comparing the performance of health care systems an alternative approach the health care system in the united states has been diagnosed as a moribund institution by a large number of media commentators and health policy analysts continually rising health care costs and inadequate health insurance coverage for approximately thirty seven million people are cited as two of the most visible symptoms supporting their diagnosis most of these individuals see little chance for the u s health care system to recover given its present design full recovery they believe requires the successful transplant of a health care system from another country the health care systems in europe and canada where government is assigned a much larger role than in the united states are argued to offer universal health care coverage and simultaneously contain health care costs simple comparative statistics appear to support the view that the performance of the u s health care system could be improved through a new health care system design infant mortality in the united states ranked twentieth among twenty four member countries of the organization for economic cooperation and development oecd in 1988 yet health care expenditures in the united states comprised 11 8 percent of gross domestic product in 1989 while the comparable average for all oecd countries was only 7 4 percent 28 these statistics portray the u s health care system as being deficient and therefore unable to offer quality medical services at a reasonable price given the limited stock of information that exists on this issue however it is ill advised to place full blame for the seemingly dismal performance on the u s health care system the simple international comparisons fail to take into account that differences in performance are not solely due to variations in health care systems while the design of a health care system including the financing scheme reimbursement method and organization of production is indeed important because it influences how various economic technological and demographic characteristics of a country are transformed into health outcomes the performance of the health care system also depends on the magnitude of these national characteristics as well a proper analysis would try to determine how the health care system itself specifically influences the performance of health

a cluster analysis on income elasticity variations and us pharmaceutical expenditures this paper examines the relationship between household income and outpatient prescribed medicines in the usa based on a sample of 2872 privately insured patients from the 1987 nmes data set the analysis is performed on regional typologies of different socioeconomic profiles of patients only a few groups show positive income elasticity

remaking macroeconomic policy after the global financial crisis a balance sheet approach this paper describes the origins of the global financial crisis and how the prevailing new keynesian macroeconomic orthodoxy failed to anticipate its severity this failure we argue stemmed from an incomplete understanding of the pivotal role of financial institutions in the amplification of the crisis and its transmission to the wider economy low global interest rates and a consequent search for yield in the pre crisis period encouraged financial institutions to build highly leveraged balance sheets which in turn generated extremely large asset price movements when a small event the downturn in the us sub prime mortgage market triggered the crisis the paper then briefly describes the element of the broadly successful and coordinated macroeconomic policy response to the crisis before turning to the medium term challenges facing policymakers in sustaining global recovery at the national level we focus on the resolution of fiscal imbalances which contributed in part to the crisis and which then worsened because of the policy actions which have been taken to deal with it at the international level we emphasise the need to rectifying the imbalances between savings and investment in many significant countries this will require greater coordination of macroeconomic policy across the world s major economies it will also involve strengthening the role and the governance of the international monetary fund

what drives health care expenditure baumol s model of unbalanced growth revisited the share of health care expenditure in gdp rises rapidly in virtually all oecd countries causing increasing concern among politicians and the general public yet economists have to date failed to reach an agreement on what the main determinants of this development are this paper revisits baumol s baumol w j 1967 macroeconomics of unbalanced growth the anatomy of urban crisis american economic review 57 3 415 426 model of unbalanced growth showing that the latter offers a ready explanation for the observed inexorable rise in health care expenditure the main implication of baumol s model in this context is that health care expenditure is driven by wage increases in excess of productivity growth this hypothesis is tested empirically using data from a panel of 19 oecd countries our tests yield robust evidence in favor of baumol s theory

examining structural breaks and growth rates in international health expenditures over the last decade there has been a growing interest in examining health expenditures in this paper we study the behaviour of health expenditures in the g3 countries usa the uk and japan and three european countries the uk switzerland and spain over the period 1960 2000 from a different perspective in that we examine 1 whether there is a common structural break in health expenditures across the g3 and european countries 2 whether structural breaks have slowed down health expenditure growth rates in these countries or vice versa our main findings are that 1 health expenditures share a common break in both bivariate and trivariate cases and structural breaks and break intervals suggest that either one or a combination of events second oil price shock the 1987 stock market crash and or recessions have contributed to the commonality of break in health expenditures in the g3 while the oil price shocks have been instrumental in the commonality of breaks for the european countries 2 except for the uk structural breaks have slowed down growth rates in health expenditures for the usa japan switzerland and spain

do per capita health care expenditures converge among oecd countries evidence from unit root tests with level and trend shifts this study examines the stochastic conditional convergence of per capita health care expenditures pchce among 19 oecd countries over the period 1972 2008 specifically newly developed lm and rals lm unit root tests with allowance for two endogenously determined structural breaks are employed the results indicate support for pchce convergence among most oecd countries the results are stronger in more general tests that control for two breaks and nonnormal errors panel unit root tests provide additional support for the stochastic convergence of pchce

a hedonic analysis of rent and rental revenue in the subsidised and unsubsidised housing sectors in geneva in this paper an analysis is made of what would be the rent difference for the tenants of subsidised units if these units were rented as unsubsidised units furthermore the existence of any pecuniary disadvantage for the owner of a subsidised unit is investigated by considering his rental revenue i e the amount paid by the tenant and the subsidy it is found that there exists a premium between an unsubsidised and a subsidised unit when using the amount paid by the tenant i e the rent as the dependent variable also the subsidy system in geneva has an influence on the pricing of each characteristic of a unit furthermore it is found that when using rental revenue as the dependent variable both sub samples can be used in a single hedonic equation thus owners of subsidised units are not at a disadvantage due to the granting of a subsidy as a result geneva s subsidy system matches the goals of agents on both the demand and supply sides

