an earnings prediction approach to examining intercompany information transfers abstract we assess potential information transfers by examining the association between the earnings announcements of early and late announcers in an industry our earnings prediction models are statistically significant much more frequently than would be expected by chance the models suggest potential positive information transfers on average but there is substantial cross industry variation in the strength of this relation we find that the greatest price reactions by nonannouncers to same industry earnings announcements occur in industries with the greatest earnings comovement

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

information in prices about future earnings abstract stock return over a period reflects the market s revision in expectation of future earnings accounting earnings over the same period however have limited ability to reflect such revised expectations therefore returns anticipate earnings changes and the earnings response coefficient from a regression of returns on contemporaneous earnings changes is biased toward zero we reduce this bias by including leading period returns in price earnings regressions the resulting estimated earnings response coefficient magnitudes suggest that the capital market on average views earnings changes to be largely permanent this is consistent with the random walk time series property of annual earnings

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

market assessment of industry and firm earnings information abstract this study examines the timing of security returns associated with industry wide earnings and firm specific earnings we predict and find that returns associated with differences in performance across industries begin and end earlier than returns associated with differences in firm specific performance within industries to earn abnormal profits a trading strategy based on forecasts of future earnings would require earlier predictions of industry wide earnings than of firm specific earnings

population aging in healthcare a minor issue evidence from switzerland our study shows that population aging substantially affects healthcare expenditure hce this conclusion supports the popular but recently strongly contested view that the coming population aging will threaten the fiscal sustainability of health systems we contribute to this debate first by estimating the determinants of swiss healthcare expenditure hce with outlier robust dynamic regressions and second by projecting swiss hce based on the estimates produced and new population scenarios medical advances and gdp per capita also play a decisive role governments can mitigate hce growth by improving the health status of the population and by stimulating cost effective and productive medical advances

time to death and the forecasting of macro level health care expenditures some further considerations although the effect of time to death ttd on health care expenditures hce has been investigated using individual level data the most profound implications of ttd have been for the forecasting of macro level hce here we estimate the ttd model using macro level data from the netherlands consisting of mortality rates and age and gender specific per capita health expenditures for the years 1981 2007 forecasts for the years 2008 2020 of this macro level ttd model were compared to forecasts that excluded ttd results revealed that the effect of ttd on hce in our macro model was similar to those found in micro econometric studies as the inclusion of ttd pushed growth rate estimates from unidentified causes upwards however the two models forecasts of hce for the 2008 2020 were similar we argue that including ttd if modeled correctly does not lower forecasts of hce

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 effects of additive outliers on tests for unit roots and cointegration this article discusses the properties of the univariate dickey fuller test and the johansen test for the cointegrating rank when there exist additive outlying observations in the time series we provide analytical as well as numerical evidence that additive outliers may produce spurious stationary hence the dickey fuller test will reject a unit root too frequently and the johansen test will indicate too many cointegrating vectors the results easily generalize to models with temporary change outliers through an empirical example we discuss how additive and temporary change outliers can be detected in practice and we show how dummy variables can be used to remove the influence of such extreme observations

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

technology growth and expenditure growth in health care in the united states health care technology has contributed to rising survival rates yet health care spending relative to gdp has also grown more rapidly than in any other country we develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth we show that health care productivity depends on the heterogeneity of treatment effects across patients the shape of the health production function and the cost structure of procedures such as mris with high fixed costs and low marginal costs the model implies a typology of medical technology productivity i highly cost effective home run innovations with little chance of overuse such as anti retroviral therapy for hiv ii treatments highly effective for some but not for all e g stents and iii gray area treatments with uncertain clinical value such as icu days among chronically ill patients not surprisingly countries adopting category i and effective category ii treatments gain the greatest health improvements while countries adopting ineffective category ii and category iii treatments experience the most rapid cost growth ultimately economic and political resistance in the u s to ever rising tax rates will slow cost growth with uncertain effects on technology growth

intraindustry information transfers associated with management forecasts of earnings this study documents information transfers associated with the sign and magnitude of the changes in earnings expectations conveyed by management forecasts that is the management forecast of one firm discloser generates unexpected price reactions for firms nondisclosers similar to the forecaster the results are consistent with information transfers documented for releases of actual earnings foster 1981 and sales announcements olsen and dietrich 1985 1 these results build on prior management forecast research that has documented a link between the sign and magnitude of the changes in earnings expectations conveyed by management forecasts and the unexpected share returns price reactions of forecasting firms ajinkya and

