quality adjusted cost functions and policy evaluation in the nursing home industry proper evaluation of cost quality trade offs inherent in regulatory policy requires identifying the structure of production from the behavioral response of quality to the policy change however estimating the structure of production with endogenous quality is difficult because of both measurement problems and data availability we develop a simple method for identifying and estimating cost functions in the presence of endogenous and unobserved quality using this method we estimate that a quality adjusted cost function for nursing homes treating quality as exogenous yields seriously misleading estimates of marginal cost and economies of scale we then used the parameter estimates to evaluate the cost quality trade off in nursing home regulatory policy

household coping in war and peacetime cattle sales in rwanda 1991 2001 abstract the economic literature has given due attention to household coping strategies in peacetime in contrast little is known about such strategies in wartime this paper studies the use of cattle as a buffer stock by rwandan households during 1991 2001 a period characterized by civil war and genocide it is found that the probability of selling cattle increases upon the occurrence of both peacetime and wartime covariant adverse income shocks the peacetime cattle sales are largely explained by shifts in the household asset portfolio in contrast in 1994 the year of the genocide almost half of the cattle sales were motivated by the need to buy food however we argue that the effectiveness of this coping strategy was severely reduced due to the wartime conditions first during the year of ethnic violence cattle prices plummeted to less than half of their pre genocide value second we find that households most targeted in the violence did not sell cattle we discuss several explanations for this latter finding

consumption vulnerability to risk in rural pakistan abstract as one of the dimensions of vulnerability this paper empirically investigates the inability of rural dwellers to cope with negative income shocks a variable coefficient regression model is applied to a two period household panel dataset collected in the north west frontier province pakistan an area with high incidence of income poverty and low human development the empirical model allows for a different ability to smooth consumption approximated by a linear function of households attributes and controls for the endogeneity of observed changes in income using qualitative information on subjective risk assessment estimation results show that the ability to cope with negative income shocks is lower for households that are aged landless and do not receive remittances regularly

the supply of charity services by nonprofit hospitals motives and market structure this article studies provision of charity care by private nonprofit hospitals we demonstrate that in the absence of large positive income effects on charity care supply convex preferences for the nonprofit hospital imply crowding out by other private or government hospitals extending our model to include impure altruism rivalry provides a possible explanation for the previously reported empirical result that both crowding out and income effects on indigent care supply are often weak or insignificant empirical analysis of data for hospitals in maryland provides evidence of rivalry on the supply of charity care

environment technology and the social articulation of risk in west african agriculture two preoccupations are not mutually exclusive superficially they share the common concern that liberalization is insufficient to resolve the subsaharan food crisis at a deeper level the two preoccupations are more intimately interrelated via the correspondence that links initial wealth to risk exposure and to behavior in both production and asset accumulation a number of recent empirical studies of risk in low income countries find that households are able to employ their accumulated assets to smooth consumption in the face of adverse agricultural production shocks 3 missing from these studies is explicit attention to the fact that the effective risk from which households insulate consumption is not that of production shocks directly but of those shocks as socially articulated by institutions and property rights this article explores the creation and distribution of effective risk estimating how environment technology and social factors interact to construct it endogenously 4 put differently this article develops the notion that the risk from which households ex post try to insulate consumption is not an immutable natural or technical feature of the landscape as michael watt s contrast between precolonial and colonial nigeria forcefully demonstrates the effective risk presented by an unchanged set of environmental and technical circumstances can

the import of hospital rate setting programs on hospital and health care expenditures 1975 85 to reduce hospital expenditures many jurisdictions now regulate hospital rates prior theoretical work has demonstrated however that the effect of rate regulation on total expenditures is a priori unclear empirical research has found that hospital rate setting programs have reduced expenditures per diem and per admission but not necessarily hospital expenditures or total health care expenditure per capita this study extends this empirical research it employs pooled cross section time series data on state level expenditure regulatory and demographic variables obrserved annually for 1975 85 the analysis provides little evidence that hospital rate setting programs have reduced hospital expenditures some rate setting programs actually are positively and significantly related to hospital expenditures overall this study does not suggest that regulatory programs will reduce hospital expenditures

weather shocks and cropland decisions in rural mozambique abstract economic development in low income settings is often associated with an expansion of higher value agricultural activities since these activities often bring new risks an understanding of cropland decisions and how these interact with shocks is valuable this paper uses data from mozambique to examine the effect of weather shocks on cropland decisions we account for the bounded nature of land shares and estimate a pooled fractional probit model for panel data our results show that crop choice is sensitive to past weather shocks farmers shift land use away from cash and permanent crops one year after a drought and from horticulture and permanent crop after a flood however this reallocation seems temporary as farmers devote less land to staples after two periods this is consistent with the aim of maintaining a buffer stock of staples for home consumption

insurer hospital bargaining negotiated discounts in post deregulation connecticut this paper uses unique data from the state of connecticut to examine discounting patterns in the state s hospital industry for the years following deregulation 1995 1998 the data provide a rare opportunity to study payer level differences in negotiated discounts for hospital services in addition to presenting descriptive evidence on how discounts vary across payers payer types and hospital types this study uses matched revenue data to analyze the economic determinants of discount magnitudes payer size appears to affect bargaining power but the economic significance of the effect is small the data exhibit patterns consistent with a bargaining explanation in which discount magnitudes depend critically on payers abilities to channel patients to hospitals with which favorable discounts have been negotiated

persistent poverty and informal credit abstract this paper explores the consequences of nonlinear wealth dynamics for the formation of bilateral credit arrangements to help manage idiosyncratic risk using original data on expected wealth dynamics social networks and informal loans among southern ethiopian pastoralist households we find that the threshold at which expected wealth dynamics bifurcate serves as a focal point at which lending is concentrated informal lending responds to recipients losses but only so long as the recipients are not too poor our results suggest that when shocks can have long term effects loans are best understood as providing a safety net rather than a scale neutral insurance mechanism furthermore the persistently poor are excluded from social networks that are necessary to obtain loans given in response to shocks

