An optimal sequential procedure for a buying-selling problem with independent observations

We consider a buying-selling problem when two stops of a sequence of independent random variables are required. An optimal stopping rule and the value of a game are obtained.

Lifetime cover in private insurance markets

In the last few decades, private health insurance rates have declined in many countries. In countries and states with community rating, a major cause is adverse selection. In order to address age-based adverse selection, Australia has recently begun a novel approach which imposes stiff penalties for buying private insurance later in life, when expected costs are higher. In this paper, we analyze Australiarsquos Lifetime Cover in the context of a modified version of the Rothschild-Stiglitz insurance model (Rothschild and Stiglitz, 1976). We allow empirically-based probabilities to increase by age for low-risk types. The model highlights the shortcomings of the Australian plan. Based on empirically-based probabilities of illness, we predict that Lifetime Cover will not arrest adverse selection. The model has many policy implications for government regulation encouraging long-term health coverage.

Paying for housework: Resources, demand and attitudes

A number of recent studies have suggested that households in western countries are increasingly turning to paid household help to perform a range of domestic tasks formerly carried out by women at home. But while expenditure on meal services, in the form of eating out or buying take out food has undoubtedly increased in recent years, the percentage of households that employ paid help with routine everyday housework activities, such as cleaning, appears to be comparatively low in many western countries. In Australia our data indicate that only 19 per cent of couple households pay someone to do domestic work, and only 11 per cent of couple households employ paid help with routine house cleaning. In this paper we use data from the Negotiating the Life Course survey, 1997 to investigate why some households use paid help with domestic labour while others do not. We examine hypotheses relating to level of resources, level of demand and gender role attitudes. We also examine attitudes about whether paid domestic help is viewed as an efficient strategy for dealing with domestic tasks. We find that although resources, demand and gender role attitudes provide the parameters within which employing household help is made possible or desirable, beliefs about the effectiveness of this strategy are also very significant. The paper concludes that domestic outsourcing is doing little to relieve women's double burden of paid and unpaid work.