the effect of the medicaid home care benefit onlong term care choices of the elderly this paper analyses the impact of medicaid home care benefits on the probability of nursing home entry and the use of formal and informal home care by disabled elderly remaining in the community using data from the national long term care survey i find evidence that medicaid home care subsidies reduced the probability of nursing home entry among at risk elderly using formal home care among non institutionalized persons the subsidy increased the use of formal home care but led to substitution of informal with formal care for services that were non medical in nature i introduction long term care for the elderly has become an area of great interest for policymakers due to the increased number of aged americans and to the important role of government in financing and regulating their care the size of the population requiring long term care is expected to increase from about 7 million in 1988 to about 18 million by the year 2040 it is popularly believed that the elderly often lack family support and must enter nursing homes when they become chronically ill in actuality the majority of impaired elderly remain at home only 22 percent of the disabled elderly population is institutionalized and the remaining 78 percent lives in the community most receiving assistance from family members of those remaining in the community 27 percent receive formal home and community based care to augment their informal care while 3 percent receive formal services only special committee on aging 1988 private insurance rarely covers longterm care since many of the elderly cannot afford prolonged out of pocket expenditures on nursing home or home health care the public sector ends up paying for it public long term care expenditures account for 0 45 percent of gnp with most of these expenditures going towards nursing home care with rapid inflation in the health care sector policymakers have been driven to explore alternatives to nursing home care which are potentially less costly one of these alternatives is home and community based care while the idea of expanding publicly financed home and community based care programs has been enthusiastically received by the elderly and their families researchers have questioned its cost effectiveness raising two issues the first concern is that extended home care benefits may not lower nursing home use but will primarily benefit persons who would not have entered a nursing home anyway the second possibility is that home care benefits will reduce reliance on informal caregiving if recipients use the formal care to substitute for rather than supplement the unpaid care they were already receiving much of the research on how formal home care affects the provision of informal home care and the use of nursing home services has focused on all forms of formal care including care paid for out of pocket two such studies are those by newman et al 1988 and hanley et al 1991 their results are likely to differ from those of an explicit analysis of the effects of a home care subsidy for example a family will purchase formal home care services as a substitute for their own informally provided care only if the opportunity cost of caregiving is greater than the cost of the paid care on the other hand if the formal care is essentially free to the recipients their families are likely to substitute formal care for their informal services even if the cost of the formal care to society is greater than the family s opportunity cost of caregiving thus home care subsidies are likely to lead to greater substitution of formal for informal care than we would observe in the absence of subsidization it is therefore misleading to extrapolate from this previous line of research to infer the effects of expanded government home care programs research concentrating on the subsidy effect itself has often been conducted through demonstration projects

sickness and death economic consequences and coping strategies of the urban poor in bangladesh summary we investigate the economic consequences of sickness and death and the manner in which poor urban households in bangladesh respond to such events based on panel data we assess the effects of morbidity and mortality episodes on household income medical spending labor supply and consumption we find that despite maintaining household labor supply serious illness exerts a negative effect on income for the poor however the estimates do not reject consumption smoothing the most prominent responses to finance current needs are increasing household debt through borrowing and depleting productive assets both of which have detrimental effects on future consumption

don t let the easy be the enemy of the good returns from art investments what is wrong with it abstract although geometric hedonic price indexes are widely used in the hedonic literature on non standard investments it is well known that portfolios of assets have values that are related to the arithmetic not geometric average of prices this paper explores the implications of the use of arithmetic hedonic price indexes for art investments log linear predictions are retransformed back to the original scale by performing a modified version of the duan s smearing factor this procedure is illustrated with an analysis of the returns from 10 459 surrealist paintings sold worldwide during the pre crisis period 1990 2007 findings show significant differences between the arithmetic versus geometric price indexes while emphasising the caution that should be exercised in interpreting the hedonic index prices of non standard investments as they are typically computed for academic and business applications