political agency government responsiveness and the role of the media abstract the role of mass media in making governments responsive to the needs of citizens is a relatively neglected area in economics we sketch a theoretical example with a role for media in enhancing government responsiveness based on asymmetric information between citizens and government we then use data for the period 1958 1992 on the extent to which indian state governments responded to food shortages via the public distribution of food correlating these with proxies of media political and economic development we find that states that are more responsive tend to also be those with high levels of newspaper circulation electoral turnout and literacy in contrast richer states do not tend to be more responsive than poorer states

an evaluation of medicaid selective contracting in california this study used 1982 1986 data on 262 private community hospitals to evaluate the effects of selective contracting for inpatient services by california s medicaid program selective contracting by medicaid significantly reduced the rate of inflation in average costs per admission and per patient day while slightly increasing average lengths of patient stays private sector contracting also reduced cost inflation rates significantly and caused small non significant reductions in lengths of stays hospital savings in 1986 due to medicaid selective contracting were 836 million 7 6 of what hospital expenditures would have been in the absence of contracting

market structure and prices the responses of hospitals in the uk national health service to competition abstract the internal market reforms to the uk national health service nhs are a model adopted in many health care systems they introduce competition in supply little is known about the impact of these reforms this paper examines the pricing responses of nhs suppliers to competition the incentives of the reformed system are analysed these indicate that prices should differ between buyers and markets these hypotheses are tested using data on spot market transactions between hospitals and health care buyers the results indicate considerable price variability but offer broad support for the hypotheses

the effect of entry regulation in the health care sector the case of home health the consequences of government regulation in the post acute care sector are not well understood we examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries about 4 5 million and subsequent home health admissions to determine whether there is a significant difference in home health utilization hospital readmission rates and health care expenditures in states with and without certificate of need laws con regulating entry we identify these effects by looking across regulated and nonregulated states within hospital referral regions which characterize well defined health care markets and frequently cross state boundaries we find that con states use home health less frequently but system wide rehospitalization rates overall medicare expenditures and home health practice patterns are similar removing con for home health would have negligible system wide effects on health care costs and quality

welfare dynamics in rural kenya and madagascar this paper presents comparative qualitative and quantitative evidence from rural kenya and madagascar in an attempt to untangle the causality behind persistent poverty we find striking differences in welfare dynamics depending on whether one uses total income including stochastic terms and inevitable measurement error or the predictable structural component of income based on a household s asset holdings our results suggest the existence of multiple dynamic asset and structural income equilibria consistent with the poverty traps hypothesis furthermore we find supporting evidence of locally increasing returns to assets and of risk management behaviour consistent with poor households defence of a critical asset threshold through asset smoothing

rainfall shocks and within community wealth inequality evidence from rural ethiopia summary household level impacts of environmental shocks are often negative but may vary considerably due to heterogeneous vulnerability this paper considers how differential vulnerability among households affects inequality within rural communities in ethiopia this study makes novel use of the demographic and health surveys dhs and a nasa agro climatology dataset results show that rainfall deficits have an equalizing effect on within community livestock inequality in parts of ethiopia but regional differences are observed a non significant effect is observed with respect to asset inequality as an initial study on this topic this paper outlines an agenda for future data collection and analysis efforts

climate change and index insurance demand evidence from a framed field experiment in tanzania abstract index insurance has been touted as part of an adaptation strategy to mitigate climate risks among smallholder farmers however in the face of increasing drought probabilities demand for index insurance may decrease compared to a scenario with no climate change if farmers learn slowly or place considerable weight on prior beliefs using data from a framed field experiment in tanzania we estimate a structural learning model based on a bayesian change point inference method and separately identify the effect of learning expectations recency bias and ambiguity on insurance demand furthermore by simulating the supply side of the insurance market under a set of plausible assumptions we show that climate change results in reduced uptake rates in most cases although demand may increase if the severity of climate change is sufficiently low overall our results provide an alternative explanation for the puzzle of low index insurance demand

agricultural extension and technology adoption for food security evidence from uganda we evaluate causal impacts of a large scale agricultural extension program for smallholder women farmers on technology adoption and food security in uganda through a regression discontinuity design that exploits an arbitrary distance to branch threshold for village program eligibility we find eligible farmers used better basic cultivation methods achieved improved food security given minimal changes in adoption of relatively expensive inputs we attribute these gains to improved cultivation methods that require low upfront monetary investment farmers also modified their shock coping methods these results highlight the role of information and training in boosting agricultural productivity among poor farmers and indirectly improving food security

food safety the media and the information market availability of information has increased rapidly over the past decades yet information on food safety is still considered problematic economists have extensively researched the effects of imperfect information however little attention has been paid to the institutional organization of the supply of information and the incentive schemes in the information market this paper analyzes how and when information is supplied by media organizations and what the implications are we first develop a theoretical framework and afterwards provide empirical evidence from media coverage of two recent food safety crises in europe

cash transfers and index insurance a comparative impact analysis from northern kenya abstract cash transfers and index insurance have become popular interventions by development agencies worldwide yet surprisingly little is known about these programs comparative impacts on participant behavior or well being this paper exploits exogenous variation in program participation and panel data from kenya to compare the causal impacts of a cash transfer program hsnp and an index based insurance product ibli which were implemented contemporaneously among the same population we find that both programs benefit clients hsnp improves child health as measured by mid upper arm circumference muac and helps households maintain their mobility dependent livestock production strategies households with ibli coverage make productivity increasing investments reduce distress sales of livestock during droughts and see a marked increase in income per adult equivalent estimating the impacts per total program costs reveals that the two programs perform comparably on average while ibli s impacts per unit marginal cost are considerably larger than hsnp s

