Permanent income in the consumption and the demand for money functions

This paper examines whether the concept of permanent income relevant for consumption decisions is the same as the one relevant for cash balance decisions. The equivalence has often been assumed in theoretical and empirical work, but it has never been explicitly tested for, although some comparisons have been made. Using Canadian quarterly data, consumption and demand for money functions are estimated jointly. The results indicate that the hypothesis that the elasticity of income expectations is the same in the two functions cannot be rejected. This conclusion holds whether or not the same income variable is used in the two functions.     

New approaches to the finance and delivery of health care

Radical reform of the financing of health care has emerged onto the political agenda in recent months. Any new proposals must, however, be judged in terms of their impact on the fundamental public policy objectives of efficiency, equity and choice. How do the new proposals measure up?     

Expected income in the demand for money: An ‘unobservable variable’ analysis

A demand for money function is specified with unobservable expected (or permanent) income as one of the explanatory variables. The model is formulated within the latent or unobservable framework and considers two cases. First, where there is a simple ‘measurement error’ relationship between latent and actual magnitudes, and second where expected income is assumed generated by a more dynamic mechanism. In both cases a consumption function with permanent income as an explanatory variable is incorporated into the model to supply the information necessary to identify the structural parameters. Identification of the models is discussed and a suitable estimation procedure developed and applied to time series data for the United Kingdom.     

On the IASB comprehensive income project: an analysis of the case for dual income display

The IASB is presently involved in a project on reporting comprehensive income. Since the IASB accounting model mixes two income determination systems, namely, historical cost accounting and fair value accounting, an interesting question pertains to whether the display of comprehensive income should reflect the existence of these two paradigms. This article scrutinizes, from both the points of view of accounting theory and a valuation perspective, the typical arguments made by proponents of historical cost net income and comprehensive fair value income. It finds that claims for exclusive reliance on a single concept of income are untenable. The analysis provides arguments in defence of an income display that explicitly features both income concepts. Such a dual income display would correspond to a categorization of comprehensive income that is currently investigated in the IASB performance reporting project. However, given the importance of summarization in financial analysis, as is most extremely reflected in the focus on the earnings per share (EPS) number, the case for a dual income display should also be considered at the highest level of summarization of financial performance reporting. In other words, mandatory publication of two EPS numbers, one for net income, and one for comprehensive income, should be considered. Possible effects on perception and actual use of financial reports that should enter such a consideration are suggested as topics for experimental research.     

Health and finance: exploring the parallels between health care delivery and professional financial planning

This article compares the role of risk and uncertainty discourse across two rather disparate areas of expertise: personal financial planning and health care delivery. On the basis of 42 semi-structured interviews and eight recorded meetings between planners and their clients, as well as a comprehensive review of extant health literature, it is argued that three points of convergence – the discursive management of uncertainty, the temporalization of risk, and the use of images – offer a modicum of certainty which functions ultimately to legitimize expertise and facilitate courses of remedial action while simultaneously assuaging laypeople’s existential anxieties. The article concludes with a number of reflections on the importance of agency and trust.     

Accounting and empire: Professionalization-as-resistance: The case of Philippines

This paper examines the emergence of the Philippine public accounting profession, which began with the Philippine accounting law in 1923 when the Philippines was a colony of the United States. Our study covers the period from 1898 (the American invasion of the Philippines) to 1929 (the immediate aftermath of the law). Extant research into the emergence of professionalization projects identifies as precursors: a competitive market for accounting services, self-organizing groups of accountants, and a ‘self-directed’ modernist state. These precursors did not apply to the Philippines. We propose that the Philippine project is best understood as a form of native resistance (Said, 1993, Culture and Imperialism, Chatto & Windus Ltd.). We argue that the law, promoted by a wholly-Filipino legislature, simultaneously both (a) addressed American concerns about financial probity and Filipino competence and (b) sought to (pre)capture the identity and work of the certified public accountant (CPA) from the Americans, who introduced the CPA into Philippine politics to expose Filipino mismanagement of government monies.     

Where babies come from: supply and demand in an infant marketplace

Persistent demand from people who have been denied the blessings of parenthood has created an assisted-reproduction market that stretches around the globe and encompasses hundreds of thousands of people. In the United States alone, nearly 41,000 children were born via in vitro fertilization (IVF) in 2001. Roughly 6,000 came from donated eggs, and almost 600 were carried by surrogate mothers. U.S. legislators have been reluctant to regulate this market. As a result, there are no national policies for IVF, which requires creating--and often discarding--embryos, or for many other technologies. State laws vary widely, and many states have no legislation on these subjects whatsoever. Although fertility specialists generally seem delighted to practice in an unregulated gray area, a modicum of regulation and the establishment of agreed-upon norms could lead to substantially lower prices, wider access, and an expansion of the market to the millions who have not yet sought out assisted reproduction. Among those millions are fertile individuals seeking to ensure that they'll be able to produce offspring in the future. For example, the technology already permits young women to freeze their eggs, thus preserving their fertility (in case, for instance, they marry late in life). The fertility trade is in some ways analogous to the markets for personal computers and DVD players, which were initially considered luxury items but migrated to the mass market, earning manufacturers the revenues to finance further innovation. A widening of availability and the introduction of property rights, rules, and institutional policies would make the marketplace more sensitive to the social, medical, and ethical issues that are emerging from the science. For example: Should there be age limits on infertility treatment? Should new procedures be subject to rigorous testing? It is time for U.S. society to begin discussion of these complex questions.     