the determinants of health expenditures evidence from us state level data most macro studies of what determines health expenditures have used the same panel of oecd country level data based on a more homogeneous panel data set of us states we constructed this note applies the model selection procedure to identify the determinants of health expenditures at the state level we find that the four key factors are gross state products the proportion of the population over the age of 65 the degree of urbanization and the number of hospital beds the cross section income elasticity of health care is around 0 7 implying that health care is a necessity rather than a luxury good at the state level the relative price of health care varies significantly across states but does not appear to have real effects on the amount of resources measured in real dollars a state devotes to health care

a comparative analysis of some policy options to reduce rationing in the uk s nhs lessons from a general equilibrium model incorporating positive health effects this paper seeks to determine the macro economic impacts of changes in health care provision the resource allocation issues have been explored in theory by applying the rybczynski theorem and empirically using a computable general equilibrium cge model for the uk with a detailed health component from the theory changes in non health outputs are shown to depend on factor bias and scale effects the net effects generally being indeterminate from the applied model a rise in the national health service nhs budget is shown to yield overall welfare gains which fall by two thirds assuming health care specific factors a nominally equivalent migration policy yields even higher welfare gains

on stationarity and cointegration of international health expenditure and gdp this paper examines stationarity and cointegration of health expenditure and gdp for a sample of 21 oecd countries using data for the period 1960 1997 by applying a test battery that allows robust inference to be made on the stationarity and cointegration issue trend stationarity and no cointegration are tested using new country by country and panel tests not previously applied in this setting new results for country by country and panel tests of non stationarity and cointegration are presented our unit root and trend stationarity results indicate that both health expenditure and gdp are non stationary the no cointegration and cointegration results indicate that health expenditure and gdp are cointegrated

the growth of public health expenditures in oecd countries do government ideology and electoral motives matter this paper empirically evaluates whether government ideology and electoral motives influenced the growth of public health expenditures in 18 oecd countries over the 1971 2004 period the results suggest that incumbents behaved opportunistically and increased the growth of public health expenditures in election years government ideology did not have an influence these findings indicate 1 the importance of public health in policy debates before elections and 2 the political pressure towards re organizing public health policy platforms especially in times of demographic change

social security income and health care spending evidence from the social security notch the paper exploits social security legislation changes to identify the causal effect of social security income on out of pocket medical expenditures of the elderly using the 1986 1994 consumer expenditure survey and an instrumental variables strategy the empirical results show that health care expenditures are responsive to changes in social security income for elderly individuals with less than a high school education the estimated income elasticities are between 1 41 and 3 47 depending on the outcome measures and are statistically significant at conventional levels the findings are in contrast to existing studies that find a small income elasticity at the individual household level this article is protected by copyright all rights reserved

health care expenditures and gdp panel data unit root test results abstract this short paper presents unit root test results for time series on per capita national health care expenditures and gross domestic product in the oecd unlike the country by country test used by hansen p king a 1996 the determinants of health care expenditure a cointegration approach j health econ 15 127 137 the test we employ exploits the panel nature of the oecd data using this approach we are able to reject the null hypothesis that these series contain unit roots no single test is likely to be definitive in this rapidly evolving area of econometric research however our results help to mitigate concern that panel data analyses of national health care expenditures are misspecified

the granger causality between health care expenditure and output a panel data approach this study investigates the granger causality relationship between real per capita gdp and real per capita health care expenditure by employing a large macro panel data set with a var representatio

the determinants of canadian provincial health expenditures evidence from a dynamic panel this article seeks to reveal the magnitude of the income elasticity of health expenditure and the impact of non income determinants of health expenditure across canada for this purpose panel data on gross domestic product the relative price of health care the share of publicly funded health expenditure the share of senior population and the life expectancy at birth have been used to investigate the determinants of canadian provincial health expenditures over a 28 year period dynamic models of health expenditure are analysed via generalized instrumental variables giv and generalized method of moments gmm results indicate that the long run income elasticity of health expenditure is substantially lower than one thus health care is far from being a luxury in canada

economy wide estimates of the implications of climate change human health we study the economic impacts of climate change induced change in human health viz cardiovascular and respiratory disorders diarrhoea malaria dengue fever and schistosomiasis changes in morbidity and mortality are interpreted as changes in labour productivity and demand for health care and used to shock the gtap e computable general equilibrium model calibrated for the year 2050 gdp welfare and investment fall rise in regions with net negative positive health impacts prices production and terms of trade show a mixed pattern direct cost estimates common in climate change impact studies underestimate the true welfare losses

demand for medical care consumption and cointegration abstract this paper considers a generalized version of grossman s health capital model and derives a cointegration restriction the restriction is tested using aggregate us data and the results are consistent with the prediction of the model

