corporate taxation and capital accumulation evidence from sectoral panel data for 14 oecd countries abstract we present new empirical evidence that sector level capital output ratios are strongly influenced by corporate tax incentives as summarised by the tax component of a standard user cost of capital measure we use sectoral panel data for the usa japan australia and eleven eu countries over the period 1982 2007 our panel combines internationally consistent data on capital stocks value added and relative prices from the eu klems database with corporate tax measures from the oxford university centre for business taxation our results for equipment investment are particularly robust and strikingly consistent with the basic economic theory of corporate investment

dividend taxes corporate investment and q abstract taxes on corporate distributions have traditionally been regarded as a double tax on corporate income this view implies that while the total effective tax rate on corporate source income affects real economic decisions the distribution of this tax burden between the shareholders and the corporation is irrelevant recent research has suggested an alternative to this traditional view one explanation of why firms in the united states pay dividends in spite of the heavy tax liabilities associated with this form of distribution is that the stock market capitalizes the tax payments associated with corporate distributions this capitalization leaves investors indifferent at the margin between a corporation s decision to pay out dividends or to retain earnings this alternative view holds that while changes in the dividend tax rate will affect shareholder wealth they will have no impact on corporate investment decisions this paper develops econometric tests which distinguish between these two views of dividend taxation by extending tobin s q theory of investment to incorporate taxes at both the corporate and personal levels the implications of each view for corporate investment decisions can be derived the competing views may be tested by comparing the performance of investment equations estimated under each theory s predictions british time series data are particularly appropriate for testing hypotheses about dividend taxes because of the substantial postwar variation in effective tax rates on corporate distributions the econometric results suggest that dividend taxes have important effects on investment decisions

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

market structure and gender disparity in health care preferences competition and quality of care we consider the relationship between market structure and health outcomes in a setting where patients have stark preferences urology patients disproportionately match with a urologist of the same gender in the united states however fewer than 6 of urologists are women despite women constituting 30 of patients we explain a portion of this disparity with a model of imperfect competition in which urology groups strategically differentiate themselves by employing female urologists these strategic effects may influence women s health as markets without a female urologist have a 7 3 higher death rate for female bladder cancer all else equal

measuring corporate sustainability management a data envelopment analysis approach despite the increased awareness of the conceptual and practical definition of corporate sustainability questions remain on how to measure performance the objective of this paper is to advance our understanding of the measurement of corporate sustainability management by introducing a data envelopment analysis dea technique and an empirical case of a korean electronics industry in particular we employ cross efficiency in the presence of dual role factors by reflecting some complexity of a real world case donations for tax benefits by employing the combined approach of cross efficiency and dual role factors we offer a new model to measure corporate sustainability management the new model and study findings contribute to the body of knowledge in corporate sustainability management and its performance measurement

patients migration across regions the case of italy this article analyses patient mobility across italian regions a modified gravity model of patient migration is specified and estimated using panel observations covering mobility and other main regional quality indicators over the period 1994 1997 despite the high level of aggregation due to data constraints the empirical findings show that in italy there is wide scope for quality driven mobility while income determines the quality of the service offered

financial factors and investment in belgium france germany and the united kingdom a comparison using company panel data we construct company panel data sets for manufacturing firms in belgium france germany and the united kingdom covering the period 1978 1989 these data sets are used to estimate empirical investment equations and to investigate the role played by financial factors in each country a robust finding is that cash flow and profits terms appear to be both statistically and quantitatively more significant in the united kingdom than in the three continental european countries this is consistent with the suggestion that financial constraints on investment may be relatively severe in the more market oriented u k financial system

fiscal policy seasonality and intertemporal substitution of investment spending in the uk abstract the effects of three pre announced changes in fiscal policy on manufacturing investment in equipment and in industrial buildings are estimated using the enger granger two step procedure the strong seasonal variation in the expenditure series is interpreted as an economic process within the same framework

the influence of uncertainty on uk manufacturing investment this paper reports the results of including proxies for growth and inflation uncertainty in an accelerator style investment equation set up in error correction form for u k manufacturing plant and machinery expenditure the uncertainty proxies are constructed as cross section dispersion indices of independent economic forecasts the results confirm the importance of output growth uncertainty as a negative determinant of capital formation inflation uncertainty was found to have a short run influence only copyright 1991 by royal economic society

demand inducement and the physician patient relationship the physician patient relationship is a paradigm for any expert client relationship the physician both diagnoses the patient s illness and recommends a treatment this dual role gives the physician incentive to recommend treatments whose costs outweigh their medical benefits these socially inefficient treatments correspond to the notion of physician induced demand the level of inducement chosen by the physician is shown to depend on the price and potential medical benefits of treatment and the relative diagnostic skills of physician and patient this model offers several testable hypotheses some of which are confirmed by related studies

