Life-cycle portfolio choice with liquid and illiquid financial assets

Traditionally, quantitative models that have studied households׳ portfolio choices have focused exclusively on the different risk properties of alternative financial assets. We introduce differences in liquidity across assets in the standard life-cycle model of portfolio choice. More precisely, in our model, stocks are subject to transaction costs, as considered in recent macroliterature. We show that when these costs are calibrated to match the observed infrequency of households׳ trading, the model is able to generate patterns of portfolio stock allocation over age and wealth that are constant or moderately increasing, thus more in line with the existing empirical evidence.

Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model for outpatient and inpatient episodes

This paper analyses whether or not tax subsidies to private medicalinsurance are self-financing by means of a structural approach. Weconstruct a simulation routine based on a microeconometric discretechoice model that allows us to evaluate the impact of premium changeson the utilisation of outpatient and inpatient health care services. Wesimulate the 1999 Spanish tax reform that abolished the tax deductionfor expenditures on private health insurance using a representativesample of the Catalan population. Prior to this reform, foregone taxrevenue arising from deductions after the purchase of private insuranceamounted to 69.2 M. per year. In contrast, the elimination of thesubsidies to private policies is estimated to generate an extra costfor the public sector of about 8.9 M. per year.

Self-selection and risk selection on the Swiss health insurance market

Abstract This thesis presents three empirical studies in the field of health insurance in Switzerland. First we investigate the link between health insurance coverage and health care expenditures. We use claims data for over 60 000 adult individuals covered by a major Swiss Health Insurance Fund, followed for four years; the data show a strong positive correlation between coverage and expenditures. Two methods are developed and estimated in order to separate selection effects (due to individual choice of coverage) and incentive effects ("ex post moral hazard"). The first method uses the comparison between inpatient and outpatient expenditures to identify both effects and we conclude that both selection and incentive effects are significantly present in our data. The second method is based on a structural model of joint demand of health care and health insurance and makes the most of the change in the marginal cost of health care to identify selection and incentive effects. We conclude that the correlation between insurance coverage and health care expenditures may be decomposed into the two effects: 75% may be attributed to selection, and 25 % to incentive effects. Moreover, we estimate that a decrease in the coinsurance rate from 100% to 10% increases the marginal demand for health care by about 90% and from 100% to 0% by about 150%. Secondly, having shown that selection and incentive effects exist in the Swiss health insurance market, we present the consequence of this result in the context of risk adjustment. We show that if individuals choose their insurance coverage in function of their health status (selection effect), the optimal compensations should be function of the se- lection and incentive effects. Therefore, a risk adjustment mechanism which ignores these effects, as it is the case presently in Switzerland, will miss his main goal to eliminate incentives for sickness funds to select risks. Using a simplified model, we show that the optimal compensations have to take into account the distribution of risks through the insurance plans in case of self-selection in order to avoid incentives to select risks.Then, we apply our propositions to Swiss data and propose a simple econometric procedure to control for self-selection in the estimation of the risk adjustment formula in order to compute the optimal compensations.

What price life insurance? : Not how but what to sell or buy--and why, facts and supporting figures which prove the fallacy of the self-serving propaganda of those "term-ites" who seek to undermine confidence in legal reserve (old line) life insurance /

Mode of access: Internet.

The role of title insurance under recording and registration

This article outlines a transaction cost theory of title insurance andanalyses the role it plays in countries with recording and registrationof land titles. Title insurance indemnifies real estate right holdersfor losses caused by pre-existing title defects that are unknown whenthe policy is issued. It emerged to complement the errors and omissions insurance of professionals examining title quality. Poor organizationof public records led title insurers in the USA to integrate titleexamination and settlement services. Their residual claimant statusmotivates insurers to screen, cure and avoid title defects. Firmsintroducing title insurance abroad produce little information on titlequality, however. Their policies are instead issued on a casualty basis,complementing and enforcing the professional liability of conveyancers.Future development in markets with land registration is uncertainbecause of adverse selection, competitive reactions from establishedconveyancers and the ability of larger banks to self-insure title risks.

A positive theory of geographic mobility and social insurance

This paper presents a tractable dynamic general equilibrium model thatcan explain cross-country empirical regularities in geographical mobility,unemployment and labor market institutions. Rational agents vote overunemployment insurance (UI), taking the dynamic distortionary effects ofinsurance on the performance of the labor market into consideration.Agents with higher cost of moving, i.e., more attached to their currentlocation, prefer more generous UI. The key assumption is that an agent'sattachment to a location increases the longer she has resided there. UIreduces the incentive for labor mobility and increases, therefore, thefraction of attached agents and the political support for UI. The mainresult is that this self-reinforcing mechanism can give rise to multiplesteady-states-one 'European' steady-state featuring high unemployment,low geographical mobility and high unemployment insurance, and one'American' steady-state featuring low unemployment, high mobility andlow unemployment insurance.

