aversion to health inequalities and priority setting in health care traditionally aversion to health inequality is modelled through a concave utility function over health outcomes bleichrodt et al bleichrodt h diecidue e quiggin j 2004 equity weights in the allocation of health care the rank dependent qaly model journal of health economics 23 157 171 have suggested a dual approach based on the introduction of explicit equity weights the purpose of this paper is to analyze how priorities in health care are determined in the framework of these two models it turns out that policy implications are highly sensitive to the choice of the model that will represent aversion to health inequality

transitory consumption durability and different approaches to test the life cycle model abstract transitory consumption and durability of consumption goods cannot be separately identified using euler equations tests of the life cycle model this problem can be solved by adopting a permanent income framework to test the theory

a new axiomatic approach to the evaluation of population health in this paper we explore the implications of normative principles for the evaluation of population health we formalize those principles as axioms for social preferences over distributions of health for a given population we single out several focal population health evaluation functions which represent social preferences as a result of combinations of those axioms our results provide new rationale for popular theories in health economics such as the unweighted aggregation of quality adjusted life years qalys or healthy years equivalents hyes and generalizations of the two aimed to capture concerns for distributive justice without resorting to controversial assumptions on individual preferences

adjustment costs durables and aggregate consumption abstract previous tests of the permanent income hypothesis pih have focused on either non durables or durables expenditures in isolation this paper studies consumer purchases of non durables and durables as the outcome of a single optimization problem it is shown that with non separability in utility the presence of adjustment costs of changing durables stocks may affect the time series properties of both components of expenditure an econometric test of the pih based on the model developed in the paper is both more efficient and less prone to bias than those in some previous studies however this test confirms earlier rejections of the pih in aggregate quarterly data

understanding preference for egalitarian policies in health are age and sex determinants this article presents an empirical assessment of the relevance of different factors when understanding preferences for outcome egalitarian policies in health in particular respondent age and sex a representative sample of the spanish population was interviewed n 1209 after being informed that those from the higher social class have longer life expectancy at birth than those from the lower social class respondents were required to choose between two programmes to increase life expectancy of the two groups by the same amount the distribution neutral programme and to target the lowest social class group thereby reducing current health inequalities the targeting or egalitarian programme two variants one with and the other without visual aid are used majority 69 of respondents support targeting an effect of age was observed where younger and older individuals are less likely to target the egalitarian policy than those in middle age however individual s sex was not associated wit

consumer durables and the real interest rate one important channel through which real interest rates affect aggregate demand is consumer expenditure on durable goods this paper examines empirically the link between interest rates and consumer durables solving for the decision rule relating income and interest rates to consumer demand is an intractable task this paper avoids this problem by examining the first order conditions necessary for maximization by the representative consumer structural parameters of there presentative utility function are thus recovered the estimated model suggests that expenditure on consumer durables is far more sensitive to changes in the interest rate than is expenditure on nondurables and services this abstract was borrowed from another version of this item

demand fluctuations and firm heterogeneity this paper reports evidence supporting the hypothesis that production flexibility is one of the forces that explain differences in the distribution of firm sizes across industries using a data set composed of annual observations on 163 four digit manufacturing industries over the period 1978 88 the authors find a negative relationship between market share and sales variability this empirical result suggests that large and small fir ms each have their own efficiency niches while large firms enjoy the advantage of static production efficiency the flexible production technologies of small firms enable them to respond better to changin g demand conditions copyright 1993 by blackwell publishing ltd

inequality aversion health inequalities and health achievement this paper addresses two issues the first is how health inequalities can be measured in such a way as to take into account policymakers attitudes towards inequality the gini coefficient and the related concentration index embody one particular set of value judgements by generalising these indices alternative sets of value judgements can be reflected the other issue addressed is how information on health inequality can be used together with information on the mean of the relevant distribution to obtain an overall measure of health achievement

axioms for health care resource allocation this paper examines principles of health care resource allocation based on axioms for individual preferences and distributive justice we establish axioms for representing individual preferences by quality adjusted life years qalys as well as axioms for existence of a social welfare function depending only on qalys a symmetric cobb douglas social welfare function is characterized by an axiom stating that social welfare is anonymous with respect to the distribution of individual life years replacing this axiom with an axiom of non age dependence we obtain a characterization of a utilitarian social welfare function with certain weights further we give axioms for a social welfare function being a weighted sum of power transformations of individual qalys

are some lives more valuable an ethical preferences approach we develop a theoretical model of the ethical preferences of individuals combining individual social welfare functions and random utility theory the model is applied by conducting a choice experiment regarding safety enhancing road investments that target different age groups and road user types the relative value of a saved life is found to decrease with age such that the present value of a saved life year is almost independent of age at a pure rate of time preference of a few percent moreover a saved pedestrian is consistently valued higher than a saved car driver of the same age