the formation of risk sharing networks this paper examines the formation of risk sharing networks in the rural philippines we find that geographic proximity possibly correlated with kinship is a major determinant of mutual insurance links among villagers age and wealth differences also play an important role in contrast income correlation and differences in occupation are not determinants of network links reported network links have a strong effect on subsequent gifts and loans gifts between network partners are found to respond to shocks and to differences in health status from this we conclude that intra village mutual insurance links are largely determined by social and geographical proximity and are only weakly the result of purposeful diversification of income risk the paper also makes a methodological contribution to the estimation of dyadic models

precautionary saving under liquidity constraints evidence from rural pakistan this paper investigates precautionary saving under liquidity constraints in pakistan using household panel data in particular while we estimates kimball s 1990 prudence parameter we deviate from dynan s 1993 framework by explicitly considering liquidity constraints as in zeldes 1989 by doing so we attempt to differentiate the standard precautionary saving caused by uncertainty from the one due to liquidity constraints furthermore endogenous liquidity constraints are considered to resolve issues of selection biases in this study we document substantial evidence of the presence of precautionary saving in pakistan more specifically the estimated prudence is significantly higher for liquidity constrained households as compared with unconstrained ones the results support the emerging view that facilitating saving may often be more important than finding better ways of lending to the poor

external validity in a stochastic world evidence from low income countries we examine empirically the generalizability of internally valid micro estimates of causal effects in a fixed population over time when that population is subject to aggregate shocks using panel data we show that the returns to investments in agriculture in india and ghana small and medium non farm enterprises in sri lanka and schooling in indonesia fluctuate significantly across time periods we show how the returns to these investments interact with specific measurable and economically relevant aggregate shocks focusing on rainfall and price fluctuations we also obtain lower bound estimates of confidence intervals of the returns based on estimates of the parameters of the distributions of rainfall shocks in our two agricultural samples we find that even these lower bound confidence intervals are substantially wider than those based solely on sampling error that are commonly provided in studies most of which are based on single year samples we also find that cross sectional variation in rainfall cannot be confidently used to replicate within population rainfall variability based on our findings we discuss methods for incorporating information on external shocks into evaluations of the returns to policy

the impact of hospital market structure on patient volume average length of stay and the cost of care a variety of recent proposals rely heavily on market forces as a means of controlling hospital cost inflation sceptics argue however that increased competition might lead to cost increasing acquisitions of specialized clinical services and other forms of non price competition as means of attracting physicians and patients using data from hospitals in 1972 we analyzed the impact of market structure on average hospital costs measured in terms of both cost per patient and cost per patient day under the retrospective reimbursement system in place at the time hospitals in more competitive environments exhibited significantly higher costs of production than did those in less competitive environments

traps and thresholds in pastoralist mobility this article presents a new approach to identifying poverty traps in east african pastoralist communities a flexible semiparametric estimation procedure is used to identify a bifurcation in the propensity to engage in the asset based mobile herding livelihood in comparison to the sedentary alternative as a function of herd size the identified threshold is consistent with previous evidence on poverty traps based on modeling herd stock dynamics the approach contributes to an emerging literature that seeks to identify poverty traps through testing the implications of the posited behavioral mechanism behind the trap as opposed to directly modeling asset dynamics the approach is further employed to provide complementary evidence on the relationship between ability and assets in sustaining mobile pastoralism

exploring hospital production relationships with flexible functional forms this paper estimates a multiproduct variable cost function using data on a sample of california hospitals the results provide useful insights into the advantages and disadvantages of flexible functional forms for cost analysis the translog function appears to provide reasonable estimates of marginal costs when evaluated at or near the approximation point of the function the estimated function performs less satisfactorily however when evaluated outside this range the paper s results do not provide strong evidence of either ray scale economies or of weak cost complementarities there is some evidence however that the degree of scale economies may be underestimated

nonmarket institutions for credit and risk sharing in low income countries the design credit and risk institutions in low income countries provides one of the most exciting testing grounds for theories of contracting with imperfect information and limited enforcement this paper reviews some of the recent literature with a special focus on nonmarket institutions that cope with risk and provide credit this literature attempts to bring together insights from economic theory especially information economics contract theory and mechanism design theory however it is also applied being motivated by the circumstance of the poor countries that their authors have visited and studied

paying positive to go negative advertisers competition and media reports this paper analyzes a two sided market for news where two rival advertisers may pay a media outlet to conceal negative information about the quality of their own product paying positive to avoid negative and or to disclose negative information about the quality of their competitor s product paying positive to go negative we show that competition in the product market does not necessarily prevent the emergence of commercial media bias whether or not competing advertisers end up having negative consequences on news accuracy ultimately depends on the extent of correlation in the quality of their products the lower the correlation the higher the expected accuracy of the media outlet s reports these findings provide a rationale to explain the observed differences in the extent of commercial media bias across seemingly similar industries or products within the same media market the results are robust to the presence of multiple media outlets and to asymmetries between the advertisers overall the paper provides theoretical insights for media regulators and for the empirical literature examining the link between advertising and news contents