hospital systems and bargaining power evidence from out of market acquisitions competition analyses generally restrict their attention to how mergers alter concentration in the relevant consumer market studying hospital competition by focusing on the local patient market may be misleading however as multi market hospital systems often play an important role in the price negotiations of their members with managed care organizations we focus on out of market hospital mergers to investigate the cross market effects of system membership on member hospital reimbursement rates based on acquisitions occurring across the united states during 2000 2008 we find that hospitals exhibit significant increases of around 14 in their net reimbursement rates after becoming affiliated with an out of market system compared to independent stand alone hospitals we find no evidence that the price effect results from changes in patient case mix the cost of providing care generally or hospital quality the findings reveal that systems can impact the market power of hospitals in ways that have not been considered in recent antitrust analysis

the effects of regulation and competition in the nhs internal market the case of general practice fundholder prices the 1989 reforms of the uk national health service introduced competition in supply within a tightly regulated framework the paper examines whether this competition affects the prices posted by sellers of medical services we argue that despite regulation market forces may have an impact on price we test this using the posted prices for one of the two types of buyer general practice fundholders we find the regulatory rules are not observed and some evidence of the impact of market forces on price

regional policy and investment behaviour the case of greece 1971 1982 louri h 1989 regional policy and investment behaviour the case of greece 1971 1982 reg studies 23 231 239 the present paper reports an attempt to evaluate the relative effects of regional policy on investment in greek manufacturing industry during 1971 82 a generalized neoclassical model of investment behaviour is used allowing for separate estimates of the effects of different policy instruments both regional investment incentives and infrastructure expenditures were found to exert a significant influence on capital formation simulations with alternative policy combinations showed that if incentives were accompanied by more equally distributed infrastructure expenditures the cost of the policy would be the same but its effects would be enhanced an equal amount of investment would be created with a fairer regional distribution louri h 1989 la politique regionale et le comportement d investissement etude de cas de la grece de 1971 a 1982 reg studies 23 231 239 cet article fait un comp

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

monopolistic competition when price and quality are imperfectly observable consider the symmetric equilibrium of a monopolistically competitive industry in which manufacturers select price and quality to maximize expected profit and consumers maximize utility by conducting costly search among sellers using an optimal sequential search rule consumers search among sellers because i each consumer idiosyncratically evaluates each seller s quality and ii a retailing sector generates variation in the prices consumers pay consumers are handicapped in their search because their observations of firms price and quality levels are noisy an improvement in price information is represented by an increase in the precision with which consumers observe sellers prices similarly an improvement in quality information is represented by an increase in precision with which consumers observe sellers quality levels an improvement of either type of information may increase or decrease welfare the perverse case in which improved price information decreases welfare occurs when price competition among firms becomes so intense relative to quality competition that firms select severely suboptimal levels of quality a consumer searching among monopolistically competitive sellers may have difficulty accurately observing the price and quality of each seller s product he must infer from his prior beliefs and noisy observations the true values of the product s price and quality attributes we show that increasing the precision with which consumers observe an attribute of a product makes the inference problem easier and causes the demand the seller faces with respect to that attribute to become more elastic the equilibrium level of that attribute changes accordingly and since the equilibrium levels of price and quality interact the equilibrium level of the other attribute changes as well these equilibrium effects can be perverse in two ways first if the precision of quality observation is fixed then improvement in the precision of price observation can reduce welfare the chain of causation is this increasing the precision of price observation causes price to fall the resulting smaller price cost margin induces sellers to reduce quality de

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

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

regional environmental efficiency in china an empirical analysis based on entropy weight method and non parametric models abstract while vigorously developing its economy china is attaching more and more importance to environmental protection and pollution control in different regions of china however there are great differences in economic development and the degree of environmental pollution in this study we use the entropy weight method to calculate the pollution indexes of different regions from 2015 to 2017 then we evaluate the chinese regional environmental efficiency based on a new non parametric frontier model moreover a new set of ranking interval models that treat the undesirable outputs as inputs is proposed to further describe the regional disparities of the environmental efficiency between different regions with robustness finally we conduct an empirical analysis by combining the stepwise regression and principal component analysis to identify the most influential variables that may affect regional environmental efficiency according to the results the southeast region of china performs best in environmental efficiency followed by the northeast region then the southwest region and the worst is the northwest region for managerial implications we find that the investment of high education and the development of the it industry can significantly increase regional environmental efficiency more importantly the results of the principal component analysis provide the government with a set of variables to strategically select the most appropriate strategy

