theories of the price and quantity of physician services a synthesis and critique abstract in the traditional neoclassical model of supply and demand prices determine the allocation of economic resources the difficulty in applying this model to physician services is the rationing of resources directly by physicians themselves eliminating the allocative function of prices welfare consequences are appropriately judged in terms of efficiency and equity not departures from the structural relationships implied by supply and demand as interpreted here both competitive theories and target income theories of this market imply that physicians consider both their own welfare and the welfare of their patients in their decision making all consumer benefits and all producer costs are internalized by physicians they consequently have an incentive to obtain the maximum possible social benefit from the resources at their disposal to the extent that they are implicitly allowed to share in the resulting social gains the distributions of gains between patients and physicians is determined by professional ethics within bounds imposed by competitive forces

world poverty and the role of agricultural technology direct and indirect effects agricultural technology can help reduce poverty through direct and indirect effects direct effects are gains for the adopters while indirect effects are gains derived from adoption by others leading to lower food prices employment creation and growth linkage effects conceptualising and measuring these effects is highly complex yet is needed for each region if technology is to be used as an effective instrument for poverty reduction we propose a methodology for doing this in the context of computable general equilibrium modelling and apply it to archetype models for africa asia and latin america results show that the dominant effect of technology on poverty is through direct effects in africa indirect agricultural employment effects in asia and linkage effects through the rest of the economy in latin america in each case increasing the poverty reduction effect through the targeting of technology across crops and through complementary rural development programmes is also explored

an anomaly in the service industry the effect of entry on fees in the context of traditional microtheory the entry of new firms into a competitive market is always expected to lower the price of the product being exchanged however several empirical investigations of the private health care industry in the united states have uncovered an apparently perverse relation as the number of health care providers in the market increases the price of the health care service the nominal fee increases a statistically significant positive relation between fees and health care provider density e g physicians per capita has been reported by newhouse i970 fuchs and kramer i972 and dyckman i978 indeed pauly and satterthwaite i 980 asserted that the zero order correlation between physicians per capita and various measures of physician fees tends invariably to be positive these empirical data spawned a number of analyses of the fees charged in private health care markets some researchers used competitive models e g feldstein i970 and fuchs and kramer i972 and assumed health care providers to be price takers most notable however are the papers which abandoned neoclassical theory and turned instead to targeted income demand creation the idea that service providers are able to create demand was first introduced formally by newhouse i970 and subsequently expanded upon by evans et al i973 green i978 fuchs i978 and dyckman i978 the notion was that health care providers have some target income and if the number of providers increases each provider can maintain income by advising patients to consume additional services e g more diagnostic tests the providers are able to create demand and can increase the fee charged along the new demand curve anderson et al i 98 i examined theoretically the concept of supplier induced demand as they demonstrated supplier induced demand can explain the observed positive relation between provider density and fees however such a model also yields additional predictions not borne out empirically e g organised medicine would promote entry of new practitioners additional empirical evidence provided by pauly and satterthwaite i98i also puts into question the validity of targeted income demand creation we propose to reconcile the empirical evidence with traditional microtheory we utilise the full price notion introduced by devany i976 but our analysis goes beyond the implication that demand elasticity increases as more customersupplied time is required our analysis also differs from pauly and satterthwaite s i980 i98i attempt at reconciliation via their theory of increasing

farm productivity and rural poverty in india armed with new data we return to an old question from the pages of this journal to what extent do india s rural poor share in agricultural growth combining data from 24 household sample surveys spanning 35 years with other sources we estimate a model of the joint determination of consumption poverty measures agricultural wages and food prices we find that higher farm productivity brought both absolute and relative gains to poor rural households a large share of the gains was via wages and prices though these effects took time the benefits to the poor were not confined to those near the poverty line

