Anufriev, M & Bottazzi, G 2010, 'Market equilibria under procedural rationality', Journal of Mathematical Economics, vol. 46, no. 6, pp. 1140-1172.
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We analyze the endogenous price formation mechanism of a pure exchange economy with two assets, riskless and risky. The economy is populated by an arbitrarily large number of traders whose investment choices are described by means of generic smooth functions of past realizations. These choices can be consistent with (but not limited to) the solutions of expected utility maximization problems. Under the assumption that individual demand for the risky asset is expressed as a fraction of individual wealth, we derive a complete characterization of equilibria. It is shown that irrespectively of the number of agents and of their behavior, all possible equilibria belong to a one-dimensional "Equilibrium Market Curve". This geometric tool helps to illustrate the possibility of different phenomena, as multiple equilibria, and can be used for comparative static analysis. We discuss the relative performances of different strategies and the selection principle governing market dynamics on the basis of the stability analysis of equilibria.
Anufriev, M & Dindo, P 2010, 'Wealth-driven selection in a financial market with heterogeneous agents', JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION, vol. 73, no. 3, pp. 327-358.
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We study the co-evolution of asset prices and individual wealth in a financial market with an arbitrary number of heterogeneous boundedly rational investors. Using wealth dynamics as a selection device we are able to characterize the long run market outcomes, i.e., asset returns and wealth distributions, for a general class of competing investment behaviors. Our investigation illustrates that market interaction and wealth dynamics pose certain limits on the outcome of agents' interactions even within the "wilderness of bounded rationality". As an application we consider the case of heterogeneous mean-variance optimizers and provide insights into the results of the simulation model introduced by Levy, Levy and Solomon (1994).
Baddeley, M 2010, 'Herding, social influence and economic decision-making: socio-psychological and neuroscientific analyses', Philosophical Transactions of the Royal Society B: Biological Sciences, vol. 365, no. 1538, pp. 281-290.
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Typically, modern economics has steered away from the analysis of sociological and psychological factors and has focused on narrow behavioural assumptions in which expectations are formed on the basis of mathematical algorithms. Blending together ideas from the social and behavioural sciences, this paper argues that the behavioural approach adopted in most economic analysis, in its neglect of sociological and psychological forces and its simplistically dichotomous categorization of behaviour as either rational or not rational, is too narrow and stark. Behaviour may reflect an interaction of cognitive and emotional factors and this can be captured more effectively using an approach that focuses on the interplay of different decision-making systems. In understanding the mechanisms affecting economic and financial decision-making, an interdisciplinary approach is needed which incorporates ideas from a range of disciplines including sociology, economic psychology, evolutionary biology and neuroeconomics.
Burke 2010, 'Striatal BOLD response reflects the impact of herd information on financial decisions', Frontiers in Human Neuroscience, vol. 4.
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Burke, CJ, Tobler, PN, Baddeley, M & Schultz, W 2010, 'Neural mechanisms of observational learning', Proceedings of the National Academy of Sciences, vol. 107, no. 32, pp. 14431-14436.
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Individuals can learn by interacting with the environment and experiencing a difference between predicted and obtained outcomes (prediction error). However, many species also learn by observing the actions and outcomes of others. In contrast to individual learning, observational learning cannot be based on directly experienced outcome prediction errors. Accordingly, the behavioral and neural mechanisms of learning through observation remain elusive. Here we propose that human observational learning can be explained by two previously uncharacterized forms of prediction error, observational action prediction errors (the actual minus the predicted choice of others) and observational outcome prediction errors (the actual minus predicted outcome received by others). In a functional MRI experiment, we found that brain activity in the dorsolateral prefrontal cortex and the ventromedial prefrontal cortex respectively corresponded to these two distinct observational learning signals.
Burke, CJ, Tobler, PN, Schultz, W & Baddeley, M 2010, 'Striatal BOLD response reflects the impact of herd information on financial decisions', Frontiers in Human Neuroscience, vol. 4.
