capital utilization and capital accumulation theory and evidence a firm may acquire additional capital input by purchasing new capital or by increasing the utilization of its current capital the margin between capital accumulation and capital utilization is studied in a model of dynamic factor demand where the firm chooses capital labour and their rates of utilization a direct measure of capital utilization the work week of capital is incorporated into the theory and estimates the estimates imply that capital stock is costly to adjust while the work week of capital is essentially costless to adjust the estimated response of the capital stock to changes in its price and in the required rate of return is more rapid than found in other estimates

comparing the welfare effects of public and private health care subsidies in the united kingdom we use a calibrated analytical model to compare the welfare costs gross of externalities of increasing subsidies for public and private health care in the uk the model incorporates wait costs for rationed public care burdens that subsidies impose on the tax system and distributional weights for different households welfare costs are significantly higher for expanding public health care over a range of parameter scenarios both policies reduce average wait times but for public health care this is offset by new waiting costs incurred on extra treatments and the burden on the tax system is much larger for expanding public health care

the screening hypothesis and the marginal productivity theory abstract using micro level data from an indian private sector company hierarchy and earnings functions for each schooling group are estimated the results support the weak as well as the strong versions of the screening hypothesis besides establishing the diminishing marginal productivity theory

modelling the dynamics of a public health care system evidence from time series data the english national health service nhs was established in 1948 and has therefore yielded some long time series data on health system performance waiting time for inpatient care have been a persistent policy concern since the creation of the nhs after developing a simple theoretical framework of the dynamic interaction between key indicators of health system performance we investigate empirically the relationship between hospital activity waiting time and population characteristics using aggregate time series data for the nhs over the period 1952 to 2003 structural vector autoregression s var suggests that in the long run higher activity is associated with lower waiting times elasticity 0 9 an increase in the elderly population is associated with higher waiting time elasticity 1 3 in the short run higher lagged waiting time leads to higher activity elasticity 0 12 we also find that shocks in waiting times are countered by higher activity so the effect is only temporary

rationing by waiting and the value of time results from a natural experiment the authors analyze data from a natural experiment with rationing by waiting in the situation motorists were confronted with a choice between waiting in line for low priced gasoline or purchasing at a higher price without waiting they view this as a revealed preference experiment and use their choices to estimate the value of time spent waiting as a function of individual characteristics in most cases the estimates of the value of time are quite similar to individuals after tax wages 13 references 7 tables

a neo schumpeterian model of health services innovation the paper presents and empirically applies a neo schumpeterian model of innovation capable of studying interactions between service providers patients and policy makers and how these complex interactions determine the timing direction and success of innovations in the public sector the model is tested using a case study that traces the introduction and development of ambulatory surgery in a spanish hospital the multi agent model applies the ideas of schumpeter to services encompassing schumpeter s five types of innovation and re introducing the policy maker as a key agent in the innovation process the model has a number of advantages over previous reduced form models first it can analyse the interactions between the economic social and political spheres that make up the complex selection environment of innovations second it captures the recursive impact of radical innovations on agents competences and preferences and their relative power this brings politics power and rhetorical persuasion to the fore third it provides an improved set of definitions for radical and incremental innovation these are not only important for understanding the sources and drivers of innovation but also for the accurate measurement of innovation

why do investment euler equations fail this article isolates sources of misspecification in neoclassical investment euler equations without ad hoc alterations of the basic model first allowing for nonlinear marginal investment adjustment costs improves model performance slightly some further improvement results from isolating firms whose optimality conditions hold even in the presence of fixed costs of adjustment or costly reversibility finally i identify which instruments contribute to model failure via standard gmm based tests and also via the empirical likelihood estimator of imbens which allows testing overidentifying restrictions individually both methods show that financial instruments contribute to rejection of the overidentifying restrictions for all firms however only the empirical likelihood estimator shows that they are a source of failure for firms that attain an interior optimum

