Conglomeration with bankruptcy costs: Separate or joint financing?

The paper analyzes the determinants of the optimal scope of incorporation in the presenceof bankruptcy costs. Bankruptcy costs alone generate a non-trivial tradeoff between thebenefit of coinsurance and the cost of risk contamination associated to joint financing corporate projects through debt. This tradeoff is characterized for projects with binary returns,depending on the distributional characteristics of returns (mean, variability, skewness, heterogeneity, correlation, and number of projects), the bankruptcy recovery rate, and the taxrate advantage of debt relative to equity. Our testable predictions are broadly consistentwith existing empirical evidence on conglomerate mergers, spin-offs, project finance, andsecuritization.

Markups, gaps and the welfare costs of business fluctuations

In this paper we present a simple theory-based measure of the variations in aggregate economic efficiency: the gap between the marginal product of labor and the household s consumption/leisure tradeoff. We show that this indicator corresponds to the inverse of the markup of price over social marginal cost, and give some evidence in support of this interpretation. We then show that, with some auxilliary assumptions our gap variable may be used to measure the efficiency costs of business fluctuations. We find that the latter costs are modest on average. However, to the extent the flexible price equilibrium is distorted,the gross efficiency losses from recessions and gains from booms may be large. Indeed, we find that the major recessions involved large efficiency losses. These results hold for reasonable parameterizations of the Frisch elasticity of labor supply, the coefficient of relative risk aversion, and steady state distortions.

Estimates of patient costs related with population morbidity: Can indirect costs affect the results?

A number of health economics works require patient cost estimates as a basic information input.However the accuracy of cost estimates remains in general unspecified. We propose to investigate howthe allocation of indirect costs or overheads can affect the estimation of patient costs in order to allow forimprovements in the analysis of patient costs estimates. Instead of focusing on the costing method, thispaper proposes to highlight changes in variance explained observed when a methodology is chosen. Wecompare three overhead allocation methods for a specific Spanish population adjusted using the ClinicalRisk Groups (CRG), and we obtain different series of full-cost group estimates. As a result, there aresignificant gains in the proportion of the variance explained, depending upon the methodology used.Furthermore, we find that the global amount of variation explained by risk adjustment models dependsmainly on direct costs and is independent of the level of aggregation used in the classification system.

The elusive costs and the immaterial gains of fiscal contraints

We study whether and how fiscal restrictions alter the business cycle features macrovariables for a sample of 48 US states. We also examine the 'typical' transmission properties of fiscal disturbances and the implied fiscal rules of states with different fiscal restrictions. Fiscal constraints are characterized with a number of indicators. There are similarities in second moments of macrovariables and in the transmission properties of fiscal shocks across states with different fiscal constraints. The cyclical response of expenditure differs in size and sometimes in sign, but heterogeneity within groups makes point estimates statistically insignificant. Creative budget accounting isresponsible for the pattern. Implications for the design of fiscal rules and thereform of the Stability and Growth Pact are discussed.

Insurance and safety after September 11, 2001: Coming to grips with the costs and threats of terrorism

This chapter, originally written as a consequence of the terrorist attacksof September 11, 2001, provides an elementary, everyday introduction tothe concepts of risk and insurance. Conceptually, risk has two dimensions:a potential loss, and the chance of that loss being realized. People can,however, transfer risk to insurance companies against the payment ofso-called premiums. In practice, however, one needs accurate assessmentsof both losses and probabilities to judge whether premiums are appropriate.For many risks, this poses little problem (e.g., life insurance); however,it is difficult to assess risks of many other kinds of events such as actsof terrorism. It is emphasized, that through evolution and learning, peopleare able to handle many of the common risks that they face in life. Butwhen people lack experience (e.g., new technologies, threats of terrorism),risk can only be assessed through imagination. Not surprisingly, insurancecompanies demand high prices when risks are poorly understood. In particular,the cost of insurance against possible acts of terrorism soared afterSeptember 11. How should people approach risk after the events of that day?Clearly, the world needs to protect itself from the acts of terrorists andother disturbed individuals. However, it is also important to address the root causes of such antisocial movements. It is, therefore, suggested thatprograms addressed at combatting ignorance, prejudice, and socialinequalities may be more effective premiums for reducing the risk ofterrosrtism than has been recognized to date.