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Like other species, humans are sensitive to the decisions and actions of conspecifics, which can lead to herd behavior and undesirable outcomes such as stock market bubbles and bank runs. However, how the brain processes this socially derived influence is only poorly understood. Using functional magnetic resonance imaging (fMRI), we scanned participants as they made decisions on whether to buy stocks after observing others' buying decisions. We demonstrate that activity in the ventral striatum, an area heavily implicated in reward processing, tracked the degree of influence on participants' decisions arising from the observation of other peoples' decisions. The signal did not track non-human, non-social control decisions. These findings lend weight to the notion that the ventral striatum is involved in the processing of complex social aspects of decision making and identify a possible neural basis for herd behavior. © 2010 Burke, Tobler, Schultz and Baddeley.
Costa, LA & Vasconcelos, L 2010, 'Share the Fame or Share the Blame? The Reputational Implications of Partnerships', Journal of Economics & Management Strategy, vol. 19, no. 2, pp. 259-301.
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We use an adverse selection model to study the dynamics of firms' reputations when firms implement joint projects. We show that in the case of joint projects a firm's reputation does not necessarily increase following a success and does not necessarily decrease following a failure. We also study how reputation considerations affect firms' decisions to participate in joint projects. We show that a high‐reputation partner is not necessarily preferable to a low‐reputation partner and, when implementation of the joint project by a single firm is possible, a high‐quality partner may not be preferable to a low‐quality partner.
Craig, L & Siminski, P 2010, 'Men's Housework, Women's Housework, and Second Births in Australia', Social Politics: International Studies in Gender, State & Society, vol. 17, no. 2, pp. 235-266.
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Is gender inequality in unpaid work within households implicated in falling fertility rates? This paper investigates whether the likelihood couples with one child will have more children is affected by: (i) the amount of household labor they each perform or (ii) the way they divide household labor between themselves. Drawing a sample of partnered couples with one child (n = 573) from the longitudinal Household, Income and Labor Dynamics in Australia survey, we conduct multivariate regression analysis and find the more housework that Australian women do, the less likely they are to have more children. Neither fathers' time allocation to housework, nor relative shares of housework, were found to have an effect on subsequent fertility. Thus, mothers' own domestic workloads negatively impacted upon fertility, but shares of housework did not. © 2010 The Author. Published by Oxford University Press. All rights reserved.
Delavande, A & Manski, CF 2010, 'Probabilistic Polling And Voting In The 2008 Presidential Election', Public Opinion Quarterly, vol. 74, no. 3, pp. 433-459.
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Delavande, A, Goldman, D & Sood, N 2010, 'Criminal Prosecution and Human Immunodeficiency Virus–Related Risky Behavior', The Journal of Law and Economics, vol. 53, no. 4, pp. 741-782.
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Docherty, P & Wang, G 2010, 'Using synthetic data to evaluate the impact of RTGS on systemic risk in the Australian payments system', Journal of Financial Stability, vol. 6, no. 2, pp. 103-117.
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This paper develops a new methodology for allowing researchers outside central banks to test the extent of payment system risk, and applies this methodology to an investigation of the impact that the introduction of real time gross settlement (RTGS) had on systemic risk in the Australian payments system. System-specific ratios are first developed to extract bilateral payment obligations from aggregate payments data in the Australian RTGS system. This synthetic data is then used to generate a deferred net settlement (DNS) system of similar dimensions to those the Australian system would have had, had RTGS not been introduced. Standard default simulation methodology is then applied to test the levels of systemic risk in both this system and the corresponding RTGS system to ascertain the degree to which the introduction of RTGS is likely to have reduced the level of risk. We find that while the level of systemic risk is likely to have been reduced in the Australian case, the size of the effect is small, a finding consistent with the results of payments system studies in other countries
Docherty, P, Tse, H, Forman, R & McKenzie, J 2010, 'Extending the Principles of Intensive Writing to Large Macroeconomics Classes', The Journal of Economic Education, vol. 41, no. 4, pp. 370-382.
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The authors report on the design and implementation of a pilot program to extend the principles of intensive writing outlined by W. Lee Hansen (1998), Murray S. Simpson and Shireen E. Carroll (1999) and David Carless (2006) to large macroeconomics classes. The key aspect of this program was its collaborative nature, with staff from two specialist units joining forces with two economics instructors to provide students with significant resources and direction in a short program of writing, embedded within an intermediate macroeconomics subject at the University of Technology, Sydney (UTS). The objective was to test potential strategies and to identify points of improvement for a more intensive program of writing development at the next stage of implementation. The authors review the literature on student writing and associated assessment issues, outline the central design features of the UTS program, and take a closer look at the centerpiece of a strategy for overcoming writing problems: a series of writing workshops targeted at two related assignments within the intermediate macroeconomics course. Copyright © Taylor & Francis Group, LLC.
