macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

a model of the bfh payments system the bfh payments system was introduced by robert l greenfield and leland b yeager in a laissez faire approach to monetary stability 6 the key element of their proposal is to dispense with base money and instead tie the means of payment to a nearly comprehensive bundle of goods and services by the institution of indirect convertibility their system promises to be free from inflation and several sources of recession while bfh was named to credit fischer black i eugene fama 3 4 and robert hall 10 11 it must not be confused with their specific institutions or arguments greenfield and yeager modified their ideas and have continued to develop the system 20 5 21 8 9 the purpose of this paper is to present a model of bfh consistent with simple textbook macroeconomics contrary to first impressions bfh is best understood using the concept of money but the absence of base money makes the quantity theory inappropriate for analysis instead a simple keynesian model illustrates the determination of interest rates real income the price level and the quantity of money aggregate supply the is relationship and money demand are conventional only the money supply process is unusual

a pack a day for 20 years smoking and cigarette pack sizes this study focuses on the determinants of cigarette consumption in particular the impact of cigarette pack sizes on the typical daily consumption of smokers is investigated results are presented from a new multi modal count data model which allows for pack effects in daily consumption levels our results suggest that smokers regulate their consumption in accordance with the variety of pack sizes that are available to them

incentive effects in the demand for health care a bivariate panel count data estimation this paper contributes in three dimensions to the literature on health care demand first it features the first application of a bivariate random effects estimator in a count data setting to permit the efficient estimation of this type of model with panel data second it provides an innovative test of adverse selection and confirms that high risk individuals are more likely to acquire supplemental add on insurance third the estimations yield that in accordance with the theory of moral hazard we observe a much lower frequency of doctor visits among the self employed and among mothers of small children copyright 2002 john wiley sons ltd

the development of the new monetary economics this paper looks into the history of economic thought to examine the forerunners of the new monetary economics this approach emphasizes the role of regulations on private financial intermediation in determining the particular institutional arrangements that contemporary monetary theory treats as data the new view investigates the possibility that under laissez faire the unit of account and means of payment traditionally bundled together in the item called money may become separated the earlier writers who share this perspective have been overlooked by historians of economic thought as well as by recent contributors to the new monetary economics an examination of these theorists is of more than historical interest for many of their insights and analyses are relevant to modern monetary theory

electoral business cycles in oecd countries studies of oecd countries have generally failed to detect real economic expansions in the pre election period casting doubt on the existence of opportunistic political business cycles we develop a theory that predicts a substantial portion of the economy experiences a real decline in the pre election period specifically the political uncertainty created by elections induces private actors to postpone investments with high costs of reversal the resulting declines referred to as reverse electoral business cycles are larger the more competitive the electoral race and the greater the polarization between major parties we test these predictions using quarterly data on private fixed investment in ten oecd countries between 1975 and 2006 the results suggest that reverse electoral business cycles exist and as expected depend on electoral competitiveness and partisan polarization moreover simply by removing private fixed investment from gross domestic product gdp we uncover robust evidence of opportunistic cycles

a microeconometric model of the demand for health care and health insurance in australia this paper develops a model for interdependent demand for health insurance and health care under uncertainty to throw light on the issue of insurance induced distortions in the demand for health care services the model is used to empirically analyse the determinants of the choice of health insurance type and seven types of health care services using micro level data from the 1977 78 australian health survey econometric implementation of the model involves simultaneously issues of discreteness of choice selectivity and stochastic dependence between health insurance and utilization health status appears to be more important in determining health care service use than health insurance choice while income appears to be more important in determining health insurance choice than in determining health care service use for a broad range of health care services both moral hazard and self selection are found to be important determinants of utilization of health care services

modeling usage of medical care services the medical expenditure panel survey data 1996 2000 we explore the determinants of usage of six different types of health care services using the medical expenditure panel survey meps data years 1996 2000 we apply a number of models for univariate count data including semiparametric semi nonparametric and finite mixture models we find that the complexity of the model that is required to fit the data well depends upon the way in which the data is pooled across sexes and over time and upon the characteristics of the usage measure pooling across time and sexes is almost always favoured but when more heterogeneous data is pooled it is often the case that a more complex statistical model is required