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

equity in health the importance of different health streams this paper develops a conceptual framework in which preferences about the distribution of future health gains depend on differences in four health streams these are as follows 1 the amount of health to be gained 2 the no treatment profiles 3 the amount of health experienced thus far and 4 the amount of health gained previously as a result of public health interventions this classification puts the well established concerns for severity stream 2 and age weights stream 3 into a more complete analytical framework stream 4 has not been discussed to date and the paper suggests some moral arguments about the distributive relevance of this stream of health

determining the parameters in a social welfare function using stated preference data an application to health one way in which economists might determine how best to balance the competing objectives of efficiency and equity is to specify a social welfare function swf this paper looks at how the stated preferences of a sample of the general public can be used to estimate the shape of the swf in the domain of health benefits the results suggest that it is possible to determine the parameters in a social welfare function from stated preference data but show that people are sensitive to what inequalities exist and to the groups across which those inequalities exist

health inequality and non monotonicity of the health related social welfare function in a recent paper in this journal abasolo and tsuchiya abasolo i tsuchiya a 2004 exploring social welfare functions and violation of monotonicity an example from inequalities in health journal of health economics 23 313 329 have strongly argued for the use of a non monotonic health related social welfare function this note discusses both the limitations of the measure proposed by abasolo and tsuchiya abasolo i tsuchiya a 2004 exploring social welfare functions and violation of monotonicity an example from inequalities in health journal of health economics 23 313 329 and the problems associated with their empirics we are able to show how non monotonicity may lead to paradoxical results and policies further we examine the empirics of abasolo and tsuchiya abasolo i tsuchiya a 2004 exploring social welfare functions and violation of monotonicity an example from inequalities in health journal of health economics 23 313 329 and provide an alternative explanation to the observed patterns in the data that do not violate monotonicity finally we briefly mention why the atkinson sen framework may be more appropriate as a way forward

on the economic foundations of cea ladies and gentlemen take your positions abstract there are still many ongoing debates about several aspects of the methodology of economic evaluations of health care interventions some of the disparities in recommendations on methodological issues may be traced back to different viewpoints on cost effectiveness analysis cea in general two important views are the welfarist approach which aims at embedding cea into traditional welfare economics and the decision maker s approach which takes a broader and more pragmatic view on cea the focus in welfarism may be on utility while that of the decision maker s approach may be considered to be on health in this paper it is examined how these two views differ and how these differences may subsequently lead to debates in methodological areas it is indicated that embedding the practical operationalisation of cea in welfare economics seems impossible in a strict welfarist approach it is necessary to view qalys as being utilities although one may question whether such an approach to qalys is appropriate also equity considerations may play an important role in cost effectiveness analysis and these should preferably be taken into account in a way that reflects societal attitudes towards an equitable distribution of health care these equity considerations may not always be directly related to utility or efficiency furthermore both camps may prefer different methods for cost measurement in areas such as productivity costs and informal care a better recognition of the contents and origins of controversies and disputes may enhance the clarity of discussions

options using a collective lottery to ration vaccines during an influenza pandemic for many countries the best way to counter an influenza pandemic is to provide citizens with a pandemic vaccine however since the global supply of the vaccines is far smaller than the quantity demanded how to allocate the limited vaccines can be a very challenging task for them in this study we introduce a collective lottery mechanism that allocates vaccines as fairly as the traditional lottery while also offering more options for family members or those who are close so that they can choose the joint probability of successes that can maximize their welfare this mechanism thus gives rise to a pareto improvement over the traditional lottery our empirical study uses the us and the uk as examples in sequential collective lotteries that are simulated to prove that such an improvement while maintaining fairness in fact exists

