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Price Regulation (price + regulation)
Selected AbstractsPOLICY OPTIONS FOR ALCOHOL PRICE REGULATION: RESPONSE TO THE COMMENTARIESADDICTION, Issue 3 2010PETRA SYLVIA MEIER No abstract is available for this article. [source] RETAIL PRICE REGULATION AND THE OPTION TO DELAYANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 3 2009Fernando T. Camacho ABSTRACT,:,This paper examines a two-period model of an investment decision in a network industry characterized by demand uncertainty, economies of scale and sunk costs. In the absence of regulation we identify the market conditions under which a monopolist decides to invest early as well as the underlying overall welfare output. In a regulated environment, we consider a monopolist who faces no downstream (final good) competition but is subject to retail price regulation. We identify the welfare-maximizing regulated prices when the unregulated market outcome is set as the benchmark. We show that if the regulator can commit to ex post regulation , that is, regulated prices that are contingent to future demand realization , then regulated prices that allow the firm to recover its total costs of production are welfare-maximizing. Thus, under ex post price regulation there is no need to compensate the regulated firm for the option to delay that it foregoes when investing today. We argue, however, that regulators cannot make this type of commitment and, therefore, price regulation is often ex ante , that is, regulated prices are not contingent to future demand. We show that the optimal ex ante regulation, and the extent to which regulated prices need to incorporate an option to delay, depend on the nature of demand uncertainty. [source] Moonlighting: public service and private practiceTHE RAND JOURNAL OF ECONOMICS, Issue 4 2007Gary Biglaiser We study job incentives in moonlighting, when public-service physicians may refer patients to their private practices. Some doctors in the public system are dedicated, and behave sincerely, but others,the moonlighters,are utility maximizers. Allowing moonlighting always enhances aggregate consumer welfare, but equilibrium public-care quality may increase or decrease; if quality increases, moonlighting improves each consumer's expected utility. Unregulated moonlighting may reduce consumer welfare as a result of adverse behavioral reactions, such as moonlighters shirking more and dedicated doctors abandoning their sincere behavior. Price regulation in the private market limits such adverse behaviors in the public system and improves consumer welfare. [source] Policy options for alcohol price regulation: the importance of modelling population heterogeneityADDICTION, Issue 3 2010Petra Sylvia Meier ABSTRACT Context and aims Internationally, the repertoire of alcohol pricing policies has expanded to include targeted taxation, inflation-linked taxation, taxation based on alcohol-by-volume (ABV), minimum pricing policies (general or targeted), bans of below-cost selling and restricting price-based promotions. Policy makers clearly need to consider how options compare in reducing harms at the population level, but are also required to demonstrate proportionality of their actions, which necessitates a detailed understanding of policy effects on different population subgroups. This paper presents selected findings from a policy appraisal for the UK government and discusses the importance of accounting for population heterogeneity in such analyses. Method We have built a causal, deterministic, epidemiological model which takes account of differential preferences by population subgroups defined by age, gender and level of drinking (moderate, hazardous, harmful). We consider purchasing preferences in terms of the types and volumes of alcoholic beverages, prices paid and the balance between bars, clubs and restaurants as opposed to supermarkets and off-licenses. Results Age, sex and level of drinking fundamentally affect beverage preferences, drinking location, prices paid, price sensitivity and tendency to substitute for other beverage types. Pricing policies vary in their impact on different product types, price points and venues, thus having distinctly different effects on subgroups. Because population subgroups also have substantially different risk profiles for harms, policies are differentially effective in reducing health, crime, work-place absence and unemployment harms. Conclusion Policy appraisals must account for population heterogeneity and complexity if resulting interventions are to be well considered, proportionate, effective and cost-effective. [source] Examining the link between price regulation and pharmaceutical R&D investmentHEALTH ECONOMICS, Issue 1 2005John A. Vernon Abstract This paper examines the link between price regulation and pharmaceutical research and development (R&D) investment. I identify two mechanisms through which price regulation may exert an influence on R&D: an expected-profit effect and a cash-flow effect. Using established models of the determinants of pharmaceutical R&D, I exploit a unique fact to quantify firm exposure to pharmaceutical price regulation: relative to the rest of the world, the U.S. pharmaceutical market is largely unregulated with respect to price. Using this fact within the