public vs private demand for covering long term care expenditures this article studies the determinants of the willingness to pay wtp for long term care ltc insurance coverage two alternatives are considered one compulsory financed through taxes the other purchased on a voluntary basis and paid through a premium wtp was elicited through open ended contingent valuation within a survey conducted in the italian region emilia romagna about ltc population needs we model information on individual wtp as a two stage process where respondents first establish their interest for ltc cover then state their wtp results show that interest and wtp are influenced by different variables and that differences arise also between the wtp for public and private coverage

measuring national energy performance via energy trilemma index a stochastic multicriteria acceptability analysis abstract the world energy council annually releases the energy trilemma index to measure the country level energy performance however the preferences among the trilemma can change from country to country which always is an undetermined issue and full of controversy this paper comprehensively considers all possible preferences and formulates interval evaluation results under certain preference such formulations are motivated by the observations that it is difficult to reach a consensus about the weights associated with the trilemma since different weight elicitation methods inevitably produce different weighting schemes therefore we propose an interval decision making problem and apply a stochastic multicriteria acceptability analysis to present a holistic measurements of the country specific energy performance this differs from the conventional wisdom that assigns exact values to corresponding weights but explores the weight space to make each country the most preferred one our analysis is demonstrated by measuring the energy performance of top 10 countries based on 2015 energy trilemma index

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

evaluation of china s electric energy efficiency under environmental constraints a dea cross efficiency model based on game relationship abstract the traditional data envelopment analysis dea model ignores the cooperation relationship among decision making units dmus so it is difficult to evaluate the dmus efficiency reasonably in this study we use a cross efficiency model considering the game relationship of dmus to evaluate and analyze the provincial electric energy efficiency of china the power industry panel data of china s 30 provinces from 2005 to 2014 are used to evaluate the energy efficiency of china s provincial power industry under environmental constraints in addition based on the obtained values of electric energy efficiency clustering analysis is implemented and the regional similarity in electric energy efficiency is analyzed the results indicate that in the past decade china s provincial electric energy efficiency has not significantly improved and efficiency values have a certain degree of volatility especially in western china in general the electric energy efficiency of eastern china is significantly higher than central and western china the clustering analysis further demonstrates that there is no polarization phenomenon in china s electric energy efficiency in recent years the electric energy efficiency of western china has been greatly improved with significant volatility it reveals that the electric energy efficiency of western china is sensitive to the environment the implementation of energy policies should be adapted to local conditions in the process of formulating policies for improving electric energy efficiency the provincial government should improve the regional opening up layout and establish effective coordination mechanisms among different regions

the relationship between hospital mortality rates and hospital market and patient characteristics this study analyses the relationship between hospital outcome specifically mortality rates and various hospital and market characteristics the data are for all general acute care hospitals in california in 1991 that had at least 50 medicare cases selected by the health care financing administration hcfa for their computation of 1991 observed and predicted mortality rates the dependent variable was constructed from these mortality rates hospital and market characteristics were obtained from california s office of statewide health planning and development 1991 tapes the american hospital association s annual 1991 report 1990 census data and hcfa s 1991 medicare hospital mortality information report highly significant results p 0 01 were found for three of the predictor variables improved mortality rates were associated with a lower proportion of medicaid patients with a larger market and with a higher prior year profit margin other factors that contributed to improved mortality rates p

payer type and the returns to bypass surgery evidence from hospital entry behavior in this paper we estimate the returns associated with the provision of coronary artery bypass graft cabg surgery by payer type medicare hmo etc because reliable measures of prices and treatment costs are often unobserved we seek to infer returns from hospital entry behavior we estimate a model of patient flows for cabg patients that provides inputs for an entry model we find that ffs provides a high return throughout the study period medicare which had been generous in the early 1980s now provides a return that is close to zero medicaid appears to reimburse less than average variable costs hmos essentially pay at average variable costs though the return varies inversely with competition

complementarities and coordination implications for governance mode and performance of multiproduct firms we explore the fit between a firm s product portfolio strategy and its governance mode with respect to complementary activities that underlie its product offering we view firm s governance choice through the lens of orchestrating complementary activities that entail multiple interrelated and often simultaneously occurring transactions our key premise is that a broader product portfolio while offering benefits through the bundle of complementary activities raises the coordination costs for firms making integration of complementary activities a preferred mode of governance we find strong support for our arguments in the context of the u s healthcare industry hospitals with a narrow service portfolio are more likely to have contracts with physicians as external service providers and hospitals with a broad service portfolio are more likely to employ their own physicians moreover hospitals that deviate from this fit based relationship suffer a significant penalty in terms of their financial performa

ranking dmus by using interval dea cross efficiency matrix with acceptability analysis abstract cross efficiency method is an extension of data envelopment analysis dea and has been widely used for ranking performance of decision making units dmus to eliminate the non uniqueness of cross efficiency scores the aggressive and benevolent strategies have been proposed as secondary goals to determine the unique cross efficiency score the current paper aims to propose an alternative strategy which does not consider the preference of the decision maker in choosing aggressive or benevolent strategy instead the paper considers all possible weight sets in weight space when computing the cross efficiency and each dmu is given an interval cross efficiency by using the stochastic multicriteria acceptability analysis smaa 2 method all dmus in the interval cross efficiency matrix cem could be fully ranked according to the acceptability indices a numerical example about efficiency evaluation to seven academic departments in a university is illustrated

