The Aggregate Demand for Private Health Insurance Coverage in the United States

This article estimates the aggregate demand for private health insurance coverage in the United States using an error correction model for the period 1966–1999. Both short- and long-run price and income elasticities of demand are estimated. The empirical findings indicate that both private insurance enrollment and the completeness of insurance are relatively inelastic with respect to changes in price and income in the short and long run. Moreover, the results suggest that an increase in the number cyclically and frictionally uninsured generates less welfare loss than an increase in the number of structurally uninsured.     

Which Price is Right: Load or Premium?

This paper uses national time series data for the United States to investigate whether changes in the premium or loading fee offer a better explanation for variations in the percentage of the population with private health insurance from 1960 to 2004. The empirical results suggest that premium provides a better measure of price when estimating the demand for health insurance at the extensive margin. The empirical analysis also indicates that the aggregate short-run price and income elasticities of demand for health insurance are fairly close at ?0.19 and 0.27, respectively. One implication is that the percentage of the population with private health insurance in the United States should continue to decline in the future if real premiums persistently grow significantly faster than the overall economy.     

Short‐run marginal medical costs from booze and butts: Evidence from the states

This article uses a panel data set of U.S. states over the 1980 to 2007 period to estimate the demands for medical care, cigarettes, and beer. The estimation process generates own‐price, income, and cross‐price elasticities for all three goods. Implied per capita beer and cigarette consumption elasticities of per capita health care expenditures, suggested by our baseline estimates, are 0.83 and 0.14, respectively. These results are robust to a number of specification tests. Simulations suggest that yearly marginal medical costs amount to approximately $12 per bottle and 27 cents per cigarette in the short run (in 2012 dollars). These results are likely to be driven by the much larger corresponding increases in the consumption of binge drinkers and heavy smokers.

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The impact of a state mandated expenditure floor on aggregate property values

Using a test of allocative efficiency in the local public sector developed by Brueckner [Journal of Public Economics 19 (1982) 311–331], this study empirically examines the impact of a state minimum education expenditure requirement on aggregate property values in Connecticut communities. The empirical results reveal that the typical community in Connecticut spends less on education and municipal services than the level that maximizes aggregate property values. The results further indicate that spending on education falls further below the property maximization level in those communities constrained by the state expenditure floor. It follows from the analysis that some state expenditure floors can raise aggregate property values and promote efficiency.     

Examining the Marginal Access Value of Private Health Insurance

According to a new theory advanced by Nyman (1999, 2003) , an important access motivation underlies the demand for health insurance. However, little empirical research has attempted to quantify and explain changes in the access value of health insurance. By assuming the demand for health insurance is derived from the demand for good health, this article shows mathematically that the marginal access value of private health insurance can be reasonably indexed by dividing the price of health insurance by a composite measure of medical prices. For the period from 1960 through 2002, national data for the United States suggests that the marginal access value of private health insurance has tended to increase over time. Based upon multiple regression analysis, marginal access value is shown to have increased over time in response to rising income, more generous benefit coverage, new medical technologies, and, in recent years, the backlash against health maintenance organizations (HMOs). In addition, expansions in the Medicaid program are shown to have slowed the growth of the marginal access value of private health insurance.     

Assessing Consumer Gains from a Drug Price Control Policy in the United States

We use national data from 1960 to 2000 to estimate the demand for pharmaceuticals in the United States. We then simulate consumer surplus gains from a hypothetical drug price control policy that would have limited drug price increases to the rate of inflation from 1981 to 2000. Using a range of values for the real interest rate, coinsurance rate, and own-price elasticity of demand, we find that the consumer surplus gains from this policy equal $472 billion by the end of 2000. According to a recent study, that same policy would have led to 198 fewer new drugs being brought to the U.S. market. Therefore, the average social opportunity cost per drug developed during this period was approximately $2.4 billion. Research on the value of pharmaceuticals suggests that the social benefits of a new drug are far greater than this estimate. Hence, drug price controls could do more harm than good.     

Medical Insurance Coverage and Health Production Efficiency

Conventional economic theory predicts that medical insurance coverage causes an inefficient production of health because of  ex ante  and  ex post  moral hazard effects. However, no research has empirically examined the magnitude of the inefficiency. This study empirically examines the impact of medical insurance on the technical efficiency of health production at the metropolitan level. The underlying health production function allows for preventive care, curative care, and behavioral factors. Data envelopment analysis determines relative technical efficiency. The multiple regression results indicate that insurance coverage generates inefficiency but the efficiency loss appears to be relatively small on the extensive margin.     

The diffusion of innovation theory and the effects of IFRS adoption by multinational corporations on capital market performance: a cross-countryanalysis

This article seeks to contribute to International Financial Reporting Standards (IFRS) literature by examining the effects of adopting IFRS on stock market performance worldwide from the diffusion of innovation theory perspective. Our study revealed several interesting findings after using combinations of unique panel data sets from 110 countries worldwide and conducting a robust empirical analysis from 1995 to 2014. First, we found a positive association between late mandatory IFRS adoption and stock market integration in Europe. Second, our findings indicate a significant negative association between early IFRS adoption and the following financial indicators: stock market trading volumes, stock market capitalization, market turnover, and market return. Third, our study reveals an insignificant association between early IFRS adoption and stock price volatility alongside stock market development. Our findings are robust and have significant practical and policy implications for regulators and policymakers of multinational corporations.     

National and International Tests of the New Drug Cost Offset Theory

The new drug cost offset theory argues that new drugs pay for themselves by keeping people out of expensive medical facilities. However, few studies have tested this theory at the macroeconomic level to determine if system‐wide savings actually accrue. This article provides two tests of the new drug cost offset theory by examining the impact of new drugs on aggregate medical care costs using time‐series data for the United States and also by using a panel data set of countries belonging to the Organization for Economic Cooperation and Development. In support of the new drug cost offset theory, the results from both tests imply the typical new drug slows the growth of overall medical care spending.