health expenditure growth looking beyond the average through decomposition of the full distribution explanations of growth in health expenditures have restricted attention to the mean we explain change throughout the distribution of expenditures providing insight into how expenditure growth and its explanation differ along the distribution we analyse dutch data on actual health expenditures linked to hospital discharge and mortality registers full distribution decomposition delivers findings that would be overlooked by examination of changes in the mean alone the growth rate of hospital expenditures is greatest at the middle of the distribution and is driven mainly by changes in the distributions of determinants pharmaceutical expenditures increase most rapidly at the top of the distribution and are mainly attributable to structural changes including technological progress making treatment of the highest cost cases even more expensive changes in hospital practice styles make the largest contribution of all determinants to increased spending not only on hospital care but also on pharmaceuticals suggesting important spill over effects

a theory of socio economic disparities in health over the life cycle motivated by the observation that medical care explains only a relatively small part of the ses health gradient we present a life cycle model that incorporates several additional behaviours that potentially explain jointly a large part of observed disparities as a result the model provides not only a conceptual framework for the ses health gradient but more generally an improved framework for the production of health we derive novel predictions from the theory by performing comparative dynamic analyses more generally our comparative dynamic method can be applied to models of similar form e g human capital health deficits firm investment to name a few

exploring the core factors and its dynamic effects on oil price an application on path analysis and bvar tvp model abstract as the uncertainty of oil price increases impacts of the influential factors on oil price vary over time it is of great importance to explore the core factors and its time varying influence on oil price in view of this based on the path analysis model this paper obtains the core factors builds an oil price system var model which uses demand supply price and inventory as endogenous variables and china s net imports as well as dollar index as exogenous variables then we set up a bvar tvp time varying parameter model to analyze dynamic impacts of core factors on oil price the results show that 1 oil prices became more sensitive to oil supply changes and the influence delays became shorter 2 the impact of oil inventories on oil prices with a time lag of two quarters but has a downward trend 3 the impact of oil consumption on oil prices with a time lag of two quarters and this effect is increasingly greater 4 the us dollar index is always the important factor of oil price and its control power increases gradually and the financial crisis occurred in 2008 further strengthens the influence of us dollar

the effect of uncertainty on the demand for medical care health capital and wealth we analyze the effect of the uncertainty of the incidence of illness on the demand for medical care and on the accumulation of health capital and wealth over the retirement years we use a simplified version of a dynamic grossman household production model to characterize patterns of an individual s precautionary behavior elderly individuals respond to uncertainty by smoothing their expected utility over time by making specific patterns of purchases of medical care and consumption we examine these patterns for individuals with different degrees of risk aversion

a flexible approach for estimating the effects of covariates on health expenditures our estimation strategy uses sequences of conditional probability functions similar to those used in discrete time hazard rate analyses to construct a discrete approximation to the density function of an outcome of interest conditional on exogenous explanatory variables once the conditional density function has been constructed we can examine expectations of arbitrary functions of the outcome of interest and evaluate how these expectations vary with observed exogenous covariates we demonstrate the features and precision of the conditional density estimation method and compare it to other commonly used methods through monte carlo experiments and an application to health expenditures using the rand health insurance experiment data overall we find that the approximate conditional density estimator provides accurate and precise estimates of derivatives of expected outcomes for a wide range of types of explanatory variables

the structure of demand for health care latent class versus two part models we contrast the two part model tpm that distinguishes between users and non users of health care with a latent class model lcm that distinguishes between infrequent and frequent users in model comparisons using data on counts of utilization from the rand health insurance experiment rhie we find strong evidence in favor of the lcm we show that individuals in the infrequent and frequent user latent classes may be described as being healthy and ill respectively although sample averages of price elasticities conditional means and event probabilities are not statistically different the estimates of these policy relevant measures are substantively different when calculated for hypothetical individuals with specific characteristics

on the distribution and dynamics of health care costs using data from the health and retirement survey and the assets and health dynamics of the oldest old survey we estimate the stochastic process that determines both the distribution and dynamics of health care costs we find that the data generating process for log health costs is well represented as the sum of a white noise process and a highly persistent ar 1 process we also find that the innovations to this process can be modelled with a normal distribution that has been adjusted to capture the risk of catastrophic health care costs simulating this model we find that in any given year 0 1 of households receive a health cost shock with a present value of at least 125 000 copyright 2004 john wiley sons ltd