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

nonfarm income diversification and household livelihood strategies in rural africa concepts dynamics and policy implications abstract asset activity and income diversification lie at the heart of livelihood strategies in rural africa this paper introduces a special issue on the topic income diversification and livelihoods in rural africa cause and consequence of change we concentrate on core conceptual issues that bedevil the literature on rural income diversification and the policy implications of the empirical evidence presented in this special issue

input subsidy programs in sub saharan africa a synthesis of recent evidence input subsidy programs have once again become a major plank of agricultural development strategies in africa ten african governments spend roughly us 1 billion annually on input subsidy programs isps amounting to 28 6 of their public expenditures on agriculture this article reviews the microlevel evidence on isps undertaken since the mid 2000s we examine the characteristics of subsidy beneficiaries crop response rates to fertilizer application and their influence on the performance of subsidy programs the impacts of subsidy programs on national fertilizer use and the development of commercial input distribution systems and finally the impact of isps on food price levels and poverty rates the weight of the evidence indicates that the costs of the programs generally outweigh their benefits findings from other developing areas with a higher proportion of crop area under irrigation and with lower fertilizer prices factors that should provide higher returns to fertilizer subsidies than in africa indicate that at least a partial reallocation of expenditures from fertilizer subsidies to r d and infrastructure would provide higher returns to agricultural growth and poverty reduction however because isps enable governments to demonstrate tangible support to constituents they are likely to remain on the african landscape for the foreseeable future hence the study identifies ways in which benefits can be enhanced through changes in implementation modalities and complementary investments within a holistic agricultural intensification strategy among the most important of these are efforts to reduce the crowding out of commercial fertilizer distribution systems and programs to improve soil fertility to enable farmers to use fertilizer more efficiently the challenges associated with achieving these gains are likely to be formidable

is land titling in sub saharan africa cost effective is land titling in sub saharan africa cost effective a cost benefit analysis suggests that the current system of formal titling should not be extended in rural madagascar and that any new system of land registration would have to be quite inexpensive to be worthwhile indeed establishing a modern property rights system without legally recognizing informal rights may expand the scope for rent seeking thus creating additional insecurity atwood 1990 purchasing a titled plot without easily being able to update the name on the document exposes the buyer to the risk that a relative of the seller sharing the family name might subsequently claim the plot or challenge the transfer analyses omitted here for brevity indicate that there is no significant advantage to owning titled land in terms of a household s access to formal credit after controlling for the household s landholdings within the mailles such land being much more likely to be titled and titled plots are no more likely to be used as collat

using evidence of household income diversification to inform study of the rural nonfarm labor market in africa abstract the labor market literature in developing countries has seldom drawn on the studies of rural household income diversification this paper draws on such studies to inform future study of the rural nonfarm labor market in africa the review of evidence provides some surprising departures from traditional images of nonfarm activities of rural households among the most striking is the dominant importance in the majority of case study areas of nonfarm wage labor as compared to self employment of nonfarm sector earnings as compared to farm sector wage earnings and of local nonfarm earnings as compared to migration earnings the most worrying finding was the poor distribution of nonfarm earnings in rural areas despite the importance of these earnings to food security and farm investments this poor distribution implies significant entry barriers and market segmentation it is probable that this will lead over time to an increasingly skewed distribution of land and other assets in rural africa

a theory of physician behavior with supplier induced demand the health care crisis of the 1960 s and 1970 s fueled unprecedented efforts by the congress to control costs and at the same time improve access to care as a basis for policy the economics literature offers confusing direction consisting of alternative theories of demand 9 13 theories of market structure 12 5 11 10 and theories of physician behavior and supply response 4 1 at the most fundamental levels of controversy economists have not resolved the issues of demand creation satisficing behavior and targeted income in the modelling of the physician firm the notion that health care markets may be dominated by the health care provider s ability to create demand was introduced formally in newhouse 12 evans parish and sully 4 green 8 and fuchs 6 all offer further refinement of the supplier induced model however as yet no formal presentation of such a theory exists to a large extent an analytical framework that incorporates the physician s decision making processes is absent and remains implicit in the empirical results found in the literature this paper presents a theoretical framework for a supplier induced model of physician behavior whereby we may compare and contrast its implications with those of the standard neoclassical model 1 the acknowledged strength of the supplier induced theory is its ability to explain empirical evidence which stands at odds with more traditional approaches in particular a number of studies have reported a direct association between physician density and physicians fees 12 7 2 that is as the stock of physicians increases the price of medi

