The impact of the reference price system on the pharmaceutical market: A theoretical approach

This article analyses the impact of the reference pricesystem on the price-setting strategies of thepharmaceutical firms and on the level of generic usage.This model is the first to take explicitly into accountthe impact of the reference price mechanism on the levelof competition between brand-name and generic drugs andnational pharmaceutical spending. We consider aduopolistic model with one firm producing the brand-namedrug, whose patent has already expired, and the otherproducing the corresponding generic version. We work ina partial equilibrium framework where firms set pricessequentially and consumers face heterogeneous switchingcosts.We show that brand producers compensate thedecline of profits by selling greater quantities insteadof charging higher prices, thus fostering pricecompetition in the pharmaceutical market. This result isa consequence of both the assumption of a verticallydifferentiated model and the introduction of thereference price system.

The structural dynamics of US output and inflation: What explains the changes?

We examine the dynamics of US output and inflation using a structural time varyingcoefficient VAR. We show that there are changes in the volatility of both variables andin the persistence of inflation. Technology shocks explain changes in output volatility,while a combination of technology, demand and monetary shocks explain variations inthe persistence and volatility of inflation. We detect changes over time in the transmission of technology shocks and in the variance of technology and of monetary policyshocks. Hours and labor productivity always increase in response to technology shocks.

Entrepreneurial structure of the mercantile company in pre-industrial Catalonia

The mercantile company was the basic form of enterprise in pre-industrial Catalonia. The aim of this paper is to study the formation and development of the mercantile companies in Barcelona whose end was the wholesale and retail sale of textiles in the botigues de teles (textile retail shops) throughout the eighteenth century. These firms were officially registered before a notary and their deeds reveal how these establishments were administered and managed.The study covers a sample of 121 mercantile companies, and the articles and documentation that were put into effect by 32 notaries who were active in Barcelona in the 18th century have been consulted in their entirety. From an initial selection of documentation, a total of 228 deeds registering companies have been found, 107 of which (47%) relate to the creation of companies whose various activities were centred in taverns, textile manufacturing, braiding.... While the 121 companies, which make up our sample and which account for 53% of the deeds registered with the notaries mentioned above, focused exclusively on the management of textile retail shops located in the commercial heart of the city. Thus one point of interest that the documentation reveals is that the majority of the mercantile companies registered by Barcelona notaries throughout the 18th century were establishments which traded in textiles. The first part of the article focuses on the structural characteristics of these enterprises, the number and socio-professional status of the partners and the extent of each partner s involvement in the administration and management. The second part of the article examines the capital investment made by each partner, their rights and obligations agreed on, the sharing out of profits and possible losses and the duration of the companies. The final aim of the paper is to highlight the evolution of these companies through one specific case.

Minimal requirements for parameters to be used for the development of predictive models for microbial source tracking. The example of the pair somatic coliphages and phages infecting Bacteroides

Several methods and approaches for measuring parameters to determine fecal sources of pollution in water have been developed in recent years. No single microbial or chemical parameter has proved sufficient to determine the source of fecal pollution. Combinations of parameters involving at least one discriminating indicator and one universal fecal indicator offer the most promising solutions for qualitative and quantitative analyses. The universal (nondiscriminating) fecal indicator provides quantitative information regarding the fecal load. The discriminating indicator contributes to the identification of a specific source. The relative values of the parameters derived from both kinds of indicators could provide information regarding the contribution to the total fecal load from each origin. It is also essential that both parameters characteristically persist in the environment for similar periods. Numerical analysis, such as inductive learning methods, could be used to select the most suitable and the lowest number of parameters to develop predictive models. These combinations of parameters provide information on factors affecting the models, such as dilution, specific types of animal source, persistence of microbial tracers, and complex mixtures from different sources. The combined use of the enumeration of somatic coliphages and the enumeration of Bacteroides-phages using different host specific strains (one from humans and another from pigs), both selected using the suggested approach, provides a feasible model for quantitative and qualitative analyses of fecal source identification.

Implications of free Shiga toxin-converting bacteriophages occurring outside bacteria for the evolution and the detection of Shiga toxin-producing Escherichia coli

In this review we highlight recent work that has increased our understanding of the distribution of Shiga toxin-converting phages that can be detected as free phage particles, independently of Shiga toxin-producing bacteria (STEC). Stx phages are a quite diverse group of temperate phages that can be found in their prophage state inserted within the STEC chromosome, but can also be found as phages released from the cell after activation of their lytic cycle. They have been detected in extraintestinal environments such as water polluted with feces from humans or animals, food samples or even in stool samples of healthy individuals. The high persistence of phages to several inactivation conditions makes them suitable candidates for the successful mobilization of stx genes, possibly resulting in the genes reaching a new bacterial genomic background by means of transduction, where ultimately they may be expressed, leading to Stx production. Besides the obvious fact that Stx phages circulating between bacteria can be, and probably are, involved in the emergence of new STEC strains, we review here other possible ways in which free Stx phages could interfere with the detection of STEC in a given sample by current laboratory methods and how to avoid such interference.