a nonparametric elicitation of the equity efficiency trade off in cost utility analysis we performed an empirical elicitation of the equity efficiency trade off in cost utility analysis using the rank dependent quality adjusted life year qaly model a model that includes as special cases many of the social welfare functions that have been proposed in the literature our elicitation method corrects for utility curvature and therefore our estimated equity weights are not affected by diminishing marginal utility we observed a preference for equality in the allocation of health the data suggest that the elicited equity weights were jointly determined by preferences for equality and by insensitivity to group size a procedure is proposed to correct the equity weights for insensitivity to group size finally we give an illustration how our method can be implemented in health policy

health inequality and non monotonicity of the health related social welfare function a rejoinder this rejoinder demonstrates that the arguments made in at 2006 are not robust and the case against non monotonic hrswf and their empirics remain overwhelming

qalys and the equity efficiency trade off as the volume of research on quality adjusted life years qalys has increased concern has begun to be expressed about the equity aspects of resource allocation decisions based on the results of this research this paper suggests that a common theme running through the criticisms of the qaly approach is a concern about inequality it also suggests that the method for incorporating distributional concerns which is currently being pursued by advocates of the qaly approach will only ever capture concerns other than a concern about inequality the paper suggests a method for incorporating both sets of concerns into resource allocation decisions

flexibility in the face of demand fluctuations employment capacity utilization and industry structure abstract this paper contributes to the theory of industry structure with fluctuating demand which was applied to us output and employment data by mills and schumann american economic review 1985 75 758 767 the paper extends the theoretical model and applies it to a unique set of german panel data of individual firms explaining fluctuations in employment and capacity utilization this contributes to the generally underinvestigated demand side of employment behavior

investigating the social value of health changes this survey has demonstrated that the danish public is concerned with distributional aspects of health gains they have a strong inclination to give priority to those in a more severe health state provided their expected benefits are large enough to bring them to the health level where their rival patients are without treatment results also indicated that the equity argument may not apply with equal force on all health dimensions respondents did to some extent trade off equity for greater health gains a nouvelle finding is that the valuations of health increments per se seem to be affected by whether questions are framed as individual or social choices if social decision making is the issue health gains which involve relieving patients of extreme problems are valued more highly than relief of minor ailments these discrepancies between individual and social valuations suggest that the use of qaly values elicited from an individual s perspective may not be valid in social decision making

flexibility choices and oligopolistic competition in an evolutionary environment we study the problem of the endogenous choice of technology when the level of demand is uncertain firms can choose either a flexible technology which allows them to vary the cost structure or a rigid technology which in periods of high demand is more efficient firms tend to adopt the ex ante more rewarding technology we develop a full dynamic model with given number of firms as well as with entry and exit and with perfect foresight as well as with myopic firms we show that firms with different technologies can coexist in the market in a permanent way and characterise the parameter configurations leading to such results

surprises in the consumption function the life cycle hypothesis has been the dominant theoretical basis for empirical work on the aggregate consumption function for about a quarter of a century under it real consumption is proportional to real life cycle wealth where the factor of proportionality depends on real interest rate expectations and the demographic structure of the population life cycle wealth is the sum of financial and human wealth however because the latter is the present real value of the stream of labour and transfer income expected over the life cycle it is not directly observable this fact has led to a great variety of proxying devices in empirical applications and in consequence much looseness in the interpretation of very different models as being all consistent with life cycle theory indeed one can argue that this has protected the hypothesis from being seriously tested and perhaps rejected an insight associated with friedman 1957 is that the view taken by consumers of life cycle income does not alter by much from period to period since there is greater persistence in life cycle income than in current income this also explains the greater persistence of consumption than of current income intuitively this would suggest that lagged consumption being related to last period s perception of life cycle income which in turn is not much different from this period s perception should have a major role in predicting current consumption this intuition was formalised by hall 1978 using ideas familiar from the study of stock market prices and the term structure of interest rates hall showed that if the real rate of interest is constant and given a number of other assumptions including no transitory element in consumption then the life cycle hypothesis implies that