a full pricing analysis of the owner managed firm in this paper we set forth a basic analytical framework for the study of the owner managed firm which is based on the assumption that customer time is an important determinant of the optimal delivery of services earlier research done in this area has to a large extent ignored the importance of customer time in the production process 2 4 9 thus the basic trade off between the money price of the service and the opportunity cost of being serviced is ignored more recently recognition of the importance of the value of time required for the acquisition of a product has been forcefully posited in de vany and saving 7 and saving 10 the main objective of this paper is to investigate the optimal changes in the ownermanager s decision variables consumption of a composite good factor usage the supply of services and fees in response to parametric changes in such factors as non labor income prices the value of customers time and the full price of services in the main our comparative statics results yield the same implications as those obtained using standard neoclassical theory provided the revenue function of the firm is concave factors exhibit hicks allen technical complementarity and the waiting time function is quasi convex however we also obtain some new and interesting results for example we find that increasing the value of customer s time reduces aggregate consumption of the ownermanager generates a labor supply response consisting of a negative substitution effect and a positive income effect and increases the use of other factors of production we also find that unlike the standard neoclassical model even if the production function exhibits hicks allen technical complementarity the own price effects of inputs are ambiguous finally since in the full price model owner manager fees are endogenous we obtain some new and interesting results concerning the response of optimal fees to parameter changes our analysis is based on the hypothesis that the customer s opportunity cost of receiving treatment is the value placed on the time spent waiting in line to be serviced and

a further analysis of the physician inducement controversy this article extends several recent contributions that have compared the physician induced demand hypothesis to the theory of a monopoly where advertising is included as a decision variable by introducing a standard profit maximizing model with inducement it derives the conditions for the optimum level of inducement to show that the controversy over inducement is directly related to the elasticity of demand for the physician s services in particular inducement is likely to be prevalent only where the individual physician has a high degree of monopoly power as measured by its elasticity of demand it will disappear entirely as competitive conditions are approached furthermore the article argues that a physician s level of induced output is likely to diminish and not increase as others have suggested following increases in physician supply

identification of physician induced demand whether market failure exists in the health care sector because physicians induce demand in their own self interest has not been clearly addressed because of identification problems a model is developed which includes the patient s financial burden as a limiting factor on demand inducement new data from a national survey are used to test the demand inducement hypothesis and identify physician initiated expenditures when individual health insurance and other factors are held constant additional corroboration of the physician induced demand hypothesis is found but the magnitude of the effect is very small and is statistically significant only for more discretionary expenditures

is there a j curve abstract if the response of the value of the trade balance to movements in the real exchange rate is described by a j curve then a real depreciation initially worsens a balance of trade deficit only improving it over time this paper investigates whether a j curve can be detected in the last twenty five years of american data no statistically reliable evidence of a stable j curve is detected the model is checked extensively to support this finding

current account norms in natural resource rich and capital scarce economies abstract the permanent income hypothesis implies that frictionless open economies with exhaustible natural resources should save abroad most of their resource windfalls and therefore feature current account surpluses resource rich developing countries rrdcs on the other hand face substantial development needs and tight external borrowing constraints by relaxing these constraints and providing a key financing source for public investment resource windfalls might then be associated with current account deficits or at least low surpluses in this paper we develop a neoclassical model with private and public investment and several pervasive features in rrdcs including absorptive capacity constraints inefficiencies in investment borrowing constraints and capital scarcity we use the model to study the role of investment and these frictions in shaping the current account dynamics under windfalls since consumption and investment decisions are optimal the model also serves to analyze current account norms benchmarks we apply the model to the economic and monetary community of central africa and discuss how our results can be used to inform external sustainability analyses in rrdcs