consumption versus asset smoothing testing the implications of poverty trap theory in burkina faso abstract despite solid theoretical foundations for the notion that poor borrowing constrained households will intertemporally manage assets to smooth consumption the consumption smoothing hypothesis has not always withstood empirical scrutiny this paper reassesses the intertemporal asset management problem with a poverty trap model and shows that we would expect to see asset smoothing not consumption smoothing in the neighborhood of critical asset levels at which optimal accumulation behavior bifurcates we then employ threshold estimation techniques to empirically confirm the co existence of consumption and asset smoothing regimes using a household panel data set from west africa households above the estimated threshold almost completely insulate their consumption from weather shocks whereas those below the threshold do not these results not only indirectly provide evidence of the existence of poverty traps but also speak to the level and incidence of the costs of uninsured risk

saving and liquidity constraints this paper is concerned with the theory of saving when consumers are not permitted to borrow and with the ability of such a theory to account for some of the stylized facts of saving behavior the models presented in the paper seem to account for important aspects of reality that are not explained by traditional life cycle models copyright 1991 by the econometric society

the role of hospital competition on treatment expenditure and outcome evidence from stroke and cardiac treatment in taiwan this article examines whether market competition affects treatment expenditure and health outcomes of stroke and cardiac treatment in taiwan our measure of treatment expenditure is the hospital expenditure paid at the index admission short term and the sum of inpatient and outpatient expenditures paid in the subsequent year long term our measure of health outcome is the probability of death in 1 and 12 months after the hospital s discharge our measure of competition follows the method developed by kessler and mcclellan that calculates the herfindal index based on the predicted patient flows using exogenous variables e g traveling distance to hospitals using data of patients hospitalized for new stroke and cardiac treatment between 1997 and 2001 in taiwan we find that an increase of market competition results in an insignificant impact on a patient s mortality in terms of treatment expenditure our results indicate that hospitals facing more competition incur higher expenditures either the short or long term expenditure finally we find evidence showing that an increase of treatment expenditure at admission is due to a raise of length of stay and treatment intensity per day as well as the usage of expensive equipment jel i11 l13 l41

asset smoothing consumption smoothing and the reproduction of inequality under risk and subsistence constraints abstract a growing literature asks whether low wealth agents can accumulate assets over time or whether they are trapped in poverty this paper develops a stochastic dynamic programming model with endogenous asset price risk to explore savings and portfolio decisions in a resource poor environment characterized by risk and subsistence constraints optimal portfolio strategies are found to bifurcate despite divisible assets and fully rational agents wealthier agents acquire a higher yielding portfolio and pursue conventional consumption smoothing poorer agents acquire a less remunerative portfolio and pursue asset smoothing rather than consumption smoothing asset based risk coping thus results in positive correlation between initial wealth and portfolio rate of return

the economics of poverty traps and persistent poverty empirical and policy implications the moral and economic imperatives to intervene in poverty traps motivate the identification of poverty traps and their structural causes so as to inform the design of appropriate policy responses however empirical identification remains challenging because of poverty traps complexity after reviewing mechanisms that can generate poverty traps we focus on one multiple financial market failures emphasising its heretofore underappreciated testable implications including specific behaviours that are rational only in the presence of a poverty trap we therefore recommend tests for these behaviours rather than more econometrically challenged efforts to directly test for poverty traps in estimated asset dynamics

price and concentration in hospital markets the switch from patient driven to payer driven competition perhaps the most widely accepted paradigm of industrial organization i o is that competition lowers prices or alternatively that price cost margins are lower in less concentrated markets 1 the applicability of this paradigm for hospital markets has been questioned for example in united states vs carilion health system and roanoke valley hospital the district and appellate courts accepted evidence that hospital prices are lower in more concentrated markets and thereby approved a merger between the two largest hospitals in a three hospital market 2 the view that competition has a weak or perverse effect on hospital prices is shared by a number of researchers 3 is a common theme in newspaper stories

a heterogeneous agent model of credit linked index insurance and farm technology adoption abstract protection from downside risk is a determinant of technology uptake among subsistence agricultural households access to credit insurance and savings may stimulate technology adoption where new methods are riskier but higher yielding or require sunk costs in this paper we employ a dynamic stochastic heterogeneous agent model where farm households have access to contingent credit and make savings technology and loan repayment choices our approach is novel as insurance is modeled as a meso level product where the bank is indemnified before any payouts are distributed to borrowers thus it accounts for both supply and demand side concerns showing a flow of effects when index insurance contracts are sold to risk aggregators for whom basis risk is lower results show letting the lender lay first claim on indemnities lowers default which can decrease interest rates and expand credit access insurance and savings may also spur technology uptake

reimbursing health plans and health providers efficiency in production versus selection the tradeoff between an insurer s or medical provider s incentives to select good risks and to produce efficiently is governed by the supply price analog to the demand price tradeoff between moral hazard and risk aversion under a variety of models the optimum supply price is a mixture of capitation and fee for service payments empirical literature shows that pure capitation payment leaves strong incentives for selection that are acted upon the presence of contracting costs in a rothschild stiglitz model means a limited pooling equilibrium can exist and that poor risks will not be at their preferred outcome

competition and efficiency in the end stage renal disease program abstract estimated coefficients for medical service production or cost functions are subject to a competitive amenity bias which may result in the failure to identify factors that affect economic efficiency our investigation of productivity of dialysis facilities did indeed indicate both the likelihood of bias and some qualitative results these results suggest that it will be difficult to estimate cost and that variation in the level of reimbursement will in competitive markets affect the level of amenity delivered to patients incurred cost amenity and patient well being will all vary positively with the reimbursement level determining the right level of reimbursement requires a policy decision on how much total amenity society wishes to deliver to beneficiaries of public programs

managed care s price bargaining with hospitals research has shown that managed care mc slowed the rate of growth in health care spending in the 1990s primarily via lower unit prices paid however the mechanism of mc s price bargaining has not been well studied this article uses a unique panel dataset with actual hospital prices in massachusetts between 1994 and 2000 to examine the sources of mc s bargaining power i find two significant determinants of price discounts first plans with large memberships are able to extract volume discounts across hospitals second health plans that are more successful at channeling patients can extract greater discounts patient channeling can add to the volume discount that plans negotiate