standard errors for the retransformation problem with heteroscedasticity abstract economists often estimate models with a log transformed dependent variable the results from the log transformed model are often retransformed back to the unlogged scale other studies have shown how to obtain consistent estimates on the original scale but have not provided variance equations for those estimates in this paper we derive the variance for three estimates the conditional mean of y the slope of y and the average slope of y on the retransformed scale we then illustrate our proposed procedures with skewed health expenditure data from a sample of medicaid eligible patients with severe mental illness

supply side and demand side cost sharing in deregulated social health insurance which is more effective abstract microeconomic theory predicts that if patients are fully insured and providers are paid fee for service utilization of medical services exceeds the efficient level moral hazard effect in switzerland both demand side and supply side cost sharing have been introduced to mitigate this problem analyzing a panel dataset of about 160 000 adults we find both types of cost sharing to be effective in curtailing the use of medical services however when moral hazard mitigation is traded off against risk selection the minimum deductible supply side cost sharing option ranks first followed by the medium deductible demand side alternative making the supply side option somewhat more effective

trade in imperfectly competitive industries the role of market size and consumer preferences this study presents theoretical and empirical analyses of market size and consumer preference asymmetries to examine the implications of trade and trade policies for imperfectively competitive food manufacturing sectors the results show that the effects of trade reforms on imperfectly competitive product trade are counter intuitive if a significant portion of food trade is attributed to market size and preference asymmetries for example countries with smaller market gain relatively more from trade liberalization than countries with larger markets because export market opportunities are greater for small countries than for large countries

academic earmarks and the returns to lobbying abstract in this paper we estimate the returns to lobbying by universities to motivate our empirical work we develop a simple theoretical model of university lobbying for academic earmarks our statistical analysis shows that universities represented by a house appropriations committee hac or senate appropriations committee sac member spend less money on lobbying than those that are not represented in addition using instrumental variables estimations we show that universities without hac or sac representation may receive some benefit to lobbying for earmarks although in many estimations this benefit is not statistically different from zero however for universities with hac or sac representation a 10 percent increase in lobbying yields an additional 2 8 percent or 3 5 percent increase in earmarks respectively this suggests that there are large returns to lobbying for academic earmarks if a university is represented by a member of one the hac or sac but little or no return if not

country asymmetries endogenous product choice and the timing of trade liberalization abstract we analyze the effects of trade liberalization on firms decisions and profits in a vertical product differentiation model with countries which have different characteristics firms decide product specifications at the beginning of the game in which autarky is followed by trade liberalization whose date is anticipated our analysis suggests that a firm located in a large or rich country is the likely market leader at the trade equilibrium this outcome might be reversed if small country firms have a strong cost advantage transport costs are negligible or if the large country opens its market before the small one

mismatch of talent evidence on match quality entry wages and job mobility we examine the impact of mismatch on entry wages separations and wage growth using unique data on worker talents we show that workers are sorted on comparative advantage across jobs within occup

assessing incentives for service level selection in private health insurance exchanges even with open enrollment and mandated purchase incentives created by adverse selection may undermine the efficiency of service offerings by plans in the new health insurance exchanges created by the affordable care act using data on persons likely to participate in exchanges drawn from five waves of the medical expenditure panel survey we measure plan incentives in two ways first we construct predictive ratios improving on current methods by taking into account the role of premiums in financing plans second relying on an explicit model of plan profit maximization we measure incentives based on the predictability and predictiveness of various medical diagnoses among the chronic diseases studied plans have the greatest incentive to skimp on care for cancer and mental health and substance abuse

censored quantile instrumental variable estimates of the price elasticity of expenditure on medical care efforts to control medical care costs depend critically on how individuals respond to prices i estimate the price elasticity of expenditure on medical care using a censored quantile instrumental variable cqiv estimator cqiv allows estimates to vary across the conditional expenditure distribution relaxes traditional censored model assumptions and addresses endogeneity with an instrumental variable my instrumental variable strategy uses a family member s injury to induce variation in an individual s own price across the conditional deciles of the expenditure distribution i find elasticities that vary from 0 76 to 1 49 which are an order of magnitude larger than previous estimates