a clarification of theories and evidence on supplier induced demand for physicians services this article both simplifies and extends the literature on physician induced demand it shows that inducement should be expected in all imperfectly competitive markets that are also characterized by incomplete agency relationships more important it argues that confusion over the extent of the inducement phenomenon has been created by several contributions that fail to distinguish between the effects of changes in physician population ratios on changes in the individual physician s output and the effects on per capita utilization in particular it demonstrates that by confounding units of analysis the major empirical results found in recent articles by rossiter and wilensky are contradicted by their model their evidence however together with findings from other studies are reinterpreted to suggest that physicians are even more constrained than is generally believed in being able to induce increases in demand

informing food security decisions in africa empirical analysis and policy dialogue discussions of economic and agricultural development in africa have focused heavily in recent years on structural adjustment i e basic policy changes aimed at allowing international and domestic markets to play a greater role in coordinating national economic activities often these structural adjustments and accompanying policies aimed at improving economic performance have been based on several implicit assumptions about how african food systems operate yet for many countries little empirical information has been available to test these assumptions hence designing policies too often becomes an exercise in planning without facts this paper argues that not only is there a need to base food security and structural adjustment policies more firmly on empirical information but that the process by which the information is obtained is as important as the information itself agricultural economists and other social scientists can and increasingly should design policy research in africa in ways that simultaneously increase effective demand for empirical information as an input into the ongoing policy process and augment african capacity continually to inform policy deliberations we illustrate the payoffs to such an approach by drawing on selected experience in several african countries weber

the role of agriculture in economic development visible and invisible surplus transfers the financial surplus of agriculture has been central to theories of the role of agriculture in economic development morrisson and thorbecke mt have used a constant price social accounting matrix sam framework to measure rigorously the financial surplus of agriculture and decompose the mechanisms of surplus extraction history and theory have however stressed the role of prices as an invisible transfer mechanism in addition to the visible transfers identified in the sam framework we extend the mt approach by defining and measuring the real surplus of agriculture and decomposing the mechanisms of surplus extraction between visible and invisible financial transfers using an archetype computable general equilibrium model for poor african nations we trace the generation transfer and use of an agricultural surplus created by a productivity gain in agriculture this shows that prices indeed play an overwhelmingly important role in transferring a surplus from agriculture to the benefit of the rest of

external adjustment in oil exporters the role of fiscal policy and the exchange rate after the decline in oil prices many oil exporters face the need to improve their external balances special characteristics of oil exporters make the exchange rate an ineffective instrument for this purpose and give fiscal policy a sizeable role these conclusions are supported by regression analysis of the determinants of the current account balance and of the trade balance the results show little or no relationship with the exchange rate and especially for the less diversified oil exporters a strong relationship with the fiscal balance or government spending

do land markets improve land use efficiency evidence from jiangsu china inefficient use of scarce and fragmented land challenges the sustainability of agriculture land markets may improve land use efficiency in recent years china has employed various instruments to

global imbalances and petrodollars oil exporters have run large current account surpluses we explore oil exporters role in the global imbalances debate current account dynamics are estimated for oil exporting countries and the rest of the world we find that fiscal policy has a much stronger effect on the current account of oil exporters than on current accounts of other countries the current account adjustment of oil exporting countries is also faster fiscal policy of oil exporters can have a significant and speedy impact on global imbalances the impact via the adjustment of exchange rates might not be effective