wealth weather risk and the composition and profitability of agricultural investments despite the growing evidence that farmers in low income environments are risk averse there has been little empirical evidence on the importance of risk in shaping the actual allocation of production resources among farmers differentiated by wealth the authors use panel data on investments in rural india to examine how the composition of productive and nonproductive asset holdings varies across farmers with different levels of total wealth and across farmers facing different degrees of weather risk income variability is a prominent feature of the experience of rural agents in low income countries the authors report evidence based on measures of rainfall variability that the agricultural investment portfolio behavior of farmers in such settings reflects risk aversion due evidently to limitations on consumption soothing mechanisms such as crop insurance or credit markets the authors results suggest that uninsured weather risk is a significant cause of lower efficiency and lower average incomes a one standard deviation decrease in weather risk measured by the standard deviation of the timing of the rainy season would raise average profits by up to 35 percent among farmers in the lowest wealth quartile moreover rainfall variability induces a more unequal distribution of average incomes for a given distribution of wealth wealthier farmers are willing to absorb significant risk without giving up profits to reduce production risk smaller farmers have to invest their limited wealth in ways that reduce their exposure to risk at the cost of lower profit rates the authors found that at high levels of rainfall variability differences in rates of profit per unit of agricultural assets were similar across classes of wealth but over the sample range of rainfall variability these rates of profit were always higher for the poorer farmers than for the wealthier ones suggesting that the disadvantages of small farmers in risk diffusion are more than offset by their labor cost advantage

buffer stock savings by portfolio adjustment evidence from rural india the empirical literature on household savings tends to treat savings simply as the residual of income minus consumption this article takes a unique approach to reconstruct the cash and asset balances using detailed household transaction data on farm households in rural india and generates monthly and seasonal icrisat panel data for the period 1976 1983 we have found that households irrespective of their landholding status cope with temporary shocks quite well by using crop inventory currency and capital assets rather than livestock as buffer assets the importance of portfolio adjustments in smoothing consumption is also confirmed by the use of a system of equations in which both portfolio and production decisions are made endogenous it is concluded that not only the level but also the diversification of household assets are important for buffering consumption as an extension we have explored the monthly icrisat panel data for the period 2009 2012 in the same villages and have found a similar pattern in household portfolio responses to income shocks

does competition between hospitals improve the quality of care hospital death rates and the nhs internal market payer driven competition has been widely advocated as a means of increasing efficiency in health care markets the 1990s reforms to the uk health service followed this path we examine whether competition led to better outcomes for patients as measured by death rates after treatment following heart attacks using data that until 1999 was not publicly available in any form on hospital level death rates we find that the relationship between competition and quality of care appears to be negative greater competition is associated with higher death rates controlling for patient mix and other observed characteristics of the hospital and the catchment area for its patients however the estimated impact of competition is small jel classification i1 l8 h4

summits riots and media attention the political economy of information on trade and globalisation supply of information has increased rapidly through the growth of commercial media and technological innovations yet economists still blame anti globalists demonstrations and public opposition to trade liberalisation on poor information this paper analyses how the structure of the media industry affects the distribution of information on trade policy and globalisation we present an empirical analysis of belgian media reporting on trade policy and globalisation over the 1999 2002 period supports these hypotheses and finds strong negative bias in media coverage moreover we find that media coverage of trade policy and globalisation is highly concentrated around summit meetings of political leaders media attention in the popular press is heavily influenced by riots and demonstrations at summits the paper points at important implications for public information on trade policy and globalisation and for economists

is informal risk sharing less effective for the poor risk externalities and moral hazard in mutual insurance abstract poor farm households are less keen to adopt high risk high return technologies than rich households yet the poor are more vulnerable to income shocks we develop a model of endogenous risk taking to explain these facts in autarky poor households adopt less risky production plans and obtain lower expected returns but face higher relative risk than the rich the introduction of risk sharing generates negative risk externalities between agents at the first best the social planner imposes a homogeneous level of risk taking in the group at the second best risk taking is not enforceable and increases with insurance generating moral hazard interestingly the poor s risk taking behavior is more sensitive to insurance the social planner thus mitigates risk taking by applying a lower insurance coverage in poor groups the introduction of risk sharing therefore reinforces the gap between rich and poor in terms of expected income and absolute risk while the effect on relative risk is ambiguous

a fresh meat almost ideal demand system incorporating negative tv press and advertising impact abstract this paper investigates fresh meat consumption in belgium during 1995 1998 through the specification of a three equation almost ideal demand system aids incorporating a media index of tv coverage and advertising expenditures as explanatory variables estimated parameters and elasticity coefficients are plausible and consistent with demand theory own price elasticities are relatively low indicating a low fresh meat demand sensitivity to price changes over this period which was dominated by mass media reports about the potential health risks associated with meat consumption the scope of the paper extends beyond the estimation of elasticity coefficients and includes the specification of a media index and simulations that provide insights into the impact of negative press relative to advertising efforts specifically the impact of television publicity is shown to have been particularly negative on beef veal expenditures in favour of pork mixture this finding corroborates expectations since mass media issues mainly pertained to bse mad cow disease and hormone residues during the investigated period with relatively little effort being undertaken and with its current strategy fresh meat advertising is found to have only a minor impact compared with negative press

competition among hospitals the traditional view of hospital competition has posited that hospitals compete primarily along quality dimensions in the form of fancy equipment to attract admitting physicians and pleasant surroundings to entice patients price competition among hospitals is thought to be non existent this paper estimates the effects of various hospital market characteristics on hospital prices and expenses in an attempt to determine the form of hospital competition the results suggest that both price and quality competition are greater in markets that are less concentrated although the net effect of the two on prices is insignificant it appears therefore that despite important distortions hospital markets are not immune to standard competitive forces

