The income effect and supplier induced demand. Evidence from primary physician services in Norway

A much debated issue within the health economic literature is whether physicians can induce demand for their services. The relationship between physicians' ‘nonpractice income’ and supply of primary physician services in Norway is examined. It is argued that, if inducement exists, physicians with a low nonpractice income who work in municipalities where competition for patients is high, compensate for lack of patients by inducing demand. This model is adapted to the institutional setting of the Norwegian primary physician services, where there is a fixed fee schedule. The analyses were performed on a large set of data, encompassing all primary care physicians in Norway who are remunerated per item of treatment. Data on output in practice were merged with information about nonpractice income from the tax forms of the physician and her/his spouse. In municipalities with high physician density, nonpractice income had no effect on the number of consultations per physician, or on the number of treatment items per consultation. The results are interpreted as evidence against the inducement hypothesis.     

The impact of the Uruguay Round on tariff escalation in agricultural products

Tariff escalation (i.e. higher tariffs on processed agricultural products than on their input commodities) has been one of the obstacles for developing countries in their efforts to establish processing industries for exports. This article assesses the changes in tariff escalation resulting from the Uruguay Round (UR) tariff concessions, examining the agricultural import markets of EU, Japan and the US. The approach consisted of comparing the base and bound tariffs, as listed in the UR tariff schedules, of actual input/output processing relationships, taking also specific tariffs into account. Three main conclusions can be drawn. First, more than half of the commodity pairs have positive tariff wedges (escalating tariffs), about 10 per cent have no tariff wedges (input and output tariffs are equal) and the remaining one-third of the commodity pairs have negative tariff wedges (de-escalating tariffs). These numbers are roughly the same for both base and bound tariff wedges. Second, as a result of the UR tariff concessions more than 80 per cent of the tariff wedges have decreased (in absolute values, i.e. positive wedges have become less positive and negative wedges have become less negative). Convergence towards zero is therefore a common feature. Third, after the full implementation of the UR tariff concessions, high levels of nominal tariff escalation will still remain for a number of commodity pairs, highest in Japan and lowest in US. Considering only the positive tariff wedges, these will average 17 per cent after the implementation of the UR (down from 23 per cent of the base years). Finally, the study has certain methodological shortcomings, and a degree of caution is in order for countries contemplating export diversification and investing in valued-added industries. There are well known problems with “water in the tariffs” and the difference between applied and bound rates of duty that are common to all studies on this subject. In addition, a number of factors that are beyond the scope of this study should also be taken into account when export diversification is considered. These relate, inter alia, to the competitiveness of the export commodities or industries in question, availability of appropriate technologies and infrastructure, product standards, technical regulations and a host of consumer preference issues having to do with brand recognition as well as product characteristics.     

International Trade, Technological Development, and Agglomeration

The paper focuses on how localized dynamic external economies of scale may cause uneven technological development internationally, and encourage regional agglomeration of industries. Location-specific technological progress depends on the absolute number of local innovating firms, and the relative number of innovating firms; i.e., the share of economic activity in a region that takes place within the innovating sector. The creation of industrial clusters contributes to explaining regional specialization, factor prices and welfare, and it appears that the critical size of a region regarding its ability to sustain an industrial cluster depends on whether factors of production are internationally mobile.     

Simulating Ruin Probabilities for a Class of Semimartingales by Importance Sampling Methods

We consider the problem of finding the probability of ruin when the risk process is assumed to be a special semimartingale with absolutely continuous characteristics. We show how the generalized Girsanov theorem can be used in connection with Monte Carlo simulation to obtain estimates of the ruin probabilities. It is shown by both analytical and numerical examples that these methods can be significantly better than ordinary simulations provided the new measure is chosen with some care.     

Activity Engagement as Escape from Self: The Role of Self-Suppression and Self-Expansion

A two-dimensional model on escape motives in activity engagement was developed in three studies. We suggested that motivation to escape the self through engagement in an activity partly derives from intentions to either prevent negative affect or to promote positive affect. A scale for measuring these intentional mindsets was developed consisting of the subcategories self-suppression and self-expansion. Results showed that the dimensions were differently related to psychological predictors, outcomes, and experiences in the activity engagement. We argue that the present research introduces escapism as a relevant theoretical and empirical concept applicable to several types of activity engagements.     

The impact of the Uruguay Round on tariff escalation in agricultural products

Tariff escalation (i.e. higher tariffs on processed agricultural products than on their input commodities) has been one of the obstacles for developing countries in their efforts to establish processing industries for exports. This article assesses the changes in tariff escalation resulting from the Uruguay Round (UR) tariff concessions, examining the agricultural import markets of EU, Japan and the US. The approach consisted of comparing the base and bound tariffs, as listed in the UR tariff schedules, of actual input/output processing relationships, taking also specific tariffs into account. Three main conclusions can be drawn. First, more than half of the commodity pairs have positive tariff wedges (escalating tariffs), about 10 per cent have no tariff wedges (input and output tariffs are equal) and the remaining one-third of the commodity pairs have negative tariff wedges (de-escalating tariffs). These numbers are roughly the same for both base and bound tariff wedges. Second, as a result of the UR tariff concessions more than 80 per cent of the tariff wedges have decreased (in absolute values, i.e. positive wedges have become less positive and negative wedges have become less negative). Convergence towards zero is therefore a common feature. Third, after the full implementation of the UR tariff concessions, high levels of nominal tariff escalation will still remain for a number of commodity pairs, highest in Japan and lowest in US. Considering only the positive tariff wedges, these will average 17 per cent after the implementation of the UR (down from 23 per cent of the base years). Finally, the study has certain methodological shortcomings, and a degree of caution is in order for countries contemplating export diversification and investing in valued-added industries. There are well known problems with “water in the tariffs” and the difference between applied and bound rates of duty that are common to all studies on this subject. In addition, a number of factors that are beyond the scope of this study should also be taken into account when export diversification is considered. These relate, inter alia, to the competitiveness of the export commodities or industries in question, availability of appropriate technologies and infrastructure, product standards, technical regulations and a host of consumer preference issues having to do with brand recognition as well as product characteristics.     

Optimal dividend policies with transaction costs for a class of jump-diffusion processes

This paper addresses the problem of finding an optimal dividend policy for a class of jump-diffusion processes. The jump component is a compound Poisson process with negative jumps, and the drift and diffusion components are assumed to satisfy some regularity and growth restrictions. Each dividend payment is changed by a fixed and a proportional cost, meaning that if ?? is paid out by the company, the shareholders receive k???K, where k and K are positive. The aim is to maximize expected discounted dividends until ruin. It is proved that when the jumps belong to a certain class of light-tailed distributions, the optimal policy is a simple lump sum policy, that is, when assets are equal to or larger than an upper barrier $\bar{u}^{*}$ , they are immediately reduced to a lower barrier $\underline{u}^{*}$ through a dividend payment. The case with K=0 is also investigated briefly, and the optimal policy is shown to be a reflecting barrier policy for the same light-tailed class. Methods to numerically verify whether a simple lump sum barrier strategy is optimal for any jump distribution are provided at the end of the paper, and some numerical examples are given.     

The choice of trade regime: delayed reform under productivity fluctuations and cost of structural change

Despite the advantages of international trade, a number of countries have stuck to restricted trade regimes, allowing the productivity gap between themselves and the “trading” world to become huge before turning to a more outward oriented trade policy. As a supplement to the existing explanations for the hesitation to change trade regime, we present a model where the international productivity development shared by open economies, is uncertain. Due to uncertainty, it might be optimal to wait and maybe exercise the option to change trade regime later, i.e. to delay a trade reform.