a game theoretic model of the relationship between prices and waiting times abstract issue the role of prices charged to patients as a policy instrument for altering waiting times method a game theoretic model is used to examine the determinants of waiting times results under certain circumstances an increase in the price charged to patients at some institutions will lower the waiting times at all institutions conclusions the results provide a set of policy implications and testable predictions that arise under a certain set of assumptions alternative assumptions as well as the policy implications and testable predictions associated with them are also examined

rates of return in the indian private sector abstract using micro level data from an indian private sector company we obtain a clearcut pattern of diminishing rates of return to schooling well in keeping with conventional human capital theory

another look at the linear q model an empirical analysis of aggregate business capital spending with maintenance expenditures the paper revisits the empirical investment literature which has established that aggregate business fixed investment is not found to be related linearly to marginal or average tobin s q the theoretical background is extended here by developing a supply side model where the depreciation rate of private capital is determined endogenously the firm can either invest in new capital which adds directly to the existing capital stock at the presence of convex adjustment costs or extend the durability of installed capital through maintenance expenditure which affects its depreciation rate the model shows that tobin s q is then a positively related sufficient statistic for both components of aggregate capital expenditures this central implication is tested empirically using aggregate time series survey data from canada on new investment and maintenance expenditures covering the period 1956 93 the estimated relationships produce significant and plausible parameter estimates for the structural parameters of the q model le texte examine la litterature empirique sur l investissement qui a etabli que le niveau d investissement agrege des entreprises en capital fixe n est pas relie de facon lineaire au coefficient moyen ou marginal q de tobin on enrichit l arriere plan theorique en developpant un modele d offre dans lequel le taux de depreciation du capital prive est determine de facon endogene l entreprise peut soit investir dans du capital nouveau ce qui ajoute directement au stock de capital existant soit allonger la vie du capital en place par des depenses de maintenance qui modifient le taux de depreciation le modele montre que le coefficient q de tobin est alors positivement relie aux deux composantes des depenses agregees en capital cette implication importante est mise au test empiriquement en utilisant les series chronologiques en provenance des enquetes de statistiques canada sur les nouveaux investissements et les depenses de maintenance pour la periode 1956 93 les relations estimees produisent des parametres plausibles et significatifs pour les parametres structurels du modele q

tax incentives and the demand for private health insurance we analyze the effect of an individual insurance mandate medicare levy surcharge on the demand for private health insurance phi in australia with administrative income tax return data we show that the mandate has several distinct effects on taxpayers behavior first despite the large tax penalty for not having phi coverage relative to the cost of the cheapest eligible insurance policy compliance with mandate is relatively low the proportion of the population with phi coverage increases by 6 5 percentage points 15 6 at the income threshold where the tax penalty starts to apply this effect is most pronounced for young taxpayers while the middle aged seem to be least responsive to this specific tax incentive second the discontinuous increase in the average tax rate at the income threshold created by the policy generates a strong incentive for tax avoidance which manifests itself through bunching in the taxable income distribution below the threshold finally after imposing some plausible assumptions we extrapolate the effect of the policy to other income levels and show that this policy has not had a significant impact on the overall demand for private health insurance in australia

rationing by waiting lists an implication in a recent article cotton lindsay and bernard feigenbaum 1984 present and test a model of rationing by waiting lists its novel feature is the recognition that being on some types of waiting list involves no opportunity cost and that consumers surplus cannot be dissipated by waiters undertaking costly activities that will help secure the good or service in question in this sense time does not act as a price although it imposes costs although lindsay s earlier version 1980 of this model has already been misinterpreted by some commentators 1 its heart is a waiting list that is equilibrated by attacking the assumption that the demand curve remains unchanged throughout the wait waiting time matters because the value of the good or service decays the longer it is delivered after order day while not wishing to take issue with this insight there are a number of points that need to be borne in mind when assessing the significance of the model especially in relation to the authors application to britain s national health service nhs