Minimal requirements for parameters to be used for the development of predictive models for microbial source tracking. The example of the pair somatic coliphages and phages infecting Bacteroides

Several methods and approaches for measuring parameters to determine fecal sources of pollution in water have been developed in recent years. No single microbial or chemical parameter has proved sufficient to determine the source of fecal pollution. Combinations of parameters involving at least one discriminating indicator and one universal fecal indicator offer the most promising solutions for qualitative and quantitative analyses. The universal (nondiscriminating) fecal indicator provides quantitative information regarding the fecal load. The discriminating indicator contributes to the identification of a specific source. The relative values of the parameters derived from both kinds of indicators could provide information regarding the contribution to the total fecal load from each origin. It is also essential that both parameters characteristically persist in the environment for similar periods. Numerical analysis, such as inductive learning methods, could be used to select the most suitable and the lowest number of parameters to develop predictive models. These combinations of parameters provide information on factors affecting the models, such as dilution, specific types of animal source, persistence of microbial tracers, and complex mixtures from different sources. The combined use of the enumeration of somatic coliphages and the enumeration of Bacteroides-phages using different host specific strains (one from humans and another from pigs), both selected using the suggested approach, provides a feasible model for quantitative and qualitative analyses of fecal source identification.

Platform pricing and consumer foresight: The case of airports

Airports have become platforms that derive revenues from both aeronautical and commercial activities. The demand for these services is characterized by a one-way complementarity in that only air travelers can purchase retail goods at the airport terminals. We analyze a model of optimal airport behavior in which this one-way complementarity is subject to consumer foresight, i.e., consumers may not anticipate in full the ex post retail surplus when purchasing a flight ticket. An airport sets landing fees, and, in addition, also chooses the retail market structure by selecting the number of retail concessions to be awarded. We find that, with perfectly myopic consumers, the airport chooses to attract more passengers via low landing fees, and also sets the minimum possible number of retailers in order to increase the concessions’ revenues, from which it obtains the largest share of profits. However, even a very small amount of anticipation of the consumer surplus from retail activities changes significantly the airport’s choices: the optimal airport policy is dependent on the degree of differentiation in the retail market. When consumers instead have perfect foresight, the airport establishes a very competitive retail market, where consumers enjoy a large surplus. This attracts passengers and it is exploited by the airport by charging higher landing fees, which then constitute the largest share of its profits. Overall, the airport’s profits are maximal when consumers have perfect foresight. Keywords: two-sided markets, platform pricing, one-way demand complementarity, consumer foresight. JEL classification: L1, L2, L93.

Invasive species and habitat degradation in Iberian streams: an analysis of their role in freshwater fish diversity loss

Mediterranean endemic freshwater fish are among the most threatened biota in the world. Distinguishing the role of different extinction drivers and their potential interactions is crucial for achieving conservation goals. While some authors argue that invasive species are a main driver of native species declines, others see their proliferation as a co-occurring process to biodiversity loss driven by habitat degradation. It is difficult to discern between the two potential causes given that few invaded ecosystems are free from habitat degradation, and that both factors may interact in different ways. Here we analyze the relative importance of habitat degradation and invasive species in the decline of native fish assemblages in the Guadiana River basin (southwestern Iberian Peninsula) using an information theoretic approach to evaluate interaction pathways between invasive species and habitat degradation (structural equation modeling, SEM). We also tested the possible changes in the functional relationships between invasive and native species, measured as the per capita effect of invasive species, using ANCOVA. We found that the abundance of invasive species was the best single predictor of natives’ decline and had the highest Akaike weight among the set of predictor variables examined. Habitat degradation neither played an active role nor influenced the per capita effect of invasive species on natives. Our analyses indicated that downstream reaches and areas close to reservoirs had the most invaded fish assemblages, independently of their habitat degradation status. The proliferation of invasive species poses a strong threat to the persistence of native assemblages in highly fluctuating environments. Therefore, conservation efforts to reduce native freshwater fish diversity loss in Mediterranean rivers should focus on mitigating the effect of invasive species and preventing future invasions

Polarization in the chilean party system: changes and continuities, 1990-1999

The focus of this thesis is the evolution of programmatic polarization in the post-authoritarian Chilean party system at the elite level. It shows the distance/proximity between parties located along the left-right ideological continuum on three sets of issues. The paper demonstrates that important changes have taken place in the meaning of the right and, especially, left poles. This implies convergence on socio-economic issues between parties, but persistence of differences on religious-value issues, and on issues related to the authoritarian/democratic cleavage. Distance between the poles has been reduced, and as a result the center has lost its own political space. In addition, the paper shows that the pattern followed by programmatic polarization at the elite level is explained by the authoritarian experience, the institutional framework, and socio-economic transformations. Together with this factors, the degree of negotiability of the issues and the cross-cutting nature of the cleavages have also shaped polarization.