mass media and public policy global evidence from agricultural policies mass media play a crucial role in information distribution and in the political market and public policy making theory predicts that information provided by the mass media reflects the media s incentives to provide news to different groups in society and affects these groups influence in policy making the paper use data on agricultural policy from 69 countries spanning a wide range of development stages and media markets to test these predictions the empirical results are consistent with theoretical hypotheses that public support for agriculture is affected by the mass media in particular an increase in media television diffusion is associated with policies that benefit the majority to a greater extent and is correlated with a reduction in agriculture taxation in poor countries and a reduction in the subsidization of agriculture in rich countries ceteris paribus the empirical results are consistent with the hypothesis that increased competition in commercial media reduces transfers to special interest groups and contributes to more efficient public policies

monopoly monopsony and contestability in health insurance a study of blue cross plans i introduction blue cross and blue shield plans the plans have historically occupied a unique niche in health care pauly 1987 notes that the plans serve both as sellers of health insurance and as buyers of health services marmor 1991 described the plans development of health insurance concepts in the 1930s their role as innovators permitted them to occupy a dominant market share position in most geographic areas as a result blair ginsburg and vogel 1975 believe they have traditionally received favorable regulatory treatment including non profit organization status and exemption from taxation potentially the plans have dual market power 1 monopoly power in the market for health insurance and monopsony power in the market for health services this may result in operating inefficiencies and may produce adverse welfare consequences monopsony theory posits that the plans will reduce payments to providers and may stifle innovation in the market for health services this occurs as the result of the plans dominant market shares generated from the fact that they were often the first in the market for insurance and from their ability to enforce a credible threat to reduce providers business should providers refuse to provide reduced cost services the plans dominant market share and their advantage in the market for health services permit them to maintain a competitive advantage in the market for health insurance 2 monopoly theory suggests that the plans advantage in the market for medical services due to regulatory and tax advantages will cause them to i raise premium prices ii sell only a limited range of health insurance policies iii offer policies with more complete coverage than consumers demand 3 iv reduce innovation in the health insurance market and v demonstrate unduly high administrative costs in the 1970s empirical work supported these predictions however the 1980s has been an era of growth of competition and the potential for even more competition in the market for health insurance baumol panzar and willig 1982a noted that a credible threat of entry can produce competitive market conditions in a concentrated market resulting in reduced prices increased quantity and more efficient administrative cost structures if pauly is correct that there are no inherent scale economies in the health insurance market and if the market for health insurance is contestable the plans will pass advantages along to subscribers as reduced premiums and will tolerate fewer administrative cost inefficiencies accordingly the plans present an opportunity to study market structure and its impact in both the market for health care and the market for health care insurance to date no study has evaluated this interplay greater understanding of these interactions is important not only to deal with the phenomena of the plans for instance more appropriate regulatory policies but also to refine the single payer debate and to consider operating standards for health alliances and health plans included in the administration s health care reform package outlined by the white house domestic policy council 1993 section ii of this paper evaluates prior studies of the plans section iii motivates the model for plan behavior section iv describes the results of our empirical study of the plans premium pricing provider payment and administrative costs section v contains our conclusions ii prior studies of plan behavior a number of prior studies have evaluated the plans unique position in the market for health insurance and in the market for health care most focus on the plans monopsony power and payments to providers most important they evaluate markets that have gone through substantial change as health maintenance organizations and preferred provider organizations hmos and ppos have replaced fee for service plans several assess market power and administrative costs

the political economy of the media coverage of the lumber tariff dispute the political economy of groups suggest that policies are more likely to be implemented if the benefits are concentrated and the costs are dispersed the importance of the role of media in society changes the classic models media can awaken the sleeping masses to the dispersed costs of a policy and raise resentment towards the group who benefits thus the content of media coverage can affect policy stromberg s 2001 model shows that the amount of newspaper space devoted to an issue should rise as the square of the number of people affected this paper finds empirical support for stromberg s theoretical findings with content analysis of newspaper coverage of the lumber tariff dispute

food insecurity in vulnerable populations coping with food price shocks in afghanistan we use the case of afghanistan during the 2007 08 food price crisis to illustrate the impact of staple food price increases on household food security using the unconditional quantile regression estimator to identify separate effects for households across the distribution we find evidence of divergent behavior the most vulnerable households with low calorie diets cannot afford to make substantial cuts to caloric intake since they are close to or below the minimum daily energy requirements accordingly we find no decline in per capita daily caloric intake as a result of the price increases such households may be sacrificing diet quality to maintain calories with a potential for serious and long term health consequences households with high calorie diets who can afford to cut back on calories experience the largest declines we find evidence of declines in dietary diversity across the entire distribution of households with slightly larger declines observed for those with the least diversity moving beyond the price responses for the average household can inform policy makers of how the most vulnerable groups are affected such information is particularly salient in a country like afghanistan where decades of war political instability and recurring droughts have led to a precarious state of food insecurity and poverty

