The economics of education and policy: Ideas for a principles course

There are many aspects of the “economics of education” that would make excellent examples for introductory economics students. The author presents two topics that are central to the economics of education and to human capital theory: the economic benefit (or “returns”) to schooling and educational attainment as an investment. There are two key concepts the author hopes students get from this discussion. The first is that there are both private and social benefits of schooling whence we derive the rationale for government intervention. The second is that educational attainment is an investment decision with both costs and benefits, and some risk.     

Development of a health economic model to evaluate the potential benefits of optimal serum potassium management in patients with heart failure

Abstract

Aims: Patients with heart failure are at increased risk of hyperkalemia, particularly when treated with renin-angiotensin-aldosterone system inhibitor (RAASi) agents. This study developed a model to quantify the potential health and economic value associated with sustained potassium management and optimal RAASi therapy in heart failure patients.

Materials and methods: A patient-level, fixed-time increment stochastic simulation model was designed to characterize the progression of heart failure through New York Heart Association functional classes, and predict associations between serum potassium levels, RAASi use, and consequent long-term outcomes. Following internal and external validation exercises, model analyses sought to quantify the health and economic benefits of optimizing both serum potassium levels and RAASi therapy in heart failure patients. Analyses were conducted using a UK payer perspective, independent of costs and utilities related to pharmacological potassium management.

Results: Validation against multiple datasets demonstrated the predictive capability of the model. Compared to those who discontinued RAASi to manage serum potassium, patients with normokalemia and ongoing RAASi therapy benefited from longer life expectancy (+1.38 years), per-patient quality-adjusted life year gains (+0.53 QALYs), cost savings (£110), and associated net monetary benefit (£10,679 at £20,000 per QALY gained) over a lifetime horizon. The predicted value of sustained potassium management and ongoing RAASi treatment was largely driven by reduced mortality and hospitalization risks associated with optimal RAASi therapy.

Limitations: Several modeling assumptions were made to account for a current paucity of published literature; however, ongoing refinement and validation of the model will ensure its continued accuracy as the clinical landscape of hyperkalemia evolves.

Conclusions: Predictions generated by this novel modeling approach highlight the value of sustained potassium management to avoid hyperkalemia, enable RAASi therapy, and improve long-term health economic outcomes in patients with heart failure.     

International working capital practices in the UK

This paper reports the results of a survey on the international working capital management practices of the top 200 companies in the UK. The purpose of the survey was to obtain information on some international aspects of working capital management in major British firms.     

From boom to gloom: Brazilian labour productivity in manufacturing relative to the United States, 1912–2019

Whereas manufacturing seems to hold the key to modern economic growth, the role of manufacturing in economy-wide convergence across countries is debatable. One strand of scholarship argues that productivity levels in manufacturing tend to remain stable across countries, and that economy-wide convergence takes place through structural transformations. Another strand maintains that productivity levels of less-developed countries tend to approach those of developed countries unconditionally, and that deindustrialization thwarts economy-wide convergence. We examine productivity in Brazilian manufacturing relative to the United States, 1912–2019. The result shows dramatic swings in the Brazilian/US productivity ratio, increasing in the decades following the Second World War, peaking in the late 1970s at impressively high levels, and declining precipitously thereafter. This sluggish performance of Brazilian manufacturing since the peak in the late 1970s has probably hindered income convergence with richer countries.     

Tolerance of tax evasion

We present a formal model in which individuals want the government to tolerate tax evasion because, in a context of limited state capacity, evasion provides insurance. Also, preferred tolerance of tax evasion increases with income, because government programs are redistributive, and decreases with perceived state capacity, because taxation is less distortionary in more capable states. We test the model using a question in the World Values Survey (WVS) about how justifiable cheating on taxes is. We find that tax evasion justifiability views present an inverted-U shape in perceived risk and increase with individuals’ income.

     

Economic and environmental effects of replacing bottom trawling with fishing with creels

Bottom trawling is associated with negative external effects such as seafloor pressure and high fuel use. Replacing bottom trawls with passive gear, such as creels, is therefore interesting for policymakers. We investigate the response of the Norway lobster fishery in Sweden to an expanded creel area. Using an economic model (FishRent), we analyse fleet structure, net present value and two environmental indicators under five management scenarios. Our results show that expanding the creel area increases the number of creel fishers, while some trawlers leave the fishery. In total, the net present value and the environmental performance of the fishery improve.     

Linking drinking to injury--causal attribution of injury to alcohol intake among patients in a Swedish emergency room

This study analysed the drinking patterns and motivation to change drinking behaviours among injury patients who acknowledged alcohol as a factor in their injuries. A cross-sectional study was conducted over 18 months at a Swedish emergency department. A total of 1930 injury patients aged 18 - 70 years were enrolled in the study (76.8% completion rate). Of those who reported drinking, 10% acknowledged alcohol as a factor in their injury. A patient was more likely to report a causal attribution of the injury to alcohol the higher the weekly intake and the higher the frequency of heavy episodic drinking. The motivation to change variables showed a similar pattern of increased likelihood of attributing a causal link of alcohol and injury with increasing discontent with drinking behaviours and increasing desire to change drinking behaviours. The findings suggest that the ability to measure causal attribution of alcohol to injuries could be a promising tool to help patients explore the association between their injuries and alcohol use and motivate patients to modify drinking behaviours in order to avoid future injuries.