Biased selection within the social health insurance market in Colombia

Las regulaciones como primaje comunitario, paquetes estandarizados y afiliación abierta, orientadas a reducir el impacto de las fallas en los mercados de seguros, tienen un efecto limitado puesto que abren espacio a la selección sesgada. A partir de 1993, el sistema de seguridad social en salud en Colombia fue reformado hacia un enfoque de mercado con la expectativa de mejorar el desempeño de los monopolios preexistentes exponiéndolos a la competencia de nuevos entrantes. La hipótesis que se maneja en el trabajo es que las fallas de mercado pueden llevar a selección sesgada favoreciendo a los nuevos entrantes. Se analizaron dos encuestas de hogares utilizando el estado de salud auto reportado y la presencia de enfermedad crónica como indicadores prospectivos del riesgo de los afiliados. Se encuentra que hay selección sesgada, llevando a selección adversa entre los aseguradores preexistentes, y a selección favorable entre los nuevos entrantes. Este patrón se observa en 1997 y se incrementa en el 2003. Aunque las entidades preexistentes son entidades públicas, y su tamaño disminuyó sustancialmente entre estos años, se analizan sus implicaciones fiscales en términos de financiación adicional por parte del gobierno.

Commodity Taxation and Social Insurance

We investigate optimal commodity taxation in a social insurance framework based on Varian (1980). We show that the tax prescriptions in this moral hazard framework are notably similar to those derive

Insurance underwriter or financial development fund: what role for reserve pooling in Latin America?

Includes bibliography

A transmission power self-optimization technique for wireless sensor networks

Wireless sensor networks (WSNs) are generally used to monitor hazardous events in inaccessible areas. Thus, on one hand, it is preferable to assure the adoption of the minimum transmission power in order to extend as much as possible the WSNs lifetime. On the other hand, it is crucial to guarantee that the transmitted data is correctly received by the other nodes. Thus, trading off power optimization and reliability insurance has become one of the most important concerns when dealing with modern systems based on WSN. In this context, we present a transmission power self-optimization (TPSO) technique for WSNs. The TPSO technique consists of an algorithm able to guarantee the connectivity as well as an equally high quality of service (QoS), concentrating on the WSNs efficiency (Ef), while optimizing the transmission power necessary for data communication. Thus, the main idea behind the proposed approach is to trade off WSNs Ef against energy consumption in an environment with inherent noise. Experimental results with different types of noise and electromagnetic interference (EMI) have been explored in order to demonstrate the effectiveness of the TPSO technique.

Supply sensitive services in Swiss ambulatory care: an analysis of basic health insurance records for 2003-2007

Swiss ambulatory care is characterized by independent, and primarily practice-based, physicians, receiving fee for service reimbursement. This study analyses supply sensitive services using ambulatory care claims data from mandatory health insurance. A first research question was aimed at the hypothesis that physicians with large patient lists decrease their intensity of services and bill less per patient to health insurance, and vice versa: physicians with smaller patient lists compensate for the lack of patients with additional visits and services. A second research question relates to the fact that several cantons are allowing physicians to directly dispense drugs to patients ('self-dispensation') whereas other cantons restrict such direct sales to emergencies only. This second question was based on the assumption that patterns of rescheduling patients for consultations may differ across channels of dispensing prescription drugs and therefore the hypothesis of different consultation costs in this context was investigated.

Predicting the risk of hospital admission in older persons--validation of a brief self-administered questionnaire in three European countries

OBJECTIVES: To validate the Probability of Repeated Admission (Pra) questionnaire, a widely used self-administered tool for predicting future healthcare use in older persons, in three European healthcare systems. DESIGN: Prospective study with 1-year follow-up. SETTING: Hamburg, Germany; London, United Kingdom; Canton of Solothurn, Switzerland. PARTICIPANTS: Nine thousand seven hundred thirteen independently living community-dwelling people aged 65 and older. MEASUREMENTS: Self-administered eight-item Pra questionnaire at baseline. Self-reported number of hospital admissions and physician visits during 1 year of follow-up. RESULTS: In the combined sample, areas under the receiver operating characteristic curves (AUCs) were 0.64 (95% confidence interval (CI)=0.62-0.66) for the prediction of one or more hospital admissions and 0.68 (95% CI=0.66-0.69) for the prediction of more than six physician visits during the following year. AUCs were similar between sites. In comparison, prediction models based on a person's age and sex alone exhibited poor predictive validity (AUC or= 0.5) were 2.3 times as likely (95% CI=2.1-2.6) as low-risk individuals to have a hospital admission, and 2.1 times as likely (95% CI=2.0-2.2) to have more than six physician visits. CONCLUSION: The Pra instrument exhibits good validity for predicting future health service use on a population level in different healthcare settings. Administrative data have shown similar predictive validity, but in practice, such data are often not available. The Pra is likely of high interest to governments and health insurance companies worldwide as a basis for programs aimed at health risk management in older persons.