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

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

the impact of positive agricultural income shocks on rural chinese households in the post collectivization period rural chinese households were required to sell part of their grain output to the state at a below market price however increases in this quota price beginning in 1993 generated substantial positive income shocks these income shocks also varied cross sectionally in accordance with crop composition given that quotas were systematically larger for rice producing households generating a quasi random source of variation in the size of the shock driven by climatic variation in suitability for rice cultivation households induced to experience relatively larger income shocks show evidence of decreased agricultural investment increased investment in non agricultural businesses and increased migration as households gain increased income consistent with the hypothesis that credit constraints may have constrained some households from entering non agricultural production ex ante in addition there is evidence that these households were concentrated among households who had not previously diversified out of agriculture

exploring poverty traps and social exclusion in south africa using qualitative and quantitative data abstract recent theoretical work hypothesises that a polarised society like south africa will suffer a legacy of ineffective social capital and blocked pathways of upward mobility that leaves large numbers of people trapped in poverty to explore these ideas this paper employs a mix of quantitative and qualitative methods novel econometric analysis of asset dynamics over the 1993 98 period identifies a dynamic asset poverty threshold that signals that large numbers of south africans are indeed trapped without a pathway out of poverty qualitative analysis of this period and the period 1998 2001 more deeply examines patterns of mobility and confirms the continuation of this pattern of limited upward mobility and a low level poverty trap in addition the qualitative data permit a closer look at the specific role played by social relationships while finding ample evidence of active social capital and networks these are more helpful for non poor households for the poor social capital at best helps sta

risk coping land tenure and land markets an overview of the literature over the last decades a significant amount of literature has been published on informal risk coping in developing countries in this paper we review how informal risk coping has been addressed in the land tenure literature from two main perspectives a first stream of research looks at how customary tenure and communal property perform key informal risk coping functions a second subset of this literature analyses how informal risk coping creates land market imperfections through sharecropping or distress sales the segmentation of the literature results from the demsetzian property rights framework further research on risk coping and land tenure would benefit from examining recent work on property regimes

poverty and land redistribution abstract despite a theoretical literature that promises that land transfers will have large impacts on the well being of poor households well identified empirical evidence on the efficacy of land redistribution is scarce in an effort to fill this gap this paper examines south africa s land redistribution for agricultural development lrad program we exploit features of lrad program implementation to extract exogenous variation in whether and for how long applicant households enjoyed land transfers binary treatment estimates which compare treated with untreated households show that beneficiary households on average experienced a 25 increase in per capita consumption our preferred continuous treatment estimates which analyze only the subset of treated households identify the impact time path of land transfers on consumption these estimates show that living standards initially drop and then after 3 4 years rise to 150 of their pre transfer level these results are statistically significant and robust to a statistically more conservative identification strategy

over indebtedness in microfinance an empirical analysis of related factors on the borrower level summary this paper analyzes the over indebtedness of microborrowers in ghana from a customer protection perspective it measures over indebtedness as a subjective indicator based on loan related sacrifices that borrowers report it finds that male microborrowers are more likely to be over indebted so are borrowers with adverse economic shocks low returns on investment and non productive loan use over indebtedness is lower for borrowers with good debt literacy general financial literacy and numeracy seem insufficient to reduce over indebtedness the paper details the relationship of the above factors to the specific sacrifices borrowers make and suggests that policy measures address the full complexity of the over indebtedness phenomenon

the importance of the savings device in precautionary savings empirical evidence from rural bangladesh we test if precautionary behavior in the consumption decisions of rural households differs across the forms of savings using monthly panel data from bangladesh we find that on average the savings device does not matter but that the effect of income on savings indeed depends on the savings device precautionary savings in the form of staple grain are relatively constant across income quartiles while nongrain precautionary savings vary across income quartiles previous studies which treat these two types of savings devices as fungible misdiagnose the reasons for and by extension the market failures behind a large percentage of the precautionary savings held by rural households

asset based poverty transition and persistence in rural china this article tests empirically for transition and persistence of poverty in rural china based on the theory of asset based poverty traps it proposes an analytical framework mitigating the problem of endogenous switching between accumulation regimes and disentangling the true state dependence of poverty specifically a dynamic asset threshold separating households into downward and upward mobility regimes is identified after taking households unobserved characteristics and observed regime differentiated accumulation strategies into account the static analysis identifies causality running from settling into a downward mobility regime to the probability of poverty measured by consumption furthermore allowing for endogenous initial poverty status the dynamic analysis finds strong true state dependence in poverty households with the same characteristics are nearly twice as likely to be poor as if they had not previously switched to the accumulation regime assets below the dynamic threshold serve as a conduit through which poverty propagates itself factors that help to break this vicious circle are identified

the effects of market structure and bargaining position on hospital prices ppos and hmos have gained widespread acceptance due in part to the belief that excess capacity and competitive market conditions can be leveraged to negotiate lower prices with health care providers we investigated prices obtained in different types of markets by the largest ppo in california our findings indicate that greater hospital competition leads to lower prices furthermore as the importance of a hospital to the ppo in an area increases the price rises substantially our testing of alternative methods for defining hospital geographic markets reveals that the common practice of using counties to define the market leads to an underestimate of the price increasing effects of a merger

risk taking behavior in the presence of nonconvex asset dynamics a growing literature on poverty traps emphasizes the links between multiple equilibria and risk avoidance however multiple equilibria may also foster risk taking behavior by some poor people we illustrate this idea with a simple analytical model in which people with different wealth and ability endowments make investment and risky activity choices in the presence of known nonconvex asset dynamics this model underscores a crucial distinction between familiar static concepts of risk aversion and forward looking dynamic risk responses to nonconvex asset dynamics even when unobservable preferences exhibit decreasing absolute risk aversion observed behavior may suggest that risk aversion actually increases with wealth near perceived dynamic asset thresholds although high ability individuals are not immune from poverty traps they can leverage their capital endowments more effectively than lower ability types and are therefore less likely to take seemingly excessive risks in general linkages between behavioral responses and wealth dynamics often seem to run in both directions both theoretical and empirical poverty trap research could benefit from making this two way linkage more explicit jel d81 o12 d90

