Market and institutional determinants in the regulation of conveyancers

Demand for law professionals in the conveyancing of property is decreasing because of market and institutional changes. On the market side, many transactions feature large, well-known parties and standardized transactions, which make professionals less effective or necessary for protecting the parties to private contracts. On the institutional side, public titling makes it possible to dispense with a broadening set of their former functions. Recording of deeds made professionals redundant as depositories of deeds and reduced demand for them to design title guarantees. Effective registration of rights increasingly substitutes professionals for detecting title conflicts with third parties and gathering their consent. Market changes undermine the information asymmetry rationale for regulating conveyancing, while institutional changes facilitate liberalizing not only conduct but also license regulations. These arguments are supported here by disentangling the logic of titling systems and presenting empirical evidence from the European and USA markets.

¿Es posible reducir el gasto sanitario a través del subsidio a los seguros sanitarios privados? La doble cobertura sanitaria en Catalunya. Estimación de patrones de utilización de servicios sanitarios y simulación de costes asociados a la asistencia

The objective of this study consists in quantifying in money terms thepotential reduction in usage of public health care outlets associatedto the tenure of double (public plus private) insurance. In order to address the problem, a probabilistic model for visits to physicians is specified and estimated using data from the Catalonian Health Survey. Also, a model for the marginal cost of a visit to a physician is estimated using data from a representative sample of fee-for-service payments from a major insurer. Combining the estimates from the two models it is possible to quantify in money terms the cost/savings of alternative policies which bear an impact on the adoption of double insurance by the population. The results suggest that the private sector absorbs an important volumeof demand which would be re-directed to the public sector if consumerscease to hold double insurance.

The effects of poor financial information systems on the long term sustainability of local public services. Empirical evidence from the Catalan Municipalities

In this paper we describe the existence of financial illusion in public accountingand we comment on its effects for the future sustainability of local publicservices. We relate these features to the lack of incentives amongst publicmanagers for improving the financial reporting and thus management of publicassets. Financial illusion pays off for politicians and managers since it allowsfor larger public expenditure increases and managerial slack, these beingarguments in their utility functions. This preference is strengthen by the shorttime perspective of politically appointed public managers. Both factors runagainst public accountability. This hypothesis is tested for Spain by using anunique sample. We take data from around forty Catalan local authorities withpopulation above 20,000 for the financial years 1993-98. We build this databasis from the Catalan Auditing Office Reports in a way that it can be linkedto some other local social and economic variables in order to test ourassumptions. The results confirm that there is a statistical relationship between the financialillusion index (FI as constructed in the paper) and higher current expenditure.This reflects on important overruns and increases of the delay in payingsuppliers, as well as on a higher difficulties to face capital finance. Mechanismsfor FI creation have to do among other factors, with delays in paying suppliers(and thereafter higher future financial costs per unit of service), no adequateprovision for bad debts and lack of appropriate capital funding either forreposition or for new equipments. For this, it is crucial to monitor the way inwhich capital transfers are accounted in local public sheet balances. As a result,for most of the Municipalities we analyse, the funds for guaranteeing continuityand sustainability of public services provision are today at risk.Given managerial incentives at present in public institutions, we conclude thatpublic regulation recently enforced for assuring better information systems inlocal public management may not be enough to change the current state of affairs.

Resolving inconsistencies in utility measurement under risk: Tests of generalizations of expected utility

This paper explores biases in the elicitation of utilities under risk and the contribution that generalizations of expected utility can make to the resolution of these biases. We used five methods to measure utilities under risk and found clear violations of expected utility. Of the theories studies, prospect theory was most consistent with our data. The main improvement of prospect theory over expected utility was in comparisons between a riskless and a risky prospect(riskless-risk methods). We observed no improvement over expected utility in comparisons between two risky prospects (risk-risk methods). An explanation why we found no improvement of prospect theory over expected utility in risk-risk methods may be that there was less overweighting of small probabilities in our study than has commonly been observed.

