The Evolution of Health Insurer Costs in Massachusetts, 2010–2012

We analyze the evolution of health insurer costs in Massachusetts between 2010 and 2012, paying particular attention to changes in the composition of enrollees. This was a period in which Health Maintenance Organizations (HMOs) increasingly used physician cost control incentives but Preferred Provider Organizations (PPOs) did not. We show that cost growth and its components cannot be understood without accounting for (1) consumers’ switching between plans, and (2) differences in cost characteristics between new entrants and those leaving the market. New entrants are markedly less costly than those leaving (and their costs fall after their entering year), so cost growth of continuing enrollees in a plan is significantly higher than average per-member cost growth. Relatively high-cost HMO members switch to PPOs while low-cost PPO members switch to HMOs, so the impact of cost control incentives on HMO costs is likely different from their impact on market-wide insurer costs.     

The moderating effect of brand strength in manufacturer–reseller relationships

This study investigates the moderating effect of brand strength in manufacturer–reseller relationships. The business marketing literature has not previously addressed brand strength differences. This research tests these brand strength differences on a conceptual framework consisting of pathways from manufacturer brand benefits (manufacturer support, brand equity and customer expectations) to reseller relationship outcomes. A multi-group structural equation analysis shows that there are no differences in the manufacturer brand support and brand equity effects on reseller satisfaction between major and minor brands. However customer expectations are important when resellers evaluate minor brands, but not for major brands. Furthermore, the findings show that resellers of minor brands are more committed to and more likely to trust manufacturers of minor brands.     

The Year in Review: Economics at the Antitrust Division, 2009–2010

This paper covers the activities of the Economic Analysis Group of the Antitrust Division, U.S. Department of Justice, during 2009–2010. It describes the economic analysis undertaken by EAG in several important investigations and other activities as an advocate for competition.     

The riskiness of outstanding mortgages in the United States, 1999–2019

This article introduces measures of credit risk for all outstanding mortgages in the United States between 1999 and 2019. Terminations play a fundamental role in offsetting risk introduced by new originations because of refinance activity and the often dual nature of home buyers as concurrent sellers. To illustrate these concepts in a policy setting, I show that the Home Affordable Refinance Program increased origination risk metrics but reduced overall risk due to associated terminations of even riskier loans. In addition to these flow dynamics, amortization, loan age, collateral appreciation, and prior selection drive changes to portfolio-level risk.     

The Year in Economics at the FCC, 2010–11: Protecting Competition Online

The past year in economics at the Federal Communications Commission focused on protecting competition in developing online markets. Our review discusses important economic issues that are raised by the FCC’s Open Internet rulemaking (which is commonly referred to as “net neutrality”) and its review of Comcast’s programming joint venture with General Electric’s NBC Universal affiliate. The Open Internet rule focused on established online markets, while the Comcast/NBCU transaction addressed nascent competition online along with competition in video programming and distribution offline.     

The performance implications of power–trust relationship: The moderating role of commitment in the supplier–retailer relationship

The current research examines how coercive power and non-coercive power affect trust and how these relationships are affected by affective and calculative commitment. It also expands the understanding of the role of an under-researched dimension of performance, i.e., strategic performance, and studies it as a mediating variable in the relationship between trust and financial performance. The proposed model is empirically tested using Partial Least Squares (PLS) in supplier–retailer channel in Taiwan. The findings reveal that affective commitment has a positive moderating effect on the negative relationship between coercive power and trust, while calculative commitment has a negative moderating effect on the positive relationship between non-coercive power and trust. The results also indicate that strategic performance partially mediates the effect of trust on financial performance. The research advances theoretical understanding on the complex power–trust relationship and provides insights into the role of commitment in both enabling and undermining channel relationships. The findings highlight the importance of building affective commitment in channel relationships and the critical role of strategic performance in the trust–financial performance relationship.     

Trade subsidies,export bans and price stabilization: Lessons of Bangladesh–India rice trade in the 2000s

During the world food price crisis of 2007–08, rice importing countries suffered through a sharp increase in international rice prices and disruptions in supply as several rice exporters restricted trade to mitigate their domestic price increases. Perhaps no country was more affected by these disruptions than Bangladesh. Our analysis shows that prior to the 2007 crisis, when Bangladesh imported an average of nearly 1 million tons of rice per year from India, domestic wholesale prices of rice in Bangladesh were co-integrated with import parity prices of subsidized Below Poverty Line (BPL) rice. When in mid-2007, India sharply curtailed exports, rice prices surged in Bangladesh.Model simulations show that a relatively small increase in private consumer stocks equivalent to about 2 weeks of normal consumption could account for the large surge in domestic prices in Bangladesh and that an additional 300,000 tons (in addition to approximately 700,000 tons of net rice distribution that actually occurred) would have been sufficient to stabilize prices in the November 2007–April 2008 period. The Bangladesh analysis thus shows that in spite of the uncertainty in international markets, careful planning, timely interventions and openness to trade can substantially reduce requirements for public stockholding.     

Adoption and policy implications of Japan’s new corporate governance practices after the reform

In this paper we explain the process and policy implications of Japanese firms’ adoption of recently reformed corporate governance practices. We use a selective adaptation framework in doing so. We present some qualitative predictions about the possible outcome of their adoption process. One advantage of our approach is that we can describe various aspects of the evolutionary process of Japan’s corporate governance reform as a system in a consistent manner, rather than as independent pieces. Our predictions provide policy implications and are empirically testable. Japan’s post-bubble corporate governance reform has been extensive and involves the enactment and revisions of many relevant laws and affected institutions. Japan’s aim has been to install US-like practices (the de facto global standard), with these practices replacing the now tarnished bank-centered practices, and to facilitate Japanese industry in regaining global competitiveness. However, we show that Japanese businesses’ adoption of US practices has been selective and efficiency and other policy implications of such behavior are potentially dysfunctional.     

