Is all cartel activity evil?

The new Australian cartel laws prohibit a provision of a contract, arrangement or understanding that inter alia, results in price fixing and output restriction between competitors in the relevant market. This is subject to a recognition that sometimes such conduct can be in the public interest, in which case the Australian Competition and Consumer Commission (ACCC) may grant an authorisation. One such instance may be an activity characterised by substantial externalised cost. An authorisation application would need to provide suitable evidence in support of the underlying case being argued. Traditionally in Australia, such evidence has been qualitative in nature; however, where possible, the ACCC and its counterparts in the EU and New Zealand encourage quantitative estimates. This is a case study of the welfare impact of output restrictions in the Australian beer industry, which is a source of substantial negative externalities. A standard simulation exercise is utilised as an example of how applicants and the competition regulator might combine theoretical and quantitative concepts to better achieve the objectives of the new legislation.

Reducing the global burden of depression : population level analysis of intervention cost-effectiveness in 14 world regions

International evidence on the cost and effects of interventions for reducing the global burden of depression remain scarce. Aims: To estimate the population-level cost-effectiveness of evidence-based depression interventions and their contribution towards reducing current burden. Method: Primary-care-based depression interventions were modelled at the level of whole populations in 14 epidemiological subregions of the world. Total population-level costs (in international dollars or I$) and effectiveness (disability adjusted life years (DALYs) averted) were combined to form average and incremental cost-effectiveness ratios. Results: Evaluated interventions have the potential to reduce the current burden of depression by 10–30%. Pharmacotherapy with older antidepressant drugs, with or without proactive collaborative care, are currently more cost-effective strategies than those using newer antidepressants, particularly in lower-income subregions. Conclusions: Even in resource-poor regions, each DALYaverted by efficient depression treatments in primary care costs less than 1 year of average per capita income, making such interventions a cost-effective use of health resources. However, current levels of burden can only be reduced significantlyif there is a substantialincrease substantial increase intreatment coverage.

Correcting for bias when estimating the cost of hospital-acquired infection : an analysis of lower respiratory tract infections in non-surgical patients

Hospital acquired infections (HAI) are costly but many are avoidable. Evaluating prevention programmes requires data on their costs and benefits. Estimating the actual costs of HAI (a measure of the cost savings due to prevention) is difficult as HAI changes cost by extending patient length of stay, yet, length of stay is a major risk factor for HAI. This endogeneity bias can confound attempts to measure accurately the cost of HAI. We propose a two-stage instrumental variables estimation strategy that explicitly controls for the endogeneity between risk of HAI and length of stay. We find that a 10% reduction in ex ante risk of HAI results in an expected savings of £693 ($US 984).