Can you get what you pay for? Pay‐for‐performance and the quality of healthcare providers

Despite the popularity of pay-for-performance (P4P) among health policymakers and private insurers as a tool for improving quality of care, there is little empirical basis for its effectiveness. We use data from published performance reports of physician medical groups contracting with a large network HMO to compare clinical quality before and after the implementation of P4P, relative to a control group. We consider the effect of P4P on both rewarded and unrewarded dimensions of quality. In the end, we fail to find evidence that a large P4P initiative either resulted in major improvement in quality or notable disruption in care.     

Housing Supply: The Other Half of the Market A Note from the Editor

The Journal of Real Estate Finance and Economics -     

TAX,STIMULI OF INVESTMENT AND FIRM VALUE

Pennings (2000 , European Economic Review, 44, pp. 383–91) has shown that the government can speed up investment by subsidizing the potential investing firm's entry cost while taxing the future proceeds from the investment, so as to render the net expected value of its subsidy program zero. This note argues that while speeding up investment, this subsidy‐tax program also lowers the value of the firm and therefore will be rejected by it.     

Efficiency and Seasonality in the UK Housing Market, 1991–2001*

This paper considers the informational efficiency of the UK owner‐occupied housing market over the period 1991–2001. Original small‐area, monthly, quality‐adjusted house price index series are developed from raw housing transaction observations for a number of UK counties and cities. These series are then tested in an autoregressive setting for characteristics indicative of weak market efficiency and seasonality. The major conclusion drawn is that there exists little evidence to support notions of inefficiency in these markets over the period considered.     

On Some Myths about Sequenced Common-Value Auctions

Equilibria are constructed for classes of game models of sequenced second-price auctions having identical common-valued objects. In some of these the equilibrium price falls on average, and in others the seller loses on average by committing to announce publicly something that he knows. Both of these possibilities are surprises.Journal of Economic LiteratureClassification Number: D44.     

Putting the Corporation in its Place

This article challenges the idea that the corporation is a globallysuperior form of business organization and that the Anglo-Americancommon-law is more conducive to economic development than thecode-based legal systems characteristic of continental Europe.Although the corporation had important advantages over the mainalternative form of organization (partnerships), it also haddisadvantages that limited its appeal to small- and medium-sizedenterprises (SMEs). As a result, when businesses were providedwith an intermediate choice, the private limited liability company(PLLC) that combined the advantages of legal personhood andjoint stock with a flexible internal organizational structure,most chose not to organize as corporations. This article tracksthe changes that occurred in the menu of business organizationalforms in two common-law countries (the United Kingdom and theUnited States) and two countries governed by legal codes (Franceand Germany) and presents data showing the rapidity with whichfirms in each country responded to enabling legislation forPLLCs. We show that the PLLC was introduced first and most easilyin a code country (Germany) and last and with the most difficultyin a common-law country (the United States). Late introductionwas associated with prolonged use of the partnership form, suggestingthat the disadvantages of corporations did indeed weigh heavilyon SMEs.     

Measuring legal systems

Factor-analytic models can substantially improve the measurement of comparative legal systems and thereby our understanding of how legal systems influence economic outcomes. These methods yield better estimates of latent constructs, allow us to evaluate whether institutional features are representative of a theoretical construct and whether allegedly distinct theoretical constructs can be separated empirically. We illustrate these points through a re-analysis of a 2003 study by Djankov, La Porta, Lopez-de-Silanes and Shleifer, using a factor-analytic method that combines continuous and categorical indicators. Our results strengthen these authors' findings with respect to how legal formalism relates to legal origin and the quality of the legal system. Yet, the results also show that many of the original index items are not significantly positively related to formalism. The results thus shed light on what institutional features should be prioritized for reform if we seek to make legal systems less formalistic. Moreover, we question the evidence that the formalism model better predicts the quality of the legal system than does the alternative “incentives” model. We argue, instead, that formalism and incentives may both relate to the tendency of a legal system to use bureaucratic rule-making. Our approach can readily be applied to the analysis of legal concepts other than formalism. Journal of Comparative Economics 35 (4) (2007) 711–728.