price and quantity in international comparisons of health care expenditure an important omission from earlier cross national comparisons of health care expenditure has been the failure to distinguish between price and quantity using recent data on purchasing power parities the purpose of this article is to report some preliminary results regarding health care expenditure and quantity across 22 oecd countries the article concludes that contrary to what has been suggested in some recent articles the relative price of health care is not correlated to the aggregate per capita income the fraction of the national income that is devoted to health care provision increases with the per capita income regardless of whether health care is measured in terms of expenditure or quantity the relative price of health care has a rationing effect on the quantity of health care that is offered with a price alasticity close to minus one the latter finding means that the health care expenditure is not greater in countries with higherprices furthermore the differences in health care expendit

putting out fires an examination of the determinants of state clean indoor air laws 1 introductionfew products have generated as much public scrutiny as tobacco in light of the health consequences associated with smoking the federal government took several steps in the 1960s such as published health warnings and restrictions on cigarette advertising to reduce the incidence of smoking beginning in the 1970s state governments began to play an increasing role in the anti smoking campaign by adopting clean indoor air laws which restricted smoking in particular locations such as restaurants bars and work sites 1various studies including wasserman et al 1991 chaloupka 1992 chaloupka and saffer 1992 and yurekli and zhang 2000 generally confirmed that clean indoor air laws are effective at reducing cigarette demand however the nature of the smoking restriction appears to matter in particular chaloupka 1992 and chaloupka and saffer 1992 found that restrictions on smoking in public places reduced cigarette demand whereas restrictions at private work sites do not significantly reduce demand 2due to variations in antismoking laws across states only a few studies have addressed the demand for clean indoor air laws in a survey of individuals from san luis obispo california for example boyes and marlow 1996 found nonsmokers and women to be more supportive of a smoking ban in restaurants and bars alternatively chaloupka and saffer 1992 used state level data and found that differences in smoking restrictions in public places and at private work sites depend on several factors including cigarette prices income tobacco production religious affiliation and political activity more recently hersch del rossi and viscusi 2004 found that voting preferences of state residents and the political affiliation of lawmakers were the main factors that affect whether or not a restriction is adopted at a specific location for example restaurants bars malls enclosed arenas and hospitals however smoking habits could have an effect on voting preferences therefore these results could show the indirect effect of tobacco consumption on smoking restrictions there are several limitations of the existing literature that lead to a need for further analysis first studies have ignored the potential role of cigarette taxation as a determinant of smoking bans for example if states adopt a general antismoking position taxes could be used in conjunction with smoking bans to reduce tobacco consumption thus depending on the argument states may view taxation as a policy substitute or a policy complement to clean indoor air laws second the potential endogeneity of right hand side variables has not been addressed for example tobacco consumption is often included as a determinant of smoking bans however tobacco consumption may potentially be endogenous in general studies have found that restrictions on smoking in public places reduce cigarette demand which implies that cigarette consumption is potentially endogenous in the reverse regression of smoking on restrictions it is unfortunate that the literature has not addressed this possibility in a systematic manner 3 third except for hersch del rossi and viscusi 2004 studies have failed to account for differences in the demand for clean indoor air laws across different restricted locations this study addresses these limitations by estimating the demand for clean indoor air laws using a panel of state level data by using a panel data set we were able to control for state specific effects that made it more or less likely that a given state had a smoking ban in a particular area specifically we accounted for the potential endogeneity of cigarette consumption and taxation within a random effects probit model of the adoption of smoking restrictions across six locations public places government buildings private work sites schools health care facilities and restaurants

health care expenditure and integration in the countries of the european union national health care differs between the member states of the european union in the quality and quantity demanded and supplied reflecting different economic structures and health care organization and delivery systems since health care expenditure depends primarily on the level of economic development and the structure of the population only convergence in economic performance and the standards of living can lead to convergence of health expenditure standards

the economic impact of medical migration an overview of the literature this paper provides an overview of the evidence and applied literature on medical migration the economic impacts of medical migration have been little researched causing a polarisation in the debate between its critics and its proponents the paucity of quantitative studies may be explained by the lack of comprehensive and consistent data investments in statistical resources on medical migration are therefore a major priority the available evidence suggests that particularly english speaking countries in sub saharan african countries and the caribbean with relatively few health workers and a high disease burden suffer most from the medical brain drain however the exodus of health workers is not the main cause of the health status crisis but rather a symptom of deeper underlying problems which often extend beyond the health sector towards the broader economic and political environment in such situations medical brain drain does pose challenges for human resource management and health service delivery the only effective and long term sustainable policy is one that addresses the underlying push and pull factors reforms have to be country led but may be supported via temporary migration schemes remittances enhancement of diaspora networks and financial aid for which a strong moral case exists

correlated equilibrium as an expression of bayesian rationality if it is common knowledge that the players in a game are bayesian utility maximizers who treat uncertainty about other players actions like any other uncertainty then the outcome is necessarily a correlated equilibrium random strategies appear as an expression of each player s uncertainty about what the others will do not as the result of willful randomization use is made of the common prior assumption according to which differences in probability assessments by different individuals are due to the different information that they have where information may be interpreted broadly to include experience upbringing and genetic makeup copyright 1987 by the econometric society

determinants of health care expenditure in africa a cross sectional study the paper presents some quantitative evidence on the relationship between certain socioeconomic and demographic factors and per capita health care expenditure in africa first gnp per capita percentage of births attended by health staff and foreign aid received per capita together explained 78 3 of the variance in health care expenditure second per capita gnp is the most significant factor explaining differences in health care expenditure contrary to what has been found in comparisons of health care expenditure in the organization for economic cooperation and development oecd countries we found that the income elasticity is close to unity furthermore aid was consistently significant and positive in the three models estimated third variables such as crude birth rate and the population under 15 years of age as percentage of total population were not significant