price changes maintenance and the rate of depreciation this study estimates rates of deterioration and depreciation for a sample of used privately owned single and twin engine aircraft over the period 1971 1991 the adoption of a strict liability stan

rationing by waiting lists an empirical investigation abstract many social systems rely on a waiting list rather than price as a rationing device we present a model of the waiting list for elective surgery in the british national health service waiting time is allowed to influence both supply of and demand for surgery the resulting models of supply and demand are estimated empirically using over 4000 observations the results indicate low elasticity of demand with respect to waiting time suggesting that increased resources may reduce waiting times without greatly stimulating utilization the policy implications are important for the british national government when choosing the level of public expenditure to be devoted to health care

quantifying uk capital adjustment costs this paper estimates uk capital adjustment costs using manufacturing and service industry data for 19702000 there is evidence of significant adjustment costs with a 1 increase in investment reducing value added by 0 05 this implies an elasticity of investment with respect to tobin s q of 2 5 and a convergence time for capital of 12 years the results suggest that adjustment costs may have caused half of the slowdown in uk total factor productivity tfp growth during the second half of the 1990s the impact is larger than that reported for the united states reflecting larger adjustment costs and higher investment growth

the market for elective surgery joint estimation of supply and demand this paper develops models of the demand for and supply of elective non emergency surgery using a panel of quarterly data for 200 english hospitals over the period 1995 2002 unusually distinct measures of supply outpatients seen and inpatient admissions and demand outpatient referrals and decisions to admit are available for each observation these offer the opportunity to estimate separate empirical models of supply and demand using ordinary least squares ols regression methods however the strong correlation between the residuals of these models suggests some merit in the deployment of seemingly unrelated regression sur methods although both static and dynamic sur estimations leave the results largely qualitatively unchanged sur estimation can have a considerable quantitative effect relative to the ols results for example sur estimation generates a lower elasticity of inpatient demand with respect to waiting time than that obtained via ols the results offer an important justification for more careful econometric modelling of hospital behaviour than has traditionally been employed in the health economics literature

estimation of the depreciation rate of physical and r d capital in the u s total manufacturing sector i introduction numerous studies on production and cost the sources of productivity and endogenous growth have recognized the pivotal role of the physical capital stock studies at various levels of aggregation over assets and industries have emphasized the crucial role of investment in plant and equipment in the growth of demand and productive capacity it is clearly recognized by economists and policymakers that knowledge capital approximated by rd 1986 to measure the depreciation rates of the stock of rd 1980 in the literature on dynamic demand models such an approach was first adopted by epstein and denny 1980 and more recently by kollintzas and choi 1985 for a single capital good and on a theoretical level in bernstein and nadiri 1987a 1987b the paper is organized as follows the specification of the model is presented in section ii section iii is devoted to a discussion of the data and to the presentation of the parameter estimates of the model in section iv we present the empirical results for the depreciation rates for physical and r d capital and compare them with those reported in the literature we compare the physical capital stock estimates generated by our model with the official capital stock estimates produced by u s department of commerce bureau of economic analysis in this section we also present our estimates of the decomposition of gross investment into replacement and expansion investment for both physical and r d capital these decompositions are important from the vantage point of public policy analysis

capital heterogeneity does it matter fundamental q and investment on a panel of italian firms we study the determinants of firms investment decisions with heterogeneous capital goods we exploit a panel of small and medium sized firms which allows us to distinguish between purchases and sales of capital goods we consider separately equipment and structures and test the hypothesis of convex adjustment costs we extend the fundamental q approach to the case of two capital inputs the results show that the standard convex costs model performs well for equipment but not for structures we find evidence of nonconvex adjustment costs in the case of structures