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

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

the competitive effects of not for profit hospital mergers a case study applying conventional horizontal merger enforcement rules to nonprofit hospitals is controversial critics contend that the different objective function of not for profits entities should mitigate competitive concerns about mergers involving nonprofit hospitals we analyze a merger that reduced the number of competitors both nonprofit in the alleged relevant market from three to two we find that the transaction was followed by significant price increases we reject the hypothesis that these price increases reflect higher post merger quality this study should help policymakers assess the validity of current merger enforcement rules especially as they apply to not for profit enterprises

health care costs on the rise again since 1999 health care costs have been growing faster than national income this rapid growth has occurred as the ability of private and public purchasers to reduce service utilization and bargain for lower prices has fallen insurers have recouped lost profits through higher premiums and new technologies have driven up costs throughout the sector private insurance market responses to these rising costs may lead to reductions in the number of people with insurance and to increased fragmentation of the insurance market over time technological change in medicine both increases costs and improves the quality of care the challenge for public policy is to maintain insurance and some degree of equity in the face of these rising costs

the changing effects of competition on non profit and for profit hospital pricing behavior abstract has the nature of hospital competition changed from a medical arms race in which hospitals compete for patients by offering their doctors high quality services to a price war for the patients of payors this paper uses time series cross sectional methods on california hospital discharge data from 1986 1994 to show the association of hospital prices with measures of market concentration changed steadily over this period with prices now higher in less competitive areas even for non profit hospitals regression results are used to simulate the price impact of hypothetical hospital mergers

permanent and transitory effects of fiscal policy on investment in the uk a major change in the british corporate tax system had only a weak effect on the level of manufacturing investment but caused a large and highly significant reduction in its seasonal variance the explanation of this change sheds new light on the impact of pre announced tax changes

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

is the impact of managed care on hospital prices decreasing prior studies find that the growth of managed care through the early 1990s introduced a strong positive relationship between price and concentration in hospital markets we hypothesize that the relaxation of constraints on consumer choice in response to a managed care backlash has diminished the price sensitivity of demand facing hospitals reducing or possibly reversing the price concentration relationship we test this hypothesis by studying the price concentration relationship for hospitals in california and florida for selected years between 1990 and 2003 while addressing the potential endogeneity of concentration we find an increasingly positive price concentration in the 1990s with a peak occurring by 2001 between 2001 and 2003 the growth in this relationship halts and possibly reverses

incorporating energy efficiency into electric power transmission planning a western united states case study abstract driven by system reliability goals and the need to integrate significantly increased renewable power generation long range bulk power transmission planning processes in the united states are undergoing major changes at the same time energy efficiency is an increasing share of the electricity resource mix in many regions and has become a centerpiece of many utility resource plans and state policies as a means of meeting electricity demand complementing supply side sources and reducing carbon dioxide emissions from the electric power system the paper describes an innovative project in the western united states to explicitly incorporate end use efficiency into load forecasts projections of electricity consumption and demand that are a critical input into transmission planning and transmission planning studies institutional and regulatory background and context are reviewed along with a detailed discussion of data sources and analytical procedures used to integrate efficiency into load forecasts the analysis is intended as a practical example to illustrate the kinds of technical and institutional issues that must be addressed in order to incorporate energy efficiency into regional transmission planning activities

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

ranking ranges in cross efficiency evaluations the existence of alternate optima for the dea weights may reduce the usefulness of the cross efficiency evaluation since the ranking provided depends on the choice of weights that the different dmus make in this paper we develop a procedure to carry out the cross efficiency evaluation without the need to make any specific choice of dea weights the proposed procedure takes into consideration all the possible choices of weights that all the dmus can make and yields for each unit a range for its possible rankings instead of a single ranking this range is determined by the best and the worst rankings that would result in the best and the worst scenarios of each unit across all the dea weights of all the dmus this approach might identify good bad performers as those that rank at the top bottom irrespective of the weights that are chosen or units that outperform others in all the scenarios in addition it may be used to analyze the stability of the ranking provided by the standard cross efficiency evaluation

