Conducting multilevel studies in purchasing and supply management research

Purchasing and supply management (PSM) research commonly covers multiple levels of theory and analysis. The theorizing and simultaneous testing of hypotheses across multiple levels is referred to as multilevel analysis (MLA) and is commonly performed using hierarchical linear modeling (HLM). Researchers in the PSM domain have paid little attention thus far to the topic of multilevel studies. Although MLA holds the potential to yield novel insights into PSM issues, it also generates new challenges for authors and reviewers alike. We contribute to this methodological dialogue by examining reasons for conducting multilevel PSM research and offering practical guidance for increasing its methodological rigor.     

Evaluating the performance of a predictive modeling approach to identifying members at high-risk of hospitalization

Abstract

Aims: To evaluate the risk-of-hospitalization (ROH) models developed at Blue Cross Blue Shield of Louisiana (BCBSLA) and compare this approach to the DxCG risk-score algorithms utilized by many health plans.

Materials and Methods: Time zero for this study was December 31, 2016. BCBSLA members were eligible for study inclusion if they were fully insured; aged 80?years or younger; and had continuous enrollment starting on or before June 1, 2016, through time zero. Up to 2?years of historical claims data from time zero per patient was included for model development. Members were excluded if they had cancer, renal failure, or were admitted for hospice. The Blue Cross ROH models were developed using (1) regularized logistic regression and (2) random decision forests (a tree ensemble learning classification method). All models were generated using Scikit-learn: Machine Learning in Python. Prognostic capabilities of DxCG risk-score algorithms were compared to those of the Blue Cross models.

Results: When stratifying by the top 0.1% of members with the highest ROH, the Blue Cross logistic regression model had the highest area under the receiving operator characteristics curve (0.862) based on the result of 10-fold cross-validation. The Blue Cross random decision forests model had the highest positive predictive value (49.0%) and positive likelihood ratio (61.4), but sensitivity, specificity, negative predictive values, and negative likelihood ratios were similar across all four models.

Limitations: The Blue Cross ROH models were developed and evaluated using BCBSLA data, and predictive power may fluctuate if applied to other databases.

Conclusions: The predictability of the Blue Cross models show how member-specific, regional data can be used to accurately identify patients with a high ROH, which may allow healthcare workers to intervene earlier and subsequently reduce the healthcare burden for patients and providers.     

Understanding organising activity among US national unions

It is well known that US aggregate union election activity under the National Labor Relations Board (NLRB) has fallen for several years. It is also well known that NLRB win rates have increased moderately during the Sweeney era relative to the later part of the Kirkland years. This article sheds new light on organising activity and win rates, by examining these data on a national union basis. The results show that several unions, including most of the largest nationals, experienced both increases in organising activity and increased win rates for the period of 1999 to 2004 compared with the years 1990–95 (the end of the Kirkland era). While explanations of variations in inter‐union organising success remain elusive, understanding and building on the experience of these ‘resurging unions’ holds the promise of union renewal more generally.     

The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?

The difference between people's valuations of gains and losses has been widely observed in both single trial and repeated trial experiments, as well as in survey responses and in commonplace behavior. However, the results of some Vickrey auction experiments indicate that the disparity may decrease, or even disappear, over repeated trials. This paper reports the results of two further repeated Vickrey auction experiments that test the impact of both a second price and a ninth price auction rule on valuations. Although valuations should be independent of this variation in the exchange price rule, the manipulation had a dramatic impact on subjects' stated values of a common market good. The results suggest that the endowment effect remains robust over repeated trials, and that contrary to common understanding, the Vickrey auction may elicit differing demands dependent on the context of the valuation.     