Docherty, PT 2010, 'Credit evaluation, capital adequacy and asset price inflation: Key issues for prudential regulation after the global financial crisis', International Journal of Applied Economics and Econometrics, vol. 18, no. 4, pp. 29-57.
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Mostihnalyses of the global financial crisis to date have focused on analysing specific features of the 'Crisis including sub-prime loans defaults, the role of structured i~estrnent vehicles, defici~ncies in the performance of credit rating agencies and the reaction of financial markets.to losses sustained on account of these forces. Less attention has been paid to the~c1imate of asset price inflation within., which sub-prime loans were written although increasing , ~ttention has been paid to the regulatory responses. required by the crisis. Th~s paper briefly surveys the theory of financial system functions and prudential regulation, and cqnsiders the implications of this theory for ,understanding the causes of the crisis and the , shape that prudential regulation should take in the light of the crisis. It'argues for the establishment of an independent, public credit rating agency and for the financial system to be regulated functionally, with any entity that issues shorfterm securities (or deposits) against ' the holding of risky loans being made subject to Basel II capita1 requirements. It also argues that these requirements be made variable for loans used to finance key assets. in order to reduce the possibility of asset price inflation.
Docherty, PT & Tse, HP 2010, 'Reducing the expectations gap: Using an academic literacies approach to improve student writing in economics', Australasian Journal of Economics Education, vol. 7, no. 1, pp. 31-58.
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This paper reports on the evaluation of a writing program embedded within an intermediate macroeconomics course at an Australian university. This program was designed to address core issues identified by an academic literacies analysis of what might be called the higher education writing problem: an observed poor quality in the writing of higher education students across a range of disciplines. The program attempted to close an expectations gap between student and academic perceptions of what constitutes good writing by using clear and detailed assessment criteria, providing exemplars of good writing, and interacting with students about their writing in a series of writing workshops. Regressions of assignment results on a range of factors and a comparison of assignment results for students who attended the writing workshops versus those who did not, indicate a small but positive, and statistically significant, effect of important aspects of the writing program on assignment outcomes. A distributional effect was also observed whereby students at the pass-fail margin who attended the writing workshops performed better than those who did not. Limitations of the study are identified and suggestions are made for further work.
Fiorini, M 2010, 'The effect of home computer use on children’s cognitive and non-cognitive skills', Economics of Education Review, vol. 29, no. 1, pp. 55-72.
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In this paper we investigate the effect of using a home computer on childrens development. In most OECD countries 70% or more of the households have a computer at home and children use computers quite extensively, even at very young ages. We use data from the Longitudinal Study of Australian Children (LSAC), which follows an Australian cohort born in 1999/2000. Skills and computer usage information is collected when children are approximately 5 and 7 years old. For cognitive skills, our results indicate that computer time has a positive effect. For non-cognitive skills the evidence is mixed, the effect depending on the score and the age of the children. We test the robustness of our results by comparing OLS, IV and Value Added estimators. Generally, the IV estimates are larger and the Value Added estimates lower than the OLS ones. However the pattern of the results is quite consistent
Garratt, RJ & Wooders, J 2010, 'Efficiency in Second-Price Auctions: A New Look at Old Data', REVIEW OF INDUSTRIAL ORGANIZATION, vol. 37, no. 1, pp. 43-50.
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Experiments on second-price sealed-bid private value auctions have established that subjects typically bid more than their value, despite the fact that value bidding is a dominant strategy in such auctions. Moreover, the laboratory evidence shows that subjects do not learn to bid their values as they gain more experience. In the present paper, we re-examine the second-price auction data from Kagel and Levin's (Econ J 103:868-879, 1993) classic paper. We find that auction efficiency increases over time, even though the frequency of overbidding is unchanged. We argue that the rise in efficiency is due to a decline in the variability of overbidding. This is consistent with subjects' learning to bid more like each other.