The teacher–community of practice–student interaction in the New Zealand technology classroom

This research investigated how secondary school technology teachers planned and implemented units that enabled students to access authentic technological practice through their contact with a community of practice (CoP). It was found that when teachers plan to access a community of practice for their students a complex dance-style relationship develops between the three parties involved. Unplanned interactions can have a significant effect on the planned teaching unit. If teachers are reflexive to the demands of the student and the CoP representative, there is the potential for the development of teaching programmes with technological outcomes that reflect authentic technological practice.     

Mergers and acquisitions in the global food processing industry in 1986–2006

Food systems around the world experienced increased merger and acquisition (M&A) activity over the past decades. Based on a sample of 13,911M&A attempts worldwide during 1986–2006, this study provides an analysis of major determinants of M&A completion in the food processing industry. Friendly attitude, cash payment and experience with M&As emerge as strong deal facilitators. Bidding competition, pursuit of parallel transactions, target subsidiary status and acquirer public status are the most important deal breakers. Unlike the lenient antitrust approach of the Reagan administration, the 1998 UK Competition Act and various directives and regulations on food safety and quality associated with the completion of the internal European market in 1992 facilitated M&A completion. In contrast, the beginning of the Economic and Monetary Union, as marked by the introduction of the Euro in 1999, had a strong negative effect on completion likelihood. This study identifies substantial regional differences. Completion of M&As that involve Asian firms depends on distinct factors. Results for NAFTA are mostly in line with predictions derived from general economic theory, compared to other regions.     

Change and diversity in smallholder rice–fish systems: Recent evidence and policy lessons from Bangladesh

Efforts to unlock the genetic potential of both rice and fish, when combined with improvements in the management of rice–fish systems, can potentially increase agricultural productivity and food security in some of the poorest and most populous countries in Asia. In Bangladesh, estimates suggest that the country’s potential rice–fish production system encompasses 2–3 million hectares of land. But despite three decades of research on biophysical and technical aspects of rice–fish systems, this potential has not been fully realized due to insufficient attention given to the social, economic, and policy dimensions of rice–fish system improvement. This paper provides a characterization of the diverse and changing nature of rice–fish systems in Bangladesh to shed new light on the economic viability of different rice–fish systems and recommend policy and investment options to accelerate the development of appropriate rice–fish technologies. Data are drawn from a novel subdistrict-level survey of fishery officers, a household/enterprise survey, focus group discussions, and a meta-review of the literature on aquaculture in the country, all of which were conducted in 2010–2011. Findings indicate that concurrent rice–fish systems, alternating rice–fish systems, and collectively managed systems offer considerable potential for increasing productivity and farm incomes in Bangladesh. Findings also suggest that while innovation in these rice–fish systems is being driven by households and communities, there is need for more supportive government policies and investments to enable further innovation. Policymakers need to develop effective regulations to promote feed and fish quality and quantity, for example. More rigorous analysis of the intended and unintended impacts of these policies and investments is also necessary.     

How far down the path to free trade? The importance of rice price stabilization in developing Asia

International trade agreements are pushing the world in the direction of free trade. But price stabilization, which is inconsistent with completely free trade, remains important in developing Asia because of the large share of rice in economic output. A policy of pure price stabilization for rice, without consistent protection (either subsidization or taxation), can help to create the macroeconomic stability that is essential for sustained rapid economic growth by increasing the quantity and efficiency of investment throughout the economy. Pure price stabilization can also generate significant equity gains by protecting poor consumers and farmers from sharp fluctuations in prices. While domestic commodity price stabilization schemes have a checkered history around the world, the experience of Asian countries in stabilizing rice prices offers more scope for optimism. Asian governments have been generally successful in stabilizing rice prices, and there are several instances where this has been accomplished without sustained protection of either consumers or farmers. However, there is room for improved stabilization mechanisms that would lower the costs of intervention.     

Bankruptcy risk and the effects of conservative policy for 1979–81

This paper considers the effects of the first two years of the current Conservative government as reflected in the change (if any) in the characteristics of bankruptcies amongst quoted companies. It applies a probit model to a sample of bankrupt and non-bankrupt quoted companies drawn from the period 1976–81 a sample subsequently broken up into Labour and Conservative subsamples. Using return on assets, size, gearing, the ratio of equity cash flow to sales, the ratio of direct exports to sales, and industry growth, as explanatory variables of bankruptcy risk and adopting a relativistic view of bankruptcy, the paper finds that the change from a Labour to a Conservative government in 1979 seems to have had no effect on the way in which relative performance, at both the firm and industry level (as measured using the six variables mentioned above) translates into bankruptcy risk.     

How do stakeholder interactions influence national food security policy in the Caribbean? The case of Saint Lucia

Increasingly, multi-stakeholder processes have been recognized as being necessary to the development of public policies seeking to promote systemic innovation in response to complex and multidimensional challenges, such as household food security, rural development, and environmental change. Saint Lucia, a small island developing state located in the Caribbean, has been grappling with a wide range of agriculture, food and nutrition security challenges with varying degrees of policy success. Recognizing the significance of the challenge, this paper explores the nature of the stakeholder interactions surrounding the development of Saint Lucia’s 2009–2015 National Agricultural Policy and considers some of the implications for food and agriculture-related policy outcomes. Results reveal a general lack of supportive conditions for effective multi-stakeholder processes, including low stakeholder participation levels, conflicting roles of different forms of social capital in the interactions between stakeholders, and missing “boundary” organizations capable of facilitating a transition towards more flexible and adaptive institutions, enhanced knowledge exchange and learning, and greater trust among stakeholders in the policy network. Future avenues for research and development are subsequently identified.