external demand constraints for agricultural exports an impediment to structural adjustment policies in sub saharan african countries abstract structural adjustment programmes are being promoted throughout the developing countries the recommended policy package including price as well as non price policies is geared towards export growth and a long term sustainable balance of payments there is considerable scepticism however whether developing countries can indeed benefit from an export oriented growth strategy first rigidities in domestic output supply responses could preclude significant export growth second external demand side constraints could impede export revenue growth if a jointly promoted export led strategy resulted in world market price deterioration analysis reveals that in the case of sub saharan africa neither of the above factors should cause a failure of structural adjustment policies however the outcome of adjustment policies could be improved if commodity and country specific factors were taken into consideration

how acquisitions affect firm behavior and performance evidence from the dialysis industry many industries have become increasingly concentrated through mergers and acquisitions which in health care may have important consequences for spending and outcomes using a rich panel of medicare claims data for nearly one million dialysis patients we advance the literature on the effects of mergers and acquisitions by studying the precise ways providers change their behavior following an acquisition we base our empirical analysis on more than 1 200 acquisitions of independent dialysis facilities by large chains over a 12 year period and find that chains transfer several prominent strategies to the facilities they acquire most notably acquired facilities converge to the behavior of their new parent companies by increasing patients doses of highly reimbursed drugs replacing high skill nurses with less skilled technicians and waitlisting fewer patients for kidney transplants we then show that patients fare worse as a result of these changes outcomes such as hospitalizations and mortality deteriorate with our long panel allowing us to identify these effects from within facility or within patient variation around the acquisitions because overall medicare spending increases at acquired facilities mostly as a result of higher drug reimbursements this decline in quality corresponds to a decline in value for payers we conclude the article by considering the channels through which acquisitions produce such large changes in provider behavior and outcomes finding that increased market power cannot explain the decline in quality rather the adoption of the acquiring firm s strategies and practices drives our main results with greater economies of scale for drug purchasing responsible for more than half of the change in profits following an acquisition

entry in monopoly market this paper develops new empirical models of market concentration from game theoretic models of entry we construct our models from inequality conditions that describe entrants equilibrium strategies in simultaneous move and sequential move games and use them to study the effects of entry in isolated monopoly markets for new automobiles from estimates of the market size necessary to support one and two dealers we conclude that monopoly dealers do not block the entry of a second dealer we also find that entry does not cause price cost margins to fall by much

integration and productivity satellite tracked evidence this paper introduces satellite tracked real time data from a large fishing firm managing its vertically horizontally and geographically linked ships to study the causal impact of integration on total factor productivity tfp after the firm acquired its vertically unintegrated contractual fish suppliers tfp increased 16 among newly integrated ships whereas it did not vary for already owned ships some classic mechanisms such as increased effort due to monitoring do not systematically explain tfp gains under integration whereas evidence on hold up threat alleviation is mixed importantly enhanced knowledge transfer and hierarchical authority enacting productivity improving operational practices among newly integrated ships are more likely explanations of the results this paper was accepted by bruno cassiman business strategy

the industrial organization of health care markets the u s health care sector is large and growing health care spending in 2011 amounted to 2 7 trillion and 18 percent of gdp approximately half of health care output is allocated via markets in this paper we analyze the industrial organization literature on health care markets focusing on the impact of competition on price quality and treatment decisions for health care providers and health insurers we conclude with a discussion of research opportunities for industrial organization economists including opportunities created by the u s patient protection and affordable care act

hospital ownership and public medical spending the hospital market is served by firms that are private for profit private not for profit and government owned and operated i use a plausibly exogenous change in hospital financing that was intended to improve medical care for the poor to test three theories of organizational behavior i find that the critical difference between the three types of hospitals is caused by the soft budget constraint of government owned institutions the decision makers in private not for profit hospitals are just as responsive to financial incentives and are no more altruistic than their counterparts in profit maximizing facilities my final set of results suggests that the significant increase in public medical spending examined in this paper has not improved health outcomes for the indigent i introduction the hospital market is served by firms that are private for profit private not for profit and publicly owned and operated in this paper i examine how a hospital s type of ownership influences its response to profitable opportunities that are created by changes in government policy the policy change that i exploit was designed to improve the quality of medical care for lowincome individuals by significantly increasing hospitals financial incentives to treat them this program also substantially increased the revenues of those hospitals that had been serving a disproportionate share of the indigent i use this plausibly exogenous change in government policy to test three different theories of organizational behavior and then to assess the impact of hospital behavioral responses on health outcomes the response of organizations to changes in government policy will have an important impact on the consequences of these policies this is likely to be especially true in the medical sector in which the federal state and local governments contract directly