Goldbaum, D & Panchenko, V 2010, 'Learning and adaptation's impact on market efficiency', JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION, vol. 76, no. 3, pp. 635-653.
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A dynamic model with learning and adaptation captures the evolution in trader beliefs and trading strategies. Through a process of learning and observation, traders improve their understanding of the market. Traders also engage in a process of adaptation by switching between trading strategies based on past performance. The asymptotic properties are derived analytically, demonstrating that convergence to efficiency depends on the model of adaptation.
Kettlewell, N 2010, 'THE IMPACT OF RURAL TO URBAN MIGRATION ON WELLBEING IN AUSTRALIA', AUSTRALASIAN JOURNAL OF REGIONAL STUDIES, vol. 16, no. 3, pp. 187-213.
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In this paper the wellbeing outcomes of rural to urban movers in Australia are studied. This is done using regression techniques to control for observable and unobservable factors that may influence outcomes. Data from the Households, Income and Labour Dynamics in Australia survey is used. It is found that males do not experience any change in wellbeing due to moving, while females experience a 7 per cent increase after 2-3 years. Implications of both economic and psychological theories are discussed in relation to the likely effect of moving upon wellbeing. It is argued that the findings here justify further research into rural wellbeing with a focus on gender specific outcomes.
Livermore, T, Siminski, P & Rodgers, J 2010, 'The Effect of Motherhood on Wages and Wage Growth: Evidence for Australia', Economic Record, vol. 87, no. SUPPL. 1, pp. 80-91.
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Labour market theory provides several reasons why mothers are likely to earn lower hourly wages than non-mothers. However, the size of any motherhood penalty is anempirical matter and the evidence for Australia is limited. This paper examines the effect of motherhood on Australian women’s wages and wage growth using a series ofpanel-data models which control for other relevant factors, both observed and unobserved. Using data from the Household, Income and Labour Dynamics in Australia(HILDA) survey, an unexplained motherhood wage penalty of around four per cent for one child, and eight per cent for two or more children, is found. Further analysissuggests that the wage penalty emerges over time through reduced wage growth, rather than through an immediate wage decline after the birth of a child. This reduction inwage growth is consistent with discrimination but also with a reduction in mothers’ work effort.
Moreno, D & Wooders, J 2010, 'DECENTRALIZED TRADE MITIGATES THE LEMONS PROBLEM', INTERNATIONAL ECONOMIC REVIEW, vol. 51, no. 2, pp. 383-399.
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In markets with adverse selection, only low-quality units trade in the competitive equilibrium when the average quality of the good held by sellers is low. We show that under decentralized trade, however, both high-and low-quality units trade, although with delay. Moreover, when frictions are small, the surplus realized is greater than the (static) competitive surplus. Thus, decentralized trade mitigates the lemons problem. Remarkably, payoffs are competitive as frictions vanish, even though both high-and low-quality units continue to trade, and there is trade at several prices.
Sheremeta, R & Zhang, J 2010, 'Can Groups Solve the Problem of Over-Bidding in Contests', Social Choice and Welfare, vol. 35, no. 2, pp. 175-197.
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This study reports an experiment that examines whether groups can better comply with theoretical predictions than individuals in contests. Our experiment replicates previous findings that individual players significantly overbid relative to theoretical predictions, incurring substantial losses. There is high variance in individual bids and strong heterogeneity across individual players. The new findings of our experiment are that groups make 25% lower bids, their bids have lower variance, and group bids are less heterogeneous than individual bids. Therefore, groups receive significantly higher and more homogeneous payoffs than individuals. We elicit individual and group preferences towards risk using simple lotteries. The results indicate that groups make less risky decisions, which is a possible explanation for lower bids in contests. Most importantly, we find that groups learn to make lower bids from communication and negotiation between group members.
Siminski, P 2010, 'Employment Effects of Army Service and Veterans’ Compensation: Evidence from the Australian Vietnam-Era Conscription Lotteries', Review of Economics and Statistics, vol. 95, no. 1, pp. 87-97.