too much ado about two part models and transformation comparing methods of modeling medicare expenditures many methods for modeling skewed health care cost and use data have been suggested in the literature this paper compares the performance of eight alternative estimators including ols and glm estimators and one and two part models in predicting medicare costs it finds that four of the alternatives produce very similar results in practice it then suggests an efficient method for researchers to use when selecting estimators of health care costs

health insurance and the demand for medical care instrumental variable estimates using health insurer claims data this paper takes a different approach to estimating demand for medical care that uses the negotiated prices between insurers and providers as an instrument the instrument is viewed as a textbook cost shifting instrument that impacts plan offerings but is unobserved by consumers the paper finds a price elasticity of demand of around 0 20 matching the elasticity found in the rand health insurance experiment the paper also studies within market variation in demand for prescription drugs and other medical care services and obtains comparable price elasticity estimates

happiness and productivity some firms say they care about the well being and happiness of their employees but are such claims hype or scientific good sense we provide evidence for a classic piece rate setting that happ

the impact of patient cost sharing on low income populations evidence from massachusetts greater patient cost sharing could help reduce the fiscal pressures associated with insurance expansion by reducing the scope for moral hazard but it is possible that low income recipients are unable to cut back on utilization wisely and that as a result higher cost sharing will lead to worse health and higher downstream costs through increased use of inpatient and outpatient care we use exogenous variation in the copayments faced by low income enrollees in the massachusetts commonwealth care program to study these effects we estimate separate price elasticities of demand by type of service overall we find price elasticities of about 0 16 for this low income population similar to elasticities calculated for higher income populations in other settings these elasticities are somewhat smaller for the chronically sick especially for those with asthma diabetes and high cholesterol these lower elasticities are attributable to lower responsiveness to prices across all categories of service and to some statistically insignificant increases in inpatient care

much ado about two reconsidering retransformation and the two part model in health econometrics in health economics applications involving outcomes y and covariates x it is often the case that the central inferential problems of interest involve e y x and its associated partial effects or elasticities many such outcomes have two fundamental statistical properties y 0 and the outcome y 0 is observed with sufficient frequency that the zeros cannot be ignored econometrically this paper 1 describes circumstances where the standard two part model with homoskedastic retransformation will fail to provide consistent inferences about important policy parameters and 2 demonstrates some alternative approaches that are likely to prove helpful in applications

a quantitative assessment of the economic impact on canada of sectoral free trade with the united states this paper attempts to measure the impact on canada of a canada united states sectoral free trade arrangement involving five manufacturing sectors the analysis is based on a quantitative general equilibrium model with particular focus on the technology industrial structure and conduct within the manufacturing industries in canada the results of the paper indicate that there are surprisingly large benefits to a sectoral free trade agreement while the real income gains are much smaller than with a bilateral free trade arrangement involving all industrial sectors they are on the order of 37 per cent of value added in the sectors considered une evaluation quantitative de l impact economique sur le canada d un libre echange sectoriel avec les etats unis ce memoire tente de mesurer l impact sur le canada d un accord de libre echange sectoriel canada etats unis impliquant cinq secteurs manufacturiers l analyse est fondee sur un modele d equilibre general quantitatif et met l accent sur la technologie ainsi que sur la structure et les comportements industriels intra sectoriels dans les industries manufacturieres au canada les resultats de cette analyse montrent que des benefices etonnamment importants peuvent emaner d un accord de libre echange sectoriel m8me si les accroissements de revenu sont bien plus faibles que ceux qui seraient engendres par un accord de libre echange bilateral impliquant tous les secteurs industriels ils atteignent un ordre de grandeur de 37 de la valeur ajoutee dans les secteurs impliques