mergers when prices are negotiated evidence from the hospital industry in recent years many hospitals have merged in part to gain bargaining leverage with managed care organizations mcos we investigate the price impact of hospital mergers by formulating and estimating an equilibrium bargaining model between hospital systems and managed care health insurers over prices for inpatient services we estimate the parameters of the model using claims and discharge data from northern virginia in 2006 inova health system proposed to acquire prince william hospital we nd that this merger would have raised prices signicantly and that the remedy of separate bargaining imposed by the ftc in a separate hospital case would have resulted in a larger price increase

estimation and identification of merger effects an application to hospital mergers abstract existing empirical estimates of merger effects are compromised by the fact that merging and nonmerging entities differ in unobserved ways that independently affect outcomes of interest to obtain an unbiased estimate of the effect of consummated mergers i propose an approach that focuses on the response of rivals to mergers and accounts for the endogeneity of exposure to these mergers i apply this approach to evaluate the impact of independent hospital mergers in the united states between 1989 and 1996 using the physical colocation of rivals as an instrument for whether they merge i find a sizeable one time increase in price following a rival s merger with the greatest increase occurring among hospitals nearest the merging hospitals these results are more consistent with predictions from structural models of the hospital industry than with prior observational estimates of the effects of hospital mergers

food self sufficiency making sense of it and when it makes sense food self sufficiency gained increased attention in a number of countries in the wake of the 2007 08 international food crisis as countries sought to buffer themselves from volatility on world food markets food self sufficiency is often presented in policy circles as the direct opposite of international trade in food and is widely critiqued by economists as a misguided approach to food security that places political priorities ahead of economic efficiency this paper takes a closer look at the concept of food self sufficiency and makes the case that policy choice on this issue is far from a straightforward binary choice between the extremes of relying solely on homegrown food and a fully open trade policy for foodstuffs it shows that in practice food self sufficiency is defined and measured in a number of different ways and argues that a broader understanding of the concept opens up space for considering food self sufficiency policy in relative terms rather than as an either or policy choice conceptualizing food self sufficiency along a continuum may help to move the debate in a more productive direction allowing for greater consideration of instances when the pursuit of policies to increase domestic food production may make sense both politically and economically

a theory of yardstick competition in the typical regulatory scheme a franchised monopoly has little incentive to reduce costs this article proposes a mechanism in which the price the regulatedfirm receives depends on the costs of identical firms in equilibrium each firm chooses a socially efficient level of cost reduction the mechanism generalizes to cover heterogeneous firms with observable differences medicare s prospective reimbursement of hospitals by using diagnostically related groups is a scheme very similar to the one outlined here

the impact of competition on management quality evidence from public hospitals in this paper we examine the causal impact of competition on management quality we analyze the hospital sector where geographic proximity is a key determinant of competition and english public hospitals where political competition can be used to construct instrumental variables for market structure since almost all major english hospitals are government run closing hospitals in areas where the governing party has a small majority is rare due to fear of electoral punishment we find that management quality measured using a new survey tool is strongly correlated with financial and clinical outcomes such as survival rates from emergency heart attack admissions ami more importantly we find that higher competition as indicated by a greater number of neighboring hospitals is positively correlated with increased management quality and this relationship strengthens when we instrument the number of local hospitals with local political competition adding another rival hospital increases the index of management quality by one third of a standard deviation and leads to a 10 7 reduction in heart attack mortality rates

the dilemma of cheap food and self sufficiency the case of wheat in iran self sufficiency in wheat has been one of the major goals of iranian agricultural policies since the revolution of 1979 even so the country failed to achieve this goal by the early 2000s despite a satisfactory growth in wheat production this paper addresses this failure and the political difficulties in introducing reforms that would reduce the need for import first the production and consumption of wheat are examined the conclusion is that the cheap bread policy has mainly been responsible for the imbalances between domestic supply and demand and the continued reliance on wheat imports moreover the paper argues that the subsidy program is an expensive safety net for the needy and shows that the iranian government has intended to reform the program since the early 1990s however subsidy reforms are politically sensitive especially in developing countries where subsidies are considered very important both for supporting the poor and for political stability an analysis of the iranian attempts at subsidy reform suggests that they have not yet succeeded mainly due to such political considerations