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Exploiting the Australian National Service lotteries of 1965-72, I estimate the effect of Army service on employment outcomes. Population data from military personnel records, tax returns, veterans’ compensationrecords and the Census facilitate a rich and precise analysis, identified by 53,000 compliers. The employment effect is confined to men who served in Vietnam and is very large, at -37 percentage points (95%CI: -32, -43) in2006. The effect has emerged gradually since the 1990s, and is mirrored by veterans’ Disability Pension effects. These results contrast with those forthe USA, possibly reflecting differences in employment incentives associated with veterans’ compensation.
Siminski, P & Ville, S 2010, 'Long-Run Mortality Effects of Vietnam-Era Army Service: Evidence from Australia’s Conscription Lotteries', American Economic Review, vol. 101, no. 3, pp. 345-349.
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We estimate the effect of Vietnam era Army service on mortality, exploiting Australia’s conscription lotteries for identification. We utilise population data on deaths during 1994-2007 and militarypersonnel records. The estimates are identified by over 51,000compliers induced to enlist in the Army, including almost 16,000 who served in Vietnam. The implicit comparison group is the set of men who did not serve in the Army, but who would have served had their date of birth been selected in the ballot. We find no statisticallysignificant effects on mortality overall, nor for any cause of death (by ICD-10 Chapter). Under reasonable assumptions on the death rate of compliers, the results can be expressed as relative risks (RR) of death during 1994-2007. The estimated overall RR associated with Armyservice is 1.03 (95% CI: 0.92, 1.19). On the assumption that Army service affected mortality only for those who served in Vietnam, the estimated RR for Vietnam Veterans is 1.06 (95% CI: 0.81, 1.51). We also find no evidence to support a hypothesis of offsetting effects dueto domestic Army service (beneficial to longevity) and service in Vietnam (detrimental).
Slonim, R & Guillen, P 2010, 'Gender selection discrimination: Evidence from a Trust game', Journal of Economic Behavior & Organization, vol. 76, no. 2, pp. 385-405.
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Wooders, J 2010, 'Does Experience Teach? Professionals and Minimax Play in the Lab', ECONOMETRICA, vol. 78, no. 3, pp. 1143-1154.
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Does expertise in strategic behavior obtained in the field transfer to the abstract setting of the laboratory? Palacios-Huerta and Volij (2008) argued that the behavior of professional soccer players in mixed-strategy games conforms closely to minimax play, while the behavior of students (who are presumably novices in strategic situations requiring unpredictability) does not. We reexamine their data, showing that the play of professionals is inconsistent with the minimax hypothesis in several respects: (i) professionals follow nonstationary mixtures, with action frequencies that are negatively correlated between the first and the second half of the experiment, (ii) professionals tend to switch between under- and overplaying an action relative to its equilibrium frequency, and (iii) the distribution of action frequencies across professionals is far from the distribution implied by minimax. In each respect, the behavior of students conforms more closely to the minimax hypothesis.
Al-Sharawneh, J, Williams, M-A & Goldbaum, D 1970, 'Web Service Reputation Prediction Based on Customer Feedback Forecasting Model', 2010 14th IEEE International Enterprise Distributed Object Computing Conference Workshops, 2010 14th IEEE International Enterprise Distributed Object Computing Conference Workshops (EDOCW), IEEE, Brazil, pp. 33-40.
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In the Service Web, customersâ feedback constitutes a substantial component of Web Service reputation and trustworthiness, which in turn impacts the service uptake by consumers in the future. This paper presents an approach to predict reputation in service-oriented environments. For assessing a Web Service reputation, we define reputation key metrics to aggregate the feedback of different aspects of the ratings. In situations where rating feedback is not available, we propose a Feedback Forecasting Model (FFM), based on Expectation Disconfirmation Theory (EDT), to predict the reputation of a web service in dynamic settings. Then we introduce the concept âReputation Aspectâ and show how to compute it efficiently. Finally we show how to integrate the Feedback Forecasting Model into Aspect-Based Reputation Computation. To demonstrate the feasibility and effectiveness of our approach, we test the proposed model using our Service Selection Simulation Studio (4S). The simulation results included in this paper show the applicability and performance of the proposed Reputation Prediction based on the Customer Feedback Forecasting Model. We also show how our model is efficient, particularly in dynamic environments.