factor hoarding and the propagation of business cycles shocks this paper analyzes the role of variable capital utilization rates in propagating shocks over the business cycle to this end we formulate and estimate an equilibrium business cycle model in which cyclical capital utilization rates are viewed as a form of factor hoarding we find that variable capital utilization rates substantially magnify and propagate the impact of shocks to agents environments the strength of these propagation effects is evident in the dynamic response functions of various economy wide aggregates to shocks in agents environments in the statistics that we construct to summarize the strength of the propagation mechanisms in the model and in the volatility of exogenous technology shocks needed to explain the observed variability in aggregate u s output other authors have argued that standard real business cycle rbc models fail to account for certain features of the data because they do not embody quantitatively important propagation mechanisms these features include the observed positive serial correlation in the growth rate of output the shape of the spectrum of the growth rate of real output and the correlation between the forecastable component of real output and various other economic aggregates allowing for variable capital utilization rates substantially improves the ability of the model to account for these features of the data

socioeconomic inequality of access to healthcare does choice explain the gradient equity of access is a key policy objective in publicly funded healthcare systems however observed inequalities of access by socioeconomic status may result from differences in patients choices using data on non emergency coronary revascularisation procedures in the english national health service we found substantive differences in waiting times within public hospitals between patients with different socioeconomic status up to 35 difference or 43 days between the most and least deprived population quintile groups using selection models with differential distances as identification variables we estimated that only up to 12 of these waiting time inequalities can be attributed to patients choices of hospital and type of treatment heart bypass versus stent residual inequality after allowing for choice was economically significant patients in the least deprived quintile group benefited from shorter waiting times and the associated health benefits were worth up to 850 per person

measuring factor adjustment costs i estimate adjustment costs for labor and capital from the euler equations for factor demand for both factors i find relatively strong evidence against substantial adjustment costs my estimates use annual data from two digit industries my results support the view that rents arising from adjustment costs are relatively small and are not an important part of the explanation of the large movements of the values of corporations in relation to the reproduction costs of their capital i investigate the potential effects of three types of specification error 1 aggregation over time 2 aggregation over firms with heterogeneous demand shocks and 3 estimation of a convex adjustment cost technology in the presence of nonconvex discrete adjustment costs i find that the likely biases from these specification errors are relatively small

competition and waiting times in hospital markets this paper studies the impact of hospital competition on waiting times we use a salop type model with hospitals that differ in geographical locationand potentially waitingtime andtwotypesofpatients high benefitpatientswhochoosebetweenneighbouring hospitals competitive segment and low benefit patients who decide whether or not to demand treatment from the closest hospital monopoly segment compared with a benchmark case of monopoly we find that hospital competition leads to longer waiting times in equilibrium if the competitive segment is sufficiently large given a policy regime of hospital competition the effect of increased competition depends on the parameter of measurement lower travelling costs increase waiting times higher hospital density reduces waiting times while the effect of a larger competitive segment is ambiguous we also show that if the competitive segment is large hospital competition is socially preferable to monopoly only if the regulated treatment price is sufficiently high 2008 elsevier b v all rights reserved

issues on the measurement of the solow residual and the testing of its exogeneity evidence for canada abstract this paper examines the impact of adjusting the solow residual for variable capacity utilization on the empirical assessment of market structure and exogeneity of productivity shocks making use of an innovative measure of capacity utilization available in canada reveals that its aggregate market structure is well described by constant returns to scale and perfect competition in contrast to most studies which do not make this adjustment furthermore when the capital stock is adjusted for variations in utilization rates canadian productivity shocks are exogenous to real and monetary variables

estimating the euler equation for aggregate investment with endogenous capital depreciation this article looks at the empirical consequences of introducing endogenous capital depreciation in the standard neoclassical model with quadratic adjustment costs to this end we formulate an empirical specification that accommodates capital maintenance and utilization in the euler equations for aggregate investment the empirical estimates with data from the canadian survey on capital and repair expenditures show that in contrast to the existing literature the performance of the euler equations is improved when we account for the impact of variable capital depreciation

