Lethal Effects of Pollution and Economic Growth: Efficiency of Abatement Technology

The accumulation of pollution negatively impacts human health. Extreme increases in pollution, in particular, may have lethal implications for human beings, and, indeed, all living organisms. This paper thus devises a new model of economic growth that takes into account these lethal effects of accumulated pollution via a pollution threshold to show two key results. First, if an abatement technology is relatively inefficient, there exists a stationary steady state in which consumption and pollution stop growing. Second, if the abatement technology is sufficiently efficient, there exists a path along which pollution decreases at an accelerating rate until it finally reaches zero. In this case, consumption grows at a constant rate.     

Impact investing

We show that investors derive nonpecuniary utility from investing in dual-objective Venture Capital (VC) funds, thus sacrificing returns. Impact funds earn 4.7 percentage points (ppts) lower internal rates of return (IRRs) ex-post than traditional VC funds. In random utility/willingness-to-pay (WTP) models investors accept 2.5–3.7 ppts lower IRRs ex ante for impact funds. The positive WTP result is robust to fund access rationing and investor heterogeneity in fund expected returns. Development organizations, foundations, financial institutions, public pensions, Europeans, and United Nations Principles of Responsible Investment signatories have high WTP. Investors with mission objectives and/or facing political pressure exhibit high WTP; those subject to legal restrictions (e.g., Employee Retirement Income Security Act) exhibit low WTP.     

Demand for temperature and rainfall index insurance in India

Weather index insurance has been attracting considerable attention from academics and policymakers. This study investigates the demand for two types of index insurance sold in India: temperature index insurance for dry season and rainfall index insurance for subsequent monsoon season. Using data from randomized subsidy experiments, we separate purchase and quantity decisions and investigate how demand for rainfall insurance is correlated with demand for temperature insurance sold in the previous season. We find that the price (premium) does not influence purchase decisions per se but does significantly influence quantity decisions. The quantity demanded is less price‐sensitive for subsequent rainfall insurance than it is for temperature insurance. We also find that purchasers of temperature insurance tend to buy rainfall insurance more often than nonpurchasers do. However, a one‐time subsidy does not influence on subsequent demand, suggesting no price‐anchoring effect.     

Does unconventional monetary policy affect inequality? Evidence from Japan

Inequality has been largely ignored in the literature and practice of monetary policy, but is gaining more attention recently. Here, we exclusively focus on the impact of unconventional monetary policy (UMP) on inequality. We look at how the recent UMP in Japan affected inequality, using household survey data. Our vector auto regression (VAR) results show that UMP widened income inequality after 2008Q3 as the Bank of Japan (BoJ) resumed its zero-interest rate policy and reinstated UMP. This is largely due to the portfolio channel. To the best of our knowledge, this is the first study to empirically analyse the distributional impact of UMP. Japan’s extensive experience with UMP may hold important policy implications for other countries.     

The impact of anti-vascular endothelial growth factor agents on visual impairment/blindness prevention in patients with diabetic macular edema and on associated patient and caregiver burden in Japan

Aims: To estimate the impact of anti-vascular endothelial growth factor (VEGF) agents on visual impairment and blindness avoided in patients with diabetic macular edema (DME) and on associated patient and caregiver productivity loss in Japan.

Methods: This study compared the impact of current care (estimated at 53.8% utilization of anti-VEGF agents using current data) with that of hypothetical care (characterized by a higher utilization of anti-VEGF agents [80.0%], as estimated by an expert panel) of DME patients. A population-based Markov model (two-eye approach) simulated visual acuity (Early Treatment Diabetic Retinopathy Study [ETDRS] letters) transitions over 5 years with DME treatments (intravitreal aflibercept, ranibizumab, and triamcinolone acetonide, and grid/focal laser) in patients with DME. Patient and caregiver productivity loss was determined using the human capital method.

Results: In total, 570,000 DME patients were included in the model over 5 years. Increased utilization of anti-VEGF agents resulted in 6,659 fewer cases of severe visual impairment (SVI; 26–35 ETDRS letters) or blindness (0–25 ETDRS letters) compared with the current care approach (26,023 vs 32,682 cases; 20.38% reduction) over this period. Increased utilization of anti-VEGF agents also contributed to productivity loss savings of ¥12.58 billion (US $115.64 million) (i.e., 17.01%) at the end of year 5. The total overall saving over 5 years was ¥45.83 billion (US $421.27 million) (13.45%).

Limitations: Few Japanese data were available, and assumptions were made for some inputs. Vision changes dependent on the function of both eyes were not studied. Only intravitreal (not sub-Tenon’s) injections of triamcinolone were considered in this model. Direct costs were not considered.

Conclusions: Increased utilization of anti-VEGF agents can reduce SVI and legal blindness in patients with DME in Japan. This would also be associated with substantial savings in patient and caregiver productivity loss.     

Availability of Long‐term Care Facilities and Middle‐aged People's Labor Supply in Japan

This paper estimates the effect of the availability of long‐term care facilities in the prefecture or medical district where middle‐aged men and women reside on their labor supply. Prefecture‐ and medical district‐ level panel datasets of the capacity of long‐term care facilities are merged with individual level employment data, and each individual's employment status is regressed on the capacities of long‐term care facilities. I find no evidence for a positive impact of the long‐term care availability on labor supply, although the estimates are unstable in sign and not estimated precisely enough to draw any strong conclusions.     

Yardstick Competition to Elicit Private Information: An Empirical Analysis

The Japanese regulatory authority has introduced a new hybrid regulation that combines a fixed-price contract with ex ante yardstick inspection for local (public utility) gas distribution. The latter compares a firm??s reported costs with those of ??similar?? firms, and penalizes high-cost firms. We infer the effect of yardstick on information revelation by comparing the actual welfare level with the hypothetical full-information welfare level. Our results suggest that only the very first inspection was effective in reducing firms?? incentive to report higher costs.     

Cost-effectiveness analysis of treatment regimens with obinutuzumab plus chemotherapy in Japan for untreated follicular lymphoma patients

Abstract

Aims

Obinutuzumab (GA101; G) is a new treatment for follicular lymphoma (FL) that is anticipated to have greater efficacy than the current treatment, rituximab (R). The aim of this study was to evaluate the cost-effectiveness of G plus chemotherapy (G?+?Chemo) against that of R plus chemotherapy (R?+?Chemo) for patients in Japan with previously untreated FL.     

Bank relationships and underwriter competition: Evidence from Japan

I examine the effects of bank relationships on underwriter choice in the Japanese corporate bond market following the 1993 deregulation. Bank relationships have significant positive effects on a firm's underwriter choice. Relationship firms receive a small but significant fee discount and, consistent with the mitigating effect of competition on hold-up costs, multiple-relationship firms receive a significantly deeper discount than single-relationship firms. Bank shareholding alone negatively affects underwriter choice, whereas shareholding together with loans has significantly more positive effects than loans alone. Finally, existing relationships reduce a Japanese firm's switching probability by 32%, in contrast to only 6% for U.S. firms.     

Early Warning for Currency Crises: What Is the Role of Financial Openness?

The paper explores whether financial openness—capital account openness and gross capital inflows—makes countries vulnerable to currency crises. A quarterly dataset on 46 advanced and emerging market economies (AEs and EMEs) during 1975Q1–2011Q4 is used, with the period after Q2 2007 used for out‐of‐sample testing. The key findings are: (1) capital account openness is associated with lower probability of currency crises, but less so for EMEs; (2) surges in gross capital flows are associated with increased risk of currency crises; and (3) the model performs well out‐of‐sample, confirming that early warning models are helpful in judging relative vulnerability.