Economics Commons^™

Medicaid Managed Care And The Health Care Utilization Of Foster Children, Makayla Palmer, James Marton, Aaron Yelowitz, Jeffery Talbert

Economics Faculty Publications

A recent trend in state Medicaid programs is the transition of vulnerable populations into Medicaid managed care (MMC) who were initially carved out of such coverage, such as foster children or those with disabilities. The purpose of this article is to evaluate the impact of the transition of foster children from fee-for-service Medicaid coverage to MMC coverage on outpatient health care utilization. There is very little empirical evidence on the impact of managed care on the health care utilization of foster children because of the recent timing of these transitions as well as challenges associated with finding data sets large …

Why ‘Simple Economics’ Is Often Wrong, And Other Book Recommendations For The Econ Lover In Your Life, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

Improved Grade Outcomes With An E-Mailed “Grade Nudge”, Ben O. Smith, Dustin R. White, Patricia C. Kuzyk, James E. Tierney

Economics Faculty Publications

Information provided at the moment a person makes a decision can influence behavior in predictable ways. The United Kingdom's Behavioural Insights Team have used this idea to help improve the insulation of lofts, collect taxes, and even reduce litter. The authors of this article developed software that appends a personalized message to each assignment in the class regarding the student's current grade. This “grade nudge” explains precisely how the assignment will impact the student's final grade given their current standing in the class. Through a randomized trial, the authors show that the nudge improves student homework performance by about four …

Keeping Our Cool: In Defense Of Air Conditioning, Arthur M. Diamond Jr.

Economics Faculty Publications

In the last 15 years three books have been published that are critical of air conditioning (Cooper 1998; Ackermann 2002; Cox 2010). No books (or even articles) in those years have been primarily devoted to a general defense. Such a defense should make the following points. Air conditioners reduce disease and mortality, especially among the ill and aged. They reduce aggressive behavior, including road rage, assaults, and murders. They increase the quality and quantity of nighttime sleep. They improve student and worker productivity by reducing noise and increasing the ability to concentrate. They increase comfort and free choice.

Demand Driven Growth And Two Class Capital Distribution With Applications To The United States, Rishabh Kumar, Christian Schoder, Siavash Radpour

Economics Faculty Publications

We present a structuralist growth and distribution model of capitalists and workers. Our model highlights the role of class-differentiated savings propensities as well as an independent accumulation function in determining the dynamics of wealth distribution in the long run. At the steady state, investment parameters do not influence the distribution of wealth but there exists a long run paradox of thrift effect, which distributes wealth to capital- ists whilst simultaneously exerting downward pressure on the long run state of aggregate demand. Applied to annual US data from 1950-2015 using the Metropolis-Hastings algorithm we find that the share of capitalist wealth …

Endowment Effects And Contribution Strategies In Public Good Experiments, John P. Weis, John J. Cadigan, Pamela Schmitt, Kurtis Swope

Economics Faculty Publications

We investigate behavior in a laboratory public good experiment with unique endowment schemes that allow a wider range of contribution strategies than in standard voluntary contribution mechanism (VCM) experiments. A baseline treatment follows a standard VCM design (subjects receive 10 tokens in each of 10 rounds that may be allocated between a private account and a group account). In a new carry-over treatment, any tokens not allocated to the group account in the current period are made available for contributions in future periods. Under full endowment, subjects receive 100 tokens in round one (rather than 10 tokens per …

Risk And Abnormal Returns In Markets For Congestion Revenue Rights, Rimvydas Baltaduonis, Samuel Bonar, John Carnes, Erin Mastrangelo

Economics Faculty Publications

In organized energy markets that use locational pricing, power generators and energy suppliers procure financial transmission rights (FTRs) to hedge against grid con- gestion charges, while third-party speculators attempt to capture a return with these extremely volatile contracts. This paper develops a novel methodology for estimating the systematic risk of individual FTRs and detecting the presence of abnormal returns among these financial instruments. The prevalence of congestion paths with abnormal returns could be used by policy experts as an efficiency measure when assessing the performance of FTR markets. Being the only organized energy market in the Western Interconnection, California has …

Micro-Data Evidence On Family Size And Chinese Household Saving Rates, Steven Lugauer, Jinlan Ni, Zichao Yin

Economics Faculty Publications

This paper examines the impact of family size on household saving. We first study a theoretical life-cycle model that includes finite lifetimes and saving for retirement and in which parents care about the consumption by their dependent children. The model implies a negative relationship between the number of dependent children in the family and the household saving rate. Then, we test the model's implications using new survey data on household finances in China. We use the differential enforcement of the one-child policy across counties to address the possible endogeneity between household saving and fertility decisions in a two-stage …