are invisible hands good hands moral hazard competition and the second best in health care markets the nature and normative properties of competition in health care markets have long been the subject of much debate in this paper we consider what the optimal benchmark is in the presence of moral hazard effects on consumption due to health insurance intuitively it seems that imperfect competition in the health care market may constrain this moral hazard by increasing prices we show that this intuition cannot be correct if insurance markets are competitive a competitive insurance market will always produce a contract that leaves consumers at least as well off under lower prices as under higher prices

ownership versus competition efficiency in public enterprise certainly the introduction of product market competition into potentially competitive or at least contestable markets can improve performance to take just one example morrison and whinston 1986 1986 estimate that even in the imperfectly contestable u s airline industry the annual u s welfare gains from deregulation have been around 6 billion

is health care really a luxury much of the work which has led to a widely held view that the income elasticity of health care spending exceeds one has been based on international cross section data or on pooled cross sections and time series in this paper we re examine this view in the context of long run equilibrium relationships between non stationary time series possibly including autonomous trends our results cast doubt upon the usefulness of pooling and upon the notion of an elasticity above one

assessing competition in hospital care markets the importance of accounting for quality differentiation quality differentiation is especially important in the hospital industry where the choices of medicare patients are unaffected by prices unlike previous studies that use geographic market concentration to estimate hospital competitiveness this article emphasizes the importance of quality differentiation in this spatially differentiated market i estimate a random coefficients discrete choice model that predicts patient flow to different hospitals and find that demand responses to both distance and quality are substantial the estimates suggest that patients do not substitute toward alternative hospitals in proportion to current market shares implying that geographic market concentration is an inappropriate measure of hospital competitiveness

the extent of the market examines the classical theory of the market in this paper authors consider the role of price market determination price movement in competitive and monopolistic markets extension of commodity markets

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

hospital competition and quality with regulated prices we analyse the effect of competition on quality in hospital markets with regulated prices considering the effect of both introducing competition monopoly versus competition and increasing competition through either lower transportation costs increased substitutability or a higher number of hospitals with semi altruistic providers and a fairly general cost structure we show that the relationship between competition and quality is generally ambiguous in contrast to the received body of theoretical literature this is consistent with and potentially explains the mixed empirical evidence

the impact of exchange rate uncertainty on the level of investment conventional wisdom has it that increasing price or exchange rate uncertainty will depress investment using the dixit pindyck model we find that there are situations where this will happen and situations where it does not there are threshold effects which allows us to identify when rising volatility would increase or decrease investment and also to identify which types of industries would gain and which would suffer from a move to fixed exchange rates this is important for monetary union in europe since it is likely that even if trade is insensitive to exchange rate volatility investment with its longer horizon will be affected textbook theories of investment under uncertainty present a rather oversimplified rule for a firm deciding whether to invest or not if the project s expected net present value npv is positive the firm invests otherwise it does not this implies that if the investment is reversible the firm will simply disinvest if the npv turns negative but if investment is irreversible then if a firm decides not to invest it will never invest this is not a realistic approach given uncertainty firms often find it convenient to wait rather than to commit themselves one way or another waiting is therefore a proper alternative to investing or not investing and firms will be confronted with an invest wait do not invest decision rather than an invest do not invest one dixit and pindyck 1994 have developed a model in which the option value of an investment project is evaluated to represent the value of waiting that option value then becomes part of the investment costs because once an irreversible investment is made the possibility of exercising this option to invest later on when better information is available has been lost thus the decision rule is still invest if npv 0 otherwise do not invest but the npv now represents the present value of the expected revenues less the value of the option to invest later less the present value of any other investment costs in this paper we extend the dixit pindyck model for varying degrees of uncertainty and price drift and specifically for the case where that uncertainty is caused by exchange rate volatility such an extension is important not only because it is a new development but also because we need to understand how monetary union will affect investment expenditures in europe for simplicity we assume the domestic prices are fixed and that the only uncertainty is in the exchange rate and hence the domestic value of foreign currency revenues that leaves us with various problems the first is to determine the threshold at which exchange rate price uncertainty is sufficient to affect investment adversely second under what conditions does that uncertainty actually reduce investment third do exchange rate misalignments or exchange rate volatility damage investment more we show that answers to such questions can be c55

some alternative models for dea cross efficiency evaluation abstract cross efficiency evaluation is an effective method for ranking decision making units dmus in data envelopment analysis dea and can be performed with different formulations aggressive or benevolent secondary goals and models this paper proposes some new alternative models for dea cross efficiency evaluation to provide more methodological options for the decision maker dm to choose from the proposed new alternative models are illustrated with two numerical examples the results are believed to be more realistic than those obtained by the alternative secondary goals suggested by liang et al liang l wu j cook w d and zhu j 2008a alternative secondary goals in dea cross efficiency evaluation international journal of production economics 113 2 1025 1030