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

socio economic status health and lifestyle abstract the role of lifestyle in mediating the relationship between socio economic characteristics and health has been discussed extensively in the epidemiological and economic literatures previous analyses have not considered a formal framework incorporating unobservable heterogeneity in this paper we develop a simple economic model in which health is determined partially by lifestyle which depends on preferences budget and time constraints and unobservable characteristics we estimate a recursive empirical specification consisting of a health production function and reduced forms for the lifestyle equations using maximum simulated likelihood msl for a multivariate probit mvp model with discrete indicators of lifestyle choices and self assessed health sah on british panel data from the 1984 and 1991 health and lifestyle survey hals we find that sleeping well exercising and not smoking in 1984 have dramatic positive effects on the probability of reporting excellent or good sah in 1991 and that these effects are much larger having accounted for endogeneity the failure of epidemiological analyses to account for unobserved heterogeneity can explain their low estimates of the relevance of lifestyle in the socio economic status health relationship indicators for prudent alcohol consumption and eating breakfast in 1984 are not found to be statistically significant determinants of sah in 1991

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

internationalization through exaptation the role of domestic geographical dispersion in the internationalization process we introduce the notion of exaptation to internationalization theory a process in which a capability is re used for a purpose and in a context different than its historical purpose and context specifically we examine which domestic capabilities may be redeployed when organizations engage in cross border m as for the first time we suggest that organizations exapt re use coordination and control capabilities initially developed to manage domestic geographical dispersion to acquire and integrate external resources across borders by analyzing 693 indian business groups over a decade we add to the recent effort to frame the internationalization process within evolutionary theory

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

the dynamics of health in the british household panel survey this paper considers the dynamics of a categorical indicator of self assessed health using eight waves 1991 1998 of the british household panel survey bhps our analysis has three focal points the relative contributions of state dependence and heterogeneity in explaining the dynamics of health the existence and consequences of health related sample attrition and the investigation of the effects of measures of socioeconomic status with a particular focus on educational attainment and income to investigate these issues we use dynamic panel ordered probit models there is clear evidence of health related attrition in the data but this does not distort the estimates of state dependence and of the socioeconomic gradient in health the models show strong positive state dependence and heterogeneity accounts for around 30 of the unexplained variation in health copyright 2004 john wiley sons ltd

the unstudied barriers to widespread renewable energy deployment fossil fuel price responses abstract renewable energy policy focuses on supporting the deployment of renewable power generators so as to reduce their costs through scale economies and technological learning it is expected that once cost parity with fossil fuel generation is achieved a transition towards renewable power should continue without the need for further renewable energy subsidies however this reasoning implicitly assumes that the cost of fossil fuel power generation does not respond to the large scale penetration of renewable power in this paper we build a standard economic framework to test the validity of this assumption particularly in the case of coal and gas fired power generation we find that it is likely that the cost of fossil fuel power generation will respond to the large scale penetration of renewables thus making the renewable energy transition slower or more costly than anticipated more analysis is needed in order to be able to quantify this effect the occurrence of which should be considered in the renewable energy discourse

a model of the demand for longevity and the value of life extension we specify a demand function for longevity or quantity of life along with corresponding demand functions for indicators of quality of life and a value of health and life extension function we show that the demand for health must be derived in conjunction with that for longevity and the related consumption plan and that all choices depend on initial individual endowments and terminal conditions our comparative dynamics predictions indicate that optimal health and longevity are increasing functions of endowed wealth rather than necessarily current income that improvements in opportunities to produce health can accentuate the differences between endowed health and attained longevity levels and that the value individuals ascribe to their health may be increasing over a good portion of their life cycle we use this model to analyze observed empirical variations in levels and trends of life expectancy and in exposure to health risks across different population groups