the incidence of mandated maternity benefits i consider the labor market effects of mandates which raise the costs of employing a demographically identifiable group the efficiency of these policies will be largely dependent on the extent to which their costs are shifted to group specific wages i study several state and federal mandates which stipulated that childbirth be covered comprehensively in health insurance plans raising the relative cost of insuring women of childbearing age i find substantial shifting of the costs of these mandates to the wages of the targeted group correspondingly i find little effect on total labor input for that group jel 118 j32 h51 in an era of tight fiscal budget constraints mandating employer provision of workplace benefits to employees is an attractive means for a government to finance its policy agenda consequently in recent years there has been a growth of interest in mandated benefits as a tool of social policy for example the centerpiece of president bill clinton s health care proposal is mandated employer provision of health insurance and more than 20 states have man

semiglobalization and international business strategy if markets were either completely isolated by or integrated across borders there would be little room for international business strategy to have content distinctive from mainstream strategy but a review of the economic evidence about the international integration of markets indicates that we fall in between these extremes into a state of incomplete cross border integration that i refer to as semiglobalization more specifically most measures of market integration have scaled new heights in the last few decades but still fall far short of economic theory s ideal of perfect integration the diagnosis of semiglobalization does more than just supply a relatively stable frame of reference for thinking about the environment of cross border operations it also calls attention to the critical role of location specificity in the prospects of distinctive content for international business strategy relative to mainstream business and corporate strategy in addition it flags factors products subject to location specificity as being salient from the perspective of international business finally it highlights the scope for strategies that strive to capitalize on the large residual barriers to cross border integration as well as those that simply try to cope with them

paying a premium on your premium consolidation in the us health insurance industry we examine whether and to what extent consolidation in the u s health insurance industry is leading to higher employer sponsored insurance premiums we make use of a proprietary panel dataset of employer sponsored healthplans enrolling over 10 million americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration we exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market level premiums we estimate real premiums increased by approximately 7 percentage points in a typical market due to the rise in concentration during our study period we also find evidence that consolidation facilitates the exercise of monopsonistic power vis a vis physicians whose absolute employment and relative earnings decline in its wake

estimating welfare in insurance markets using variation in prices we provide a graphical illustration of how standard consumer and producer theory can be used to quantify the welfare loss associated with inefficient pricing in insurance markets with selection we then show how this welfare loss can be estimated empirically using identifying variation in the price of insurance such variation together with quantity data allows us to estimate the demand for insurance the same variation together with cost data allows us to estimate how insurers costs vary as market participants endogenously respond to price the slope of this estimated cost curve provides a direct test for both the existence and the nature of selection and the combination of demand and cost curves can be used to estimate welfare we illustrate our approach by applying it to data on employerprovided health insurance from one specific company we detect adverse selection but estimate that the quantitative welfare implications associated with inefficient pricing in our particular application are small in both absolute and relative terms

food in sub saharan africa trends and policy challenges for the 1990s abstract the food situation in africa can be expected to become increasingly serious as the end of the century approaches the gap between domestic supply and food needs in rapidly widening yield increasing technology becomes essential in view of land scarcity in high potential areas and sustainability problems in marginal zones the concern of governments for food self sufficiency however must not divert attention from the primary objective of household food security which is essentially a question of households real income accelerated rural growth and improved rural health and sanitation services accessible to the poor are central elements for household food security improvement

strategic integration of hospitals and physicians a striking development in the healthcare market place has been the formation of strategic relationships between hospitals and physicians hospital physician integration appears to be a response to rapidly expanding managed care health insurance we examine whether integration lead to efficiency gains from transaction cost economies thereby allowing providers to offer managed care insurance plans lower prices or whether integration is really a strategy to improve bargaining power and thereby increase prices we find that integration has little effect on efficiency but is associated with an increase in prices especially when the integrated organization is exclusive and occurs in less competitive markets

