Keynes, Lucas and involuntary unemployment: a reply to Hayes

In this response to Mark Hayes's criticism of his article, ‘Lucason involuntary unemployment’, the author insists on theneed to draw a distinction between labour rationing (a marketoutcome) and unemployment (the activity of job seeking). Economictheory is mainly concerned with the former. Yet the issue ofthe voluntarity versus the involuntarity of unemployment pertainsto unemployment as an activity. Failing to make this distinctioncannot but lead to semantic confusion.     

Health insurance subsidies and the expansion of an implicit marriage penalty: a regional comparison of various means-tested programmes

Any subsidy provision for healthcare premiums, including those embedded in Affordable Care Act (ACA), has the potential to result in some couples facing an implicit penalty when married relative to unmarried. To illustrate such consequences of means-tested subsidies of health insurance premiums, we construct hypothetical households earning different levels of income who are eligible for current subsidies in the USA. and compare the estimated implicit marriage penalty faced by these households to the one faced by low-income households who are eligible for various means-tested programmes (e.g. TANF, WIC, SNAP) for each of the 48 contiguous states. We find that, like very low-income households, marriage can potentially penalize couples who receive health insurance premium subsidies by decreasing their overall disposable income by as much as 14%. We find that the ACA increases the number of households subject to marriage penalties embedded in means-tested programmes for low-income couples. This distortion will exist for any future health insurance premium subsidies that are means tested at the household income level.     

Premium subsidies and demand for private health insurance: results from a regression discontinuity design

This article investigates the impact of a private health insurance (PHI) subsidy on the demand for PHI in the context of the Australian health care system. In particular, we focus on the subpopulation of elderly Australians and exploit discontinuous increases to the universal ‘PHI rebate’ that occur when people turn 65 and 70 years. Using a regression discontinuity design, we find the policy has little effect on take-up of PHI and is best interpreted as a wealth transfer to elderly Australians who already have insurance.     

Prices,income and the economic status of older,single women: Implications for health care and housing policies

Paper presented at the annual meetings of the Association for Social Economics, New Orleans in January 1992.     

Price distortion and income dispersion in a labor-managed economy: Evidence from Yugoslavia

Although the standard literature on a labor-managed economy implies price distortions and spillovers of profits into wages, the evidence obtained for the Yugoslav economy does not support these predictions. In particular, price distortions in the mid-1970s are found to be small. Price deviations estimated by means of linear price models permit the calculation of excess profits and permit testing of whether they spill over into incomes. Again, contrary to what the standard theory predicts, only a small fraction of such profits is transferred into incomes.     

An extension of the Blinder–Oaxaca decomposition to a continuum of comparison groups

This paper proposes an extension of the Blinder–Oaxaca decomposition from two to a continuum of comparison groups. The proposed decomposition is then estimated for racial wage differences in urban Peru, exploiting a novel data set that allows the capturing of different degrees of mestizaje (racial mixtures).     

汇率变动、央行票据与冲销成本:2004-2009

在中央银行通过央行票据进行货币冲销的操作中,过高的成本一直被国内外学者认为是央行票据不适宜作为长期冲销工具的重要理由。2004-2009年的中国数据显示,在不考虑汇率因素的情况下,3月期和1年期央行票据冲销操作均表现为盈利;而在考虑汇率变动的情况下,央行票据冲销操作在财务成本的动态变化中盈亏互现。可见,汇率因素对央行票据冲销操作的财务成本产生了重要影响。考虑汇率因素后,尽管冲销操作总体上表现为亏损,但亏损较为有限,所以不能仅从成本角度质疑央行票据冲销操作的可持续性。     

Long-run dynamics between trade liberalization and income inequality in the European Union: a second generation approach

Empirica - The surprisingly limited literature investigating whether there exists a long-run association between trade liberalization and income inequality finds strong evidence for it. We point...     

A comparison of healthcare resource use for rotavirus and RSV between vulnerable children with co-morbidities and healthy children: a case control study

Abstract

Objective:

To quantify the differences in hospital length of stay (LOS) and cost between healthy and vulnerable children with cystic fibrosis (CF), insulin-dependent diabetes mellitus (IDDM), cancer, and epilepsy who contract rotavirus (RVGE) or respiratory syncytial virus (RSV).

Methods:

Hospital Episode Statistics (HES) data were collected for England, for children <5 years old, admitted between April 2001 and March 2008, using ICD-10 codes for RVGE and RSV. Cases were identified as having RVGE and/or RSV plus CF, IDDM, cancer, or epilepsy. Healthy controls had RVGE and/or RSV only, additional controls had eczema only. Cost, hospital LOS, and demographics were collected.

Results:

Four hundred and eighty-six (0.5%) cases and 101,784 (99.5%) healthy controls were admitted with RVGE or RSV, with 17,420 eczema controls. RVGE was present in 153 (31.5%) cases and 7532 (7.4%) healthy controls, and RSV in 333 (68.5%) cases and 94,252 (92.6%) healthy controls. Cases were older (1.1 years, SD?=?1.3 years), had greater LOS (9.9 days, SD?=?19.9), and cost more (£3477, SD?=?£7765) than healthy controls (age?=?0.2, SD?=?0.5, p?<?0.001; LOS?=?1.9 days, SD?=?3.1, p?<?0.001; cost?=?£595, SD?=?£727, p?<?0.001). Cost for cases was 6-times greater than healthy controls (p?<?0.001). Controls had a 0.3 day greater LOS (p?<?0.001) with RSV, but a £17 (p?=?0.085) lower mean cost than RVGE.

