Suicide as an indicator of quality of life: evidence from dialysis patients

Quality of life has been measured in many different ways for patients with chronic medical conditions. What is unique about the approach used here is that it uses suicide rates as a relatively objective measure of quality of life within the population of dialysis patients. Using a Heckman selection model, we estimate the relative suicide rates across patients undergoing both hemodialysis and peritoneal dialysis. Our empirical results show that patients on hemodialysis have relatively lower suicide rates after controlling for other factors. Specifically, our results indicate that 141 fewer suicides will occur for every 1,000 patients shifted from peritoneal to hemodialysis. Prior estimates of the higher costs of the latter modality yield an estimated expenditure of $42,043 per suicide avoided.     

Economists tackle the challenges of a pandemic

Business Economics - The COVID-19 pandemic radically and rapidly changed the world, including the world of business economists. Eight NABE members employed in a wide variety of fields discuss how...     

Redistribution by insurance market regulation: Analyzing a ban on gender-based retirement annuities

We illustrate how equilibrium screening models can be used to evaluate the economic consequences of insurance market regulation. We calibrate and solve a model of the United Kingdom's compulsory annuity market and examine the impact of gender-based pricing restrictions. We find that the endogenous adjustment of annuity contract menus in response to such restrictions can undo up to half of the redistribution from men to women that would occur with exogenous Social Security-like annuity contracts. Our findings indicate the importance of endogenous contract responses and illustrate the feasibility of employing theoretical insurance market equilibrium models for quantitative policy analysis.     

The effective tax rate and the pretax rate of return

This paper presents new estimates of the taxes paid on nonfinancial corporate capital, on the pretax rate of return to capital, and on the effective tax rate. The basic time series show that both the pretax rate of return and the effective tax rate have varied substantially in the past quarter century.An explicit analysis indicates that, after adjusting for different aspects of the business cycle, pretax profitability was between one and 1.5 percentage points lower in the 1970s than in the 1960s. The rate of profitability in the 1960s was also about one-half of a percentage point greater than the profitability in the 7 years of the 1950s after the Korean war.Changes in productivity growth, in inflation, in relative unit labor costs, and in other variables are all associated with changes in profitability. None of these variables, however, can explain the differences in profitability between the 1950s, 1960s and 1970s.Looking at broad decade averages, the effective tax rate and the pretax rate of return move in opposite directions, lower pretax profits occuring when the tax rate is high. There thus appears to have been no tendency for pretax profits to vary in a way that offsets differences in effective tax rates.     

Beyond public management

The Netherlands are often considered an excellent example of ‘new public management’ reforms. Especially the ‘Tilburg model’ of management reform that took place in Dutch local government in the mid-1980s has become internationally renowned. In this review of public management reforms that took place in Dutch local and national government during the 1980s and 1990s we will show that managerial reforms were not the only dominant story in the The Netherlands. Dutch administration experienced a shift in frame of reference beyond public management. This review will not concentrate on ‘factual reforms’ but rather on reform ideas. This study departs from the empirical positivist approach where ‘objective facts’ play the central role. There is no one and single ‘objective truth’ about reforms. Managerial reform seemed the dominant story. In ‘reality’ there was a variety of reform ideas.     

Dividend taxes,corporate investment,and ‘Q’

Taxes on corporate distributions have traditionally been regarded as a ‘double tax’ on corporate income. This view implies that while the total effective tax rate on corporate source income affects real economic decisions, the distribution of this tax burden between the shareholders and the corporation is irrelevant. Recent research has suggested an alternative to this traditional view. One explanation of why firms in the United States pay dividends in spite of the heavy tax liabilities associated with this form of distribution is that the stock market capitalizes the tax payments associated with corporate distributions. This capitalization leaves investors indifferent at the margin between a corporation's decision to pay out dividends or to retain earnings. This alternative view holds that while changes in the dividend tax rate will affect shareholder wealth, they will have no impact on corporate investment decisions.This paper develops econometric tests which distinguish between these two views of dividend taxation. By extending Tobin's ‘q’ theory of investment to incorporate taxes at both the corporate and personal levels, the implications of each view for corporate investment decisions can be derived. The competing views may be tested by comparing the performance of investment equations estimated under each theory's predictions. British time series data are particularly appropriate for testing hypotheses about dividend taxes because of the substantial postwar variation in effective tax rates on corporate distributions. The econometric results suggest that dividend taxes have important effects on investment decisions.     

Annuity Markets and Retirement Security

The growing importance of defined contribution pension arrangements has drawn increased attention to the means by which retired people draw down their assets. Current UK law requires annuitisation of at least a fraction of defined contribution plan accumulations. Annuity markets have recently attracted some criticism with respect to pricing and the available range of product options. This paper describes a key feature of voluntary annuity markets: the presence of ‘adverse selection’. This is the tendency of annuitants to live longer than non‐annuitants, since individuals who know that they are likely to die soon do not purchase annuities. The paper presents information that quantifies the importance of adverse selection in the setting of private annuity prices and discusses the role of compulsory annuitisation requirements in reducing it. Requiring individuals to participate in the annuity market can reduce selection effects, at the cost of reducing individuals' range of retirement income options.     

Environmental taxes on intermediate and final goods when both can be imported

One of the most difficult administrative problems in implementing broad-based environmental taxes concerns the tax treatment of imports, particularly imports of final goods that are producedusing intermediate goods that are taxed domestically. Provided there is no joint production, taxing imported final goods based on the amount of intermediate goods consumed in their domestic production will raise marginal costs by the same amount for domestic and foreign producers. This rule is impossible to implement when final goods are produced as joint products, however, as in the petroleum refining and petrochemical industries. In such cases arbitrary assignments of intermediate good inputs to final goods-for example, on the basis of relative output weight or value-are likely to change the relative marginal costs of domestic and foreign producers.