to the best of their abilities regularly find themselves advised by rival economic theories and disputed empirical analyses as a consequence there is a real possibility that they may occasionally err missing true violations of competition law or finding firms liable that actually had no other intentions than good competition in this paper possible consequences of such imperfect competition law enforcement on firm strategies are considered in a simple model of collusion it is found that the incidence of anti competitive behavior increases in both types of enforcement errors type ii errors decrease expected fines while type i errors encourage industries to collude precautionary when they face the risk of a false conviction hence fallible antitrust enforcement may stifle genuine competition thus stimulating the very behavior competition policy is meant to deter when enforcement errors are non negligible competition authorities run the risk of being over zealous in the sense that welfare is best served by an authority that is selective and conscientious in its targeting of alleged anticompetitive acts

measuring progress towards universal health coverage with an application to 24 developing countries the last few years have seen a growing commitment worldwide to universal health coverage uhc yet there is a lack of clarity on how to measure progress towards uhc this paper proposes a mashup index that captures both aspects of uhc that everyone irrespective of their ability to pay gets the health services they need and that nobody suffers undue financial hardship as a result of receiving care service coverage is broken down into prevention and treatment and financial protection into impoverishment and catastrophic spending nationally representative household survey data are used to adjust population averages to capture inequalities between the poor and better off nonlinear tradeoffs are allowed between and within the two dimensions of the uhc index and all indicators are expressed such that scores run from 0 to 100 and higher scores are better in a sample of 24 countries for which there are detailed information on uhc inspired reforms a cluster of high performing countries emerges with uhc scores of between 79 and 84 brazil colombia costa rica mexico and south africa and a cluster of low performing countries emerges with uhc scores in the range 35 57 ethiopia guatemala india indonesia and vietnam countries have mostly improved their uhc scores between the earliest and latest years for which there are data by about 5 points on average however the improvement has come from increases in receipt of key health interventions not from reductions in the incidence of out of pocket payments on welfare

exchange rate determination and the demand for money this paper examines the conventional monetary equation of exchange rate determination under certain exogeneity conditions one can write the price level at home and abroad as the ratio of the nominal money supply to the demand for real money balances then since the exchange rate is the domestic price of foreign exchange one can equate the exchange rate to the ratio of domestic to foreign prices this then allows one to write and estimate the exchange rate as a function of the money supply differential income differential and interest rate differential if the domestic and foreign money demand errors are autocorrelated and if deviations from purchasing power parity are autocorrelated tests based on the above model may be invalid only if all autoregressive parameters are equal will test results be valid a full information maximum likelihood procedure is used to estimate and test the assumptions necessary for the conventional procedure to be correct finally two alternative models of exchange rate determination are considered to illustrate the importance of introducing the error terms at the beginning of the analysis this abstract was borrowed from another version of this item