the evaluation of electric energy consumption in the brazilian residential sector a technological improvement proposal in order to increase its efficiency abstract in light of brazil s socio economic development in the last 20 years the population has greater access to consumer goods hence impacting the escalating growth in electricity demand thereby resulting in the need for substantial investments in electricity generation and transmission in contrast government institutions have not taken effective measures to increase the energy efficiency of the most impactful energy consuming appliances which would reduce the need for energy investments through econometric models brazil s residential electricity consumption was projected up to 2030 and it is predicted that results can be achieved if through tax exemption the government can promote the use of more energy efficient technologies through an economic and financial evaluation our study analyzes the potential effects of a decrease in tax revenues for the state in light of lower investment needs in energy generation and distribution

does hospital competition save lives evidence from the english nhs patient choice reforms recent substantive reforms to the english national health service expanded patient choice and encouraged hospitals to compete within a market with fixed prices this study investigates whether these reforms led to improvements in hospital quality we use a difference in difference style estimator to test whether hospital quality measured using mortality from acute myocardial infarction improved more quickly in more competitive markets after these reforms came into force in 2006 we find that after the reforms were implemented mortality fell i e quality improved for patients living in more competitive markets our results suggest that hospital competition can lead to improvements in hospital quality

estimating the residual demand curve facing a single firm this paper presents an econometric technique for estimating the single firm residual demand curve that does not require the estimation of demand cross elasticities the technique is particularly suited for the estimation of firm market power in product differentiated industries where cross elasticities are notoriously difficult to measure one estimated parameter is directly related to a firm s markup of price over marginal cost when product differentiation is extensive when an industry consists of a dominant firm and a price taking fringe when a consistent conjectures equilibrium is the correct oligopoly solution concept when firms are stackelberg leaders relative to their environment or when firms are perfect competitors the estimates can indicate power over price in other circumstances an instrumental variables technique is employed using firm individuated factor prices to identify firm specific residual demand yet even when instruments are unavailable the technique produces elasticity estimates biased in the conservative direction of disproving market power this methodology is applied to estimate the market power of three firms in an industry characterized by product differentiation brewing over our 1962 82 sample period pabst and coors had similar national market shares and each had high shares in several states yet pabst was virtually a price taker while coors possessed substantial market power anheuser busch had market power in the early part of the sample but little after 1975 when miller brewing changed the competitive nature of the industry

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

resolving the impasse on hospital scale economics a new approach the existence of scale economies in hospitals in important for both public and managerial policy yet production and cost function studies have found conflicting evidence more recently more sophisticated studies have typically found scale diseconomies which is inconsistent with the views of industry participants and observers in the early 1980s california deregulated both private and public health insurance medical which provides a natural laboratory for examining hospital efficiency using stigler s original and multivariate survivor analysis we resolve the conflict in favour of scale economies and reconcile the controversy the survivorship methodology in simple to apply and a useful tool in conjunction with statistical cost and production studies

monopsony power and relative wages in the labor market for nurses this paper examines the thesis that monopsony power is an important determinant of wages in nursing labor markets using data from the 1985 93 current population surveys measures of relative nurse non nurse wage rates for 252 labor markets are constructed contrary to predictions from the monopsony model no positive relationship exists between relative nursing wages and hospital density or market size nor is support found for the presence of monopsony power based on evidence on union wage premiums slopes of experience profiles or the mix of rn to total hospital employment

dea cross efficiency evaluation based on pareto improvement abstract cross efficiency evaluation as an extension tool of data envelopment analysis dea has been widely applied in evaluating and ranking decision making units dmus unfortunately the cross efficiency scores generated may not be pareto optimal which has reduced the effectiveness of this method to solve this problem we propose a cross efficiency evaluation approach based on pareto improvement which contains two models pareto optimality estimation model and cross efficiency pareto improvement model and an algorithm the pareto optimality estimation model is used to estimate whether the given set of cross efficiency scores are pareto optimal solutions if these cross efficiency scores are not pareto optimal the pareto improvement model is then used to make cross efficiency pareto improvement for all the dmus in contrast to other cross efficiency approaches our approach always obtains a set of pareto optimal cross efficiencies under the predetermined weight selection principles for these dmus in addition if the proposed algorithm terminates at its step 3 the evaluation results generated by our approach unify self evaluation peer evaluation and common weight evaluation in dea cross efficiency evaluation specifically the self evaluated efficiency and the peer evaluated efficiency converge to the same common weight evaluated efficiency when the algorithm stops this will make the evaluation results more likely to be accepted by all the dmus