context of a system of quasi-structural equations, I simulate how a new policy regulating pharmaceutical prices in the U.S. will affect R&D investment. I find that such a policy will lead to a decline in industry R&D by between 23.4 and 32.7%. This prediction, however, is accompanied by several caveats. Moreover, it says nothing about the implications for social welfare; therefore, these issues are also discussed. Copyright © 2004 John Wiley & Sons, Ltd. [source] Modelling Spikes in Electricity Prices,THE ECONOMIC RECORD, Issue 263 2007RALF BECKER During periods of market stress, electricity prices can rise dramatically. Electricity retailers cannot pass these extreme prices on to customers because of retail price regulation. Improved prediction of these price spikes therefore is important for risk management. This paper builds a time-varying-probability Markov-switching model of Queensland electricity prices, aimed particularly at forecasting price spikes. Variables capturing demand and weather patterns are used to drive the transition probabilities. Unlike traditional Markov-switching models that assume normality of the prices in each state, the model presented here uses a generalised beta distribution to allow for the skewness in the distribution of electricity prices during high-price episodes. [source] RETAIL PRICE REGULATION AND THE OPTION TO DELAYANNALS OF PUBLIC AND COOPERATIVE ECONOMICS, Issue 3 2009Fernando T. Camacho ABSTRACT,:,This paper examines a two-period model of an investment decision in a network industry characterized by demand uncertainty, economies of scale and sunk costs. In the absence of regulation we identify the market conditions under which a monopolist decides to invest early as well as the underlying overall welfare output. In a regulated environment, we consider a monopolist who faces no downstream (final good) competition but is subject to retail price regulation. We identify the welfare-maximizing regulated prices when the unregulated market outcome is set as the benchmark. We show that if the regulator can commit to ex post regulation , that is, regulated prices that are contingent to future demand realization , then regulated prices that allow the firm to recover its total costs of production are welfare-maximizing. Thus, under ex post price regulation there is no need to compensate the regulated firm for the option to delay that it foregoes when investing today. We argue, however, that regulators cannot make this type of commitment and, therefore, price regulation is often ex ante , that is, regulated prices are not contingent to future demand. We show that the optimal ex ante regulation, and the extent to which regulated prices need to incorporate an option to delay, depend on the nature of demand uncertainty. [source] Switching statins in Norway after new reimbursement policy , a nationwide prescription studyBRITISH JOURNAL OF CLINICAL PHARMACOLOGY, Issue 4 2007Solveig Sakshaug What is already known about this subject ,,Use of statins is growing worldwide and costs represent a burden to public budgets. ,,The introduction of simvastatin generics, generic substitution and price regulations have contributed to price reductions and resulted in overall cost reductions of statin use in Norway. What this study adds ,,New reimbursement regulations for statins in Norway in June 2005, making simvastatin the drug of choice, had a great impact on physicians' prescribing of statins. ,,Nearly 40% of the atorvastatin users switched to simvastatin during the 13-month period after implementation of the new regulations. ,,Among the new users of statins the proportion receiving simvastatin increased from 48% in May 2005 to 92% in June 2006. ,,The new regulations have reduced costs of statins, even though the prevalence of statin use has increased. Aims To assess the changes in prescribing of statins in Norway after implementation of the new reimbursement regulations for statins in June 2005. Methods Data were retrieved from the Norwegian Prescription Database covering the total population in Norway (4.6 million). Outcome measures were the proportion of atorvastatin users switching to simvastatin and changes in the proportion of new statin users receiving simvastatin. Based on retail costs for all statin prescriptions dispensed in Norway, expenditure was measured in Norwegian currency. Results One-year prevalences of statin use increased from 6.3 to 6.8% for women and from 7.5 to 8.1% for men from the year before to the year after the new statin regulations. Of atorvastatin users (N = 131 222), 39% switched to simvastatin during the 13-month period after the implementation. The proportion of switching was higher in women (41%) than in men (36%). In May 2005, 48% of the new statin users received simvastatin. The proportion of new users receiving simvastatin increased rapidly after implementation of the new regulations to 68% in June 2005 and reached 92% in June 2006. Expenditure was reduced from ,120 million to ,95 million when comparing the year before with the year after the new statin regulations. Conclusions The new reimbursement policy for statins has had a great impact on physicians' prescribing of statins in Norway. Physicians in Norway acknowledge the importance of contributing to cost containment. [source] | |||||||||||||