is land titling in sub saharan africa cost effective evidence from madagascar formalizing land rights has been promoted as a way to encourage agricultural investment and stimulate land markets yet little is known about the benefits of such policies in sub saharan africa where the preconditions for success are less favorable the analysis uses a large sample of plots from an intensively titled rice growing area of madagascar and compares land specific investments land productivity and land values for titled and untitled plots cultivated by the same household having a title has no significant effect on plot specific investment and correspondingly little effect on land productivity and land values these results are broadly consistent with a simulation of a theoretical model of investment under expropriation risk calibrated to the same data a cost benefit analysis suggests that the current system of formal titling should not be extended in rural madagascar and that any new system of land registration will have to be quite inexpensive to be worthwhile

isolation and agricultural productivity this article examines the mechanisms that transmit isolation into productivity in particular we study the effect of isolation and transport infrastructure on welfare and agricultural productivity in the case of madagascar madagascar is a good case study given the bad shape of its infrastructure and therefore the significant variation in isolation based on comprehensive household survey data combined with a census of communes we discover a strong poverty isolation relationship further we find the inverse relationship between agricultural productivity and isolation to be surprisingly strong we isolate the following reasons why productivity might decline with isolation i transportation induced transaction costs ii the inverse relationship between plot size and productivity iii increasing price variability and extensification onto less fertile land and iv insecurity

current account dynamics real exchange rate adjustment and the exchange rate regime in emerging market economies abstract in emerging market economies real exchange rate adjustment is critical for achieving a sustainable current account position and thereby for helping to maintain macroeconomic and financial stability this study examines two related hypotheses i that real exchange rate adjustment promotes the rebalancing of the current account and ii that a flexible nominal exchange rate facilitates real exchange rate adjustment and thus the rebalancing of the current account evidence from an event study analysis for a large set of emerging market economies over the period 1975 2008 indicates that real exchange rate adjustment has contributed significantly to reducing current account imbalances the adjustment of current account deficits in countries with a fixed exchange rate regime typically occurs through an exchange rate crisis and substantial costs in terms of forgone output are incurred vector error correction analysis supports the findings of the event study namely in the long run real exchange rate movements facilitate current account adjustment

forward shifting of the personal income tax by self employed canadian dentists in this paper two tests are conducted of the null hypothesis that self employed canadian dentists do not shift the burden of their personal income tax forward to their patients by charging higher real dental fees the first test using ordinary least squares estimation of a reduced form dental fee equation is based on an exogenous tax variable the second test uses two stage least squares estimation of a reduced form dental fee equation with an endogenous tax variable both tests reject the null hypothesis of no forward shifting and fail to reject the hypothesis that self employed canadian dentists shift forward 100 percent of their personal income tax burden

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

post green revolution food systems and the triple burden of malnutrition developing country food systems have changed dramatically since the green revolution period at the same time malnutrition still represents a challenge and is now understood to encompass the three simultaneous dimensions of undernourishment micronutrient deficiencies and over nutrition manifest in overweight and obesity these changes in food systems and in the understanding of the global malnutrition challenge necessitate fresh thinking about food systems based strategies to reduce malnutrition this paper introduces a special section that offers such new perspectives we discuss trends with respect to indicators of the triple burden of malnutrition to understand the extent of global malnutrition challenges and then relate those to food systems transformation in developing countries

why have some indian states done better than others at reducing rural poverty the unevenness of the rise in rural living standards in the various states of india since the 1950s allowed the authors to study the causes of poverty they modeled the evolution of average consumption and various poverty measures using pooled state level data for 1957 91 they found that poverty was reduced by higher agricultural yields above trend growth in nonfarm output and lower inflation rates but these factors only partly explain relative success and failure in reducing poverty initial conditions also mattered states that started the period with better infrastructure and human resources with more intense irrigation greater literacy and lower infant mortality rates had significantly greater long term rates of consumption growth and poverty reduction by and large the same variables that promoted growth in average consumption also helped reduce poverty the effects on poverty measures were partly redistributive in nature after controlling for inflation the authors found that some of the factors that helped reduce absolute poverty also improved distribution and none of the factors that reduced absolute poverty had adverse impacts on distribution in other words there was no sign of tradeoffs between growth and pro poor distribution