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

oil development operating cost estimates 1955 1985 abstract few if any published oil production cost estimates can be verified as to method and basic data using us drilling costs and some assumptions explained in the text this paper estimates development operating costs in 41 oil producing nations from 1955 to 1985 from publicly available data on drilling estimation methods are described in detail so that anyone with access to better information on any item can substitute it to arrive at a better estimate

a dynamic analysis of the demand for health insurance and health care we find that asymmetric information is important for the uptake of supplementary private health insurance and health care utilization we use dynamic panel data models to investigate the sources of asymmetric information and distinguish short run selection effects into insurance from long run selection effects short run selection effects i e responses to shocks are adverse but small in size also long run effects driven by differences in for example preferences and risk aversion are small but we find some evidence for multidimensional asymmetric information for example mental health causes advantageous selection estimates of health care utilization models suggest that moral hazard is not important

the demand for health with uncertainty and insurance this paper develops michael grossman s demand for health model by letting the depreciation rate depend upon the level of health by letting the incidence and size of illness be uncertain and by investigating how the individual s demand for health would be affected by the introduction of insurance beside the more theoretical results there are also some results with important policy implications when formulating the hypothetical scenario in willingness to pay wtp studies it is important whether the individual believes that the level of health is uncertain or not the existence of insurance could also affect the stated wtp amount taking this into account could therefore explain some of the differences in the wtp for seemingly identical health care programs in different countries or different areas in the same country

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

a theoretical rationale for an inelastic demand for health care abstract this paper provides a theoretical rationale for the empirical finding that the demand for health care is inelastic using wagstaff bull econ res 38 1986 93 version of grossman j polit econ 80 1972 223 human capital model of the demand for health the paper develops a criterion to identify restrictions on the basics of the model i e on the utility and health production functions for the purpose of realizing an inelastic demand for health care

salience and consumer choice we present a theory of context dependent choice in which a consumer s attention is drawn to salient attributes of goods such as quality or price an attribute is salient for a good when it stands out among the good s attributes relative to that attribute s average level in the choice set or more broadly the choice context consumers attach disproportionately high weight to salient attributes and their choices are tilted toward goods with higher quality price ratios the model accounts for a variety of disparate evidence including decoy effects and context dependent willingness to pay it also suggests a novel theory of misleading sales

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

optimal medical treatment under asymmetric information a model is developed of patient doctor interaction under asymmetric information it examines how both the probability of consulting and initial health status are semi endogenously determined by a potential patient determining a threshold health level below which he demands a consultation it is shown that the demand elasticity with respect to socio economic variables is lower the more severe the illness the paper also offers a model of the supply side a distinction is established between uncertainty and asymmetric information between the patient and the doctor after deriving the conditions for an equilibrium of the patient doctor interaction payment systems for achieving medical adequacy and pareto efficiency are analysed

the asymmetric effects of reversible tariff changes under the united states gsp in a partial equilibrium textbook model of competitive international trade the volume and net value of imports always vary inversely with the tariff rate this result depends on assumptions that the tariff changes are substantial exogenous permanent and applied on a most favorednation mfn basis empirical applications of this theory however encounter different conditions generalequilibrium effects such as changes in prices exchange rates and income tend to be offsetting imperfect competition can make the incidence of the tariff indeterminate many tariff changes are small endogenous temporary and or discriminatory to illustrate how these differences in tariffs can alter their observed relation to imports we offer the following examples a tokyo round cuts in u s tariffs were staged generally over eight years and averaged only 0 3 percent per annum 6 as compared to 6 4 percent average annual changes in american import prices over the same 1980 87 period 18 if search and recontracting costs caused buyers to ignore relatively small price variations then many observed tariff changes would produce negligible effects b governments tend to lower tariffs when imports are low enough to obviate political problems and they raise them as a response to import surges observers who ignore this endogeneity might conclude that imports are positively related to tariff rates c while many tariff concessions are bound under the gatt some duties are temporarily altered to provide import relief for domestic producers or preferential access for certain trade partners importers may not respond if the temporary benefits of doing so are exceeded by the costs of finding substitutes d the importers response to a tariff change will also differ between cases where some or all imports of a given product are affected a discriminatory tariff change might shift the shares of suppliers while leaving total imports virtually unaltered empirical studies seldom test the relation between imports and tariffs directly time series estimates of import demand equations usually subsume the tariff in a gross price variable

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

more health care utilization with more insurance coverage evidence from a latent class model with german data we analyse the impact of optional deductibles private supplementary health insurance and income on the demand for health care utilization measured as the number of physician visits with data from the german socio economic panel soep with a set of newly available variables for the years 2002 2004 and 2006 that measure individual health more accurately and including risk attitudes towards health we find that possible endogeneity of the insurance choice is not a problem a latent class approach that takes into account the panel structure of the data reveals that especially individuals who have few doctor visits the low users respond strongest to insurance status and income in this group we find that more insurance increases the demand for physician visits and there is a pro rich inequity in health care utilization no such effects are found for the high users

