Does the Samaritan’s Dilemma Matter? Evidence from U.S. Agriculture by Tatyana Deryugina, Barrett Kirwan :: SSRN

December 9, 2016

The Samaritan’s dilemma posits a downside to charity: recipients may rely on free aid instead of their own efforts. Anecdotally, the expectation of free assistance is thought to be important for decisions about insurance and risky behavior in numerous settings, but reliable empirical evidence is scarce. We estimate whether the Samaritan’s dilemma exists in U.S. agriculture, where both private crop insurance and frequent federal disaster assistance are present. We find that bailout expectations are qualitatively and quantitatively important for the insurance decision. Furthermore, aid expectations reduce both the amount of farm inputs and subsequent crop revenue.

Source: Does the Samaritan’s Dilemma Matter? Evidence from U.S. Agriculture by Tatyana Deryugina, Barrett Kirwan :: SSRN


Social Security May Increase Pressure for Progressive Taxation in the Coming Years by Nick Gogerty :: SSRN

December 9, 2016

Social Security cost overruns indirectly create cash flow pressure on the Federal budget. Relieving this pressure may mean higher estate, high income and transaction related taxes in the next 5 -10 years. Therefore it is important to be prepared and be tax efficient.

Source: Social Security May Increase Pressure for Progressive Taxation in the Coming Years by Nick Gogerty :: SSRN


Abdication and Federalism by Justin Weinstein-Tull :: SSRN

December 7, 2016

States abdicate many of their federal responsibilities to local governments. They do not monitor local compliance with those laws; they disclaim responsibility for the actions of their local governments; and they deny state officials the legal capacity to bring local governments into compliance. When sued for noncompliance with these federal laws, states attempt to evade responsibility by arguing that local governments — and not the state — are responsible. These arguments create serious and unexplored barriers to enforcing federal law. They present thorny issues of federalism and liability, and courts struggle with them. Because neither courts resolving these conflicts nor advocates litigating them are aware that abdication occurs regularly across a number of policy areas, courts have failed to develop a consistent methodology for addressing it. This Article argues that courts should reject these state arguments in most cases and outlines the contours of a “nonabdication doctrine” that would be less solicitous and accommodating of existing state laws and more attentive to the language of federal laws.

This Article is the first to uncover these state arguments and mark them as a pattern across a surprisingly diverse set of states and federal policies: indigent defense, election law, public assistance, conditions of incarceration, and others. It uses state filings — including archived documents — as well as interviews with numerous advocates and state officials, to explore the concept of state abdication. It posits that abdication is a consequence of superimposing federal responsibilities onto the diverse legal and political relationships between states and their local governments. It suggests that abdication provides a new lens through which to reassess previous thinking on localism, federalism, and decentralization. Because abdication permits states to shelter noncompliance with federal law at the local level and mutes productive local dissent, it reveals a failure of decentralizing federal policy that federalism scholars currently overlook.

Source: Abdication and Federalism by Justin Weinstein-Tull :: SSRN


Updating Mechanism for Lifelong Insurance Contracts Subject to Medical Inflation by Michel Denuit, Jan Dhaene, Hamza Hanbali, Nathalie Lucas, Julien Trufin :: SSRN

December 7, 2016

This paper proposes a practical way for ex-post indexing of level premiums in lifelong medical insurance contracts, in order to take into account observed medical inflation. We show that ex-post indexing can be achieved by considering only premiums, without explicit reference to reserves. This appears to be relevant in practice as reserving mechanisms may not be transparent to policyholders and as some insurers do not compute contract-specific reserves, managing the whole portfolio in a collective way. The present study originates from a proposal for indexing lifelong medical insurance level premiums in Belgium. As an application, we study the impact of various indexing mechanisms on a typical medical insurance portfolio on the Belgian market.