determinants of health care decisions insurance utilization and expenditures abstract this paper studies three interrelated health care decisions insurance utilization and expenditures the model treats insurance as an endogenous variable with respect to both utilization and expenditures addresses potential selection issues and takes into account that the decisions to use health care and the level of treatment are determined by different decision makers we employ semiparametric methods to avoid making distributional assumptions using the medical expenditure panel survey 2005 data the semiparametric approach predicts insurance to increase the level of expenditures by 48 a number in accord with an important experimental study and less than half that obtained using parametric methods

hospital utilization in mixed public private system evidence from australian hospital data this article investigates whether patients who used a mixture of private and public hospital care have higher total hospital utilization than those who exclusively used either public or private hospital care using australian hospital administrative data of heart disease patients we found that those who used a mixture of private and public care had the highest total hospital utilization our findings are robust to how utilization is measured and endogeneity between utilization and hospital type choice

shifted deductibles for high risks more effective in reducing moral hazard than traditional deductibles in health insurance a traditional deductible i e with a deductible range 0 d is in theory not effective in reducing moral hazard for individuals who know ex ante that their expenditures will exceed the deductible amount d e g those with a chronic disease to increase the effectiveness this paper proposes to shift the deductible range to si si d with starting point si depending on relevant risk characteristics of individual i in an empirical illustration we assume the optimal shift to be such that the variance in out of pocket expenditures is maximized results indicate that for the 10 percent highest risks in our data the optimal starting point of a 1000 deductible is to be found far beyond 1200 which corresponds with a deductible range of 1200 2200 or further we conclude that compared to traditional deductibles shifted deductibles with a risk adjusted starting point lower out of pocket expenditures and may further reduce moral hazard

ordinary least squares and sample selection models of health care demand monte carlo comparison this article examines alternative econometric models for health care demand estimation the analysis compares the rand health insurance study two part model with sample selection model estimators in a monte carlo simulation experiment designed to approximate individual level health care demand conditions the underlying variable distributions are taken from cross sectional data for a swiss 1981 population survey three sets of error distribution assumptions are examined bivariate normal normal logistic and cauchy despite theoretical concerns with the two part model it outperforms the sample selection model in terms of mean squared error of parameter estimate

alternative models of choice under uncertainty and demand for health insurance the authors test a standard expected utility model and alternative models about how people evaluate risky prospects using data about individuals preferences among health insurance plans a model that assumes people evaluate gains and losses relative to a reference rather than final outcomes treat gains and losses asymmetrically and process certain and uncertain outcomes separately provides a better fit than the standard utility model these findings suggest inertia in health insurance plan choice and that individuals are more responsive to decreases than to increases in the price of insurance copyright 1996 by mit press

is more always better a survey on positional concerns abstract we use survey data to provide some empirical information about concerns regarding relative standing respondents chose between a world where they have more of a good than others and one where everyone s endowment of the good is higher but the respondent has less than others questions asked about education attractiveness and intelligence for one s child and oneself income vacation time approval and disapproval from a supervisor and papers to write half of the respondents preferred to have 50 less real income but high relative income concerns about position were strongest for attractiveness and supervisor s praise and weakest for vacation time

contraception as development new evidence from family planning in colombia there has been considerable debate in the last decade about whether or not family planning programmes in developing countries reduce fertility or improve socio economic outcomes this article provides new evidence by studying the expansion of one of the worlds oldest and largest family planning organisations profamilia of colombia it finds that family planning explains less than 10 of colombias fertility decline during its demographic transition as in wealthy countries however lowering the costs of first birth postponement produced important socio economic gains enabling young women to obtain more education and to work more and live independently later in life

