Physician licensure and quality: Part II

When traveling from San Diego to Milwaukee for Thanksgiving, my flight was delayed two hours.  While this was an inconvenience, it did provide me with the opportunity to finish the book Capitalism and Freedom by Milton Friedman.  The book espouses a libertarian point of view; this point of view is one which is currently held…

Organ Sales

What is do be done regarding the long waits for those needing a donated organ to save their life? As expected, economists recommend market creation as the solution. Freakonomics authors Stephen J. Dubner and Steven D. Levitt argue in the New York Times (“Flesh Trade“) that the creation of a market for organs makes sense.…

Physician licensure and quality: Part I

In most markets, quality regulation is not used.  If you buy a pair of pants that is lower quality than you had anticipated, you simply will not frequent the store again.  If the firm continues to offer low quality pants (at insufficiently low prices), few consumers will patronize the store and the firm will go…

Nobel prize winner Milton Friedman dies at 94

Milton Friedman is one of the 20th century’s most renowned economists.  The International Herald Tribune has an informative obituary (“Milton Friedman…“) in yesterday’s paper.  Below are some selected excerpts from the article. Friedman’s most famous book is Capitalism and Freedom.  One of the major tenets of the book is that “you have to have economic…

Nagase Effect

How do medical care costs respond to different coinsurance rates? The RAND Health Insurance Experiment (Manning, et al. AER 1987) demonstrated that moral hazard is problem; individuals with lower coinsurance rates tend to use more medical services. In 1935, Kozo Nagase formulated a mathematical heuristic to describe how coinsurance rates affected medical expenditures in Japan.…

Schumpeter, Hayek and the Learning Economy

As I well know, technical command of high-level calculus and mathematical modeling are prerequisites to success in 21st century graduate schools of economics. Economists generally create a mathematical model of how they believe the world functions and solve the equations to find the optimum (i.e.: quantity, price, tax rate, etc.). Perfect information is often assumed.…