the boundary between planning and incremental budgeting empirical examination in a publicly owned corporation this paper is a study within the field of public budgeting it focuses on the capital budget and it attempts to model and analyze the capital budgeting process using a framework previously developed in the literature of incremental budgeting within this framework the paper seeks to determine empirically whether the movement of capital expenditure budgets can be represented as the routine application of incremental adjustments over an existing base of allocations and whether further forward looking adjustments can be found its setting is a british publicly owned corporation the paper proposes an extended model of incremental budgeting which explains absolute change in budget allocations by introducing variables expressing current expenditure outturn over or under spend of previous allocations previous budgetary cuts and wider financial pressures in the corporation s environment planning variables are then included in an attempt to uncover purposive behavior the analysis reveals different patterns of allocation for peripheral and for mainstream investments the former appear to grow in an incremental fashion with no response to leading planning variables the latter exhibit responsiveness to planning variables and allocations do not take the form of routine incremental adjustments to the existing base an interpretation of the results is undertaken the analysis points to revisions of existing theory and suggests fresh ways of looking at and systematically modeling the organizational system of resource allocation

robust determinants of health care expenditure growth our aim is to disclose robust explanatory variables for health care expenditure hce growth by introducing to this field of research a method that is especially well suited for situations of model uncertainty the extreme bounds analysis eba we analyse data for 33 oecd countries over the period 1970 2010 and include as far as it is statistically feasible all macroeconomic and institutional determinants of hce growth in the eba that have been suggested in the literature furthermore we analyse to what extent outliers in the data influence the results our results confirm earlier findings that gdp growth and a variable representing baumol s cost disease theory emerge as robust and statistically significant determinants of hce growth depending on whether or not outliers are excluded we find up to six additional robust drivers the growth in expenditure on health administration the change in the share of inpatient expenditure in total health expenditure the lagged government share in gdp t

intra industry information transfers associated with earnings releases abstract the impact that a firm s earnings releases have on the stock prices of other firms in its industry is examined for an identifiable sub set of firms the results are consistent with a significant information transfer occurring between the earnings release firm and the other firms in its industry this subset is identified by examining the impact of the release on the stock price of the announcing firm the magnitude of this impact is more significant for a sample of firms which have a larger percentage of their revenues in the same line of business as the earnings release firm vis a vis a sample with a lower percentage of their revenues from the same line of business alternative interpretations of the empirical results are also discussed the research findings have implications for information content and market efficiency research and for research on policy issues associated with disclosure regulation

does the u s health care sector suffer from baumol s cost disease evidence from the 50 states this study examines if health care costs in the united states are affected by baumol s cost disease it relies on an empirical test proposed by hartwig 2008 and extended by colombier 2010 and uses a panel data set of 50 states over the 1980 2009 period the results suggest that health care costs grow more rapidly when economy wide wage increases exceed productivity gains the findings are fairly robust with respect to time and state fixed effects individual state time trends and two stage least square estimation consequently this study suggests that the u s health care sector suffers from baumol s cost disease

intra industry information releases a recursive systems approach abstract this paper investigates the extent of intra industry information transfers associated with the half yearly earnings announcements of a sample of australian firms the omitted factor interpretation of foster s 1981 results is examined using a recursive systems specification of the return generating process to model extra market return covariation in cross section although some aspects of the results do appear sensitive to the alternative methodologies the overall conclusion is consistent with foster 1981 and supports the existence of intra industry information transfers associated with firms earnings releases

investment planning and arm s length control in a nationalised industry applying a relatively decentralised system of control which would keep state owned enterprises soe at arm s length from ministerial departments has been a stated policy for many governments around the world however the specific controls typically used for implementing this policy have seldom been successful the purpose of this paper is to review and evaluate certain of these controls drawing upon the british system of arm s length control of nationalised industries in order to delimit the problem the paper cuts across the government soe relationship from the perspective of investment planning using primary information from the capital investment process in a particular nationalised industry the paper searches for evidence on whether and in what ways existing controls have not been successful three types of controls are investigated 1 the economic and financial groundrules which are supposed to simulate a competitive business style efficiency these rules are often assumed to act as an invisible hand limiting direct government control 2 the direct investment review in the framework of the wider public sector expenditure survey in discussing the nature of this review the paper examines whether government approval of investment conforms to an incrementalist or muddling through model it further considers the role for incremental methods in controlling soe investment 3 the attempt to use corporate planning as a control instrument evidence from internal control processes within the enterprise and in particular the review of investment by a central executive is used in order to evaluate the above controls this serves to show the diffuse character of the planning process and the possibilities and limitations of using similar controls at the government level suggestions are put forward for strengthening these forms of control by modifying or reinforcing certain elements within the existing arm s length framework the paper would be useful for evaulating the difficulties involved in establishing some form of orderlines and formalisation in government soe relationships it shows some of the weaknesses associated with certain technocratic rules and solutions to public policy problems in this environment

the saving and investment nexus for china evidence from cointegration tests the saving and investment nexus as postulated by feldstein and horioka fh 1980 is revisited the saving investment correlation for china is estimated over the periods 1952 1998 and 1952 1994 the latter culminating in a period of fixed exchange rate regime amongst the key results it is found that saving and investment are correlated for china for both the period of the fixed exchange rate and the entire sample period with high saving investment correlation the results suggest that the chinese economy is in conformity with the fh hypothesis this is a valid outcome for in china capital mobility was fairly restricted over the 1952 1994 period as indicated by the relatively low foreign direct investment