an econometric model of the two part decision process in the demand for health the decision to contact a physician and the decision about how often to contact a physician are determined by different decisionmakers we introduce a negative binomial distributed hurdle model that specifies the two stages of the decisionmaking process as different stochastic processes while at the same time taking care of the discrete nature of the data empirical results are based on a cross section of the west german socioeconomic panel specification tests reveal that the two stages of the process need to be treated as two distinct processes this in turn implies that ignoring this distinction leads to serious misinterpretation

how big is the crowding out effect of user fees in the rural areas of ethiopia implications for equity and resources mobilization summary using a nested multinomial logit model this study investigates the demand reduction and diversion effects of user fees in rural areas of ethiopia the results reveal that an increase in user fees of public clinics which are the most widely used alternative can have a significant demand reduction effect on the poorest of the poor this implies that despite cost recovery has been advocated as an alternative means of health care financing in most of the developing world increasing user fees may drive the poorest segment of the population out of the health care market unless some protective measures are taken

applied welfare economics with discrete choice models economists have been paying increasing attention to the study of situations in which consumers face a discrete rather than a continuous set of choices such models are potentially very important in evaluating the impact of government programs upon consumer welfare but very little has been said in general regarding the tools of applied welfare economics indiscrete choice situations this paper shows how the conventional methods of applied welfare economics can be modified to handle such cases it focuses on the computation of the excess burden of taxation and the evaluation of quality change the results are applied to stochastic utility models including the popular cases of probit and logit analysis throughout the emphasis is on providing rigorous guidelines for carrying out applied work this abstract was borrowed from another version of this item

political business cycles in the new keynesian model i know there s the myth of the autonomous fed nixon barked a quick laugh richard nixon talking to arthur burns on october 23 1969 just after burns s nomination to the fed had been announced 1 i d like to see another lowering of interest rates i think there s room to do that i can understand people worrying about inflation but i don t think that s the big problem now george h w bush interview with new york times june 24 1992 i introduction economic conditions before elections affect election outcomes 2 rational politicians who recognize this regularity may therefore be tempted to try to influence the economy in the quarters preceding an election date to maximize their chances of being reelected the literature on political business cycles pbc has developed models that rationalize economic fluctuations induced by political cycles nordhaus 1975 presented a model of opportunistic political cycles the party in power stimulates the economy before elections to improve its reelection probability others have observed that different parties may have different preferences over inflation and output or unemployment outcomes and therefore we should observe partisan political cycles hibbs 1977 was the first to introduce the partisan cycle model in which left wing parties were assumed to have at least one of the following a higher output target a higher inflation target or a higher relative weight on minimizing output rather than inflation deviations from the targets compared with right wing parties several papers test for the existence of opportunistic or partisan cycles in the united states alesina cohen and roubini 1992 and alesina roubini and cohen 1997 find only weak evidence of an opportunistic political cycle looking at m1 growth rates grier 1989 and beck 1987 instead find support for the effect of political variables on m1 growth rates for the 1960 1980 period but not on the mean level of the federal funds rate as discussed in drazen 2000a 2000b there is basically no evidence instead that political cycles matter for macroeconomic outcomes by looking at data on unemployment and output growth grier 2008 is a recent exception and only weak evidence for inflation empirical tests of the partisan cycle model alesina roubini and cohen 1997 faust and irons 1999 find partisan differences in output growth rates but no support for partisan cycles in inflation and monetary policy tests of pbc typically assume monetary policy as the main tool that is exploited by politicians to manipulate the economy these studies usually focus on comparing the level of inflation output money growth rates or interest rates across political cycles or they add a political dummy variable to the relevant regression and test its significance this paper offers a different approach the paper aims to empirically test various political business cycle theories adopting an optimizing new keynesian model with a monetary and fiscal policy mix as the main setting the inclusion of both fiscal and monetary policy is motivated by drazen 2000b 3 the new keynesian model is a baseline setting for the analysis of monetary policy but it has not been widely used to study pbc an advantage of this paper with respect to most of the previous pbc literature lies in the use of a general equilibrium framework this is in fact necessary when testing the importance of politically motivated policy choices to effectively control for differences in the macroeconomic conditions the set of shocks or the private sector expectations that prevail when the policy decision is taken the monetary and fiscal policy rule parameters as well as the parameters that reflect the frequency of price adjustment by firms and the steady state level of inflation are allowed to depend on the observed political regime