Anufriev, M & Bottazzi, G 1970, 'Market equilibria under procedural rationality', JOURNAL OF MATHEMATICAL ECONOMICS, pp. 1140-1172.
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We analyze the endogenous price formation mechanism of a pure exchange economy with two assets, riskless and risky. The economy is populated by an arbitrarily large number of traders whose investment choices are described by means of generic smooth functions of past realizations. These choices can be consistent with (but not limited to) the solutions of expected utility maximization problems.Under the assumption that individual demand for the risky asset is expressed as a fraction of individual wealth, we derive a complete characterization of equilibria. It is shown that irrespectively of the number of agents and of their behavior, all possible equilibria belong to a one-dimensional " Equilibrium Market Curve" This geometric tool helps to illustrate the possibility of different phenomena, as multiple equilibria, and can be used for comparative static analysis. We discuss the relative performances of different strategies and the selection principle governing market dynamics on the basis of the stability analysis of equilibria. © 2010 Elsevier B.V.
Chiarella, C & Di Guilmi, C 1970, 'Debt deflation dynamics in a heterogenous agent economy', 16th International Conference on Computing in Economics and Finance, London, UK.
Chiarella, C & Di Guilmi, C 1970, 'The Financial Instability Hypothesis: A Stochastic Microfoundation Framework', Workshop on the Complexity of Financial Crisis in a Long-Period Perspective: Facts, Theory and Models, Sienna, Italy.
Di Guilmi, C 1970, 'Financial instability hypothesis: A stochastic microfoundation framework', Interacting Agents and Nonlinear Dynamics in Macroeconomics, Udine, Italy.
Di Guilmi, C 1970, 'The financial instability hypothesis: A stochastic microfoundation', The Hyman P. Minsky Summer Seminar and Conference, New York, USA.
Fiorini, M & Keane, M 1970, 'How the allocation of children's time affects cognitive and non-cognitive development', NBER Summer Institute, Boston, USA.
Johar, M & Maruyama, S 1970, 'Intergenerational Cohabitation in Modern Indonesia: Filial Support and Dependence', UNSW Australian School of Business Research Paper, 1st Australasian Workshop on Econometrics and Health Economics, Melbourne.
Johar, M, Jones, G, Keane, M, Savage, EJ & Stavrunova, O 1970, 'Expected waiting times and the decision to buy private health insurance', 1st Australasian Workshop on Econometrics and Health Economics, Melbourne.
Johar, M, Jones, G, Keane, M, Savage, EJ & Stavrunova, O 1970, 'The demand for private health insurance: Do waiting lists or waiting times matter?', American Society of Health Economists Conference, Cornell University, USA.
Johar, M, Jones, G, Keane, M, Savage, EJ & Stavrunova, O 1970, 'The demand for private health insurance: Do waiting lists or waiting times matter?', European Conference of Health Economics, Helsinki, Finland.
Keane, M & Stavrunova, O 1970, 'Adverse Selection, Moral Hazard and the Demand for Medigap Insurance', 19th European Workshop on Econometrics and Health Economics, Lausanne, Switzerland.
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The size of adverse selection and moral hazard eects in health insurance markets has important policy implications. For example, if adverse selection eects are small while moral hazard eects are large, conventional remedies for inefficiencies created by adverse selection (e.g., mandatory insurance enrolment) may lead to substantial increases in health care spending. Unfortunately, there is no consensus on the magnitudes of adverse selection vs. moral hazard. This paper sheds new light on this important topic by studying the US Medigap (supplemental) health insurance market.
Goldbaum, D 2010, 'Follow the Leader: Network Simulations Examining Conditions for Emergent Social Hierarchies', UTS F&E Working Paper #155.
Goldbaum, D 2010, 'Follow the leader: Steady state analysis of a dynamic social network'.
Goldbaum, D 2010, 'Learning and adaptation as a source of market failure'.
Goldbaum, D & Panchenko, V 2010, 'Learning and adaptation's impact on emergent market efficiency'.
Henckel, T, Menzies, GD & Zizzo, DJ 2010, 'Inferential Expectations and the Missing Middle of Price Changes', Applied Econometrics and Policy Working Paper, University of East Anglia.