Modelling economy-ecology linkages in mangroves: Economic evidence for promoting conservation in Bintuni Bay, Indonesia

Woodchip exports pose a potential threat to a 300 000-ha mangrove ecosystem in the Bintuni Bay area of Irian Jaya, Indonesia. The bay supports an important shrimp export industry, and coastal areas support 3000 households. Traditional non-commercial uses of mangroves have an estimated value of Rp20 billion/yr (US$10 million/yr); commercial fisheries are valued at Rp70 billion/yr (US$35 million/yr) and selective commercial mangrove cutting schemes have a maximum value of Rp40 billion/yr (US$20 million/yr).Forest management options, ranging from clear cutting to a cutting ban, are evaluated in a cost–benefit analysis incorporating linkages among mangrove conversion, offshore fishery productivity, traditional uses, and benefits of erosion control and biodiversity maintenance functions. “Linkage scenarios” are developed that reflect potential ecosystem component interactions in Bintuni Bay. Clear cutting is optimal only if linkages are ignored. A cutting ban is optimal if linear and immediate linkages between ecosystem components exist. Under a scenario with linear but delayed linkages of 5 years, selective cutting of 25% of the harvestable mangrove is the optimal strategy; it has a present value of Rp70 billion (US$35 million) greater than the clear cutting option, and more extensive cutting would yield no additional net benefits.Strong economic arguments exist for conservative mangrove clearing. Where strong ecological linkages occur, severe restrictions on clearing activities will be economically optimal. Where ecosystem dynamics are uncertain, programs reducing linkage effects – such as greenbelts, replanting, or selective cutting – will minimise potential economic losses.     

Is Improving Access to University Enough? Socio‐Economic Gaps in the Earnings of English Graduates

Much research and policy attention has been on socio‐economic gaps in participation at university, but less attention has been paid to socio‐economic gaps in graduates’ earnings. This paper addresses this shortfall using tax and student loan administrative data to investigate the variation in earnings of English graduates by socio‐economic background. We find that graduates from higher income families (with median income of around 77,000) have average earnings which are 20% higher than those from lower income families (with median income of around £26,000). Once we condition on institution and subject choices, this premium roughly halves, to around 10%. The premium grows with age and is larger for men, in particular for men at the most selective universities. We estimate the extent to which different institutions and subjects appear to deliver good earnings for relatively less well off students, highlighting the strong performance of medicine, economics, law, business, engineering, technology and computer science, as well as the prominent London‐based universities.     

Can Fund Managers Select Outperforming REITs? Examining Fund Holdings and Trades

Despite at least six empirical studies published since 2000 designed to assess fund managers’ Real Estate Investment Trust (REIT)‐selection ability, their skill remains in question. Unlike previous studies, we examine fund holdings and trades of REITs to answer this question. This approach allows us to explicitly account for portfolio rebalancing that alters REIT‐characteristic weights of fund portfolios. Results show that fund managers, after controlling for property type, size and momentum, generated significant positive alpha with their securities‐selection ability. To understand the sources of such ability, we examine whether fund managers who followed certain trading strategies outperformed relative to other managers. The potential trading strategies are based on public information related to geographic concentration, net‐asset‐value‐to‐price ratios, income and appreciation styles and leverage of the underlying REITs. Comparative and regression analyses show that none of the strategies fully explains why fund managers were able to select REITs that outperformed. We surmise that the outperformance mainly derives from the endemic abilities of managers to uniquely process REIT‐specific information and generate private valuation beliefs that lead to profitable investment decisions.     

Employee cost-sharing and the welfare effects of flexible spending accounts

Flexible Spending Accounts (FSAs) subsidize out-of-pocket health expenses not covered by employer-provided health insurance, making health care cheaper ex post, but also reducing the incentive to insure. We use a cross section of firm-level data to show that FSAs are indeed associated with reduced insurance coverage, and to evaluate the welfare consequences of this shift. Correcting for selection effects we find that FSAs are associated with insurance contracts that have coinsurance rates about 7 percentage points higher, relative to a sample average coinsurance rate of 17%. Meanwhile, coinsurance rates net of the subsidy are approximately unchanged, providing evidence that FSAs are only welfare neutral if we ignore distributional considerations and the deadweight loss of the taxes necessary to finance the subsidy. These results also suggest that FSAs may explain a significant fraction of the shift in health care costs to employees that has occurred in recent years.