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

the willingness to pay for the health care under taiwan s national health insurance system in this study we utilized the nested multinomial logit model to estimate the willingness to pay wtp values for different national health insurance nhi coverage plans in taiwan the wtp value for having care from clinics in a hospital care only hco plan is nt 178 us 6 per person month the wtp value for having care from hospitals in a clinic care only cco plan is nt 1342 us 43 per person month the wtp value for the nhi with a universal coverage uc is nt 1540 us 49 per person month the figure nt 1540 us 49 is equivalent to 8 77 of monthly household income much higher than the new premium rate of the new nhi tax 2 5 4 of monthly household income proposed by the taiwan s government our result suggests that taiwan s government may increase the new premium rate further in order to make taiwan s nhi financially more sustainable

the effect of double coverage on health care utilization of children double coverage refers to a situation in which a person is covered by more than one health plan in a family in which the husband and wife are both offered employer provided insurances it is possible for one or more family members to be double covered this article is the first to examine double coverage of children and quantify the effects of double coverage on health care utilization for any population results show that double coverage does not affect the frequency at which children consume medical services but rather double coverage leads children to consume more expensive forms of health care

preventive care underused even when free is there something else at work explaining the rationale of preventive care underuse is a difficult task considering its great benefits for health underuse is even more difficult to explain in countries like italy where preventive care can be obtained for free in this article we investigate the determinants of prevention underuse with an empirical model based on human capital theory which also includes three factors to which little attention has been paid so far role played by the general practitioner gp nonmonetary barriers to access and health beliefs we apply a recursive probit model explaining both recourse to prevention and to the gp which allows us to adequately measure the effect of the latter on the former and to quantitatively compare the determinants of curative and preventive care we find that the gp plays a minor role in prevention use but that nonmonetary barriers to access and health beliefs are strong determinants of preventive care demand finally we also find support for both grossman s capital depreciation the

the political economy of improving health care for the poor in rural africa institutional solutions to the principal agent problem both governments and private for profit markets have been disappointing in meeting the needs of the african poor for health care ngo services provide a much more attractive alternative for this clientele despite the fees they charge they do so because they represent an institutional solution to the imperfect information problem in health care through simulations based on data from cameroon we demonstrate that if fee charging ngos replace the highly subsidised but poorly managed facilities operated by african governments the poor would be better off those ngos that are decentralised in their financial and personnel management are most effective the politics of making the recommended changes are assessed

the benefits of central bank s political independence abstract we consider a two tier model of monetary policy where the central banker is both subject to the explicit influence of elected political principals through contracts and the implicit influence of interest groups willing to capture monetary policy we analyze the impact of granting independence to the central banker on the scope for capture and the agency costs of delegating the monetary policy to a central banker political independence increases those agency costs but significantly stabilizes the politically induced fluctuations of inflation and improves ex ante social welfare

good bye financial repression hello financial crash some unintended consequences of financial liberalization in latin america are analyzed in this paper intrinsic imperfectious in financial markets and the policy dilemmas they pose are reviewed first the stylized facts of southern cone experiments in financial liberization are then presented alternative ways of organlzing domestic capital markets under latin american conditions are discussed and an eclectic reform mongering program is proposed

health insurance and the demand for medical care evidence from a randomized experiment we estimate how cost sharing the portion of the bill the patient pays affects the demand for medical services the data come from a randomized experiment a catastrophic insurance plan reduces expenditures 31 percent relative to zero out of pocket price the price elasticity is approximately 0 2 we reject the hypothesis that less favorable coverage of outpatient services increases total expenditure for example by deterring preventive care or inducing hospitalization

non price rationing and the choice of medical care providers in rural cote d ivoire this paper investigates the role of travel time in rationing medical care services in a developing country where monetary prices are zero a nested multinomial logit model of provider choice is estimated using 1985 data from rural cote d ivoire unlike previous studies of health care demand in developing countries our results indicate that travel time plays an important role in rationing health care and that medical care demand for poorer individuals is substantially more travel time elastic than for richer individuals

a laissez faire approach to monetary stability this paper develops some diverse hints for a new monetary system offered separately by fischer black eugene fama and robert e hall for reasons that will become evident though we should perhaps say payments system instead of monetary system none of the economists mentioned has actually proposed the particular system set forth here nor examined all its properties and we call it the bfh system not to implicate them but only to give credit for some component ideas and to have a convenient label l regardless of who if anyone may actually advocate the system contemplating it is instructive it illuminates by contrast some characteristics of our existing and recent systems

the determinants of access to health care and medicines in india abstractthis article explores the issue of demand for health care and medicines in india where household share of total health expenditure is one of the highest among high and low income countries previous work found that important determinants include health status socio demographics income and demand for care was inelastic compared with previous studies this article uses large household data sets including data on medicine expenditure to explore health seeking behaviour count models find that determinants include health status socio demographic information health insurance household expenditure and government regulation elasticities range from 0 13 to 0 03 and are generally consistent with literature findings for inpatient care conditional on having at least one hospitalization the expected number of hospitalizations increases with being male and household expenditure medicine expenditure accounts for a large share of household health expenditure low income individuals could experience