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

the future of uk final user energy demand anticipation of final user energy demand is central to suppliers and policy makers plans recent developments in dynamic econometrics such as the cointegration approach have enabled energy modellers to study long run relationships between demand and its determinants principally economic activity and real prices the purpose of this paper is to present the seecem output elasticity estimates and forecasts using the cointegration approach as well as the methodology and analysis underlying them as economic activity is expected to grow in all but the iron and steel sector the long run relationships indicate that most sectors will increase overall fuel use up to the year 2000 despite weak but potentially volatile world oil prices and given stable environmental policies average real oil prices should remain broadly constant except in the transport sector economic activity elasticities and increased competition in supply industries imply that natural gas and electricity are likely to take an increasing share of final user requirements at the expense of petroleum products and coal this gradual and continued shift towards cleaner fuels is likely to ameliorate adverse environmental consequences resulting from the overall growth in final user fuel demand

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

income and health spending evidence from oil price shocks health expenditures as a share of gdp in the united states have more than tripled over the past half century a common conjecture is that this is a consequence of rising income we investigate this hypothesis by instrumenting for local area income with time series variation in oil prices interacted with local oil reserves this strategy enables us to capture both partial equilibrium and local general equilibrium effects of income on health expenditures our central income elasticity estimate is 0 7 with 1 1 as the upper end of the 95 confidence interval which suggests that rising income is unlikely to be a major driver of the rising health expenditure share of gdp 2013 the president and fellows of harvard college and the massachusetts institute of technology

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 empirical role of the exchange rate on the crude oil price formation this paper adopts a novel empirical approach to the crude oil price formation for the purpose of understanding the price reactions of opec member countries to changes in the exchange rate of the us dollar against other major currencies and prices of other members the results are broadly consistent with the view of the absence of a unified opec determined price in the international crude market literature in addition the results also highlight a cross regional dimension of the crude oil market

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

disease microdams and natural resources in tigray ethiopia impacts on productivity and labour supplies we examine the effects of water microdams and ensuing waterborne diseases on household decisions in tigray ethiopia where the government implemented a water resource development programme two decades ago we find microdams increase productivity of both fuelwood collection and crop production but the costs of these dams to households can be significant in villages close to dams disease prevalence is higher and all household labour categories spend more time sick and more time is spent by male and female adults caring for sick family members these can cost the household anywhere in the region of 150 250 birr per season depending on the type of labour diversion and the productivity of labour males are most significant here removing their time from production results in 40 60 per cent higher productivity and income losses compared to diversion of female labour sick households also spend significantly more money on health care especially when male and female adults are sick

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

estimating and forecasting the real prices of crude oil a data rich model using a dynamic model averaging dma approach given that oil price fluctuations have been of great interest for macroeconomics in the recent years due to its important implications for future inflation economic growth and policy making the aim of this paper is to estimate and forecast west texas intermediate wti crude oil prices using a large monthly dataset that covers the period from march 1983 to december 2011 to achieve this aim forecasting with factor models offers a usual approach that utilizes large datasets however a forecasting model which simply includes all factors in state space equation and does not allow for time varying may be not suitable with a highly volatile market such as oil market to overcome these limitations an approach that accounts both for parameter and model uncertainty is employed in particular this study uses the dynamic model averaging dma approach suggested by koop and korobilis 2012 the key element of the dma approach is that it allows both for model and parameter to vary at each point of time by doing so the dma is robust to structural breaks empirical findings show that dma approach outperforms any other alternative model used in the forecasting exercise results also show that there is model but not parameter variation in this oil price forecasting exercise finally the findings suggest that the dma approach provides a better proxy of expected spot prices than future prices

the determination of oil prices 1945 1995 the paper provides a theoretical framework to explain the determination of international oil prices based upon the interaction of supply and demand curves the analysis of components of the framework identifies important characteristics of the global market for crude oil the paper applies the framework to the oil market from 1945 in particular it incorporates key changes in the market to enhance understanding of how the market has been and is working finally the framework is used to explain why oil prices have become more volatile and what issues and questions arise from current oil market behaviour

