Applying conjoint analysis in economic evaluations: an application to menorrhagia

The increased demand for health care, coupled with limited resources, means that decisions have to be made concerning the allocation of scarce health care resources. This paper considers how conjoint analysis (CA) can be used to aid this decision making process. It is shown how the technique can be used to estimate marginal rates of substitution between attributes, willingness to pay (WTP) if cost is included as an attribute and overall utility scores for different ways of providing a service. The technique is applied to consider women's preferences for two surgical procedures in the treatment of menorrhagia: hysterectomy and conservative surgery. The results suggest conservative surgery is preferred to hysterectomy, as indicated by higher utility scores for the former and a marginal WTP of 7593 to have conservative surgery rather than hysterectomy. The internal validity of CA was also shown. It is concluded that CA is a potentially useful instrument for policy makers. However, numerous methodological issues need addressing before the technique becomes an established instrument within economic evaluations.     

Optimal risk-sharing with effort and project choice

We consider first-best risk-sharing problems in which “the agent” can control both the drift (effort choice) and the volatility of the underlying process (project selection). In a model of delegated portfolio management, it is optimal to compensate the manager with an option-type payoff, where the functional form of the option is obtained as a solution to an ordinary differential equation. In the general case, the optimal contract is a fixed point of a functional that connects the agent's and the principal's maximization problems. We apply martingale/duality methods familiar from optimal consumption-investment problems.     

Who actually goes to university?

Access to higher education (HE) is a major policy issue in England and Wales. There is concern that children from lower socio-economic backgrounds are far less likely to get a degree. We analyse the changing association between socio-economic background and the likelihood of going to university, using data from the Youth Cohort Study (YCS), spanning the period 1994–2000. We find evidence of substantial social class inequality in HE participation but conclude that this is largely due to education inequalities that emerge earlier in the education system. Conditional on GCSE and A level performance, we find no additional role for socio-economic background or parental education in determining pupils’ likelihood of going to university.     

Inflation,growth, and distribution: The Brazilian economy after the post war

Abstract

Following Marglin and Bhaduri (1990 Marglin, S.A., and Bhaduri, A. “Profit Squeeze and Keynesian Theory.” In S.A. Marglin and J. Schor (eds.), The Golden Age of Capitalism. Reinterpreting the Postwar Experience. Oxford: Clarendon, 1990. [Google Scholar]), the purpose of this paper is to investigate empirically the interaction between income distribution and growth of aggregate demand during the 1951–89 period in Brazil. Applying Hein and Vogel’s (2008) methodology we conclude that the Brazilian economy showed a profit-led demand regime. In a context of high inflation, high concentration of markets, and wage control, retained profits were the main source to finance new capital. In this sense, we found a large sensitivity of investment relative to the wage share, a result that is compatible with a consumption pattern based on high income, which supported the growth trend with low wages observed during the period.     

LATIN AMERICAN EXCHANGE RATE DEPENDENCIES: A REGULAR VINE COPULA APPROACH

This study implements a regular vine copula methodology to evaluate the level of contagion among the exchange rates of six Latin American countries (Argentina, Brazil, Chile, Colombia, Mexico, and Peru) from June 2005 to April 2012. We measure contagion in terms of tail dependence coefficients, following Fratzscher's (1999) definition of contagion as interdependence. Our results indicate that these countries are divided into two blocks. The first block consists of Brazil, Colombia, Chile, and Mexico, whose exchange rates exhibit the largest dependence coefficients, and the second block consists of Argentina and Peru, whose exchange rate dependence coefficients with other Latin American countries are low. We also found that most of the Latin American exchange rate pairs exhibit asymmetric behaviors characterized by nonsignificant upper tail dependence and significant lower tail dependence. These results imply that there exists contagion in Latin American exchange rates in periods of large appreciations, whereas there is no evidence of contagion during periods of currency depreciation. This empirical regularity may reflect the “fear of appreciation” in emerging economies identified by Levy‐Yeyati, Sturzenegger, and Gluzmann (2013). (JEL C32, C51, E42)     

Procurement favouritism and technology adoption

It is well known that the design of cost minimizing procurement rules for the selection of a contractor among distinct technological groups requires the favouritism of inefficient firms. In this paper, I show that, if technology adoption is non-contractible, these policies will also provide optimal incentives for the inefficient firms to adopt more efficient technologies.     

Evolving Aspirations and Cooperation

A 2×2 game is played repeatedly by two satisficing players. The game considered includes the Prisoner's Dilemma, as well as games of coordination and common interest. Each player has anaspirationat each date, and takes an action. The action is switched at the subsequent period only if the achieved payoff falls below aspirations; the switching probability depends on the shortfall. Aspirations are periodically updated according to payoff experience, but are occasionally subject to trembles. For sufficiently slow updating of aspirations and small tremble probability, it is shown that both players must ultimately cooperate most of the time.Journal of Economic LiteratureClassification Numbers C72, D83.     

Heuristic Approximation to Cramér-von Mises Type Statistics

We derive a formal expansion for a distribution in terms of another distribution. As a particular case we get the formal Edgeworth expansion. The heuristic procedure that we present is used to obtain approximations for distribution functions of the Cramér-von Mises and Watson goodness-of-fit statistics. Finally we compare our results with some obtained in the literature.     

Credit and inflation under borrower?s lack of commitment

In this paper we study the effects of monetary policy on privately supplied credit in model economies where money is needed for transaction purposes and agents who default on their loans cannot participate in the credit market but are allowed to accumulate money. In our deterministic benchmark economy where agents alternate in productivity, credit has the role of smoothing consumption. We show that deflation crowds out credit completely. The reason is that deflation increases the value of being excluded from the credit market and eliminates the incentive to repay loans. When inflation is positive but low, credit, consumption smoothing and welfare increase with inflation, until inflation reaches a threshold at which the allocation is efficient and money becomes superneutral.