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

on consumer preferences and the willingness to pay for term life insurance abstract we run a choice based conjoint cbc analysis for term life insurance on a sample of 2017 german consumers using data from web based experiments individual level part worth profiles are estimated by means of a hierarchical bayes model drawing on the elicited preference structures we then compute relative attribute importances and different willingness to pay measures in addition we present comprehensive simulation results for a realistic competitive setting that allows us to assess product switching as well as market expansion effects on average brand critical illness cover and underwriting procedure turn out to be the most important nonprice product attributes hence if a policy comprises their favored specifications customers accept substantial markups in the monthly premium furthermore preferences vary considerably across the sample while some individuals are prepared to pay relatively high monthly premiums a large fraction exhibits no willingness to pay for term life insurance at all presumably due to the absence of a need for mortality risk coverage we also illustrate that utility driven product optimization is well suited to gain market shares avoid competitive price pressure and access additional profit potential finally based on estimated demand sensitivities and a set of cost assumptions it is shown that insurers require an in depth understanding of preferences to identify the profit maximizing price

flexible discrete choice demand models consistent with utility maximization an application to health care demand policies a considerable literature has developed to estimate the economic determinants of health care provider choice one important goal of this literature has been the estimation of price elasticities of health care demand particularly in rural areas of developing countries where debates continue regarding appropriate levels of user fees in government health facilities world bank accurate estimation of price elasticities is crucial to evaluating the trade offs between health promotion and revenue generation in rural areas where poorly funded government clinics are often consumers only accessible health care choices however the exact empirical implementation of demand estimation with discrete data has be

sharing health risk and income risk within households evidence from japanese data the question of which household members should consume medical services and in what quantities is examined by using japanese household level data two key concepts are employed health risk and income risk and whether family heads or dependants bear these risks investigated health risk is the risk that a household member falls ill while income risk is the risk that future household income decreases it is found that both heads and dependants make fewer visits to doctors as household size increases it is also found that only dependants visited doctors less frequently following the reform of the public health insurance system which raised the co payment rate of family heads from 10 to 20 these findings imply that heads and dependants share health risk but dependants bear income risk

cost sharing and pharmaceutical utilisation and expenditure in russia this paper presents estimates of the impact of exemption status and other socio economic variables on pharmaceutical use in russia estimates are derived from a newly collected household survey covering around four thousand households separate results for a zero inflated negbin model of utilisation of prescriptions and for a two part model of the overall level of household expenditure on pharmaceuticals are presented full exemption from prescription charges is shown to increase the utilisation of prescription items and reduce the probability of the households incurring drug expenditure

explaining african economic performance africa has had slow growth and a massive exodus of capital in many respects it has been the most capital hostile region we review and interpret the aggregate level and microeconomic literatures to identify the key explanations for this performance there is a reasonable correspondence of the two sets of evidence pointing to four factors as being important these are a lack of openness to international trade a high risk environment a low level of social capital and poor infrastructure these problems are to a substantial extent attributable to government behaviour and the paper includes a review of the political economy literature which addresses that behaviour

the demand for primary schooling in madagascar price quality and the choice between public and private providers abstract we estimate a discrete choice model of primary schooling and simulate policy alternatives for rural madagascar among school quality factors the results highlight the negative impacts on schooling demand of poor facility quality and the use of multigrade teaching several grades being taught simultaneously by one teacher in public schools simulations indicate the feasibility of reducing multigrade in public schools by adding teachers and classrooms a policy that would lead to modest improvements in overall enrollments and would disproportionately benefit poor children given much higher price elasticities for poorer households raising school fees to cover some of the additional costs would strongly counteract these favorable distributional outcomes an alternative policy of consolidation of primary schools combined with multigrade reduction or other quality improvements is likely to be ineffective because of the strongly negative impact of distance to school