Congenital Toxoplasmosis In Austria: Prenatal Screening For Prevention Is Cost-Saving, Andrea-Romana Prusa, David C. Kasper, Larry Sawers, Evelyn Walter, Michael Hayde, Eileen Stillwaggon

Economics Faculty Publications

Background:

Primary infection of Toxoplasma gondii during pregnancy can be transmitted to the unborn child and may have serious consequences, including retinochoroiditis, hydrocephaly, cerebral calcifications, encephalitis, splenomegaly, hearing loss, blindness, and death. Austria, a country with moderate seroprevalence, instituted mandatory prenatal screening for toxoplasma infection to minimize the effects of congenital transmission. This work compares the societal costs of congenital toxoplasmosis under the Austrian national prenatal screening program with the societal costs that would have occurred in a No-Screening scenario.

Methodology/Principal Findings:

We retrospectively investigated data from the Austrian Toxoplasmosis Register for birth cohorts from 1992 to 2008, including pediatric …

Second Chance For High School Dropouts? A Regression Discontinuity Analysis Of Postsecondary Educational Returns To The Ged, Christopher Jepsen, Peter Mueser, Kenneth R. Troske

Economics Faculty Publications

We evaluate the educational returns to General Educational Development (GED) certification using state administrative data. We use fuzzy regression discontinuity (FRD) methods to account for the fact that GED test-takers can repeatedly retake the test until they pass it and the fact that test-takers have to pass all five subtests before receiving the GED. We find that the GED increases the likelihood of postsecondary attendance and course completion substantially but that the GED impact on overall credits completed is modest; the GED causes an average increment of only two credits for men and six credits for women.

Consumer's Guide To Regulatory Impact Analysis: Ten Tips For Being An Informed Policymaker, Susan Dudley, Richard Belzer, Glenn C. Blomquist, Timothy Brennan, Christopher Carrigan, Joseph Cordes, Louis A. Cox, Arthur Fraas, John Graham, George Gray, James Hammitt, Kerry Krutilla, Peter Linquiti, Randall Lutter, Brian Mannix, Stuart Shapiro, Anne Smith, W. Kip Viscusi, Richard Zerbe

Economics Faculty Publications

Regulatory impact analyses (RIAs) weigh the benefits of regulations against the burdens they impose and are invaluable tools for informing decision makers.We offer 10 tips for nonspecialist policymakers and interested stakeholders who will be reading RIAs as consumers.

1. Core problem: Determine whether the RIA identifies the core problem (compelling public need) the regulation is intended to address.
2. Alternatives: Look for an objective, policy-neutral evaluation of the relative merits of reasonable alternatives.
3. Baseline: Check whether the RIA presents a reasonable “counterfactual” against which benefits and costs are measured.
4. Increments: Evaluate whether totals and averages obscure relevant distinctions and trade-offs.
5. Uncertainty: Recognize …

In Latest Jobs Numbers, A Vindication For Minnesota’S Policy Choices, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

Subcontracting And The Survival Of Plants In The Road Construction Industry: A Panel Quantile Regression Analysis, Dakshina G. De Silva, Georgia Kosmopoulou, Carlos Lamarche

Economics Faculty Publications

This paper investigates how subcontracting parts of contracted work shapes entrants’ success and survival. We find that newly developed quantile regression approaches can be adapted to study survival of firms competing for government contracts in road construction. The method is applied on a data set that includes patterns of firm entry, exit and auction related information. We find an apparent increase in the business life of firms who subcontract out part of their projects. In Texas, these subcontracting effects appear to be more pronounced for firms with few or no options outside the industry, and among firms who contract out …

Divestment And Climate Change, William J. Mcnally

Economics Faculty Publications

In January of 2016, a number of Laurier faculty signed a letter (hereafter “The Letter”) urging the University to divest from fossil fuel companies in all endowment funds and the employee pension.1 This research note addresses a number of issues related to the divestment strategy—in particular, the stranded asset thesis, financial strategy alternatives, implementation challenges and the financial effects of divestment strategies. This note does not consider alternative strategies for decarbonizing the economy. The Letter itself does not explain why divestment is superior to alternatives like promoting research into clean energy generation, renewable energy sources, climate science, and environmental economics. …

Perspectives On Evaluation In Financial Education: Landscape, Issues, And Studies, William B. Walstad, Carly Urban, Carlos J. Asarta, Elizabeth Breitbach, William Bosshardt, Julie Heath, Barbara O'Neill, Jamie Wagner, Jing Jian Xiao