exploring social welfare functions and violation of monotonicity an example from inequalities in health the social welfare function swf has been used within the economics literature to study trade offs between equality and efficiency these swfs are characterised by properties determined by traditional welfare economics one of these properties the monotonicity principle is explored in this paper in the context of health there may be occasions when the monotonicity principle is violated as there may be circumstances where distributional issues dominate efficiency concerns when this is the case conventional swfs are not flexible enough to represent such social preferences therefore we propose a swf with an alternative specification which is general enough to accommodate preferences that are not necessarily monotonic a survey of the spanish general public was undertaken to estimate preferences regarding equality in health relative to efficiency in health the results with 973 usable responses give strong support to the existence of public preferences which violate the monotonicity principle and thus to the usefulness of the alternative specification proposed here

consumption of non durables and durables an empirical note abstract the empirical analysis of consumption in four european countries and the u s a shows different autocorrelation patterns for non durables and durables which do not however correspond to the differences implied by the life cycle permanent income model as formulated by hall and mankiw

the measurement of individual utility and social welfare it has been suggested by a number of economists that decisions about how to allocate scarce health care resources should be informed by the cost per quality adjusted life years qalys of the different alternatives one of the criticisms of the qaly approach is that it is based on the measurement of individual utility yet the values elicited are used to inform social choice in this respect it is argued that the qaly approach fails to take account of distributional issues that are known to be important in the context of health care this paper addresses this issue and presents an approach grounded in microeconomic theory that is flexible enough to deal with a wide range of efficiency equity trade offs while making the nature of the trade off transparent in addition it is an approach that is relatively simple to investigate empirically and the results of a preliminary study are presented as illustration of this

price leadership with incomplete information abstract the dominant firm is a price searcher for the market as such it is in the position of providing a public good for fringe suppliers this public good consists in the price setter s search for the best price this paper presents a model of the dominant firm s behavior in acquiring information about demand where such information is costly the results accord with intuition for example the larger the market share of the dominant firm the more information it acquires

the persistence of market leadership evidence from japan this article explores the persistence of market leadership in japanese manufacturing industries over the period 1975 2004 by applying survival data techniques we examine how long market leadership persists and how the duration of market leadership varies according to industry specific characteristics our findings indicate that market leaders maintain their leadership positions for on average 20 years from 1975 in japanese manufacturing industries we provide evidence that market leadership tends to persist in capital intensive and legally cartelized industries whereas it is less likely to persist in demand volatile r d intensive and import intensive industries copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the equity efficiency trade off in environmental policy evidence from stated preferences the design of environmental policy raises several equity issues in particular the distribution of benefits and costs at the same time it has often been argued that there is a trade off in environmental policy between equity and efficiency which brings these issues firmly to the attention of environmental economics in this paper we use a simple choice experiment to elicit individual preferences over equity efficiency trade offs in the context of two environmental problems local air pollution and global climate change we find that equity matters to people as much as efficiency does in the design and delivery of environmental policy

health related externalities evidence from a choice experiment health related external benefits are of potentially large importance for public policy this paper investigates health related external benefits using a stated preference discrete choice experiment framed in a health care context and including choice scenarios defined by six attributes related to a recipient and the recipient s condition communicability severity medical necessity relationship to respondent location and amount of contribution requested subjects also completed a set of own treatment scenarios and a values orientation instrument we find evidence of substantial health related external benefits that vary as expected with the scenario attributes and subjects value orientations the results are consistent with a number of hypotheses offered by the general theoretical analysis of health related externalities and the analysis of externalities specific to health care

technology investment under flexible capacity strategy with demand uncertainty abstract this paper investigates technology investment under flexible capacity strategy with demand uncertainty technology investment enables a firm to reduce its total production cost while flexible capacity strategy aims to reduce a firm s production waste by postponing production until demand is known adopting a general technology investment cost we examine how technology investment cost structure affects a firm s technology investment decisions we derive the conditions under which the firm will benefit from technology investment we show that the firm can increase its expected profit through technology investment only when the unit technology investment cost that varies inversely with the basic technology level is below a threshold however even though the technology investment cost is zero the benefit from the increase in technology level is limited furthermore we analytically determine the optimal technology levels and establish their relationships under different technology investment cost structures our findings will help firms evaluate various technology investment options and choose the most proper one