exploring the variability of patient costs in disease management programs a hierarchical modelling approach disease management programs include a wide variation of patients with different chronic diseases and different health care utilization the aim of this article was to identify factors on patient level and organizational level that explain the variability in costs of patients with different chronic diseases enrolled in a dmp by employing a rigorous analytical model a generalized linear mixed model glmm was specified to perform a multi level analysis of cross sectional hierarchical data from 16 dmps in the netherlands multiple imputation sub group analysis per disease and analysis from both the health care and the societal perspectives were also performed our model showed that age the presence of cardiovascular disease multi morbidity and payments on top of the payment for the usual care had positive relation with costs while better quality of life was associated with lower health care costs in the copd sample physical activity and employment were associated with health care costs our study show

trade liberalisation with imperfect competition abstract this paper presents a computable general equilibrium world trade model with imperfectly competitive industries in all countries which can be used to evaluate trade liberalisation proposals we find that the welfare gains from worldwide trade liberalisation can be as much as twice those obtained from models with constant returns to scale and perfect competition for some large countries however trade liberalisation under imperfect competition can lead to smaller welfare gains or even welfare losses as in the case of the united states

demand for medical care by the elderly a finite mixture approach summary in this article we develop a finite mixture negative binomial count model that accommodates unobserved heterogeneity in an intuitive and analytically tractable manner this model the standard negative binomial model and its hurdle extension are estimated for six measures of medical care demand by the elderly using a sample from the 1987 national medical expenditure survey the finite mixture model is preferred overall by statistical model selection criteria two points of support adequately describe the distribution of the unobserved heterogeneity suggesting two latent populations the healthy and the ill whose fitted distributions diaer substantially from each other 1997 by john wiley sons ltd

ageing chronic conditions and the evolution of future drugs expenditure a five year micro simulation from 2004 to 2029 the healthy ageing assumptions may lead to substantial changes in paths of aggregate health care expenditure notably catastrophic expenditure of people at the end of the life but clear assessments of involved amounts are not available when we specifically consider ambulatory care as drug expenditure generally offered to chronically ill people we estimate the effects of epidemiological and life expectancy changes on french health expenditure until 2029 by applying a markovian micro simulation model from a nationally representative database the originality of these simulations holds in using an aggregate indicator of morbidity mortality capturing vital risk and making it possible to adapt the quantification of life expectancies by taking into account the presence of severe chronic pathologies we forecast future national drugs expenditure under different epidemiological scenarios of chronic morbidity trend scenario healthy ageing scenario and medical progress scenario for the population aged 25

rural electrification and household labor supply evidence from nigeria in nigeria the most populated african country rural electrification is a critical issue because of the low household electrification rate and the poor quality of the grid this energy poverty has harmful economic and social consequences in rural areas such as low productivity lack of income generating opportunities and poor housing conditions in this paper we consider electrification as a technical shock that may affect household time allocation using the 2010 2011 general household survey we investigate how electrification affects female and male labor supply decisions within rural households in nigeria focusing on husband wife data we consider potential dependence in spouses labor supply decisions and address the challenge of zero hours of work using a recent copula based bivariate hurdle model deb et al 2013 in addition an instrumental variable strategy helps identify the causal effect of elec trification our results underline that this dependence in spouses labor supply decisions is critical to consider when assessing the impact of electrification on these outcomes electrifi cation increases the working time of both spouses in the separate assessments but the joint analysis emphasizes only a positive effect of electrification on husbands working time in line with the household labor supply approach our findings highlight that within the household the labor supply decisions of one spouse significantly affect those of the other spouse thus if we neglect the effect of electrification on the spouse of the individual examined we may fail to assess how this individual has been actually affected by this common shock on both spouses our results suggest that these within household relationships promote husbands working time at the expense of wives working time

household use of agricultural chemicals for soil pest management and own labor for yard work in spite of its potential health and environmental risks and contribution to agribusiness the use of agricultural chemicals for yard care has not been well studied in our discrete continuous choice model estimated with data from a national survey a household chooses how much money if any to initially spend on types of agricultural chemicals and applicators and how much time to subsequently spend on other yard work households in big cities or with large gardens are more likely to use organic chemicals the probability that a household chooses a mix of do it yourself and hired applications of synthetic chemicals increases with income age and the presence of preschoolers among households that apply only synthetic chemicals without hired help those with young children with higher incomes in big cities and with male heads spend more on the chemicals the time that such households spend on other yard work increases with expenditures on the chemicals cancellation of a pesticide registration might create an extra private cost for households with young children even though the ban might reduce external costs