the aggregate effects of health insurance evidence from the introduction of medicare this paper investigates the effects of market wide changes in health insurance by examining the single largest change in health insurance coverage in american history the introduction of medicare in 1965 i estimate that the impact of medicare on hospital spending is over six times larger than what the evidence from individual level changes in health insurance would have predicted this disproportionately larger effect may arise if market wide changes in demand alter the incentives of hospitals to incur the fixed costs of entering the market or of adopting new practice styles i present some evidence of these types of effects a back of the envelope calculation based on the estimated impact of medicare suggests that the overall spread of health insurance between 1950 and 1990 may be able to explain about half of the increase in real per capita health spending over this time period

investment and conditional uncertainty the role of market power irreversibility and returns to scale abstract market power irreversibility and returns to scale decisively determine how uncertainty affects investment we empirically show that this relationship is positive when deviations from the neoclassical paradigm are absent as frictions are introduced the positive sign gradually dies out and turns negative

the determinants of investment in greek manufacturing an attempt is made to provide some insight into the determinants of manufaturing investment in greece for this purpose an accelerator relative costs profits model is used and both the putty putty and putty clay versions are examined estimates reveal that demand and profits factors play an important role in investment decision while the impact of relative inputs cost is significant mainly in the short run window regression experiments show that there is a dramatic fall in profits elasticity of investment and a corresponding increase in the significance of demend factor in the later periods

the rise and fall of customary wage differentials among nursing personnel in us hospitals 1956 1985 between 1956 and 1985 the employment of registered nurses rns relative to other nursing personnel rose despite constant relative wages among rns licensed practical nurses and nurses aides over this thirty year period hospital management proclaimed chronic shortages of rns economists have used monopsonistic models to explain the persistence of these shortages as an alternative to the monopsonistic model this paper presents an institutional argument for why hospital management sought to maintain relative wages among classes of nursing personnel while at the same time successfully raising the relative use of rns through a variety of nonwage inducements and manipulations of rn supply c 1995 academic press inc copyright 1995 by oxford university press

corporate investment and bank dependent borrowers during the recent financial crisis abstract we use the recent financial crisis period to analyse the effect of bank credit tightening on firm investment we derive a new set of credit tightening indexes from the ecb bank lending survey combining these with annual balance sheet data from germany france italy spain belgium and portugal we exploit the heterogeneity in the dependence on bank finance of different industries to identify real effects of credit tightening we show that in response to tightening investment falls substantially more in bank dependent industries

restructuring of firms in transition ownership institutions and openness to trade we develop a theoretical framework for defensive and strategic restructuring and provide estimates of restructuring in privatized firms in an advanced transition economy slovenia our rich data point to both types of restructuring as well credit rationing and bargaining with respect to investment privatized firms display profit maximizing behavior and a firm s export orientation and institutional features such as insider vs outsider privatization employee ownership and employee control do not affect the firm s employment and investment behavior the results suggest that a major exposure to world competition induces similar economic behavior in firms with different structural and institutional characteristics

the specification of a hospital cost function a comment on the recent literature in the empirical estimation of hospital cost functions two radically different types of specifications have been chosen to date ad hoc forms and flexible functional forms based on neoclassical production theory this paper discusses the respective strengths and weaknesses of both approaches and emphasizes the apparently unreconcilable conflict between the goals of maintaining functional flexibility and keeping the number of variables manageable if at the same time patient heterogeneity is to be adequately reflected in the case mix variables a new specification is proposed which strikes a compromise between these goals and the underlying assumptions are discussed critically