priority setting in health care and higher order degree change in risk this paper examines how priority setting in health care expenditures is influenced by the presence of uncertainty about the severity of the illness and the effectiveness of medical treatment we provide necessary and sufficient conditions on social preferences under which a social planner will allocate more health care resources to populations at higher risk changes in risk are defined by the concept of stochastic dominance up to order n the shape of the social utility function and an equity weighting function are used to model the inequality aversion of the social planner we show that for higher order risk changes the usual conditions on preferences such as prudence or relative risk aversion are not necessarily required to prioritise health care when there are different levels of uncertainty associated with otherwise similar patient groups

uncertainty and the demand for medical care abstract this paper provides an analysis of the effects of uncertainty on the demand for medical care using a simplified version of grossman s human capital model of the demand for health two types of uncertainty are analysed the uncertainty surrounding the incidence of illness and the uncertainty surrounding the effectiveness of medical care in the first the consumer s basic level of health is assumed to be a random variable in the second the effectiveness of medical care is assumed to be random comparative static results are reported indicating the effects on the demand for medical care of both increases in the means of these distributions and mean preserving spreads of the distributions

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

new york city cab drivers labor supply revisited reference dependent preferences with rational expectations targets for hours and income this paper reconsiders whether cabdrivers labor supply decisions reflect reference dependent preferences following botond koszegi and matthew rabin 2006 we construct a model with targets for hours as well as income both determined by rational expectations estimating using henry s farber s 2005 2008 data we show that the reference dependent model can reconcile his 2005 finding that drivers stopping probabilities are significantly related to hours but not income with the negative wage elasticity of hours found by colin camerer et al 1997 and farber 2005 2008 the model yields sensible estimates that avoid farber s 2008 criticism that drivers income targets are too unstable to allow a useful reference dependent model of labor supply

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

trade benefits under the eec generalized system of preferences the purpose of the paper is to test for the existence of a statistically significant effect of the eec generalized system of preferences on actual trade flows between developing countries and the eec using a gravity type model we estimate the gross trade creation effect of the eec generalized system of preferences on the eec imports from 10 major developing countries estimation on a yearly basis for the period 1967 1978 indicates the presence of a statistically significant effect it would appear that gross trade creation amounted to about s2 billion for these 10 countries in 1978 in addition to these calculations the paper reviews the eec generalized system of preferences in detail and offers comments on its future impact on exports from developing countries

individual welfare when consumers can shop for health insurance i introduction the affordable care act aca of 2010 allows millions of americans to buy health insurance policies on competitive insurance exchanges as application denial is illegal consumers will be able to change health insurance policies when there are changes in the economic environment or health status the phenomenon of endogenous consumer contract choice is poised to play an important role in the study of health insurance demand and medical care utilization among the broad population not just for the elderly who can choose among alternative medicare plans this article illustrates the importance of endogenous consumer health insurance contract choice by analyzing the individual welfare effect of a reduction in the price of medical care a potential consequence of the aca we show that the insurance contract choice response is critical to determining the outcome ii prior literature the analysis of the individual moral hazard welfare effect of a medical care price decline was a topic of discussion in the literature during the last three decades of the previous century while there was disagreement on the perspective to take a conventional wisdom emerged as health insurance discounts the price of medical care the consumer faces a lower i e net price this causes moral hazard induced excess consumption and welfare loss for a given coinsurance rate a price decline further lowers the net price increases excess demand and exacerbates the welfare loss the conventional wisdom was challenged by gaynor haas wilson and vogt 2000 they focused on the competitive insurance company and allowed it to increase the coinsurance rate so as to offset the medical care price decline which leaves the net price demand and moral hazard induced welfare loss unchanged in the situation when the consumer decides to become uninsured they show that individual welfare loss can be reduced these form the basis for their proposition 1 the rest of their paper deals with societal welfare the current article relates to this proposition 1 the issue of individual moral hazard welfare loss as distinct from the issue of societal welfare the modeling approach has much in common with gaynor haas wilson and vogt 2000 our model is the dual we therefore shift the focus from the insurer to the consumer who explicitly exercises endogenous insurance contract choice we eschew their assumption of a unit elastic insurance demand and allow for other possible insurance demand responses not just the unit elastic one we show that if insurance demand is medical care price elastic then it is indeed possible to have a reduction in moral hazard welfare loss in our treatment however this outcome does not require the consumer to become uninsured furthermore and most important we show that the opposite can easily be true if insurance demand is inelastic i e the insured retains some portion of the reduction in out of pocket expense risk then moral hazard welfare loss increases after the price reduction although the increase is less than would occur in the absence of the contract choice effect our results build on our previous work in dusansky and k05 2006 we studied the role of health insurance choice in medical care demand taking a partial equilibrium approach the response of a competitive insurance industry was precluded in dusansky and koc 2010 we explored the interaction between the endogenous demands for health insurance and medical care demand using a more general principal agent model in which the competitive insurer s response to a medical care price change is explicitly allowed to alter the consumer s insurance choice set the current article extends that analysis to examine the effect of a medical care price change on individual consumer moral hazard welfare loss iii the model we employ a principal agent model in which the consumer faces health status uncertainty and is able to exercise endogenous insurance policy choice