Conclusion:

RVGE and RSV are more serious diseases in vulnerable children, requiring more intense resource use. The importance of preventing infection in vulnerable children is underlined by hygiene and appropriate isolation and vaccination strategies. When universal vaccination is under consideration, as for rotavirus vaccines, evaluation of a vaccination programme should consider the potentially positive impact on vulnerable children.

Limitations:

Limitations of the study include a dependency on accurate coding, an expectation that patients are identified through laboratory testing, and the possibility of unidentified underlying conditions affecting the burden.     

Efficient delivery of subsidies to the poor: Improving the design of a cash transfer program in Ecuador

Many governments provide monetary transfers to low-income families. The mechanism through which these subsidies are distributed may contain several inefficiencies that diminish the net-value obtained by the recipients. In this paper, we build and estimate a behavioral dynamic model that allows us to evaluate the efficiency of current and alternative distribution mechanisms. The proposed model is simple and resembles the individual's decision to collect the transfer. To estimate it, we use data from a cash transfer program in Ecuador where recipients incur high transaction costs each time they collect their benefits. Despite its simplicity, our model is able to replicate the observed data remarkably well. We use it to simulate alternative payment mechanisms and show that an adequate design of the delivery of payments can substantially increase the value of cash transfer programs.     

The relationship between wealth or income and time preference is empirical, not apodictic: a critique of Rothbard and Hoppe

There is no doubt that when income or wealth increases, impatience for present goods declines. When time preference for the present falls, interest rates decline as well. But is this phenomenon a necessary condition of human action as Rothbard and Hoppe contend? This is widely thought to be true when a man is on the very verge of death. There is an aphorism according to which “a drowning man will grasp even at the blade of a sword.” In this view, someone who is starving will not postpone the consumption of food for tomorrow that is necessary to keep him alive today. But we disagree. And what is the situation under more ordinary circumstances far removed from starvation? We argue in this paper that, contrary to Rothbard and Hoppe, under these conditions it is a reliable but only a broad empirical generalization that time preferences and interest rates are inversely related to wealth or income, it is not a matter of praxeology.     

The behavioral response to voluntary provision of an environmental public good: Evidence from residential electricity demand

This paper develops a theory of voluntary provision of a public good in which a household's decision to engage in a form of environmentally friendly behavior is based on the desire to offset another behavior that is environmentally harmful. The model generates predictions about (1) participation in a green-electricity program at the extensive and intensive margins, and (2) changes in electricity consumption in response to participation. We test the theory using billing data for participants and nonparticipants in a green-electricity program in Memphis, Tennessee. High-consumption households are more likely to participate, and they participate at higher levels. In terms of a behavioral response, households participating above the minimum threshold level do not change electricity consumption, but those participating at the minimum threshold increase electricity consumption 2.5 percent after enrolling in the program. The result is based on identification strategies that exploit before–after differences between participants and nonparticipants, and differences in the timing of enrollment among participants only. Despite the increase in electricity demand upon the purchase of green electricity for the households with a “buy-in” mentality, the net effect for the buy-in households is a reduction in pollution emissions, as the behavioral response is not large enough to offset the environmental benefit of the green-electricity purchase.     

Testing and applying a theory of utility: An attempt to decompose income in compensatory and scarcity rents

Data on income after tax, schooling completed, job held, age, and ‘level of satisfaction’ of 2663 members of the Dutch Consumer Union have been used to estimate regression equations of two types. Type I may be called a specification of a utility function, Type II an ‘earnings function’ (where income after tax was used as earnings). For both types a number of alternatives were estimated both with regard to mathematical shape and with regard to variables included. Defining equitable or justified income differences as differences which do not change the level of satisfaction, a formula for equitable incomes for given combinations of job, schooling and age can be derived from Type I equations. All regression coefficients are found to be lower than the corresponding earnings function coefficients. The latter can then be decomposed into a ‘compensatory’ component and a ‘scarcity rent’ component.     

Trade efficiency and economic development: evidence from a cross country comparison

Economic theory suggests that development is enhanced through income growth, which is driven through increased trade. However, the empirical evidence of such a relationship most of the times is proved to be weak. In this study we try to determine the factors influencing this relationship by measuring ‘trade efficiency’. Using the data envelopment analysis (DEA) window method for a sample of 16 OECD countries, we obtained the efficiency scores and the optimal output levels for the inefficient countries for a time period of 5 years under consideration. Results drawn from the broadly used ratio analysis were also compared to the results derived from the DEA model. Our empirical findings show that ‘trade efficient’ countries have clear characteristics like low-exchange rates for exports, low R&D intensity, high-value intra industry trade and positive impact of net trade on their gross domestic product.     

