Who pays the high health costs of older workers? Evidence from prostate cancer screening mandates

Between 1992 and 2009, 30 US states adopted laws mandating that health insurance plans cover screenings for prostate cancer. Because prostate cancer screenings are used almost exclusively by men over age 50, these mandates raise the cost of insuring older men relative to other groups. This article uses a triple-difference empirical strategy to take advantage of this quasi-random natural experiment in raising the cost of employing older workers. Using Integrated Public Use Microdata Series data from the March Supplement of the Current Population Survey, I find that the increased cost of insuring older workers results in their receiving 2.8% lower hourly wages, being 2% less likely to be employed and being 0.7% less likely to have employer-sponsored health insurance.     

The effects of domestic rice market interventions outside business-as-usual conditions for imported rice prices

The Philippine government intervenes in the domestic rice market through the imposition of import tariffs and the provision of producer and consumer subsidies. While policymakers are aware that these programmes come with allocative efficiency costs, they justify the programmes on the grounds that they insulate the domestic economy from unexpected price spikes in the international rice market. An interesting matter for policy evaluation is to quantify the insulation benefit that the programmes provide in circumstances of sudden severe import price spikes. To examine this question, we undertake a dynamic computable general equilibrium (CGE) simulation in which the Philippines is subject to an external rice price shock. We find that the insulation benefit of the support programmes under a 2008-like event is worth approximately 0.10% of real consumption. However, the cost of insuring against these price spikes is significant. We estimate the annual cost of the rice market interventions at approximately 0.40% of real consumption.     

Bernanke versus Taylor: a post mortem

Our analysis sheds light on the issue of whether the monetary policy contributed to the recent housing boom and bust. We have estimated and analysed a model that allows a comparison between the actual policy and several alternative Taylor rules. When the Taylor rule path was computed using revised data and the deflator for the GDP, we found a notable impact on key housing market variables, supporting Taylor’s critique of the Fed policy. However, the bulk of our evidence suggests that the policy as it would have been conducted under our real-time Taylor rules would not have had any significant impact on the housing market variables. This conclusion is robust with regard to the price index used as well as the relative weights used on the inflation and output gaps.     

Dictator monopolies and essential goods: experimental evidence

Monopolists set prices and if the good is unessential this may place the consumer in an uncomfortable position. But if the good is essential the consumer faces a pay-to-live or -die choice. Dictator and ultimatum games are superficially similar in that one game offers the right of refusal, while the other does not. The dictator monopoly is, however, not a game, and behaviour could be radically different in the market environment versus game environment. We recast the dictator game as a dictator monopoly experiment and find that the fairness characteristic of the game evaporates quickly as rounds progress.     

Compatibility,interoperability, and market power in upgrade markets

We examine the market power of a seller who repeatedly offers upgraded versions of a product. In the case of pure monopoly, the seller also controls compatibility across versions. In the case of an entrant who offers an upgrade, the incumbent seller also controls subsequent interoperability across versions. We argue that control of compatibility and interoperability does not allow an incumbent seller to charge a price premium relative to when such control is absent and, consequently, neither is a necessary source of market power.     

Picking a loser: Strategic surprise in a design and development game

We take a setting in which upstream players produce design ideas and downstream players select among these ideas to develop finished products. Design diversity is valuable at the upstream stage and coordination is valuable at the downstream stage. However, this outcome is not always realized. We show that an intermediary between upstream and downstream can improve on equilibrium outcomes by acting as a coordination and commitment device whose optimal policy must sometimes reward inferior ideas. We apply the model to technology standards, trend‐driven industries, political primaries, and the management of process innovation. We discuss incentives to vertically integrate.     

Does more medical care improve population health? New evidence for an old controversy

This article investigates the aggregate relationship between medical care and health for the US population. I use annual state level panel data for the period 1983 to 2000 to estimate static and dynamic health production function models. I find no compelling evidence that greater aggregate utilization of medical care from application of existing technology improves population health by lowering mortality in the short run or long run. My results suggest that development of new medical technologies that diffuse rapidly throughout the nation and at different rates across states may well explain much of the decline in the age-adjusted death rate over the past several decades, as well as persistent differences in mortality across geographic regions. Overall, my findings suggest that the US may be experiencing ‘flat of the curve medicine’ with future improvements in mortality from medical care coming from new and better technologies rather than greater intensity of services.     

The Development and Diffusion of Radical Technological Innovation: The Role of Bus Demonstration Projects in Commercializing Fuel Cell Technology

North American, European and Japanese governments have legislated to control Greenhouse Gas emissions and have promoted alternative technology as part of strategies to address climate change. Governments worldwide have sought to encourage adoption of alternative automotive technology by funding demonstrations and in-service trials. Among other initiatives the automotive industry has explored applications of a radical technological innovation—fuel cells—to power a range of vehicles from forklifts to buses. This paper examines the rationale and actions of various stakeholders to facilitate adoption of fuel cell technology in vehicles through a specific market segment—that of fuel cell buses (FCBs)—and explores the progress of FCB projects in North America, Europe and Japan. It examines the role of demonstration projects and highlights the complexity of the relationship between government and developers, and the multifarious and conflicting objectives of industry players that inhibit progress.     

Niche Entry as a Route to Mainstream Innovation: Learning from the Phosphoric Acid Fuel Cell in Stationary Power

The paper charts the efforts to establish a successful niche position for the phosphoric acid fuel cell (PAFC) in stationary power generation, as a precursor to wider technological system and regime change. Market entry depends on matching price/performance characteristics to a niche, and improving performance through increasing returns, the most important and immediate of which are ‘learning effects’. The paper identifies five types of learning effect: (i) migrating the technology to other niches and into the mainstream; (ii) opening the way for other technologies that may have greater scope for migration; (iii) transferring learning within the pioneering company to other technologies or products; (iv) transferring experience to others in the industry; and (v) enabling users to learn. Although PAFC may be perceived as a failure in some respects, a wider perspective suggests it has made a positive and useful contribution to learning.     

AN EQUILIBRIUM SEARCH MODEL OF SYNCHRONIZED SALES*

We demonstrate the existence of periodic nonstationary equilibria with self‐generating cycles in a simple model of random search. Our results provide a theory of synchronized sales based on product market search by heterogeneous consumers. That is, our model explains how it can be optimal for all sellers to follow a repeated pattern of posting a high price for several periods and then posting a low price for one period.