unit root and cointegration tests timeseries versus panel estimates for international health expenditure models classical regression estimates of the determinants of the oecd health expenditures are useful for policy formulation and evaluation however if the underlying timeseries data are not collectively stationary in levels the estimated parameters are faulty and can misguide health policy until very recently the crucial stationarity tests were ignored in a large number of studies on international comparisons stationarity adf phillips perron ips heterogeneous panel and cointegration engle granger bivariate johansen s multivariate tests are conducted here using 1960 1997 health expenditures data 1998 cd rom of 19 oecd countries it is found that extending the time series data length affects the order of integration and number of cointegrating vectors however it is arguable whether the order of integration decreases or increases as more observations are added for testing the failure of the johansen and engle granger cointegration tests for most of the oecd countries cautions policy makers against

aggregate health care expenditure in the united states evidence from cointegration tests unlike recent studies that are based on international cross sectional series this paper attempts to quantify the role of the determinants of aggregate health care expenditure per capita using time series data for the period of 1960 87 for the united states the paper applies the relatively new procedures of unit root testing cointegration and error correction modelling the evidence supports cointegration although the results indicate that per capita income age of the population number of practising physicians and public financing of health care are important determinants the age structure of the population and number of practising physicians emerge as the major determinants of aggregate health care expenditure in the united states

fiscal decentralization and spillover effects of local government public spending the case of italy abstractfiscal decentralization and spillover effects of local government public spending the case of italy regional studies this paper investigates the presence of spatial interdependencies in the regional public expenditure decision process and the impact of fiscal decentralization on its determinants the analysis refers to the constitutional reform concluded in italy in 2001 that redefined the legislative powers of the regions and their sectoral competence the results highlight the opportunistic behaviour of regional governments in sectors where they can benefit from neighbours public expenditure spillovers other findings comprise the presence of congestion and mobility effects a shift in demand to the private sector except for education and the mobility of individuals towards richer regions

aggregate health care expenditures and national income is health care a luxury good it is well known that a strong relationship exists between national expenditures on health care and national income this has been used to suggest that health care is a luxury good and that factors such as the type of health care delivery system in a country are of little importance in determining expenditure levels this paper argues that these implications rely upon the application of microeconomic analysis to macroeconomic data and that this is not appropriate as well as raising questions about the inferences drawn from previous studies new empirical evidence is presented which casts some doubts on previous findings international comparisons are based on purchasing power parity rather than exchange rate conversions underlining the importance of prices as well as quantities in the relationship and leading to the conclusion that the aggregate data show health care to be if anything a necessity rather than a luxury good

medical care costs how much welfare loss hardly a week goes by without a front page newspaper article on rising health care costs and the uninsured in this article i focus mainly on costs arguing that the issue has been somewhat misconceived while the level of medical care spending in the u s is a cause for concern the welfare losses associated with rises in that level of spending may not be as large as the public rhetoric can make them seem in fact cost containment may not be as urgent as is widely supposed and some proposed cost containment policies may result in welfare losses for the insured and even increase the number of uninsured

the economics of moral hazard revisited pauly s 1968 pauly m 1968 the economics of moral hazard comment american economic review 58 531 537 analysis of the welfare loss from insurance assumes that medical care consumption is not determined by income but recent studies suggest it is this study argues that 1 pauly s analysis overstates the welfare loss because it includes the effect of income on consumption 2 the relevant income effect is derived from income transfer from the healthy to the ill that occur when the probability of illness is less than 1 and 3 the welfare loss can be considered the transaction cost of insurance

animal spirits and fiscal policy abstract in this paper we study the effects of government spending with a behavioral macroeconomic model in which agents have limited cognitive capabilities and use simple heuristics to form their expectations however thanks to a learning mechanism agents can revise their forecasting rule according to its performance this feature produces endogenous and self fulfilling waves of optimistic and pessimistic beliefs animal spirits this framework allows us to show that the short run spending multiplier is state dependent the multiplier is stronger under either extreme optimism or pessimism and reduces in periods of tranquility furthermore the more the central bank focuses on output gap stabilization the smaller the multiplier we also show that periods of increasing public debt are characterized by intense pessimism while intense optimism occurs in periods of decreasing debt this allows us to show that governments face a trade off between the stabilization of the animal spirits and the stabilization of public debt then we show that the existence of this trade off has implications also for the stabilization of the output gap

public private mix of health expenditure a political economy and quantitative analysis this paper constructs a simple model to examine decisions on public and private health spending under majority voting in the model agents with heterogeneous incomes choose how much to consume and spend on health care and vote for public health expenditure the health status of an agent is determined by a ces composite of public and private health expenditure the existence and uniqueness of the voting equilibrium are established a quantitative exercise reveals the importance of the relative effectiveness of public and private health expenditure and their substitutability in determining the public private mix of health expenditure and in accounting for the observed differences across a sample of 22 advanced democratic countries

the specification of hedonic indexes for urban housing most studies evaluating the effect on housing prices of regulatory programs for controlling urban growth use econometric methods hedonic price models without considering the research design aspects of the task this article examines the strengths and