health status and the demand for health results on price elasticities the relationship between measured health status and the elasticity of demand for ambulatory physician services is estimated using data from the national medical care utilization and expenditure survey nmcues although the theoretical relationship between health status and demand elasticity is ambiguous results obtained in this study suggest that declines in health reduce the elasticity of the initial decision to seek care but have no discernible effect on the elasticity of demand at mean levels of consumption these results are consistent with the findings of rand s hie and suggest that consumer price sharing has little effect on initial access to physicians for those in poor health

reference health and the demand for medical care we propose that health in prior periods termed reference health is theoretically and empirically relevant to the demand for medical care to address non normality in the distributions of medical care spending consumption and health we use a conditional density estimator nested in a finite mixture framework we find that reference health can help explain the variation in spending among individuals with the same contemporaneous health particularly in the top tail of the spending distribution we demonstrate that omitting reference health understates the potential cost savings of healthy aging initiatives by 50 percent this article is protected by copyright all rights reserved

using the travel cost method to value visits and stigma in connection with arv adherence in uganda abstractthis article uses the travel cost method to value both client visits to collect antiretroviral therapy arv and stigma which prevents arv adherence using a representative sample for uganda initiated specifically for this study we found a willingness to pay wtp valuation for visits made in the range of us 14 us 17 and a willingness to accept wta valuation of us 25 for visits missed the valuations for stigma based on a novel measure of stigma using a new estimation method were close to the valuations for visits these valuations can be used to estimate the benefits to carry out cost benefit analyses cbas of interventions aimed at increasing arv coverage and adherence

monetary trends in the united states and the united kingdom a review from the perspective of new developments in monetary economics milton friedman and anna schwartz monetary trends reports a great many findings 53 are enumerated in the introduction but paramount is the stability of the demand for money in the us and britain over the past century the money stock controls money income this proposition more than anything else is the point of their painstaking investigation friedman and schwartz argue against what might neutrally be called the early post war view of the macroeconomic role of money velocity will move easily to reconcile any level of nominal income to any money stock the demand for money in this view is a will o the wisp as the authors put it monetary policy has little influence over real activity stabilization policy necessarily relies on fiscal instruments the volume is completely convincing in disposing of this idea today s reader is likely to be puzzled why so much space is devoted to a view that has no serious adherents among professional economists friedman and schwartz are generals fighting an earlier war a situation accentuated by the long lags in putting this volume into print though the opposing armies fighting for the early postwar view have withdrawn in total rout a new front has opened up and the quantity theory is fighting for its life once again worse yet the new armies are fighting under the banner of free market economics and are led by former colleagues and students of milton friedman the midwest once the stronghold of the quantity theory is now largely occupied by the enemy the new monetary economics views the quantity theory as nothing more than an artifact of government regulation an economy organized along free market principles could function without money at all fischer black 1970 it is true that the kinds of monetary regulations imposed by the american and british governments of the past century create a more or less stable relation between a certain class of assets called money and nominal spending eugene fama 1980 but different regulations would alter that relation even the real bills doctrine anathema to quantity theorists because it invites unlimited expansion of the money supply has advocates in the new school thomas sargent and neil wallace 1981 a monetary system where the government is unconcerned about the money stock has been advocated by a university of chicago economist while visiting the hoover institution john bilson 1981 restoring the intrinsic value of money not limiting its quantity has been found to be the key to successful disinflation by one member of this group sargent 1982 a critical summary titled a laissez faire approach to monetary stability written see p 1528 above for publication information

welfare effects of rural hospitial closures a nested logit analysis of the demand for rural hospital services been a central question in rural health debates over the past decade the reported results are mixed with some researchers finding that hospital closures in rural areas result in lower rates of inpatient hospitalizations bindman keane and lurie while other researchers have found no such link hadley and nair the literature on the economic impact of rural hospitals provides an additional perspective on hospital closures where researchers find that the presence of a hospital in a rural community generates significant positive economic effects cordes while research on both the access effect and the economic impact shed light on rural hospital closures neither approach rests upon the economic theory of demand and the principles of welfare analysis this paper argues that welfare evaluations of u s rural health policies can be undertaken with a discrete choice model of the demand