Compliance costs for personal income tax in a transition country: the case of Slovenia

The evaluation of taxpayers' compliance costs has grown in significance within tax system research over the last 15 years. In 2001, two surveys of VAT and personal income taxpayers were conducted in Slovenia to evaluate compliance costs for the 2000 fiscal year. This paper presents the results of research into compliance costs for personal income tax in Slovenia. The results show that compliance costs for personal income tax are relatively low, primarily because most taxpayers consider filing their tax declaration to be a simple procedure, which means that consultancy costs are low.     

Retiree health care benefits: strategies for a changing workforce.

Demographic, economic and cultural trends foretell a dramatically different environment for retiree health care coverage. This article will focus on the redesign of retiree health benefits to meet the retirement objectives of employers and employees, anticipate changing demographics, and respond to changes in Medicare and other government initiatives, including the Consumer Bill of Rights. The material will discuss recent design trends, including managed care, and present results of a study the author co-authored for the Kaiser Family Foundation on changes in retiree health plans.     

Indirect tax reform and the specification of demand: the case of Ireland

This paper examines the sensitivity of marginal tax reform analysis to changes in the underlying demand system. In particular, we analyse the sensitivity of results from Ahmad and Stern’s (J Publ Econ 25(3):259–298, 1984) marginal tax reform model to different specifications of Deaton and Muellbauer’s (Am Econ Rev 70(3):312–326, 1980) Almost Ideal Demand System (AIDS) and Banks et al.’s (Rev Econ Stat 79(4):527–539, 1997) Quadratic AIDS. Using Irish Household Budget Survey data, we show that tax reform results exhibit a low degree of sensitivity to changes in the underlying demand system. An adjustment for a mass of observed zero-expenditures in the data for certain goods produces most sensitivity in the tax reform results. Even in these cases, many of the tax reform recommendations remain constant. Including demerit good arguments in the tax reform model can substantially alter the tax reform recommendations relating to demerit goods. Notably though, when we include these arguments in the tax reform model, the results are particularly insensitive to changes in the underlying demand system.     

Health care reform and reform for health: creating a health system for communities in the 21st century

If we are to improve the health of the population and reduce the inequalities in health that plague our communities and our planet, we will have to give greater attention to the determinants of health. The reform of the health care system, necessary though it is, will never be sufficient; we need to reform our whole society and in particular to focus on human rather than economic development. At the community level we need to create healthy communities that are “health-creating systems” of environmental, social and human development, as well as health care systems that focus first on improving and maintaining health. Such a “bottom-down” health care system would see the hospital become once again the place of last resort (but still a potentially important partner in creating healthier communities) and would focus instead on how to provide health promotion and health care from the household level up.     

The income elasticity of tax revenue: estimates for income and consumption taxes in the United Kingdom

This paper provides estimates of individual and aggregate revenue elasticities of income and consumption taxes in the UK over the period 1989–2000. It shows how budgetary changes, including changes to income‐related deductions, have substantially affected income elasticities. The estimates of consumption tax revenue elasticities show that changes in consumption patterns over time are important. A merit of the approach used here is that elasticity estimates can be calculated readily from official published sources.     

Forecasting demand for secondary materials: A case study of waste paper

The authors examine how best to forecast the demand for a resource, in this case waste paper, using three methods. The first is based on long or short-term GDP forecasts, the second is a basic or modified Holt-Winters model, and the third is an input-output model, which can incorporate various scenarios to allow for the effects of technical change. All three techniques are superior to time-series projection. As data availability increases, the application of a combination of these methods would improve the policy response to resource shortage.     

Ethical values: the real crisis in health care

This author argues that the growth of apathy and greed and loss of ethical values in the current health care delivery system is due to the change in the foundation of the expectations between the consumer and the provider of health care. The agendas of the "third parties" involved with the provision of health care has caused confusion in the mind of the consumer and loss of autonomy for the health care provider. A historical perspective is provided that includes discussion of the issues of culpability for the current outcomes. Finally, the author discusses possible remedies to the current system.     

Managed care,technology adoption,and health care: the adoption of neonatal intensive care

Managed care may influence technology diffusion in health care. This article empirically examines the relationship between HMO market share and the diffusion of neonatal intensive care units. Higher HMO market share is associated with slower adoption of mid-level units, but not with adoption of the most advanced high-level units. Opposite the common supposition that slowing technology growth will harm patients, results suggest that health outcomes for seriously ill newborns are better in higher-level units and that reduced availability of mid-level units may increase their chance of receiving care in a high-level center, so that slower mid-level growth could have benefitted patients.     

Mental health: Shifting the balance of care

For the first time, Departments have been forced to go public on their medium‐term spending forecasts. As one might expect, a good deal of smoke has been made. PUBLIC MONEY invites its readers to penetrate the smokescreen and pick the high and low spenders of the next ten years.