Are Factor Substitutions in HMO Industry Operations Cost Saving?

Past research on the potentials for cost-saving scale and scope economies in multiproduct HMO operations in the United States are incomplete in their economics of the underlying technology structure. This article exploits the translog cost model estimates of all past studies of HMO production to infer the extent to which pairwise factor substitutions (e.g., administrative services vs. medical care resources, e.g., hospital days, physician services) suggest potential for cost savings in groups and independent practice associations. Given the industry's nonhomothetic production over a 20-year period, the conceptually valid Morishima elasticity measure at constant output reveals limited cost-saving potentials from factor interchange and input demands. These opportunities differ for groups and IPAs across Medicare and non-Medicare products. My findings add a timely and significant dimension to understanding potential cost savings in HMO operations. Policy suggestions and cost implications are rationalized in light of the declining Medicare HMO enrollment and recent changes in factor input prices.     

Innovation Policy in Search of an Economic Foundation: The Case of Research Partnerships in the United States

Research partnerships are not a new organizational form, but since the mid 1980s the US government, like other national governments, has provided a favorable environment for them to flourish. The purpose of this paper is to address the question: What is the economic foundation upon which public support of research partnerships in the USA is based? In addition, given that foundation: What additional information is needed to increase the efficacy of the current policy environment? We summarize the relevant literature and find that as a whole, the theoretical literature makes clear that research partnerships are a socially beneficial organizational form once formed. However, more empirical research is needed of a different type that has occupied the journals to date. We offer an agenda for such research that will complement the policy process.     

Banks’ earnings: Empirical evidence of the influence of economic and financial market factors

The structure of income is a foremost address within research on banks’ performance, especially with regard to effects on the resilience of banks’ earnings. Indeed, given their central position in the economy, banks shall thrive to generate sustainable earnings and control for their potential volatility. Existing studies mostly consider the weight of non‐net interest income (nonNII) as opposed to the traditional NII income source. Such aggregated nonNII is found to increase earnings risk but more granular studies conflict. We propose an original investigation of the influence of economic and financial conditions on various income types, assuming that performance may actually be driven by both the income structure and external conditions. We focus European banks, which have long been allowed to diversify beyond retail banking. Out of a straight panel framework, we question if the influence of external conditions spreads to earnings components other than credit losses and trading income and if it does allow for diversification benefits among components. We find that each component actually evolves owing to its own equation. Furthermore, effects of single variables may cumulate over different components of earnings (e.g. GDP) or provide with diversification benefits. These effects are all the more important since they are not mitigated by operating expenses. Hence, over a regarded period, banks’ performance depends upon their structure of income and upon volatilities and correlations of influential variables. Besides controlling for ex‐ante volatility, our approach shows that a given structure of income is not necessarily more resilient than others but that selected non‐banking income may support a higher stability of Earnings     

Customer value from a customer perspective: a comprehensive review

The value concept is one of marketing theory’s basic elements. Identifying and creating customer value (CV) – understood as value for customers – is regarded as an essential prerequisite for future company success. Nevertheless, not until quite recently has CV received much research attention. Ideas on how to conceptualize and link the concept to other constructs vary widely. The literature contains a multitude of different definitions, models, and measurement approaches. This article provides a broad overview, analysis, and critical evaluation of the different trends and approaches found to date in this research field, encompassing the development of perceived and desired customer value research, the relationships between the CV construct and other central marketing constructs, and the linkage between CV and the company interpretation of the value of the customer, like customer lifetime value (CLV). The article concludes by pointing out some of the challenges this field of research will face in the future.      

The measurement and interpretation of structural budget balances

Zusammenfassung Strukturelle Budgetsalden bilden ein wichtiges Diagnoseinstrument für wirtschaftspolitische Entscheidunge. Die Arbeit beschäftigt sich mit der Bereinigung von Budgetausgaben und-einnahmen um zyklischen Schwankungen in der wirtschaftlichen Aktivität und der Aussagekraft von strukturellen Budgetsalden für fiskalpolitische Fragestellungen.

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I thank Johann Brunner, Klaus Neusser, four anonymous referees, and especially Alfrerl for helpful comments on earlier drafts of this paper. All remaining shortcomings are my own. A version of the paper titled Evaluating Budget Consolidation Efforts was presented at the Austrian Economic Association Meeting 1990 in Linz.     

Information acquisition,referral, and organization

Each of two experts may provide a service to a client. Experts' cost comparative advantage depends on an unknown state, but an expert may exert effort to get a private signal about it. In a market, an expert may refer the client to the other for a fee. In equilibrium, only one expert exerts effort and refers, and the equilibrium allocation is inefficient. Referral efficiency can be restored when experts form an organization, in which a referring expert must bear the referred expert's cost. However, the referred expert shirks from work effort because of the lack of cost responsibility.     

Canadian beef and dairy farmers’ attitudes towards animal vaccines

The willingness to pay (WTP) approach is increasingly being used in different disciplines to assess peoples’ readiness to accept change. This paper assesses the potential for two subunit vaccines for the prevention and control of bovine tuberculosis and paratuberculosis in cattle. A survey of beef and dairy farmers was conducted across Canada to identify factors that influence their WTP for subunit vaccines. Estimated results of the interval‐data model indicate that the size of a farmer’s cattle herd, neighbourhood effect, and buyer recommendations for vaccination significantly influence farmers’ WTP while veterinarians appear to be the most critical pathway for farmers to source information on new vaccine options. The mean willingness to pay amounts for both vaccines reveals that farmers are likely to use the vaccines if the costs are kept at reasonable level.     

Travel behaviour in Ghana: empirical observations from four metropolitan areas

The paper examines the travel behaviour of residents in four key metropolitan areas in Ghana with data from 926 respondents including 451 females obtained at intra-commuter vehicle terminals. The analysis of the data showed that the Ghana Private Road Transport Union (GPRTU) continues to dominate in the intra-urban commuter service. Also, in spite of persistent complaints from consumers about the high cost of transport fares, it is rather the cost of food, children’s education, clothing and to some extent personal entertainment which consume a disproportionate share of residents’ disposable incomes. Notwithstanding this finding, respondents’ expectation is to pay less than they are doing now for commuting within the study areas.     

High frequency trading and the new market makers

This paper characterizes the trading strategy of a large high frequency trader (HFT). The HFT incurs a loss on its inventory but earns a profit on the bid–ask spread. Sharpe ratio calculations show that performance is very sensitive to cost of capital assumptions. The HFT employs a cross-market strategy as half of its trades materialize on the incumbent market and the other half on a small, high-growth entrant market. Its trade participation rate in these markets is 8.1% and 64.4%, respectively. In both markets, four out of five of its trades are passive i.e., its price quote was consumed by others.