"Quicker and sicker" under Medicare's prospective payment system for hospitals: new evidence on an old issue from a national longitudinal survey

Medicare's prospective payment system for hospitals (PPS), introduced in the USA in 1983, replaced cost reimbursement with a system of fixed rates which created incentives for hospitals to control costs. Previous studies found that elderly patients were discharged from hospital "quicker and sicker" under PPS and concluded that families were coping at home. We analyse a national longitudinal survey, the first National Health and Nutrition Examination Survey and its Epidemiologic Followup Study, which includes data on more outcomes over a longer period than earlier studies. We find that the rate of admission to nursing homes from the community in the first weeks after a hospital discharge more than tripled under PPS, suggesting that families were not always able to cope. As another response to sicker patients, discharges directly to nursing homes from hospitals, which jumped initially under PPS, may have risen further when payment rates were tightened in the early 1990s. Hospital readmissions fell after the first few years. Our findings are strengthened by the fact that we control for patients' health using health information collected independently of hospital admission.     

Quantal response equilibria with heterogeneous agents

This paper introduces a model of quantal response equilibrium with heterogeneous agents and demonstrates the existence of a representative agent for such populations. Except in rare cases, the representative agent?s noise terms cannot be independently and identically distributed across the set of actions, even if that is assumed for the individual agents. This result demonstrates a fundamental difference between a representative agent and truly heterogeneous quantal responders and suggests that when fitting quantal response specifications to aggregate data from a population of subjects, the noise terms should be allowed to be jointly dependent across actions. Even though this introduces additional degrees of freedom, it makes the model well specified. The representative agent inherits a regular quantal response function from the actual agents, so this model does impose falsifiable restrictions.     

Detecting Linguistic Traces of Destructive Narcissism At-a-Distance in a CEO’s Letter to Shareholders

Destructive narcissism is recognized increasingly as a serious impairment to good corporate leadership and ethical conduct. The Chief Executive Officer’s letter to shareholders (an important formal corporate communications medium) has potential to provide linguistic traces of destructive narcissism and insight to aspects of corporate leadership and the ambient ethical culture of a company. We demonstrate this potential through selective analyses of the letters of the Chief Executive Officers of Enron, Starbucks, and General Motors.     

What determines the efficiency of Australian mining companies?

We examine the firm‐specific determinants of technical efficiency in Australian mining companies using data envelopment analysis (DEA). To do so, we employ panel data sourced from individual mining companies listed on the Australian Securities Exchange (ASX) over the period 2010–2014. To ensure valid statistical inference in the presence of serial correlation between DEA efficiency scores, we apply Simar and Wilson's two‐stage bootstrap method. We find that ownership concentration, firm size, firm age, product portfolio, product diversification and growth status significantly contribute to efficiency gains. However, other firm‐specific factors, such as capacity utilisation, financial risk and overseas operations appear to have limited impact on the technical efficiency of mining firms.     

The Kafka quagmire for the poor in India

Khare and Varman present a compellingly pessimistic analysis of the plight of the poor in India. The dilemmas of the poor are often exacerbated by large corporations seeking to find ways to market products to impoverished emerging market consumers. In India, consumers are frequently hurt by these initiatives, small retailers may suffer, while corruption and trickery by petty bureaucrats and ruthless landlords help the rich get richer at the expense of the poor. The article by Khare and Varman is a scathing indictment based on detailed ethnographic evidence but it reveals only a fraction of the disadvantages and traps of disempowerment facing those Indians living lives of great precarity. In this comment, we seek to build upon Khare and Varman’s insightful analysis both in order to reinforce their conclusions about the Kafkaesque existence of India’s poor and to introduce some further considerations and complications that make the quagmire even more entrapping. We focus on four sources of these problems: patriarchy, bureaucracy and corruption, class and caste power and hierarchies, and uneven and inadequate infrastructure. We also highlight some largely individual and non-government initiatives that may offer hope of escaping this quagmire for the poor.     

Economics at the Antitrust Division: 2017–2018

This article describes some of the work of Antitrust Division economists over the past year, with a focus on modeling. It begins by illustrating the mapping from evidence to prediction using tools for assessing the effects of mergers using Bertrand, Cournot, and auction models. It then turns to two hot topics in competition policy: the implications of claims of increasing margins for merger enforcement and the validity of claims of increasing concentration. Finally, it considers how mergers affect prices in bargaining models.     

Job satisfaction and relative income in economic transition: Status or signal?: The case of urban China

We use two datasets for urban China to examine whether an increase in reference group income lowers or increases job satisfaction. The former is consistent with a status effect — an increase in the income of others lowers my satisfaction because I feel jealous. The latter is consistent with a signal effect — an increase in the income of others might make me jealous, but it also provides an information signal about my future prospects. When we use a single item indicator of job satisfaction we find no support for a status or signal effect; however, when we use a psychometrically valid instrument to measure job satisfaction, we find some support for the existence of a status effect. We consider the components of job satisfaction through which the status effect operates. We find that the status effect operates through satisfaction with co-workers, operating procedures, pay and supervision.     

Christmas in Japan: Globalization Versus Localization

Products and services promoted on a global scale raise issues of globalism that are more superficial than the issues raised by the globalization of world holidays. It is one thing to have an Ikea and a KFC in the city, and conceivably quite another thing to have Christmas, Valentine's Day, and Halloween. Holidays like these have more complex cultural ideologies behind them. They threaten to displace traditional local holidays. And they offer a significant context in which to examine the interplay of global and local forces in the contemporary marketplace. We ask to what degree Christmas in Japan represents Western cultural imperialism, global homogenization, and a Westernization of Japan, versus local cultural adaptation, hybridization, and appropriation.