learning about the prospects for mobility economic and political dynamics following fundamental policy reform abstract the political left turn in latin america which lagged its transition to liberalized market economies by a decade or more challenges conventional economic explanations of voting behavior this paper generalizes the forward looking voter model to a broad range of dynamic possibly non concave income processes under full information the model implies support for redistributive policies materializes rapidly if few prospects of upward mobility are present in contrast modeling voters evolving beliefs about an unknown income dynamic process shows a slow and polarizing shift toward redistributive preferences simulation using fitted income dynamics suggests that this imperfect information perspective accounts for latin america s right to left political shift and offers additional insights about political dynamics in the face of economic polarization

shocks and their consequences across and within households in rural zimbabwe abstract increasing attention is now being paid to poverty dynamics in developing countries this work links the extent to which households smooth consumption or smooth assets given income shocks the empirical evidence on the churning of households in and out of poverty and the possibility that temporary shocks can have permanent consequences using longitudinal data from rural zimbabwe this paper extends the discussion of these issues by disaggregating the impact of shocks by levels of asset holdings by disaggregating the impact of shocks on individual level welfare and by assessing the extent to which such shocks have permanent consequences by doing so it assesses the validity of distinguishing between asset and consumption smoothing and provides insights into whether poverty dynamics assessed at the household level provide an adequate picture of dynamics at the individual level

are the poor less well insured evidence on vulnerability to income risk in rural china the authors test how well consumption is insured against income risk in a panel of sampled households in rural china they estimate the risk insurance models by generalized method of moments treating income and household size as endogenous insurance exists for all wealth groups although the hypothesis of perfect insurance is universally rejected those in the poorest wealth decile are the least well insured with 40 percent of an income shock being passed on to current consumption by contrast consumption by the richest third of households is protected from almost 90 percent of an income shock the extent of insurance in a given wealth stratum varies little between poor and nonpoor areas

stochastic wealth dynamics and risk management among a poor population we use herd history data collected among pastoralists in southern ethiopia to study stochastic wealth dynamics among a poor population although covariate rainfall shocks plainly matter household specific factors including own herd size account for most observed variability in wealth dynamics we find no support for the tragedy of the commons hypothesis past studies may have conflated costly self insurance with stocking rate externalities biophysical shocks move households between multiple dynamic wealth equilibria the lowest suggesting a poverty trap according to nonconvex path dynamics these findings have broad implications for development and relief strategies among a poor population vulnerable to climatic shocks a vast economic literature on risk management rests explicitly or implicitly on the classic friedmanite permanent income hypothesis studies of portfolio management consumption smoothing social insurance and the like all depend on the canonical assumption that stochastic income realisations are drawn from a stationary income distribution leading to consumption smoothing off a stable asset base the possibility of asset accumulation connects this literature to the immense literature on the theory and empirics of economic growth

risk and intertemporal substitution livestock portfolios and off take among kenyan pastoralists abstract most decisions involve variability in two dimensions uncertainty across states of nature and fluctuations over time the stakes involved in tradeoffs between these variability dimensions are especially high for the poor who have difficulty managing and recovering from shocks we assume epstein and zin recursive preferences and estimate risk aversion and intertemporal substitution as distinct preferences using data from kenyan herders results suggest that the assumption implicit in additive expected utility models that relative risk aversion rra is the inverse of the elasticity of intertemporal substitution eis is flawed specifically our rra and eis estimates are consistent with a preference for the early resolution of uncertainty which we believe is driven importantly by the instrumental value of early uncertainty resolution this same preference pattern is consistent with asset smoothing in response to a dynamic asset threshold

when faced with income and asset shocks do poor rural households in vietnam smooth food consumption or assets abstractvietnamese rural households are exposed to severe covariate and idiosyncratic shocks however these households are remarkably resilient and have steadily increased real income and consumption over the survey period 2006 to 2012 to explain household strategies to cope with shocks we test three theoretical models the permanent income hypothesis pih complete market hypothesis cmh and asset smoothing theory ast there is support for ast as households smooth productive assets rather than consumption and for cmh as households smooth consumption against idiosyncratic but not covariate shocks there is no support for pih

gmo standards endogenous policy and the market for information the paper develops a composite index of gmo standards restrictiveness for 60 countries assigning objective scores to six different regulatory dimensions using this index and its components we empirically investigate the political and economic determinants of gmo regulations for 55 countries controlling for spatial autocorrelation results show that many of the determinants highlighted in the theoretical literature such as the structure of the agricultural sector and the institutional environment are important determinants of the restrictiveness of the gmo regulation as a key result there emerges a prominent role of the market for information showing that the structure of domestic mass media public vs private is an important driver of gmo standards

temperature shocks short term growth and poverty thresholds evidence from rural tanzania using the lsms isa tanzania national panel survey by the world bank we study the relationship between rural household consumption growth and temperature shocks over the period 2008 2013 temperature shocks have a negative and significant impact on household growth only if their initial consumption lies below a critical threshold as such temperature shocks slow income convergence among households agricultural yields and labour productivity are the main transmission channels these findings support the schelling conjecture economic development would allow poor farming households to cope with climate change and closing the yield gap and modernizing agriculture is crucial for adaptation to the negative impacts of global warming

market share and the illusion of power can blue cross force hospitals to discount researchers in health care financing have claimed that large private insurers like blue cross frequently exercise monopsony power to obtain discounts from normal hospital charges they claim that the monopsony power derives from a large blue cross share of a given hospital cost shifting whereby hospitals offset the discount by raising charges to less powerful customers this paper re examines both theoretically and empirically the conditions necessary for a private insurer to extract discounts from a hospital we demonstrate that the theoretical conditions necessary for blue cross to force a discount do not exist in the indiana market using revenue data from 110 indiana hospitals we reject the traditional claim that blue cross pays less than other insurers as a function of market share