review of the literature on the determinants of healthcare expenditure this study reviews the literature on determinants of healthcare expenditure for the period 1998 to 2007 the methodology combines searches in the mesh database of pubmed with the search in the principal journals of health economics 20 primary studies were found that met the criteria for inclusion no single pattern of results is clearly identified among the 20 articles four consider income to be the principal determinant of healthcare expenditure two of them jointly with population ageing six highlight population ageing as against six others that emphasize the proximity to death the remaining six do not focus on a specific variable or focus on another variable e g technological progress or territorial decentralization 11 of the 20 articles calculate the income elasticity of demand only two of them obtaining a value greater than 1 thus cataloguing healthcare expenditure as a luxury good there is therefore no unanimity in the variables and econometric regressions of healthcare expenditure in

tenable strategy blocks and settled equilibria when people interact in familiar settings social conventions usually develop so that people tend to disregard alternatives outside the convention for rational players to usually restrict attention to a block of conventional strategies no player should prefer to deviate from the block when others are likely to act conventionally and rationally inside the block we explore two set valued concepts coarsely and finely tenable blocks that formalize this notion for finite normal form games we then identify settled equilibria which are nash equilibria with support in minimal tenable blocks for a generic class of normal form games our coarse and fine concepts are equivalent and yet they differ from standard solution concepts on open sets of games we demonstrate the nature and power of the solutions by way of examples settled equilibria are closely related to persistent equilibria but are strictly more selective on an open set of games with fine tenability we obtain invariance under the insertion of a subgame with a unique totally mixed payoff equivalent equilibrium a property that other related concepts have not satisfied

equity in the finance and delivery of health care some tentative cross country comparisons textabstractequity is widely acknowledged to be an important goal in the field of health care indeed mclachlan and maynard 1982 have gone so far as to suggest that the vast majority of the population would elect for equity to be the prime consideration p 556 a view endorsed by mooney 1986 p 145 several researchers have investigated how successful their own country s delivery and or financing system is in achieving its stated equity goals in general the strategy of these studies is to compare the current situation with some ideal or target situation le grand 1978 for example in what has become a classic study in the field compares the distributions across socio economic groups of illness and public expenditure on health care in britain in 1972 and concludes that the national health service nhs has failed to achieve equity in the delivery of health care

price effects of rent control on controlled and uncontrolled rental housing in toronto a hedonic index approach this paper examines the price effects of rent controls with exemptions on rent controlled and non rent controlled housing in toronto a model of rent determination in the controlled and uncontrolled markets is presented the paper then applies a hedonic pricing technique to develop indices of the uncontrolled rent relative to the controlled rent for standardized sets of housing characteristics approximately one half of the difference in observed rents is attributable to quality differences between markets and one half to the effect of rent controls

strategic monetary and fiscal policy interactions an empirical investigation this paper identifies leadership regimes in monetary fiscal policy interactions in three countries the uk the us and sweden we specify a small scale structural general equilibrium model of an open economy and estimate it using bayesian methods we assume that the authorities can act strategically in a non cooperative policy game and compare different leadership regimes we find that the model of fiscal leadership gives the best fit for the uk and sweden while in the us the nash or non strategic regime dominates we assess the extent to which policy maker preferences reflect microfounded social preferences

is social protection a necessity or a luxury good new multivariate cointegration panel data results the aim of this paper is to test the claim that social protection is a luxury good therefore gdp elasticity of selected social protection expenditure is estimated using a new econometric approach developed first by kao and chiang advances in econometrics 15 179 222 2000 time series properties of selected social expenditure in 18 oecd countries from 1981 to 1998 are examined using panel data cointegration tests and ols fmols and dols estimators results were found which differ from previous analyses reporting substantially higher income elasticities with the fmols selected social expenditure has income elasticities smaller than one but greater than one with the dols it is noteworthy that whether selected social expenditure is stationary or nonstationary may have critical implications for researchers and policy makers desiring to model and explain the impact of this expenditure on a country economic system

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

price elasticity of expenditure across health care services policymakers in countries around the world are faced with rising health care costs and are debating ways to reform health care to reduce expenditures estimates of price elasticity of expenditure are a key component for predicting expenditures under alternative policies using unique individual level data compiled from administrative records from the chilean private health insurance market i estimate the price elasticity of expenditures across a variety of health care services i find elasticities that range between zero for the most acute service appendectomy and 2 08 for the most elective psychologist visit moreover the results show that at least one third of the elasticity is explained by the number of visits the rest is explained by the intensity of each visit finally i find that high income individuals are five times more price sensitive than low income individuals and that older individuals are less price sensitive than young individuals

time for revisionism on rent control economists traditional hostility to rent contols is based on models that treat the housing market as perfectly competitive and on the experience with hard controls in new york city and many european countries following world war ii the current soft rent control systems in north america are varied and qualitatively different from earlier hard controls the theoretical case against them is weak particularly when the housing market is viewed as imperfectly competitive the empirical case against them is weak too economists should reconsider their blanket opposition to current rent control systems and evaluate them on a case by case basis

national and international tests of the new drug cost offset theory the new drug cost offset theory argues that new drugs pay for themselves by keeping people out of expensive medical facilities however few studies have tested this theory at the macroeconomic level to determine if system wide savings actually accrue this article provides two tests of the new drug cost offset theory by examining the impact of new drugs on aggregate medical care costs using time series data for the united states and also by using a panel data set of countries belonging to the organization for economic cooperation and development in support of the new drug cost offset theory the results from both tests imply the typical new drug slows the growth of overall medical care spending

