Which consumers are ready for consumer-directed health plans?

Consumer Directed Health Plans (CDHPs) are new and increasingly popular insurance products in the United States that aim to increase consumer involvement in health care decision-making. Using quantitative and qualitative methods, we examine characteristics of employees in a large firm that voluntarily enroll in CDHPs. We find salaried and hourly high deductible CDHP enrollees to be substantially healthier and have higher educational attainment than Preferred Provider Organizations (PPO) enrollees. There was less favorable selection into a more popular, lower deductible CDHP.     

Residential location and the earnings of African American women

In comparing the earnings of African American women to three reference groups—white women, African American men, and white men—three principal findings emerge. First, African American women residing in the suburbs are worse off than any other suburban group. Second, central city African American women are worse off than any other group of central city residents. Third, while central city residence imposes a statistically significant earnings penalty on men of both races, no such penalty is found for African American or white women. Therefore, African American women will enjoy no earnings advantage if they move to the suburbs. This finding underscores the importance of including women in studies of residential location and the socioeconomic status of African Americans. A narrow focus on male data to inform policy is clearly insufficient.     

Bookshelf 2003

Books reviewed: Wolfgang Lecher, Bernhard Nagel and Hans‐Wolfgang Platzer. The Establishment of European Works Councils: From information committee to social actor. Wolfgang Lecher, Hans‐Wolfgang Platzer, Stefan Rüb and Klaus‐Peter Weiner. European Works Councils: Developments, types and networking. Wolfgang Lecher, Hans‐Wolfgang Platzer, Stefan Rüb and Klaus‐Peter Weiner. European Works Councils: Negotiated Europeanisation. Between statutory framework and social dynamic. Gregor Murray, Jacques Bélanger, Anthony Giles and Paul‐André Lapointe (eds). Work and Employment Relations in the High‐Performance Workplace. Bob Hancké. Large Firms and Institutional Change: Industrial Renewal and Economic Restructuring in France. Daryl D’Art and Thomas Turner (eds). Irish Employment Relations in the New Economy. Margaret Linehan, Michael J. Morley and James S. Walsh. International Human Resource Management and Expatriate Transfers: Irish Experiences.     

Symposium Overview

Journal of Productivity Analysis -     

The Multiple Effects of Business Planning on New Venture Performance

We investigate the multiple effects of writing a business plan prior to start‐up on new venture performance. We argue that the impact of business plans depends on the purpose for and circumstances in which they are being used. We offer an empirical methodology which can account for these multiple effects while disentangling real impact effects from selection effects. We apply this to English data where we find that business plans promote employment growth. This is found to be due to the impact of the plan and not selection effects.     

Efficiency Measurement in Network Industries: Application to the Swiss Railway Companies

The persistence of increasingly high government subsidies in Switzerland’s railroads has led the federal and cantonal authorities to discussing the possibility of high-powered incentive contracts such as those based on cost efficiency benchmarking. Railways are however, characterized by a high degree of unobserved heterogeneity that could bias the efficiency estimates. This paper examines the performance of several panel data models to measure cost efficiency in network industries. The unobserved firm-specific effects and the resulting biases are studied through a comparative study of several stochastic frontier models, applied to a panel of 50 railway companies operating over a 13-year period.* The authors wish to thank Michael Crew and two anonymous referees for their helpful suggestions. Aurelio Fetz provided an excellent assistance, which is gratefully acknowledged. Any remaining errors are the responsibility of the authors.This revised version was published in June 2005 with corrections in the author affiliations.     

Understanding the Theoretical and Empirical Content of Critiques of U.S. Job Creation Research

Although the hypothesis that small firms create the majority of net new jobs is widely believed, a number of researchers have attacked this using empirical data. Since these attacks have been presented as corrections of past methodological errors, their authors may influence policy makers. This paper argues that the substance of these attacks is a difference in theoretical perspectives even though the researchers claim to focus on methodological differences. This paper explains the two underlying economic theories and then reviews the job creation research to demonstrate the relationship between theory and methodology.The theory discussion and methodological results demonstrates that all methodologies used to calculate small firms share of net new jobs are incorrect for analyzing the dynamics of capitalism. The appropriate methodology for understanding economic growth is analysis of new employment created over time by cohorts of newly formed firms. Recognition of this fact, combined with describing the empirical research supporting this approach, reinforces the use of economic development policies designed to promote entrepreneurship.     

Does the Limit Order Routing Decision Matter?

We examine the impact deciding to route limit orders away fromthe New York Stock Exchange (NYSE) has on three dimensions ofexecution quality with methodologies controlling for marketconditions and order submission strategies. Overall differencesin limit order execution quality between regional stock exchangesand the NYSE are small, suggesting that the order routing decisionmay not affect retail limit order traders substantively. Conditioningon the distance between the limit order's price and prevailingquotes, however, reveals systematic differences in executionquality. This implies that brokers can strategically route limitorders to improve retail limit order execution quality.