A sequential model for older workers’ labor transitions after a health shock

In this work we study older workers (50 64) labor force transitions after a health/disability shock. We find that the probability of keeping working decreases with both age and severity of the shock. Moreover, we find strong interactions between age and severity in the 50 64 age range and none in the 30 49 age range. Regarding demographics we find that being female and married reduce the probability of keeping work. On the contrary, being main breadwinner, education and skill levels increase it. Interestingly, the effect of some demographics changes its sign when we look at transitions from inactivity to work. This is the case of being married or having a working spouse. Undoubtedly, leisure complementarities should play a role in the latter case. Since the data we use contains a very detailed information on disabilities, we are able to evaluate the marginal effect of each type of disability either in the probability of keeping working or in returning back to work. Some of these results may have strong policy implications.

Growing at the production frontier. European aggregate growth, 1870-1914

The view of a 1870-1913 expanding European economy providing increasing welfare to everybody has been challenged by many, then and now. We focus on the amazing growth that was experienced, its diffusion and its sources, in the context of the permanent competition among European nation states. During 1870-193 the globalized European economy reached a silver age . GDP growth was quite rapid (2.15% per annum) and diffused all over Europe. Even discounting the high rates of population growth (1.06%), per capita growth was left at a respectable 1.08%. Income per capita was rising in every country, and the rates of improvement were quite similar. This was a major achievement after two generations of highly localized growth, both geographically and socially. Growth was based on the increased use of labour and capital, but a good part of growth (73 per cent for the weighted average of the best documented European countries) came out of total factor productivity efficiency gains resulting from not well specified ultimate sources of growth. This proportion suggests that the European economy was growing at full capacity at its production frontier. It would have been very difficult to improve its performance. Within Europe, convergence was limited, and it only was in motion after 1900. What happened was more the end of the era of big divergence rather than an era of convergence.

The significance of distributive effects in social assessment of health care

In this paper we address the importance of distributive effects in the social valuation of QALY's. We propose a social welfarefunction that generalises the functions traditionally used in the health economic literature. The novelty is that, depending on the individual health gains, our function can representeither preferences for concentrating or preferences for spreading total gain or both together, an issue which has notbeen addressed until now. Based on an experiment, we observe that this generalisation provides a suitable approximation tothe sampled social preferences.

Wage inequality and unemployment with overeducation

A skill-biased change in technology can account at once for the changes observed in a number of important variables of the US labour market between 1970 and 1990. These include the increasing inequality in wages, both between and within education groups, and the increase in unemployment at all levels of education. In contrast, in previous literature this type of technology shock cannot account for all of these changes. The paper uses a matching model with a segmented labour market, an imperfect correlation between individual ability and education, and a fixed cost of setting up a job. The endogenous increase in overeducation is key to understand the response of unemployment to the technology shock.

Launching prices for new pharmaceuticals in heavily regulated and subsidized markets

This paper provides empirical evidence on the explanatory factorsaffecting introductory prices of new pharmaceuticals in a heavilyregulated and highly subsidized market. We collect a data setconsisting of all new chemical entities launched in Spain between1997 and 2005, and model launching prices. We found that, unlike inthe US and Sweden, therapeutically "innovative" products are notoverpriced relative to "imitative" ones. Price setting is mainly used asa mechanism to adjust for inflation independently of the degree ofinnovation. The drugs that enter through the centralized EMAapproval procedure are overpriced, which may be a consequence ofmarket globalization and international price setting.

Macroprudential policy, countercyclical bank capital buffers and credit supply: Evidence from the Spanish dynamic provisioning experiments

We analyze the impact of countercyclical capital buffers held by banks on the supplyof credit to firms and their subsequent performance. Spain introduced dynamicprovisioning unrelated to specific bank loan losses in 2000 and modified its formulaparameters in 2005 and 2008. In each case, individual banks were impacteddifferently. The resultant bank-specific shocks to capital buffers, coupled withcomprehensive bank-, firm-, loan-, and loan application-level data, allow us toidentify its impact on the supply of credit and on real activity. Our estimates showthat countercyclical dynamic provisioning smooths cycles in the supply of credit andin bad times upholds firm financing and performance.