disentangling the heterogeneous income elasticity and dynamics of health expenditure in this article we empirically study the impact of per capita income on health care expenditure and its dynamics over time in a sample of 14 oecd countries for the period 1971 to 2009 a simple model built upon one developed by newhouse 1977 suggests that health care is a necessity in the short run but it cannot be rejected to be a luxury good in the long run our findings provide strong empirical evidence that a year s health expenditure is conditioned by the previous one interestingly our results reveal increasing income inelasticity over time along with huge heterogeneity across countries finally this article supports the hypothesis of conditional convergence in health care spending among countries in designing policies which facilitate the sustainability of national health systems we emphasize that ceteris paribus the greater the participation of public health the lower the growth rate of health spending high share of children and elderly over working age population opposite influences w

on the effect of income and relative price on demand for health care ec evidence this paper demonstrates that the relative price of health care could be used to explain the conflicting results of the empirical studies which attempt to measure the income elasticity of demand our empirical results based on a conventional model and cross national data set for the ec show that whereas health care may be labelled as a luxury good the large income effect can be interpreted as merely offsetting the price effect

household production of health investment analysis and applications michael grossman s health investment model provides significant insights into allocations between both leisure and income and health and nonhealth goods our geometric extension i integrates labor leisure choice with the consumer s production of both health and nonhealth goods and ii distinguishes between medical expenditures and healthcare investment this provides a framework for examining the effects of changes in incomes and wages alternative insurance arrangements including managed care travel times waiting times and schooling observed differences between the income elasticities for health goods and health investment can be resolved through relative resource intensities in the production of health and nonhealth goods

comparing french and us hospital technologies a directional input distance function approach french and us hospital technologies are compared using directional input distance functions the aggregation properties of the directional distance function allow comparison of hospital industry level performance as well as standard firm level performance with regard to productive efficiency in addition the underlying constituents of efficiency in the short run congestion and technical inefficiency and in the long run scale inefficiency are analysed by decomposing the overall measure by virtue of using the directional distance function it is also possible to obtain an estimate of a lower bound on allocative inefficiency it is found that french and us hospitals use quite different technologies long run scale inefficiencies cause most of the french hospitals inefficiency while short run technical inefficiency is the main source of overall productive inefficiency in the us hospitals

health spending savings and fertility in a lifecycle dynastic model with longevity externalities we investigate health spending savings fertility and policy implications in a lifecycle dynastic model with longevity externalities in annuity returns we show that such externalities engender not only excessive health spending but also under saving and excessive fertility social security and health subsidization increase health spending and savings but reduce fertility from laissez faire levels a publicly funded universal health system under labour income taxation raises fertility taxing health spending or using social security and public health together can obtain socially optimal health spending savings longevity and fertility numerical results based on us observations suggest substantial variations among these cases especially in old age health spending

evidence on the determinants of canadian provincial government health expenditures 1965 1991 abstract real per capita provincial government expenditures on health care over the period 1965 1991 are examined using pooled time series cross section regression analysis key determinants of real per capita provincial government expenditures on health care over the period 1965 1991 are real provincial per capita income the proportion of the provincial population over age 65 and real provincial per capita federal transfer revenues established program financing had a negative and significant impact on real per capita provincial government health expenditures in newfoundland and quebec an income elasticity of 0 77 implies that health care is not a luxury good

conversion factor instability in international comparisons of health care expenditure parkin mcguire and yule 1987 hereafter pmy report that a regression of per capita health care expenditure on per capita income using different conversion factors exchange rates gdp ppps health ppps gave rise to different results in this note we apply updated data to the same empirical relationship in contrast to pmy we find no noticeable conversion factor instability in that relationship either with respect to the health care income elasticity or with the magnitude of multiple correlation coefficient

is health care a luxury the debate revisited with new evidence from emerging economies abstractthis paper studies the long run relationship between health care expenditure and income using a panel data set of emerging economies over the period 1995 2012 the results show that expenditure on health care and income are non stationary and cointegrated after controlling for cross sectional dependence and unobserved heterogeneity among different countries we find that the income elasticity of health care is less than 1 indicating that health care is a necessity and not a luxury government expenditure and out of pocket expenditure turn out to be important determinants of health care expenditure among non monetary factors results show that old age dependency and female education seem to have significant bearings on health care expenditures policy recommendations suggest that government should increase spending on health care in emerging economies since higher incomes may not automatically translate into higher health care spending by the people of these countries

new panel results on cointegration of international health expenditure and gdp this article tests for existence of cointegration between health expenditure and gdp using data from 25 oecd countries for the period 19607ndash 1997 the empirical modelling is based on a heterogeneous bivariate vector error correction panel model that allows for trending data as well as intercepts and trends in the cointegrating relations univariate country by country and panel unit root tests generally fail to reject the null of a unit root in the health expenditure and gdp variables country by country results based on the johansen multivariate likelihood based inference indicate somewhat mixed results on country specific cointegration with a rank of one found for 12 countries and a rank of zero for the remaining 13 countries application of a new panel test for cointegration rank with higher power than the individual tests indicates that health expenditure and gdp are cointegrated around linear trends