contingent valuation of time spent on nhs waiting lists this paper derives estimates of the consumer bourne costs of waiting lists for nonurgent medical care the methodology used is contingent valuation the paper examines the use of this methodology and presents the experimental context and the estimates derived the estimates indicate the average valuation of a month spent on a waiting list for nonurgent care is approximately 40 pounds but also show that there exist significant interpersonal differences in valuations copyright 1990 by royal economic society

dynamic hospital competition under rationing by waiting times abstract we develop a dynamic model of hospital competition where i waiting times increase if demand exceeds supply ii patients choose a hospital based in part on waiting times and iii hospitals incur waiting time penalties we show that whereas policies based on penalties will lead to lower waiting times policies that promote patient choice will instead lead to higher waiting times these results are robust to different game theoretic solution concepts designs of the hospital penalty structure and patient utility specifications furthermore waiting time penalties are likely to be more effective in reducing waiting times if they are designed with a linear penalty structure but the counterproductive effect of patient choice policies is smaller when penalties are convex these conclusions are partly derived by calibration of our model based on waiting times and elasticities observed in the english nhs for a common treatment cataract surgery

empirical studies of depreciation this paper surveys empirical research on depreciation based on an econometric model of asset prices introduced by hall in 1971 and shows how hall s model provides a vehicle for unifying research on constant quality price indices and depreciation an additional objective of the paper is to illustrate the use of this research in constructing an integrated system of income product and wealth accounts a system of vintage accounts like that originated by christensen and jorgenson in 1973 is the key to successful integration

new and old models of business investment a comparison of forecasting performance previous empirical evaluations of investment models have focused on the relative in sample fit of various nonstructural models the authors evaluation extends this work along two dimensions first they augment the usual set of models with two euler equations derived explicitly from dynamic optimization under rational expectations one euler equation is typical of those found in the investment literature while the other embeds time to build lags that yield a richer dynamic structure second the authors focus on out of sample forecast performance as the primary criterion of model evaluation their results indicate that the traditional models dominate both euler equations in forecasting investment copyright 1995 by ohio state university press

a dynamic model of supply of elective surgery in the presence of waiting times and waiting lists this paper analyses hospitals decisions regarding the supply of elective surgery in a dynamic model in the presence of waiting times and waiting lists we show that periods of increasing decreasing supply and increasing decreasing waiting list may be optimal paths towards the steady state we also analyse the hospitals response to exogenous shocks on the demand and the supply for example an increase in the marginal tariff for the provider generates overshooting in the supply supply jumps upwards when the shock is introduced and then slowly reduces towards the steady state value

returns to investment in education a global update the author updates compilations of rate of return estimates to investment in education published since 1985 and discusses methodological issues surrounding those estimates some key patterns among the three main levels of education primary education continues to exhibit the highest social profitability in all world regions private returns are considerably higher than social returns because of the public subsidization of education the degree of public subsidy increases with the level of education which is regressive social and private returns at all levels generally decline by the level of a country s per capita income overall the returns to female education are higher than those to male education but at individual levels of education the pattern is more mixed the returns to the academic secondary school track are higher than the vocational track since unit cost of vocational education is much higher and the returns for those who work in the private competitive sector of the economy are higher than in the public noncompetitive sector and the returns in the self employment unregulated sector of the economy are higher than in the dependent employment sector controversies in the literature are discussed in the light of the new evidence the undisputable and universal positive correlation between education and earnings can be interpreted in many ways the causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education given the fact that moral and pragmatic considerations prevent the generation of such pure data researchers have to make do with indirect inferences or natural experiments some have been attempted the author looks at the research on overeducation or surplus schooling the conclusions reinforce earlier patterns they confirm that primary education continues to be the number one investment priority in developing countries they also show that educating females is marginally more profitable than educating males that the academic secondary school curriculum is a better investment than the technical vocational tract and that the returns to education obey the same rules as investment in conventional capital that is they decline as investment is expanded