Economics Faculty Publications

This review discusses the heterogeneity in the effectiveness of financial education programs that occurs because of the unique conditions for programs and methods to evaluate them. The authors define six groups served by financial education: children, youth, college students and young adults, working adults, military personnel, and low-income consumers. They then discuss research and evaluation literature for each group with a critical eye on program purpose, content, and evaluation. They also present findings affecting multiple groups on four issues: student loans, homeownership, retirement planning, and financial advising. The accumulated evidence on the effectiveness of financial education is positive, although the …

Short Vs. Long: Cognitive Load, Retention And Changing Class Structures, Brandon Sheridan, Ben O. Smith, Erin G. Pleggenkuhle-Miles

Economics Faculty Publications

University class structure is changing. To accommodate working students, programmes are increasing their offerings of long night classes – some lasting as long as six hours. While these long classes may be more convenient for students, they have unintended consequences as a result of cognitive load. Using a panel of 124 students (372 observations) and a differencing approach that controls for student characteristics, we show that student exam performance decreases by approximately one-half letter grade on content taught in the second half of a long class (significant at the 5% level).

The Ethics Behind Efficiency, Jonathan B. Wight

Economics Faculty Publications

The normative elements underlying efficiency are more complex than generally portrayed, and rely upon ethical frameworks that are generally absent from classroom discussions. most textbooks, for example, ignore the ethical differences between Paretto efficiency (based on voluntary win-win outcomes) and the modern Kaldor-Hicks efficiency used in public policy assessments (in which winners gain more than losers lose). For the latter to be ethically palatable, society must have in place basic institutions of justice, transparency, and accountability. Normative economics thus requires a pluralist approach that includes considerations of virtue and duty, closer to Adam Smith's Enlightenment conceptions. This surprising finding should …

Review Of Cord And Hammond, Eds. Milton Friedman: Contributions To Economics And Public Policy, Arthur M. Diamond Jr.

Economics Faculty Publications

Gary Becker, at a 2007 AEA reception for a documentary on Milton Friedman, gave a brief informal testimonial to his teacher, colleague, and friend. He told of sharing a cab, during which Friedman discussed economics with the cab driver. When they reached their destination, Friedman was slow to leave the cab, wanting to raise a few more ideas with the driver. Friedman was all about the ideas, and not at all about the status of the person discussing the ideas.

The Long Term Effects Of An Aging Fleet On Operational Availability And Cost: Evidence From The Us Coast Guard, Christopher W. Lavin, Robert M. Mcnab, Ryan S. Sullivan

Economics Faculty Publications

This paper empirically examines whether the aging of a fleet affects operational availability and operating cost using a unique data-set on the 117 47-foot Motor Lifeboats (MLBs) of the United States Coast Guard (USCG). Procured from 1997 to 2003, the 47-foot MLB is the standard lifeboat of the USCG and all 117 MLBs remain in service. The aging of the MLB fleet has resulted in higher annual operating costs and lower operational availability, although the nature of this relationship remains unclear. Our estimation strategy utilizes an error components estimator to examine these issues. We employ three variants of the dependent …

Under-Representation Of Hispanics In Gifted Education : A Look Across State Lines, Elena Andreadis, Michael A. Quinn

Economics Faculty Publications

This paper is the first to test a national panel data set of Hispanic enrollments in gifted education. Using data from 2002-2010, it is found that lower education budgets have a disproportionately negative impact on Hispanics and differences across states in learning disability programs may lower Hispanic gifted enrollments. Larger Hispanic student populations do not seem to be a significant factor across states, but have a negative effect within states over time. Graduating a high percentage of Hispanic students increases gifted program enrollments. Identification of students as learning disabled needs to be reexamined in the context of race/ethnicity as well. …

How Do The Trans-Pacific Economies Affect The Usa? An Industrial Sector Approach, Takeshi Yagihashi, David D. Selover

Economics Faculty Publications

This paper studies how the Trans-Pacific region affects the US economy in terms of business cycle transmission. We use a large data set consisting of disaggregated sectoral industrial production indexes from selected countries in the region and employ a factor-augmented vector autoregression (FAVAR) approach to analyze the transmission of shocks in different industries. We find that a positive output shock in the entire Trans-Pacific region has positive effects on the majority of US manufacturing sectors. We also find that sectoral shocks in five sectors of the Trans-Pacific region have a large impact on the overall US economy. Three of the …

Health Capital Investment And Time Spent On Health Related Activities, Juan Du, Takeshi Yagihashi