the demand for health some new empirical evidence this paper presents some new estimates of the pure investment and pure consumption models of the demand for health in contrast to previous studies the paper presents parameter estimates of both reduced form and structural demand for health care equations the latter which are obtained by treating health capital as a latent variable in a recursive equation system provide a safer way of checking the consistency of the model s predictions with the data the present analysis of the pure consumption model differs from previous analyses in its recognition of the dependency of the shadow price of initial assets on the entire lifetime profiles of the model s exogenous variables the paper also explores the implications in terms of reliability of parameter estimates of the failure on the part of previous studies to recognize this

the choice of medical providers in rural benin a comparison of discrete choice models in this paper we estimate three different discrete choice models of provider choice using data from the rural district of ouidah in benin these three model are multinomial logit ml 2 independent multinomial probit imp 3 multinomial probit mp a comparison of imp and mp allows us to reject the independence assumption between providers furthermore the cross price elasticities computed from the restrictive specifications ml and imp are dramatically different from those computed from the more general one mp these results cast some doubt on the validity of the previous findings and policy recommendations that are typically based on the ml specification

the demand for alcohol the differential response to price although several studies indicate that drinking is responsive to price little work has focused on whether prices have a differential effect on light moderate or heavy drinking this study examines the price responsiveness of the demand for alcohol whether heavy drinkers are less sensitive to price than light or moderate drinkers the study uses data on alcohol consumption on the 1983 national health interview survey the results indicate that both light and heavy drinkers are much less price elastic than moderate drinkers further we cannot reject the hypothesis that the very heaviest drinkers have perfectly price inelastic demands

quality of medical care and choice of medical treatment in kenya an empirical analysis underutilization of medical facilities in african countries is widely believed to be a result of consumer disappointments with quality of care this paper uses data from a randomized household survey enriched with exogenous information on health facility attributes to examine more deeply the quality factor in health care demand in rural kenya we find that broad availability of drugs in a medical facility is positively related to medical care use contrary to intuitive expectations lack of prescription drugs is also positively related to medical care demand while lack of aspirin reduces demand we explain this counter intuitive result by noting that any measure of availability of a consumable input is evidence of both demand and supply demand may be positively correlated with lack of drugs for example precisely because there is excess demand for available supplies the results indicate the importance of selecting truly exogenous indicators of service quality for demand analysis we also find that health care demand decreases with user fees and with greater distance to the provider but increases with income gender is not a significant determinant of the choice of medical care in this dataset whether considered separately or interacted with service variables

a nonparametric vs latent class model of general practitioner utilization evidence from canada abstract predicting health care utilization is the foundation of many health economics analyses such as calculating risk adjustment capitation payments or measuring equity in health care utilization the most common econometric models of physician utilization are parametric count data models since the most common metric of physician utilization is the number of physician visits this paper makes two distinct contributions to the literature analyzing gp utilization i it is the first to use a nonparametric kernel conditional density estimator to model gp utilization and compare the predicted utilization with that from a latent class negative binomial model and ii it uses panel data to control for the potential endogeneity between self reported health status and the number of gp visits the goodness of fit results show the kernel conditional density estimator provides a better fit to the observed distribution of gp visits than the latent class negative binomial model there are some meaningful differences in how the predicted conditional mean number of gp visits changes with a change in an individual s characteristics called the incremental effect ie between the kernel conditional density estimator and the latent class negative binomial model the most notable differences are observed in the right tail of the distribution where the ies from the latent class negative binomial model are up to 190 times the magnitude of the ies from the kernel conditional density estimator

demand for health a generalised grossman model the demand for health and medical care is analysed within a generalised grossman type health investment model its underlying assumptions are shown to differ from those employed earlier in a manner which avoids some of the criticisms levelled at grossman s model the comparative static predictions of the generalised model are examined and it is demonstrated that most previous health investment models are derivable from it also the present model is applicable to a new wider range of problems thus increasing the scope of economic explanations of health behaviour

how does household portfolio diversification vary with financial literacy and financial advice household investment mistakes are an important concern for researchers and policymakers alike portfolio underdiversification ranks among those mistakes that are potentially most costly however its roots and empirical importance are poorly understood i estimate quantitatively meaningful diversification statistics and investigate their relationship with key variables nearly all households that score high on financial literacy or rely on professionals or private contacts for advice achieve reasonable investment outcomes compared to these groups households with below median financial literacy that trust their own decision making capabilities lose an expected 50 bps on average all group differences stem from the top of the loss distribution