Fiscal insurance and debt management in OECD economies

Assuming the role of debt management is to provide hedging against fiscal shocks we consider three questions: i) what indicators can be used to assess the performance of debt management? ii) how well have historical debt management policies performed? and iii) how is that performance affected by variations in debt issuance? We consider these questions using OECD data on the market value of government debt between 1970 and 2000. Motivated by both the optimal taxation literature and broad considerations of debt stability we propose a range of performance indicators for debt management. We evaluate these using Monte Carlo analysis and find that those based on the relative persistence of debt perform best. Calculating these measures for OECD data provides only limited evidence that debt management has helped insulate policy against unexpected fiscal shocks. We also find that the degree of fiscal insurance achieved is not well connected to cross country variations in debt issuance patterns. Given the limited volatility observed in the yield curve the relatively small dispersion of debt management practices across countries makes little difference to the realised degree of fiscal insurance.

Stock market volatility and learning

Introducing bounded rationality in a standard consumption-based asset pricing model with time separable preferences strongly improves empirical performance. Learning causes momentum and mean reversion of returns and thereby excess volatility, persistence of price-dividend ratios, long-horizon return predictability and a risk premium, as in the habit model of Campbell and Cochrane (1999), but for lower risk aversion. This is obtained, even though our learning scheme introduces just one free parameter and we only consider learning schemes that imply small deviations from full rationality. The findings are robust to the learning rule used and other model features. What is key is that agents forecast future stock prices using past information on prices.

A mixed splicing procedure for economic time series

This note develops a flexible methodology for splicing economic time series that avoids the extreme assumptions implicit in the procedures most commonly used in the literature. It allows the user to split the required correction to the older of the series being linked between its levels and growth rates on the basis what he knows or conjectures about the persistence of the factors that account for the discrepancy between the two series that emerges at their linking point. The time profile of the correction is derived from the assumption that the error in the older series reflects the inadequate coverage of emerging sectors or activities that grow faster than the aggregate.

Like milk or wine: Does firm performance improve with age?

Our empirical literature review shows that little is known about how firm performance changes with age, presumably because of the paucity of data on firm age. For Spanish manufacturing firms, we analyse the firm performance related to firm age between 1998 and 2006. We find evidence that firms improve with age, because ageing firms are observed to have steadily increasing levels of productivity, higher profits, larger size, lower debt ratios, and higher equity ratios. Furthermore, older firms are better able to convert sales growth into subsequent growth of profits and productivity. On the other hand, we also found evidence that firm performance deteriorates with age. Older firms have lower expected growth rates of sales, profits and productivity, they have lower profitability levels (when other variables such as size are controlled for), and also that they appear to be less capable to convert employment growth into growth of sales, profits and productivity.

Regional value added in Italy over the long run (1891-2001): linking indirect estimates with official figures, and implications

This paper presents value added estimates for the Italian regions, in benchmark years from 1891 until 1951, which are linked to those from official figures available from 1971 in order to offer a long-term picture. Sources and methodology are documented and discussed, whilst regional activity rates and productivity are also presented and compared. Thus some questions are briefly reconsidered: the origins and extent of the north-south divide, the role of migration and regional policy in shaping the pattern of regional inequality, the importance of social capital, and the positioning of Italy in the international debate on regional convergence, where it stands out for the long run persistence of its disparities.

Like milk or wine: Does firm performance improve with age?

Our empirical literature review shows that little is known about how firm performance changes with age, presumably because of the paucity of data on firm age. For Spanish manufacturing firms, we analyse the firm performance related to firm age between 1998 and 2006. We find evidence that firms improve with age, because ageing firms are observed to have steadily increasing levels of productivity, higher profits, larger size, lower debt ratios, and higher equity ratios. Furthermore, older firms are better able to convert sales growth into subsequent growth of profits and productivity. On the other hand, we also found evidence that firm performance deteriorates with age. Older firms have lower expected growth rates of sales, profits and productivity, they have lower profitability levels (when other variables such as size are controlled for), and also that they appear to be less capable to convert employment growth into growth of sales, profits and productivity. Keywords: firm age, firm growth, LAD, financial structure, vector autoregression JEL CODES: L25, L20