A glutathione precursor, N-acetyl-cysteine, modulates mismatch negativity generation in schizophrenia patients

Schizophrenia patients exhibit deficits in low-level processing, including pitch discrimination. This deficiency manifests in auditory evoked potentials (AEPs) as an impaired mismatch negativity (MMN), an electrophysiological response to infrequent target stimuli interspersed among frequent standard stimuli that typically peaks ~100ms post-stimulus onset. NMDA receptor antagonists have been shown to block MMN generation in both animals and humans, and NMDA dysfunction has been linked to the underlying pathophysiology of schizophrenia. A parallel line of evidence indicates that glutathione (GSH) regulation is perturbed in schizophrenia patients at the gene, protein and functional levels (Tosic et al., 2006). This GSH dysregulation leads to NMDA receptors' hypofunction through interaction with their redox site (Steullet et al., 2006). The present study aimed to modulate GSH levels in schizophrenia patients and assessed the effects of such a modulation on MMN generation mechanisms. N-acetyl-cysteine (NAC), a GSH precursor, was administered to schizophrenia patients, using a double-blind cross-over protocol. One group received NAC (2g/day) for 60 days and then placebo for another 60 days, and vice-versa for the second group. AEPs from patients were recorded at the onset of the protocol, at the point of cross-over, and at the end of the study. Participants were instructed to manually respond to target stimuli (2kHz pure tones occurring 20% of the time among 1kHz pure tones). Analyses of AEPs recorded at protocol onset indicated that patients (n=11) were significantly impaired in generating the MMN relative to age-matched controls (n=11). Specifically, the global field power (GFP), an index of AEP magnitude, was measured over the 70- 155ms post-stimulus interval and submitted to an analysis of variance (ANOVA). There was a significant interaction between population and stimulus frequency, indicating impaired MMN generation in patients at protocol onset. Analyses of AEPs recorded during administration of NAC (n=7) versus placebo (n=7) revealed the efficacy of this GSH precursor in modulating MMN generation mechanisms. ANOVA of GFP over the 70- 155ms post-stimulus interval, using stimulus frequency and treatment as within-participants variables, revealed a significant interaction and indicated that NAC can ameliorate MMN generation. We discuss these results in terms of potential therapeutic strategies for schizophrenia.

Report on Impacts and Costs of the Iowa Low-Income Weatherization Program, 2001

This report summarizes state and utility low-income weatherization program activity for households weatherized to completion during calendar year 2001. The report includes state, utility, and agency summaries of calendar year 2001 spending and impacts by measure, end-use, and fuel.

Report on Impacts and Costs of the Iowa Low-Income Weatherization Program: Executive Summary 2001

This report summarizes state and utility low-income weatherization program activity for households weatherized to completion during calendar year 2001. The report includes state, utility, and agency summaries of calendar year 2001 spending and impacts by measure, end-use, and fuel.

Report on Impacts and Costs of the Iowa Low-Income Weatherization Program: Executive Summary 2001

This report summarizes state and utility low-income weatherization program activity for households weatherized to completion during calendar year 2001. The report includes state, utility, and agency summaries of calendar year 2001 spending and impacts by measure, end-use, and fuel.

Report on Impacts and Costs of the Iowa Low-Income Weatherization Program: Executive Summary 2003

This report summarizes state and utility low-income weatherization program activity for households weatherized to completion during calendar year 2001. The report includes state, utility, and agency summaries of calendar year 2001 spending and impacts by measure, end-use, and fuel.

Report on Impacts and Costs of the Iowa Low-Income Weatherization Program, 2003

This report summarizes state and utility low-income weatherization program activity for households weatherized to completion during calendar year 2003. The report includes state, utility, and agency summaries of calendar year 2003 spending and impacts by measure, end-use, and fuel. The base data consisted of statewide program tracking databases of spending and measure installations for households completed during the calendar year 2003..

Report on Impacts and Costs of the Iowa Low-Income Weatherization Program, 2004

This report summarizes state and utility low-income weatherization program activity for dwellings weatherized to completion during calendar year 2004. The report includes state, utility, and agency summaries of calendar year 2004 spending and impacts by measure, end-use, and fuel. The base data consisted of statewide program tracking databases of spending and measure installations maintained by the Iowa Department of Community Action Agencies.

Report on Impacts and Costs of the Iowa Low-Income Weatherization Program, 2005

This report summarizes state and utility low-income weatherization program activity for dwellings weatherized to completion during calendar year 2005. The report includes state, utility, and agency summaries of calendar year 2005 spending and impacts by measure, end-use, and fuel. The base data consisted of statewide program tracking databases of spending and measure installations maintained by the Iowa Department of Community Action Agencies.