The determinants of physician and pharmacist utilization and equity of access under Korean universal health insurance

This study examines the social and behavioral determinants of two types of primary care, seeing a physician or a pharmacist, for Koreans and evaluates the equity of the Korean national health insurance system. The study applies the Aday and Andersen access framework to cross-sectional data from the 1992 Korean National Health Interview Survey (N = 21,841).^ The study found that in Korea, the elderly were most likely, and children least likely, to have used physician services. Women, household heads, those in small families, and the less educated were more likely than their counterparts to use physician and pharmacist services. Health status and need were important determinants of Koreans seeing a doctor or a pharmacist. Differences in need substantially accounted for the original differences observed between subgroups. Resources associated with having insurance coverage, a regular source of care, and place of residence (rural/urban) ameliorated to some extent the subgroup differences in the use of physicians' and pharmacists' services among Koreans. They were also major independent predictors of access. Having insurance remains a particularly important predictor of who uses physician services. Among the insured, trade-offs in the use of physician and pharmacist services were found in the current system, i.e., uninsured and poor Koreans were more likely to use pharmacist services, while insured and rural Koreans were more likely to use doctor services. Among the insured, cost sharing rates are lower for physician than for pharmacist services. Self-employed persons were less likely than government and industrial workers to use physician services. An underlying expectation under universal health insurance was that the Korean health care system would be equitable. The research results, however, did not fully support this expectation.^ The policy implications of these findings are that measures are required to extend insurance coverage to the uninsured, to equalize differences in benefit packages between health plans, and to expand the availability of physicians in rural areas. Further research is also needed to understand those who do not currently have a regular source of care and why and the access barriers that may exist for selected demographic subgroups (those in large families and unmarried or divorced/widowed persons). ^

Measuring Unemployment Insurance Generosity

In this paper, we develop a methodology to summarize the various policy parameters of an unemployment insurance scheme into a single generosity parameter. Unemployment insurance policies are multdimensional objects. They are typically defined by waiting periods, eligibility duration, benefit levels and asset tests when eligible, which makes intertemporal or international comparisons difficult. To make things worse, labor market conditions, such as the likelihood and duration of unemployment matter when assessing the generosity of different policies. We build a first model with such complex characteristics. Our model features heterogeneous agents that are liquidity constrained but can self-insure. We then build a second model that is similar, except that the unemployment insurance is simpler: it is deprived of waiting periods and agents are eligible forever with constant benefits. We then determine which level of benefits in this second model makes agents indifferent between both unemployment insurance policies. We apply this strategy to the unemployment insurance program of the United Kingdom and study how its generosity evolved over time.

A comparison of healthcare access, healthcare utilization and asthma self-management for Hispanic children in border and non-border regions of Texas

The purpose of this culminating experience was to investigate the relationships between healthcare utilization, insurance coverage, and socioeconomic characteristics of children with asthma along the Texas-Mexico Border. A secondary data analysis was conducted on cross-sectional data from the Texas Child Asthma Call-back Survey, a follow-up survey to the random digit dialed Behavior Risk Factor Surveillance Study (BRFSS) conducted between 2006-2009 ( n = 556 adults living in households with a child with asthma).^ The proportion of Hispanic children with asthma in Border areas of Texas was more than twice that of non-Border areas (84.8% vs. 28.8%). Parents in Border areas were less likely to have their own health insurance (OR = 0.251, 95% C.I. = 0.117-0.540) and less likely to complete the survey in English than Spanish (OR = 0.251 95% C.I. = 0.117-0.540) than parents in non-Border areas. No significant socio-economic or health care utilization differences were noted between Hispanic children living in Border areas compared to Hispanic children living in non-Border areas. Children with asthma along the Texas-Mexico Border, regardless of ethnicity and language, have insurance coverage rates, reported cost barriers to care, symptom management, and medication usage patterns similar to those in non-Border areas. When compared to English-speakers, Spanish-speaking parents in Texas as a whole are far less likely to be taught what to do during an asthma attack (50.2% vs. 78.6%).^ Language preference, rather than ethnicity or geographical residence, played a larger role on childhood asthma-related health disparities for children in Texas. Spanish-speaking parents in are less likely to receive adequate asthma self-management education. Investigating the effects of Hispanic acculturation rates and incongruent parent-child health insurance coverage may provide better insight into the health disparities of children along the Texas-Mexico Border.^