granger causality between total expenditure on health and gdp in oecd evidence from the toda yamamoto approach abstract in this paper a modified version of the granger causality test proposed by toda and yamamoto is used to investigate causality between gdp and healthcare expenditure in oecd countries the findings indicate that bidirectional granger causality is predominant

socialist structural gaps a simultaneous inference analysis this paper reconsiders the statistical evidence for the presence of urbanization and employment gaps for socialist economies professor gur ofer s original work on the existence of such gaps is expanded in three specific ways first the data are expanded to include many more countries and time periods second this paper uses a slightly more sophisticated form of ofer s original model third and most important this paper presents a more sophisticated statistical analysis of the country gap estimates developed by ofer in particular simultaneous inference tests t tests for the individual country gaps and means replacement technique tests for the presence of a gap in averages are applied the simultaneous inference test results which utilize the information on all socialist economies simultaneously are contrasted with two variants of non simultaneous tests that have not been applied in this ocntext but which have been used frequently in other contexts copyright 1989 by mit press

an econometric analysis of health care expenditure a cross section study of the oecd countries this paper is an empirical examination of the determinants of aggregate health care expenditure the paper presents a systematic analysis of relationships across 19 oecd countries showing the effects of aggregate income institutional and socio demographic factors on health care expenditure the results indicate that institutional factors of the health systems in addition to per capita gross domestic product gdp contribute significantly to the explanation of the health care expenditure variation between countries for example the way physicians in outpatient care are paid and the mixture of public private funding and inpatient outpatient care

on the determination of the us aggregate health care expenditure per capita real health care expenditure is examined against three major groups of explanatory variables economic demographic and health stock and it is found that the three groups of variables have an impact on real health care spending other subcategories such as real private and government health care pharmaceutical dental home nursing ambulatory personal medical consumption and in patient expenditures have also been examined and have been found to be affected by the explanatory variables for several subcomponents there is evidence of supplier inducement of the demographic group of variables the ageing population had an impact only on the per capita real overall and private health care outlay and pharmaceutical spending also cointegrating relationships were found and consistent estimators of the elasticities found

monetary and fiscal policies interaction in monetary unions in this paper the literature on the interaction between monetary and fiscal policies in a monetary union is surveyed by adopting the concept of symbiosis as a starting point the paper highlights the importance of uncertainty policy makers preferences and targets then the role of commitment to policy rules and coordination is addressed the analysis also focuses on the importance of the data considered for the generation of the policy mix as a final step the paper discusses the main results in the literature on public debt management in a monetary union all the reported theoretical results are then adopted to retrieve policy and institutional implications for the european monetary union

is health care really a luxury a demand and supply approach many studies have found strong and positive relationship between per capita income and health care expenditure these studies usually adopt the assumptions that 1 the relationships among the variables are constant and or 2 the supply side market for health care could be treated by using standard demand functions models to take into account of the supply side of health care we use the demand and supply approach with the cointegration model to re examine this issue by using taiwan health care expenditure data our results show that the real income elasticity is smaller than unity and the health care expenditures are primarily for curing rather than caring

population and income is there a puzzle abstract this note presents wide evidence on the relationship between population and income for 125 countries for which data was available for the period 1950 2000 the main result is that there is a weak but negative relationship between population growth and per capita gdp as income increases population expands at a slower rate this relationship appears to be stronger for african countries and for asian countries before 1970

algorithmic rationality game theory with costly computation abstract we develop a general game theoretic framework for reasoning about strategic agents performing possibly costly computation in this framework many traditional game theoretic results such as the existence of a nash equilibrium no longer hold nevertheless we can use the framework to provide psychologically appealing explanations of observed behavior in well studied games such as finitely repeated prisoner s dilemma and rock paper scissors furthermore we provide natural conditions on games sufficient to guarantee that equilibria exist

the interactions between fiscal policy and monetary policy this paper studies the interactions of fiscal policy and monetary policy when they stabilize a single economy against shocks in a dynamic setting if both policy makers are benevolent then in our model the best outcome is achieved when monetary policy does nearly all of the stabilization if the monetary authorities are benevolent but the fiscal authority discounts the future or aims for an excessive level of output then a nash equilibrium will result in large welfare losses after an inflation shock there will be excessively tight monetary policy excessive fiscal expansion and a rapid accumulation of public debt however if in these circumstances there is a regime of fiscal leadership then the outcome will be very nearly as good as when both policy makers are benevolent

the normative economics of health care finance and provision whereas in many countries the crisis in medical care has been seen in terms of excess spending on health services in the uk it has been seen at least by most of those who manage and work in the nhs as a crisis of underfunding this has come about as the result of the government s successful attempts to restrain the rate of growth of real spending on the nhs which in turn reflects the government s belief that its principal effective weapon against what it perceives to be inefficiency in the nhs is to challenge management itself reformed and to some extent liberated by systematic financial squeezes the same concern has given rise to a host of proposals for reform of the nhs most of which involve a much greater role for private insurance private finance of other kinds such as out of pocket payments and private provision of health care itself

public health capital and productivity in the spanish regions a dynamic panel data model abstract this paper investigates the impact of public health expenditure and variations in the composition of this expenditure on economic growth we develop an extension of the solow model that includes health as a publicly provided input in order to explain variations in productivity the paper reports the results of an empirical investigation using panel data for the spanish regions the results suggest that current government health spending has consistently positive effects while governmental investment in health care has no effect on productivity