optimal health insurance for multiple goods and time periods we examine the efficiency based arguments for second best optimal health insurance with multiple treatment goods and multiple time periods correlated shocks across health care goods and over time interact with complementarity and substitutability to affect optimal cost sharing health care goods that are substitutes or have positively correlated demand shocks should have lower optimal patient cost sharing positive serial correlations of demand shocks and uncompensated losses that are positively correlated with covered health services also reduce optimal cost sharing our results rationalize covering pharmaceuticals and outpatient spending more fully than is implied by static one good or one period models

health and other asset holdings despite clear evidence of correlations between financial and medical statuses and decisions most models treat financial and health related choices separately this article bridges this gap by proposing a tractable dynamic framework for the joint determination of optimal consumption portfolio holdings health investment and health insurance we solve for the optimal rules in closed form and capitalize on this tractability to gain a better understanding of the conditions under which separation between financial and health related decisions is sensible and of the pathways through which wealth and health determine allocations welfare and other variables of interest such as expected longevity or the value of health furthermore we show that the model is consistent with the observed patterns of individual allocations and provide realistic estimates of the parameters that confirm the relevance of all the main characteristics of the model

semi parametric estimation of hurdle regression models with an application to medicaid utilization this paper develops a semi parametric estimation method for hurdle two part count regression models the approach in each stage is based on laguerre series expansion for the unknown density of the unobserved heterogeneity the semi parametric hurdle model nests poisson and negative binomial hurdle models which have been used in recent applied literature the empirical part of the paper evaluates the impact of managed care programmes for medicaid eligibles on utilization of health care services using a key utilization variable the number of doctor and health centre visits health status measures and age seem to be more important in determining health care utilization than other socio economic and enrollment variables the semi parametric approach is particularly useful for the analysis of overdispersed individual level data characterized by a large proportion of non users and highly skewed distribution of counts for users 1997 john wiley sons ltd

higher order risk attitudes a review of experimental evidence abstract this paper reviews the recent but fast growing experimental literature on higher order risk attitudes after introducing the theoretical context we first review the basic evidence and empirical moderators of these risk attitudes we then discuss recent extensions to ambiguity time risk and multi attribute utility in the last part we review indirect evidence from applied economic decision tasks

health and portfolio choices a diffidence approach the effect of health status on portfolio decisions has been extensively studied from an empirical viewpoint in this paper we propose a theoretical model of individuals choice of financial assets under bivariate utility functions depending on wealth and health our approach makes an extensive use of the diffidence theorem we establish the conditions under which the share of wealth held in risky assets falls as 1 individuals health status deteriorates and 2 individuals health status becomes risky these conditions are shown to be related to the behavior of the intensities of correlation aversion and of cross prudence as wealth increases

employer investments in employee health implications for the family as health producer the model presented in this paper further extends the demand for health model in which the family is the producer of health investments to consider the case in which an employer has incentives for investing in the health of a family member the household and the employer are assumed to interact strategically in the production of health the general insight provided is that the conditions which determine the nature of the relationship between the employer and the employee for instance market conditions production technologies taxes and government regulation will also affect the allocation of health investments and health capital within the family