sadcc food security strategies evolution and role abstract over the last seven years the scope of strategies promoted by the sadcc food security program has broadened steadily at first there was an almost complete preoccupation with food production the program now includes projects related to cereal market stabilization regional trade and food aid most recently consumption objectives have been made an explicit concern of the program this paper traces the evolution of policy underlying this expansion of interest cooperation between sadcc member states rests on the principle that more can be achieved by joint effort than by individual states acting alone however experience to date suggests that it is easier to define the benefits of regional collaboration than to capture them the sadcc food security program requires technical and financial capacity in order to pursue its objectives but the success of collaborative ventures rests to a more critical extent on the level of confidence which exists among member states

is hospital competition socially wasteful we study the consequences of hospital competition for medicare beneficiaries heart attack care from 1985 to 1994 we examine how relatively exogenous determinants of hospital choice such as travel distances influence the competitiveness of hospital markets and how hospital competition interacts with the influence of managed care organizations to affect the key determinants of social welfare expenditures on treatment and patient health outcomes in the 1980s the welfare effects of competition were ambiguous but in the 1990s competition unambiguously improves social welfare increasing hmo enrollment over the sample period partially explains the dramatic change in the impact of hospital competition

regulation and capacity competition in health care evidence from u s dialysis markets abstract this paper studies entry and capacity decisions by dialysis providers in the united states we estimate a structural model where providers make continuous strategic choices of capacity based on their private information about own costs and knowledge of the distribution of competitors private information we evaluate the impact on the market structure and providers profits under counterfactual regulatory policies that increase the costs or reduce the payment per unit of capacity we find that these policies reduce the market capacity as measured by the number of dialysis stations however the downward sloping reaction curve shields some providers from negative profit shocks in certain markets the paper also has a methodological contribution in that it proposes new estimators for bayesian games with continuous actions

consumption patterns and their effects on land required for food abstract vast amounts of land are required for the production of food but the area suitable for growing crops is limited in this paper attention is paid to the relationship between food consumption patterns and agricultural land requirements land requirements per food item that were determined in a previous study are combined with data on the per capita food consumption of various food packages varying from subsistence to affluent leading to information on land requirements for food large differences could be shown in per capita food consumption and related land requirements while food consumption expenditure and the physical consumption of specific foods change rapidly over time a difference of a factor of two was found between the requirements for existing european food patterns while the land requirement for a hypothetical diet based on wheat was six times less than that for an existing affluent diet with meat it is argued that in the near future changes in consumption patterns rather than population growth will form the most important variable for total land requirements for food trends towards the consumption of foods associated with affluent lifestyles will bring with them a need for more land lifestyle changes changes in consumer behavior on a household level can be considered as powerful options to reduce the use of natural resources such as agricultural land

differentiation and competition in hmo markets this paper examines how differentiation among health maintenance organizations hmos affects local market competition most markets for hmos appear sufficiently unconcentrated however differences among hmos may make competition less intense than the number of competitors would suggest to investigate this possibility we distinguish hmos that serve only local markets from those that operate regional or national networks we analyze how hmos of one type affect the profitability of the other using an equilibrium model of entry and product choice while the two types of hmos have strong competitive effects within segments the competitive effect of differentiated firms is negligible

adverse selection and inertia in health insurance markets when nudging hurts this paper investigates consumer inertia in health insurance markets where adverse selection is a potential concern we leverage a major change to insurance provision that occurred at a large firm to identify substantial inertia and develop and estimate a choice model that also quantifies risk preferences and ex ante health risk we use these estimates to study the impact of policies that nudge consumers toward better decisions by reducing inertia when aggregated these improved individual level choices substantially exacerbate adverse selection in our setting leading to an overall reduction in welfare that doubles the existing welfare loss from adverse selection jel d82 g22 i13 a number of potential impediments stand in the way of efficient health insur ance markets the most noted of these is adverse selection first studied by akerlof 1970 and rothschild and stiglitz 1976 in insurance markets prices reflect the expected risk costs of the insured pool whether the reason is price regulation or private information when insurers cannot price all risk characteristics riskier consumers choose more comprehensive health plans this causes the equilibrium prices of these plans to rise and healthier enrollees to select less comprehensive coverage than they would otherwise prefer