farmers welfare and changing food prices nonparametric evidence from rice in madagascar this paper uses nonparametric density estimation and kernel smoothing techniques to examine the instantaneous distributional implications of rice price changes in madagascar while many farmers do not participate in product markets as either buyers or sellers and net sales or marketable surplus are fairly small for many others the roughly one third of rice farmers who fall below the poverty line face significant negative first order welfare effects from increases in the mean or variance of rice prices conversely the first order gains from rice price increases are highly concentrated among the largest rice farmers and particular regions in madagascar

the role of patient time in the pricing of dental services the fee provider density relation explained the literature on the economics of medical care has emphasized certain features of medical markets which appear to set them apart from the conventional supply demand framework of the theory of competitive markets ignorance of medicine and the efficacy of various treatments leave buyers of medical and or dental services dependent upon the physician dentist or other health care provider for information pertinent to the choice of treatment or procedure thus the traditional separation of the consumer s and supplier s decision making processes is broken down and the supplier is in a position to directly influence demand or may even be considered the decision maker proponents of the supplier induced demand model argue that physicians inflate demand whenever the supply of medical manpower is expanded this interpretation has gained attention because it appears to offer an explanation for the observed cross sectional positive relation between fees and the density of health care providers 2 it is well known however that the demand creation model which assumes a zero or constant marginal cost below marginal revenue of demand creation is not closed either fees or demand is unbounded one solution to this problem is to assume a target or reference income as a limit on demand creation feldstein 12 fuchs kramer 13 evans et al 9 with such a limit the demand creation satisficing model can be closed and

agricultural productivity growth rural economic diversity and economic reforms india 1970 2000 a salient theme in d gale johnson s work is the importance of agricultural development for general prosperity and for economic diversification e g johnson 2000 johnson has also noted that most of the world s poor are engaged in farming so that a key focus of development policy is to raise the incomes of farmers from a global perspective increasing the productivity of agriculture given the fixity of land is necessary for both poverty reduction and the development of the nonagricultural sector at the level of the world agricultural productivity gains poverty reduction and the growth of the nonfarm sector are complements however the question remains whether these observations imply that every poor country should focus its public resources on agricultural development in order to raise the incomes of people now engaged in farming and whether such a policy is necessary for obtaining economic diversity in this article we use the experience of india over the past 30 years to address the issue of whether agricultural technical change actually leads to economic diversification and income growth within the rural sector in the context of an open economy country in which there are cross area trade and capital flows we focus in particular on the rural sector because this is the sector in which linkages between agricultural and nonagricultural sectors are thought to be the strongest we exploit the fact that india has maintained a policy of openness with respect to agricultural technology over this period permitting and actively supporting agricultural development and has moved to a reformed regime in which goods are traded and capital is more mobile in the 1990s evidence on the relationship between agricultural growth and nonfarm

agricultural technology productivity and poverty in madagascar summary this paper uses a unique spatially explicit dataset to study the link between agricultural performance and rural poverty in madagascar we show that controlling for geographical and physical characteristics communes that have higher rates of adoption of improved agricultural technologies and consequently higher crop yields enjoy lower food prices higher real wages for unskilled workers and better welfare indicators the empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural madagascar

better technology better plots or better farmers identifying changes in productivity and risk among malagasy rice farmers we introduce a method for properly attributing observed productivity and risk changes among new production methods farmers and plots by controlling for farmer and plot heterogeneity results from madagascar show that the new system of rice intensification sri is indeed a superior technology although about half of the observed productivity gains appear due to farmer characteristics rather than sri itself the technology generates the estimated average output gains of more than 84 the increased estimated yield risk associated with sri would nonetheless make it unattractive to many farmers within the standard range of relative risk aversion