production costs transaction costs and local government contractor choice i introduction declining fiscal conditions increasing service obligations and public clamor for more effective government have led local governments to examine alternatives to the bureaucratic supply of publicly provided services the alternative which has received the most attention is contracting under this arrangement services are financed by the local government but production of the service is contracted to external suppliers a growing body of work has explored the contracting decision 1 focusing on the production choice does a local government providing i e financing a service produce it internally or externally the contracting decision however has a second part the contractor choice given the decision to externally produce a service does the local government contract with other governments with nonprofit organizations or with for profit firms 2 contracting is expected to yield production cost savings by exploiting scale economies overcoming input rigidities and capitalizing on managerial and competition induced efficiency incentives the extent to which these production cost savings are achieved depends on the sector of the external producer at the same time public accountability requires contracting governments to be concerned with the proper execution of the contracting process to ensure that shirking is minimized the transaction costs generated by this oversight also vary by the sector of the contractor thus the cost of service delivery depends on the sector of the external producer understanding the contractor choice from among the three sectors would add insight into the motivations for contracting and ultimately enable us to more correctly predict the cost and service quality effects of different external supply alternatives this paper explores the determinants of local government contractor choice in the next section we examine the production and transaction costs associated with organizations from the public nonprofit and for profit sectors we then develop a general model of the contractor choice and empirically test it using data on local government contract arrangements for three health services hospital drug and alcohol prevention and treatment and mental health ii service delivery costs and contractor options we posit that a local government in selecting the sector with which to contract seeks to maximize its utility by choosing the alternative that minimizes the costs of service delivery there are two components of service delivery costs production costs and transaction costs 3 production costs contracting is viewed as a means to overcome scale diseconomies perverse managerial incentives and input rigidities which generate a production cost premium for internal production external production separates the production scale decision from jurisdictional size thus allowing scale economies to be realized this benefit is provided by external production with any contractor of the appropriate size and thus scale economies should not in theory affect the sector choice however the extent to which the contractor exhibits managerial incentives and input flexibility which contribute to production cost savings depends on its organizational form managerial incentives the efficiency incentives of managers vary by the form of their organization in public bureaus principal agent problems arise from the informational advantages of the agents bureaucrats over their principals mayor council which are perceived to increase public production costs for example niskanen s 1971 notion of public bureaucrats as budget maximizers is predicated on the bureau s knowledge of the actual cost of delivering services and the use of this knowledge to increase their budgets in addition the lack of property rights to residuals the difference between budgets and actual production costs reduces incentives for bureaucrats to minimize costs

a note on the relational aspects of hospital market definitions several recent analyses of the structure conduct and performance of local hospital markets base their market definitions on geographic constructs that fail to consider the implications of a market s location relative to other hospital markets in this note we show the importance of relational aspects of hospital markets use of any a priori measure of hospital markets that does not consider these aspects should be reconsidered

user cost elasticity of capital revisited researchers still lack consensus about the size of the user cost elasticity of capital the divergence in prior estimates may have arisen because one of the two strands of research has neglected cointegration among capital its user costs and sales using german firm level panel data i show that estimating a distributed lag model prevalent in prior literature leads to low estimates of the user cost elasticity properly accounting for cointegration in an error correction model yields a much larger point estimate of the price elasticity of capital close to 1 non random sample attrition is found to be relatively unimportant

the impact of regional competition on the health care industry we investigate factors that determine firm markups by employing data on prices and quantities of various medical procedures at major hospitals in the united states we focus on the impact of hospital quality rival competition and the number of medical procedures upon the health care demand our analysis covers health care markets across the united states with the market definition based upon the hospital referral regions our findings highlight potential implications of the relationship between hospital markups and market structure

interrelated factor demands for manufacturing a dynamic translog cost function approach abstract in this paper we report the results of estimating a joint model for labour capital and energy using the transcendental logarithmic cost function of christensen jorgenson and lau 1973 this allows us to determine both the own price and cross elasticities of substitution between labour capital and energy we combine a model of factor shares with a dynamic adjustment process for each factor we also impose on the cross equation restrictions necessary to provide additivity homogeneity and symmetry since the covariance matrix in systems of share relationships is singular we follow the suggestions of anderson and blundell 1982 and employ a mullivariate error corrrection model the results suggest that additivity symmetry and homogeneity restrictions do hold and that there are short run increasing returns to scale

a dea estimation of a lower bound for firms allocative efficiency without information on price data abstract in this paper we estimate a lower bound for the sum of firms allocative efficiencies in the absence of information on prices for this purpose we only estimate technical efficiency at both the firm and the industry level using a directional distance function and choosing a relevant direction our result relies on the decomposition of overall inefficiency into technical and allocative inefficiency at both the firm and the industry level the convexity of a technology induces a transfer from both total technical inefficiency and part of allocative inefficiency at the firm level to technical inefficiency solely at the industry level the remaining firms allocative inefficiency could be counted at the industry level hence the difference between technical inefficiencies at both levels can be interpreted as a lower bound for the sum of allocative inefficiency in the industry we show how to implement this bound in a dea framework

unions and hospitals some unresolved issues abstract this article investigates the impact of unions on the wages of hospital workers our ols findings agree with previous ols studies unions increase registered nurses rns wages by five percent and by about eight to ten percent for other hospital workers by contrast we find after correcting for selectivity bias in hospital unionization status a direct union effect of about twenty percent on rn wages and in excess of thirty percent on wages of other hospital workers while the results based on selectivity bias adjustments make us uneasy we do not reject them out of hand we also find indirect union effects up to five percent by other unionized occupations within a hospital and up to ten percent by other unionized hospitals in the local labor market prospective reimbursement programs have a negative impact on the wages of hospital workers but are only significant for non unionized occupations our three empirical tests of monopsony all reject the view that monopsony is a factor in hospital wage setting even considering the large union effects based on selectivity bias adjustment we conclude that unions have been a minor contributor to hospital cost inflation

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