Source: Updating Mechanism for Lifelong Insurance Contracts Subject to Medical Inflation by Michel Denuit, Jan Dhaene, Hamza Hanbali, Nathalie Lucas, Julien Trufin :: SSRN


Family Economics Writ Large by Jeremy Greenwood, Nezih Guner, Guillaume Vandenbroucke :: SSRN

December 7, 2016

Powerful currents have reshaped the structure of families over the last century. There has been (i) a dramatic drop in fertility and greater parental investment in children; (ii) a rise in married female labor-force participation; (iii) a decline in marriage and a rise in divorce; (iv) a higher degree of assortative mating; (v) more children living with a single mother; (vi) shifts in social norms governing premarital sex and married women’s roles in the labor market. Macroeconomic models explaining these aggregate trends are surveyed. The relentless flow of technological progress and its role in shaping family life are stressed.

Source: Family Economics Writ Large by Jeremy Greenwood, Nezih Guner, Guillaume Vandenbroucke :: SSRN


Savings after Retirement: A Survey by Mariacristina De Nardi, Eric French, John Bailey Jones :: SSRN

December 7, 2016

The saving patterns of retired US households pose a challenge to the basic life-cycle model of saving. The observed patterns of out-of-pocket medical expenses, which rise quickly with age and income during retirement, and heterogeneous life span risk can explain a significant portion of US saving during retirement. However, more work is needed to distinguish these precautionary saving motives from other motives, such as the desire to leave bequests. Progress toward disentangling these motivations has been made by matching other features of the data, such as public and private insurance choices. An improved understanding of whether intended bequests left to children and spouses are due to altruism, risk sharing, exchange motivations, or a combination of these factors is an important direction for future research.

Source: Savings after Retirement: A Survey by Mariacristina De Nardi, Eric French, John Bailey Jones :: SSRN


Hospital Quality, Medical Charge Variation, and Patient Care Efficiency: Implications for Bundled Payment Reform Models by Seokjun Youn, Gregory R. Heim, Subodha Kumar, Chelliah Sriskandarajah :: SSRN

December 6, 2016

Patient-centric healthcare reform models pursue lower healthcare costs, improved care quality, and better patient population health outcomes. Many patient-centric reform models focus on standardizing treatment protocols and reducing care delivery variability. Yet the structure of reform models themselves may lead to unintended process variability, the implications of which researchers should analyze. Prior research has not determined whether the reform models can potentially drive better patient-centric outcomes. A distinct challenge in analyzing their potential impact concerns a lack of publicly available historical data on reform models. We circumvent this challenge by recasting available data into relevant metrics, and examining how variation in hospital medical charges relates to patient-centric reform model goals. To do so, we develop a hospital-condition level measure called weighted average coefficient of variation (WACV) to identify the degree of variation in hospital medical charges resulting from underlying care process variability. WACV contributes by capturing unwarranted process variation in medical care protocols after controlling for warranted variation due to patient distributions of illness severity.

Using Medicare data from New York state, we find evidence that higher charge variation (WACV) levels are indeed associated with lower hospital technical efficiency. Secondly, we show that prior-period process quality (that measures how well a hospital adheres to evidence-based medical guidelines) has a significant negative association with WACV. In contrast, the prior-period outcome quality measures are not associated with WACV. For policy-makers, the results imply that managerial incentives and interventions based on process quality may be more effective for changing operational behaviors, compared to basing incentives and interventions solely on outcome quality. Further, the results imply that WACV should play a role in the design of healthcare reform models. We examine these implications for bundled payment programs, which fix the amount of reimbursement for hospitals within a predefined boundary of patient care episode.

Empirical results suggest that the current bundled payment provider selection mechanism does not consider the degree of unwarranted variation in charges, which we claim to be the improvement opportunity for each participating provider. In doing so, our results contribute by demonstrating that existing bundled payment program policies may not achieve intended goals.

Source: Hospital Quality, Medical Charge Variation, and Patient Care Efficiency: Implications for Bundled Payment Reform Models by Seokjun Youn, Gregory R. Heim, Subodha Kumar, Chelliah Sriskandarajah :: SSRN