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

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

oil prices the start of an era abstract the paper argues that the international oil market has recently experienced fundamental changes which could well result in a significant discontinuity leading to much lower prices and consequent instability the paper develops an analytical framework to explain how oil prices are determined it then considers the future prospects for the various factors and driving forces which will influence future price it outlines in what way the oil market environment has altered and then considers two consequences of this new environment the volatility of oil prices and their absolute level

environmental quality medical care demand and environmental tax interactions assuming that improvements in environmental quality lead to lower demand for medical care it has been shown that general equilibrium interactions with the tax distorted labor market reduce the benefits from such improvements and thus lower the second best optimal environmental tax this paper provides some insights on how the link between environmental quality individual s health capital and the demand for medical care affects the analysis of pollution taxes the paper develops structural conditions under which improvements in environmental quality decrease increase the demand for medical care and discusses their implications for environmental tax interactions

the value of life and the rise in health spending over the past half century americans spent a rising share of total economic resources on health and enjoyed substantially longer lives as a result debate on health policy often focuses on limiting the growth of health spending we investigate an issue central to this debate is the growth of health spending a rational response to changing economic conditions notably the growth of income per person we develop a model based on standard economic assumptions and argue that this is indeed the case standard preferences of the kind used widely in economics to study consumption asset pricing and labor supply imply that health spending is a superior good with an income elasticity well above one as people get richer and consumption rises the marginal utility of consumption falls rapidly spending on health to extend life allows individuals to purchase additional periods of utility the marginal utility of life extension does not decline as a result the optimal composition of total spending shifts toward health and the health share grows along with income in projections based on the quantitative analysis of our model the optimal health share of spending seems likely to exceed 30 percent by the middle of the century

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

optimal choices under uncertainty the case of two argument utility functions this paper presents a unified treatment for the analysis of two argument utility functions with a random budget constraint the way in which changes in both additive and multiplicative risk affect optimal choices has been analyzed prov iding intuitive economic explanations to third order magnitudes which usually appear in this kind of analysis two examples are given in t erms of optimal savings and labor supply under uncertainty finally an application to taxation under uncertainty is given where both the effects of increased tax progressivity and the rules for efficient t axation are analyzed copyright 1988 by royal economic society

portfolio choice in retirement health risk and the demand for annuities housing and risky assets in a life cycle model a retiree faces stochastic health depreciation and chooses consumption health expenditure and the allocation of wealth between bonds stocks and housing the model explains key facts about asset allocation and health expenditure across health status and age the portfolio share in stocks is low overall and is positively related to health especially for younger retirees the portfolio share in housing is negatively related to health for younger retirees and falls significantly in age finally out of pocket health expenditure as a share of income is negatively related to health and rises in age

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

has the european community gsp increased ldc exports hypothesized differences in mean changes in shares of european community ec import markets over the period 1976 84 are tested for each of 36 less developed countries means are calculated for cases in which mfn tariffs are re established and for cases in which duty free treatment is restored under the ec generalized system of preferences they are compared with means for cases in which tariffs remained constant we attempt to control for both product specific and cyclical influences on imports in contrast to some previous results our findings suggest that denial restoration of preferential treatment i e a tariff increase decrease has its expected negative positive effect

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

measuring multivariate risk preferences in the health domain we investigate univariate and multivariate risk preferences for health longevity and wealth we measure attitudes toward correlation and attitudes toward higher order dependence structures such as cross prudence and cross temperance making use of the risk apportionment technique proposed by eeckhoudt et al 2007 for multivariate gains we find correlation aversion and cross prudence in longevity and wealth for losses we observe correlation seeking and cross imprudence we do not find clear evidence for cross temperance our results indicate that longevity and wealth are considered to be substitutes for gains but not for losses second univariate higher order risk preferences are comparable for longevity and wealth although somewhat closer to linearity for wealth third we find evidence that attitudes toward dependence structures in the health domain are sign dependent

