Contracting for Health Services with Unmonitored Quality

In both the NHS and Medicare, recent emphasis has been on contracts with payment based only on the number of patients treated. It is shown that, without direct monitoring of quality or effort to reduce costs, such contracts are efficient only when it is efficient to treat all patients wanting treatment. It may not be when treatment costs are insured or subsidised. Such contracts can then be improved by including payments for the number of patients wanting treatment, as well as for the number actually treated. Even then, the outcome will not generally be efficient if quality is multi-dimensional.     

Constitutional Choice and Prosperity: A Factor Analysis

Forempirical purposes most studies on the influence of freedom on prosperity across nations use either aggregate measuresof economic freedom combined with a measure of political liberty,or single components of these aggregates to describe the freedom-variable.For a scholar of constitutional economics, both these approachesdo not seem to be satisfactory. From his theoretical viewpointhe would favor an approach that focuses on properties of thepolitico-economic order that can be interpreted as appropriateconstraints for preferred outcomes. Factor analysis is the methodused in this paper to extract from a pool of components thatdescribe freedom two main factors, namely (1) the appropriatenessof the framework in which the market operates, and (2) the degreeof political interventions into the market process. It is shownthat these two factors have great influence on the prosperityof nations.     

Constitutions as Commitment or Coordination Device? Comment on C. Azariadis and V. Galasso: Constitutional “Rules” and Intergenerational Fiscal Policy

In a recentcontribution to Constitutional Political Economy, Azariadis andGalasso argued that due to the fact that constitutions allowfor a partial precommitment of the individuals, constitutionalrules are a good means to guarantee an efficient level of redistributionbetween generations. I argue that constitutional rules have noinherent advantage with respect to commitment compared to otherrules. However, the beneficial role of constitutions stems fromtheir ability to create a focal point that helps to solve theequilibrium selection problem.     

Arbeitsmarkt: Rückenwind auch für Ältere

Durch den aktuellen Aufschwung ist es zu einem deutlichen Rückgang der Arbeitslosigkeit gekommen. Profitieren davon auch die ?lteren Arbeitnehmer? Wie lang sind ?ltere im Durchschnitt arbeitslos? Welche Probleme hat diese Gruppe bei der Wiedereingliederung in den Arbeitsmarkt? Wie sollte die Arbeitsmarktpolitik auf diese Probleme reagieren? Dr. Martin Dietz, 37, ist wissenschaftlicher Referent am Institut für Arbeitsmarkt- und Berufsforschung in Nürnberg.     

A meta-analysis of humor in advertising

This meta-analysis combines 369 correlations on the effects of humor in advertising and thus quantifies, updates, and expands previous literature reviews on the effects of humor in advertising. In line with previous reviews, the meta-analytic correlations demonstrate that humor in advertising significantly enhances A_AD, attention, and positive affect. Contrary to the assumptions of previous reviews, there is no evidence that humor impacts positive or negative cognitions, and liking of the advertiser. The meta-analytic findings clarify some ambiguous prior conclusions: humor significantly reduces source credibility, enhances positive affect, A_BR and purchase intention. The decline from lower order to higher order communication effects is particularly strong, with the effect size of the impact of humor on A_AD being twice as large as the effect size for A_BR. This impact of humor in advertising has been rather stable over the past decades. A moderator analysis reveals, however, that the findings of academic humor research are somewhat biased. As for the underlying theory, the positive and linear relationship between the funniness of the ad and brand attitudes supports an affective mechanism underlying the impact of humor in advertising.     

The Dynamic Behavior of Wages and Prices: Cointegration Tests within a Large Macroeconomic System

The dynamic relationship between wages and prices has long held a central place within the economic literature. Most macroeconomic models make assumptions as to the causal relationship between the two variables. Unfortunately, empirical investigations have produced widely divergent results. In particular, the present paper examines the results of time-series studies and argues that the lack of a consensus is due to improperly specified models. Once the wage-price relationship is embedded within a multiple vector system, identification of a wage-price cointegrating relationship is significantly improved. In addition, the increased efficiency yields evidence in favor of the dual feedback between wages and prices.