Estimation of resource utilisation difference between lithium and valproate treatment groups from the VALID study

Abstract

Objective:

To assess the difference in resource utilisation between lithium and valproate treatment groups from the VALID study.

Methods:

A modelled economic study was conducted as an appendage to the VALID study, an international, randomised, open-label, parallel-group, 12-week, equivalence study in patients with bipolar I disorder experiencing a manic/mixed episode, compared the efficacy and safety of valproate against that of lithium. The difference in health resource utilisation between the treatment groups was analysed based on information collected from a standardised questionnaire.

Results:

Efficacy and tolerability of valproate and lithium were shown to be comparable in the management of bipolar disorder in the VALID study. Cost analysis was based on information for 138 (35.5% male, mean age: 37.73 years) and 131 (45.8% male, mean age: 38.98 years) patients from lithium and valproate treatment groups, respectively. The groups differed in the number of hospital visits (503 vs. 421), outpatient visits (15 vs. 2), and number of work days lost (907 vs. 514.5) due to bipolar disorder. All differences were in favour of the valproate treatment group. In the modelled analysis and subsequent sensitivity analyses, the total cost saving was calculated to be US$199,322 (range: US$37,629–$226,903). This would translate into a cost saving of US$1444 per patient, or a cost saving of US$6278 per patient per year (range: US$1185–$7145 per patient per year).

Limitations:

The present study suffers from the limitations inherent in any economic evaluation that uses data from multicentre clinical trials with potential variations in treatment provision as well as the theoretical bias from an open-label study design. The study sample size had also limited statistical power to detect moderate differences in total medical costs, given the large variances often observed on cost variables.

Conclusions:

The use of valproate over lithium is likely to result in substantial cost savings to the healthcare system and reduce the financial burden to patients.     

Uncovering the interrelationship between the U.S. stock and housing markets: a bootstrap rolling window Granger causality approach

The purpose of this study is to investigate the time-varying interrelationship between the housing market and the stock market in the U.S. during the period of 1890–2013, by employing a rolling window subsample with a bootstrap Granger causality test. The rolling window allows for structural changes in the economy over time. Whereas previous studies have not identified a causal relationship between the U.S. housing price index and the SP500 stock price index, this new analysis is the first to identify certain periods wherein either the wealth effect or the investment effect can be observed.     

Human capital of entrepreneurial teams in nascent high-tech sectors: a comparison between Cleantech and Internet

We use an inductive approach to understand what types of founders’ human capital, at individual and team levels, are necessary to recognise and exploit entrepreneurial opportunities. A sample of 195 founders who teamed up in the nascent phases of Cleantech and Interned-based sectors is analysed. The results suggest a twofold moderating effect of the sectoral context. First, a more hard science-based and complex sector like Cleantech demands technically more skilled entrepreneurs, but at the same time, it still requires fairly commercially experienced and economically competent individuals. Furthermore, the business context also appears to exert an important influence on team formation dynamics: individuals are more prone to team-up with cofounders possessing complementary know-how when they are starting a new business venture in the Cleantech rather than in the Internet-based sector. Overall, these results stress the role of the specific high-tech business context at stake when analysing entrepreneurial team composition patterns.     

A farewell to critical junctures: Sorting out long-run causality of income and democracy

We consider the empirical relevance of two opposing hypotheses on the causality between income and democracy: The Democratic Transition hypothesis claims that rising incomes cause a transition to democracy, whereas the Critical Junctures hypothesis denies this causal relation. Our empirical strategy is motivated by Unified Growth Theory, which hypothesizes that the present international income differences have roots in the prehistoric past. Thus, we use prehistoric measures of biogeography as instruments for modern income levels, and find a large long-run causal effect of income on the degree of democracy. This result rejects the Critical Junctures hypothesis, which is an important part of the Primacy of Institutions view.     

Locational-based coupling of electricity markets: benefits from coordinating unit commitment and balancing markets

We estimate the benefits of electricity locational marginal pricing (LMP) that arise from better coordination of day-ahead commitment decisions and real-time balancing markets in adjacent power markets when there is significant uncertainty in demand and wind forecasts. To do so, we formulate a series of stochastic models for committing and then dispatching electric generators subject to transmission limits. In the unit commitment stage, the models optimise day-ahead generation schedules under either the full set of network constraints or a simplified net transfer capacity (NTC) constraint, where the latter represents the present approach for limiting forward electricity trade in Europe. A subsequent redispatch model then creates feasible real-time schedules. Benefits of LMP arise from decreases in expected start-up and variable generation costs resulting from consistent consideration of the full set of network constraints both day-ahead and in real time. Meanwhile, coordinating adjacent balancing markets provides benefits because intermarket flows can be adjusted in real-time in response to changing conditions. To quantify these benefits, we analyse a stylised four-node network, examining the effects of varying system characteristics on the magnitude of the locational-based unit commitment benefits and the benefits of intermarket balancing. We conclude that both categories of benefits are situation dependent, such that small parameter changes can lead to large changes in expected benefits. Although both can amount to a significant percentage of operating costs, we find that the benefits of coordinating balancing markets generally exceed unit commitment benefits.