The effects of a universal child benefit

I study the impact of a universal child benefit on fertility and family well-being. I exploitthe unanticipated introduction of a new, sizeable, unconditional child benefit in Spain in2007, granted to all mothers giving birth on or after July 1, 2007. The regressiondiscontinuity-type design allows for a credible identification of the causal effects. I find thatthe benefit did lead to a significant increase in fertility, as intended, part of it coming froman immediate reduction in abortions. On the unintended side, I find that families whoreceived the benefit did not increase their overall expenditure or their consumption ofdirectly child-related goods and services. Instead, eligible mothers stayed out of the laborforce significantly longer after giving birth, which in turn led to their children spending lesstime in formal child care and more time with their mother during their first year of life. Ialso find that couples who received the benefit were less likely to break up the year afterhaving the child, although this effect was only short-term. Taken together, the resultssuggest that child benefits of this kind may successfully increase fertility, as well asaffecting family well-being through their impact on maternal time at home and familystability.

Transition probabilities and duration analysis among disability states: Some evidence from Spanish data

In this paper we study the disability transition probabilities (as well as the mortalityprobabilities) due to concurrent factors to age such as income, gender and education. Althoughit is well known that ageing and socioeconomic status influence the probability ofcausing functional disorders, surprisingly little attention has been paid to the combined effectof those factors along the individuals' life and how this affects the transition from one degreeof disability to another. The assumption that tomorrow's disability state is only a functionof the today's state is very strong, since disability is a complex variable that depends onseveral other elements than time. This paper contributes into the field in two ways: (1) byattending the distinction between the initial disability level and the process that leads tohis course (2) by addressing whether and how education, age and income differentially affectthe disability transitions. Using a Markov chain discrete model and a survival analysis, weestimate the probability by year and individual characteristics that changes the state of disabilityand the duration that it takes its progression in each case. We find that people withan initial state of disability have a higher propensity to change and take less time to transitfrom different stages. Men do that more frequently than women. Education and incomehave negative effects on transition. Moreover, we consider the disability benefits associatedto those changes along different stages of disability and therefore we offer some clues onthe potential savings of preventive actions that may delay or avoid those transitions. Onpure cost considerations, preventive programs for improvement show higher benefits thanthose for preventing deterioration, and in general terms, those focussing individuals below65 should go first. Finally the trend of disability in Spain seems not to change among yearsand regional differences are not found.

Audit risk and rent extraction: Evidence from a randomized evaluation in Brazil

We report results from a randomized policy experiment designed to test whether increasedaudit risk deters rent extraction in local public procurement and service delivery in Brazil. Ourestimates suggest that temporarily increasing annual audit risk by about 20 percentage pointsreduced the proportion of irregular local procurement processes by about 17 percentage points.This reduction was driven entirely by irregularities involving mismanagement or corruption. Incontrast, we find no evidence that increased audit risk affected the quality of publicly providedpreventive and primary health care services -measured based on user satisfaction surveys- orcompliance with national regulations of the conditional cash transfer program "Bolsa Família".

The distribution of talent across contests

Do the contests with the largest prizes attract the most able contestants? Towhat extent do contestants avoid competition? In this paper, we show, theoreticallyand empirically, that the distribution of abilities plays a crucial role in determiningcontest choice. Sorting exists only when the proportion of high-ability contestantsis sufficiently small. As this proportion increases, contestants shy away from competitionand sorting decreases, such that, reverse sorting becomes a possibility. Wetest our theoretical predictions using a large panel data set containing contest choiceover three decades. We use exogenous variation in the participation of highly-ablecompetitors to provide empirical evidence for the relationship among prizes, competition,and sorting.

Civil conflict and human capital accumulation: The long-term effects of political violence in Perú

This paper provides empirical evidence of the persistent effect of exposure to political violence on humancapital accumulation. I exploit the variation in conflict location and birth cohorts to identify the longandshort-term effects of the civil war on educational attainment. Conditional on being exposed toviolence, the average person accumulates 0.31 less years of education as an adult. In the short-term,the effects are stronger than in the long-run; these results hold when comparing children within thesame household. Further, exposure to violence during early childhood leads to permanent losses. I alsoexplore the potential causal mechanisms.