health care insurance and the contract choice effect i introduction it is well known that consumers anticipate some aspects of their medical care consumption examples include obstetrical services dental procedures vision care outpatient mental health services and minor elective surgery so that medical care demand anticipation influences the choice of health insurance coverage in turn the characteristics of the chosen plan set the degree of cost sharing and therefore the net price that the consumer faces which is given by the percentage of cost sharing times the gross price of medical care this net price influences the consumer s actual demand for the broad range of medical services 1 in this way insurance choice is influenced by particular anticipated utilization and actual general utilization is influenced by the selected insurance plan health insurance choice and medical service demand are interdependent although this interdependence has been noted in the literature few researchers have attempted to model it 2 and none have explicated its implications for consumer demand behavior and the ensuing econometric analysis of medical care demand we do so in this article using an intertemporal model that highlights the role of expectations in the insurance choice medical care demand interaction under uncertainty we show that the medical care demand response to a change in its gross price consists of two separate components the standard neoclassical demand effect and an insurance contract choice effect when the gross price of medical care changes the net price to the consumer is altered for a fixed degree of cost sharing however a change in the gross price can prompt a change in the intended choice of health plan causing a change in the degree of cost sharing for example if the gross price of medical care rises our consumer may choose to pay a higher premium for an insurance policy that is more generous one that has a lower cost sharing percentage in this case the net price which first increased exogenously would now decrease endogenously the health insurance contract choice effect can play an important role in determining the consumer s observable demand response to a change in the gross price of medical care the standard medical care demand curve could be less responsive because of it and econometric studies of the price elasticity of medical care that ignore it which is typically the case in the literature would produce estimates that are erroneous furthermore although somewhat remote the contract choice effect opens the door to a perverse outcome a medical care demand curve that is upward sloping this could occur when the contract choice effect is very strong ii the model we consider an individual consumer who faces a single period two stage planning problem in the first stage the consumer makes an ex ante choice of insurance plan at the time this choice is made he knows his income for the period all prices including the gross price of medical care and his current health status however he is uncertain about his future health status in the second stage during which health status uncertainty is resolved the consumer makes ex post decisions about purchases of medical care and other goods in the first stage the consumer chooses from a variety of health insurance policies with varying characteristics the simplest has a deductible of some amount e g 250 per person 750 per family a percentage cost share e g consumer pays 20 the insurance provider 80 of each episode and a cap on total dollar outlay beyond which the insurer pays 100 of remaining expenses other policies place more emphasis on co payments e g consumer pays 20 to a physician for an office visit the insurance provider pays the balance of the negotiated cost and some policies combine all of these elements co pays for office visits 20 80 cost shares for hospital stays different mixes of percentage cost shares depending on services that are out of network in network but not preferred provider and so on

optimal health insurance for prevention and treatment this paper reexamines the efficiency based arguments for optimal health insurance extending the classic analysis to consider optimal coverage for prevention and treatment separately our paper considers the tradeoff between individuals risk reduction on the one hand and both ex ante and ex post moral hazard on the other we demonstrate that it is always desirable to offer at least some insurance coverage for preventive care if individual consumers ignore the impact of their preventive care on the health premium using a utility based framework we reconfirm the conventional tradeoff between risk avoidance by risk sharing and moral hazard for insuring treatment goods uncompensated losses that reduce effective income provide a new efficiency based argument for more generous insurance coverage for prevention and treatment of health conditions the optimal coinsurance rates for prevention and for treatment are not identical

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 method of constant market shares analysis reconsidered constant market shares cms analyses are frequently used in applied studies of export development this paper reviews the development of the method and argues that it can be considerably improved a new version of the method is developed which in addition to the familiar cms effects also allows for the calculation of effects reflecting the ability of each country to adapt its export structure to the changes in the commodity and country composition of world imports the method is applied to a sample of 20 oecd countries for the period 1961 83

an appropriate mechanism of fuels pricing for sustainable development abstract in this work the authors after a brief outlook concerning the markets of main energy commodities propose an alternative mechanism for fuel pricing consisted with a sustainable development technological change and technological pluralism costs and environmental issues are the benchmarks of the discussion developed the two mechanisms here proposed for fuel pricing try to encompass all these aspects stressing the scarcity concern not only under a merely based resource point of view but emphasizing also the technological variable as the first one to take into consideration in fact technology the mean by which resources are transformed into usable services energy forms is strictly linked to its limits above all productivity efficiency and environmental effects and cannot be any more considered only following the classical principles of the lowest cost of utilization without evaluating the other aspects related to the goals of sustainable development widely shared at the international level furthermore taking into consideration that some estimates of petroleum life expectancy calculate about 40 50 yr of consumption at current rates of demand a new mechanism to consider the right value of this resource and consequently all energy commodities is necessary without any pretension of exhaustion of the topic this work seems to be in line with this perspective trying to apply all these principles to price fuels

reference dependent consumption plans we develop a rational dynamic model in which people are loss averse over changes in beliefs about present and future consumption because changes in wealth are news about future consumption preferences over money are reference dependent if news resonates more when about imminent consump tion than when about future consumption a decision maker might to generate pleasant surprises overconsume early relative to the optimal committed plan increase immediate consumption following surprise wealth increases and delay decreasing consumption following surprise losses since higher wealth mitigates the effect of bad news people exhibit an unambiguous first order precautionary savings motive

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