sex differentials in unemployment rates a case for no concern this paper reevaluates the concept of unemployment in the context of differing labor market and nonmarket opportunities for men and women discussing common fallacies in female to male unemployment rate comparisons and their use as an indicator of labor market equality suggestive empirical evidence is presented for an alternative unemployment rate concept for women for interpreting the procyclical variation in female to male unemployment rate differentials and for decomposing unemployment differences into differences in labor market characteristics and in behavioral coefficients for the two sexes the paper concludes that a large part of the observed unemployment rate differential may be attributed to the definition and methodology used in deriving unemployment statistics rather than to discrimination in productive opportunities

the determinants and effects of health expenditure in developed countries previous studies of international differences in health spending have been restricted to the use of relatively small samples of cross sectional data our objective here is to re examine the results of previous work using a sample of 560 pooled time series and cross section observations results confirm the importance of gdp as a determinant of health spending with an estimated income elasticity at or around unity but also suggest that oecd countries should not be regarded as a single homogeneous group the importance of some non income variables is also confirmed although the direct effect of these factors appears to be small

a memory based model of bounded rationality in order to investigate the impact of limited memory on human behavior i develop a model of memory grounded in psychological and biological research i assume that people take their memories as accurate and use them to make inferences the resulting model predicts both over and underreaction but provides enough structure to predict when each effect dominates i then use this framework to study the consumption decision the results match empirical work on consumption predictability as well as differences in the marginal propensity to consume from different income streams most importantly because it ties the extent of bias to a measurable aspect of the stochastic process being forecasted the model makes testable empirical predictions

public financing of health expenditures insurance and health outcomes the effects of public financing of health expenditures insurance coverage and other factors on health outcomes are examined within health production models estimated using 1960 1992 data across 20 oecd countries mortality rates are found to depend on the mix of health care expenditures and the type of health insurance coverage increases in the publicly financed share of health expenditures are associated with increases in mortality rates increases in inpatient and ambulatory insurance coverage are associated with reduced mortality the effects of gdp health expenditures and age structure on mortality are similar to those in previous studies tobacco use alcohol use fat consumption female labour force participation and education levels are also significantly related to overall mortality rates increases in income inequality are associated with lower mortality rates suggesting that the negative relationship between inequality and health outcomes suggested by some previous studies does not remain w

monetary and fiscal policy in the great moderation and the great recession in this paper we argue for a new approach to monetary and fiscal policy during the great moderation the inflation targeting regime worked well central banks used the interest rate to stabilize inflation and subject to inflation being controlled stabilized the level of demand fiscal policy exerted discipline over the public sector deficits thereby indirectly managing the level of public debt such fiscal housekeeping worked well because the monetary authorities were stabilizing the economy but once private sector deleveraging led to the great recession and interest rates hit their zero bound the outcome could no longer be managed by monetary policy recovery depended on the automatic stabilizers output and tax revenues have fallen public debt has been created and assets have been created which a deleveraging private sector wishes to hold but the effect has been very gradual recovery would have been faster if fiscal policy had been responsible for the restoration of full employment in an environment which tolerated the necessary rises in public debt conversely policies of austerity designed to reduce public debt have slowed the recovery growth will not be resumed until the private sector begins to invest strongly again creating the financial assets which the private sector wishes to hold thereby enabling public debt to be retired this has not yet happened because the private sector correctly does not believe that macroeconomic policy is capable of sustaining a strong recovery

is health care really a luxury in oecd countries evidence from alternative price deflators this article examines whether real health care expenditure he is a luxury or necessity for organization for economic co operation and development oecd countries over the period 1972 to 2004 within a panel unit root and panel cointegration framework to realize this objective we regress he on real gross domestic product gdp the proportion of the population aged over 65 p65 and a time trend t we first present results for 18 countries where real he per capita is obtained using a general gdp deflator for these countries we find that health care is a luxury for just one country next we present results for eight countries where real he is obtained using a specific health care price index when the general gdp deflator is replaced with a specific health care price index at least one of the gdp p65 or t coefficients for the eight countries changes in a reasonably dramatic fashion suggesting that the use of the gdp deflator introduces bias into the regression we find that he is a necessity in

health care is an individual necessity and a national luxury applying multilevel decision models to the analysis of health care expenditures health care is neither a necessity or a luxury it is both since the income elasticity varies with the level of analysis with insurance individual income elasticities are typically near zero while national health expenditure elasticities are commonly greater than 1 0 the debate over whether health care is or is not a luxury good arises primarily from the failure to specify levels of analysis clearly so as to distinguish variation within groups from variation between groups apparently contradictory empirical results are shown to be consistent with a simple nested multilevel model of health care spending

the effect of rent control on the price of rental housing an hedonic approach it is widely believed that rent control leads to a decline in the quality of rental housing this study examines the effect of rent control on the quality of rental housing in new york city quality change is linked to the suppression of rent below

stationarity of health expenditures and gdp evidence from panel unit root tests with heterogeneous structural breaks this paper re examines the stationarity of national health care expenditures and gdp in a panel setting utilizing data from 20 oecd countries over the period from 1960 to 1997 previous research in this area has recognized the drawback of not allowing for structural breaks in their unit root tests and noted that their empirical results may not be robust we advance the literature by utilizing a recently developed panel lm unit root test that allows for heterogeneous level shifts in contrast to previous analyses that did not consider breaks our results reject the unit root null hypothesis for both series