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Working paper number: 8
Absract: Microeconomic evidence suggests price changes are either very small, or large. The theory of inferential expectations predicts this phenomena if agents use a low test size, reflecting a reluctance to change their minds on the basis of evidence.
Johar, M, Jones, G, Keane, M, Savage, E & Stavrunova, O 2010, 'Differences in waiting times for elective admissions in NSW public hospitals: A decomposition analysis by non-clinical factors. CHERE Working Paper 2010/7'.
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In the Australian public health system, access to elective surgery is rationed through provision of health care services, it is generally assumed that a patient?s waiting time and locations. In this paper we undertake Oaxaca-Blinder and DiNardo-Fortin-Lemieux decompostition analyses to attribute variation in waiting time to a component explained by clinical need and to differential treatment effects. The latter have an interpretation as discrimination, since treatments vary by non-clinical factors such as socioeconomic status. Using data from public patients in NSW public hospitals in 2004-2005, we find socioeconomically advantaged patients, patients in remote areas, and patients in several Area Health Services have shorter waiting times than their clinical comparable counterparts. Furthermore, the discrimination effect dominates clinical admission if their treatments are delayed. This finding has policy implications for the current operation of waiting lists and order of admission and for the design of equitable quality targets for public hospitals.
Johar, M, Jones, G, Keane, M, Savage, E & Stavrunova, O 2010, 'The demand for private health insurance: do waiting lists or waiting times matter? CHERE Working Paper 2010/8'.
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Besley, Hall, and Preston (1999) estimated a model of the demand for private health insurance in Britain as a function of regional waiting lists and found that increases in the number of people waiting for more than 12 months (the long-term waiting list) increased the probability of insurance purchase. In the absence of waiting time data, the length of regional long-term waiting lists was used to capture the price-quality trade-off of public treatment. We revisit Besley et al.?s analysis using Australian data and test the use of waiting lists as a proxy for waiting time in models of insurance demand. Unlike Besley et al., we find that the long-term waiting list is not a significant determinant of the demand for insurance. However we find that long waiting times do significantly increase insurance. This suggests that the relationship between waiting times and waiting lists is not as straightforward as is commonly assumed.
Johar, M, Jones, G, Keane, M, Savage, E & Stavrunova, O 2010, 'Waiting times and the decision to buy private health insurance. CHERE Working Paper 2010/9'.
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Over 45% of Australians buy health insurance for private treatment in hospital. This is despite having access to universal and free public hospital treatment. Anecdotal evidence suggests that one possible explanation for the high rate of insurance
coverage is to avoid long waiting times for public hospital treatment. In this study, we investigate the effect of expected waiting time on individual decisions to buy private health insurance. Individuals are assumed to form an expectation of their own waiting
time as a function of their demographics and health status. We estimate models of expected waiting time using administrative data on the population hospitalised for elective procedures in public hospitals in 2004-05 and use the parameter estimates to
impute expected waiting times for individuals in a representative sample of the population. We model the impact of expected waiting time on the decision to purchase private health insurance. In the insurance demand model, cross-sample predictions are adjusted by the individuals? probability of hospital admission. We find that expected waiting time does not increase the probability of buying insurance but a high probability of experiencing a long wait does. Overall we find there is no significant impact of waiting time on insurance purchase. In addition, we find that the inclusion of individual waiting time variables removes the evidence for favourable selection into private insurance, as measured by self-assessed health. This result suggests that a source of the favourable selection by reported health status may be aversion to long waits among healthier people.
Johar, M, Maruyama, S & Nakamura, S 2010, 'Transition to Parent-Child Coresidence: Parental Needs and the Strategic Bequest Motive'.
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The strategic bequest motive implies that children may want to live with their parents and provide care for them with the expectation of inheriting a larger portion of their bequest. This paper examines this hypothesis by focusing on the transition to coresidence by elderly Japanese parents and their children using underutilized Japanese panel data. Unlike previous studies, evidence for the bequest motive is generally tenuous. In addition, our use of a two-component mixture logit model identifies the minority group of families that follows the bequest motive and the majority group that does not.
Keane, M, Savage, EJ, Stavrunova, O & Jones, G 2010, 'Hospital waiting times and the demand for private health insurance'.