nash equilibrium tariffs for the united states and canada the roles of country size scale economies and capital mobility a theoretical analysis of optimal nash equilibrium tariff rates is presented a numerical general equilibrium model is then used to find nash equilibrium tariff rates for the united states and canada the nash equilibrium tariffs are small relative to partial equilibrium estimates 18 percent for the united states and 6 percent for canada the united states is essentially indifferent between the nash equilibrium and free trade while canada is better off at the latter by 4 billion empirical results support theoretical predictions that the optimal tariff is smaller when the country is smaller there are scale economies and free entry and capital is internationally mobile

heterogeneous effect of coinsurance rate on healthcare expenditure generalized finite mixtures and matching estimators the article proposes a combination of finite mixture models and matching estimators to account for heterogeneous and nonlinear effects of the coinsurance rate on healthcare expenditure the analysis with panel data for adult japanese consumers in 2008 2010 and for female consumers in 2000 2010 demonstrates the presence of subpopulations with high medium and low healthcare expenditure and subpopulation membership is explained by lifestyle variables generalized finite mixtures provide adequate fit compared to loglinear model conditional average treatment effect estimations reveal the existence of nonlinear effects of the coinsurance rate in the subpopulation with high expenditure

the distribution of gains from bilateral tariff reductions abstract a two good two country model is used to analyse the distribution of gains from proportionate bilateral tariff reductions it is shown that the distribution of gains is given by the solution to a rather complicated quadratic equation which exhibits multiple real roots the country with the more elastic offer surface will be the relative gainer for example if it has either a very large or a very small tariff relative to the other country s tariff and relative to its own optimal nash equilibrium tariff

a comparison of alternative models for the demand for medical care we have tested alternative models of the demand for medical care using experimental data the estimated response of demand to insurance plan is sensitive to the model used we therefore use a split sample analysis and find that a model that more closely approximates distributional assumptions and uses a nonparametric retransformation factor performs better in terms of mean squared forecast error simpler models are inferior either because they are not robust to outliers e g anova anocova or because they are inconsistent when strong distributional assumptions are violated e g a two parameter box cox transformation

the heckman correction for sample selection and its critique this paper gives a short overview of monte carlo studies on the usefulness of heckman s 1976 1979 two step estimator for estimating selection models such models occur frequently in empirical work especially in microeconometrics when estimating wage equations or consumer expenditures it is shown that exploratory work to check for collinearity problems is strongly recommended before deciding on which estimator to apply in the absence of collinearity problems the full information maximum likelihood estimator is preferable to the limited information two step method of heckman although the latter also gives reasonable results if however collinearity problems prevail subsample ols or the two part model is the most robust amongst the simple to calculate estimators

the pervasive absence of compensating differentials we study the relation between individual preferences for job amenities e g type of work job security and compensating wage differentials in cross section to this end we estimate a partial equilibrium job search model on panel data from eight european countries there are five non wage job characteristics and two sources of job to job mobility on the job search and reallocation shocks we also allow for two types of unobserved heterogeneity we find strong preferences for amenities especially job security yet these preferences do not translate into significant wage differentials in cross section counterfactual experiments show that one would need extremely low levels of search frictions for compensating differentials to arise lastly a similar exercise on the distribution of job change outcomes reveals the role of constrained job to job mobility in the absence of compensating wage differentials copyright 2009 john wiley sons ltd

returns to job satisfaction in the presence of horizontal mismatch in this paper we study the relationship among horizontal mismatch job satisfaction and wages using data from the 2013 scientists and engineers statistical data system sestat estimates from 2sl