Economics Faculty Publications

One key component in the health capital investment model in (Grossman, M. Journal of Political Economy, 80: 223–255, 1972) is time spent on improving health. However, few empirical studies have examined how time spent on health investment is determined. In this paper, we fill this void in the literature by investigating how people allocate their time for different types of health-related activities in response to economic variables. Using the American Time Use Survey, we distinguish health-enhancing and health-deteriorating leisure activities, with the rationale that these activities may respond differently to socioeconomic environment. We find that health-enhancing and health-deteriorating time respond …

An Overlapping-Generations Model Of Firm Heterogeneity In Economic Development, Yu Chen, Haiwen Zhou

Economics Faculty Publications

We study firm heterogeneity in economic development in an overlapping-generations general equilibrium model in which manufacturing firms engage in oligopolistic competition. Individuals differ in their productivities in the manufacturing sector and choose to become entrepreneurs or workers. The model is surprisingly tractable. In the steady state, an increase in the entry barrier in the manufacturing sector or an increase in the percentage of income spent on the agricultural good decreases the wage rate, but the level of output in the manufacturing sector does not necessarily decrease. An increase in the degree of patience of an individual increases the steady state …

The Ethics Behind Efficiency, Jonathan B. Wight

Economics Faculty Publications

The normative elements underlying efficiency are more complex than generally portrayed, and rely upon ethical frameworks that are generally absent from classroom discussions. Most textbooks, for example, ignore the ethical differences between Pareto efficiency (based on voluntary win-win outcomes) and the modern Kaldor-Hicks efficiency used in public policy assessments (in which winners gain more than losers lose). For the latter to be ethically palatable, society must have in place basic institutions of justice, transparency, and accountability. Normative economics thus requires a pluralist approach that includes considerations of virtue and duty, closer to Adam Smith’s Enlightenment conceptions. This surprising finding should …

Goods-Time Elasticity Of Substitution In Health Production, Juan Du, Takeshi Yagihashi

Economics Faculty Publications

We examine how inputs for health production, in particular, medical care and health-enhancing time, are combined to improve health. The estimated elasticity of substitution from a constant elasticity of substitution production function is significantly less than one for the working-age population, rejecting the unit elasticity of substitution used in previous studies.

Economic Costs And Benefits Of A Community-Based Lymphedema Management Program For Lymphatic Filariasis In Odisha State, India, Eileen Stillwaggon, Larry Sawers, Jonathan Rout, David Addiss, Leanne Fox

Economics Faculty Publications

Lymphatic filariasis afflicts 68 million people in 73 countries, including 17 million persons living with chronic lymphedema. The Global Program to Eliminate Lymphatic Filariasis aims to stop new infections and to provide care for persons already affected, but morbidity management programs have been initiated in only 24 endemic countries. We examine the economic costs and benefits of alleviating chronic lymphedema and its effects through a simple limb-care program. For Khurda District, Odisha State, India, we estimated lifetime medical costs and earnings losses due to chronic lymphedema and acute dermatolymphangioadenitis (ADLA) with and without a community-based limb-care program. The program would …

What Americans Should Demand From Trump And Clinton On Economic Policy, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

No, Broadband And Garbage Collection Aren’T Public Goods. Here’S Why They Might Require Regulation Anyway, Louis D. Johnston

Economics Faculty Publications

No abstract provided.

An Evaluation Of Constitutional Constraints On Capital Taxation, Begoña Domínguez, Zhigang Feng

Economics Faculty Publications

This paper investigates the desirability of constitutional constraints on capital taxation in an environment without government debt and where benevolent governments have limited commitment. In our setup, governments can choose proportional capital and labor income taxes subject to the constitutional constraint but cannot commit to the actual path of taxes. First, we explore a form of constitutional constraint: a constant cap on capital tax rates. In our quantitative exercise, we show that a three per cent cap on capital taxes provides the highest welfare at the worst sustainable equilibrium. However, such cap decreases welfare at the best sustainable equilibrium (both …

Anchoring In Financial Decision-Making: Evidence From The Field, Michael Jetter, Jay K. Walker

Economics Faculty Publications

This paper analyzes 12,596 wagering decisions of 6,064 contestants in the US game show Jeopardy!, focusing on the anchoring phenomenon in financial decision-making. We find that contestants anchor heavily on the initial dollar value of a clue in their wagering decision, even though there exists no rational reason to do so. More than half of all wagers occur within $500 of the initial dollar value, although the maximum possible wagering value averages $5,914. This anchoring phenomenon remains statistically significant on the one percent level, even after controlling for scores, clue category, time trends, and player-fixed effects.When exploiting within-player variation …