Contingent Valuation Method

How much would you be willing to pay for a cancer treatment with a 2% chance of working?  How much would you be willing to spend for a new vaccine that was as effective as a prior vaccine, but was now available in chewable tablets?  One way to answer questions regarding new products or goods…

Social Security Around the World XI: Measuring Benefits

Throughout the past week, I have spoke of the work disincentives many social security programs create.  The question is: how do we measure these disincentives.  The economics literature has given three different metrics to measure implicit social security wealth a retiree has and I will discuss each in turn. Accrual The accrual method measures how much…

SCHIP expansion in Minnesota and New York

Under the Balanced Budget Act of 1997, the Federal government established the State Children’s Health Insurance Program (SCHIP), which was aimed at reducing the number of uninsured children in the United States. States were given a variety of options of how to implement this program. Nineteen states decided to operate the SCHIP program as an…

Does Public Insurance Crowd Out Private Insurance

Programs such as Medicaid and Medicare aim to expand health insurance to those currently uninsured.  These programs certainly accomplish this goal, but they also crowd out private insurance.  This means that an individual who has private health insurance may decide to use public insurance instead.  This would mean that society is simply substituting individual payment…

Difference in Difference Estimation

Difference in Difference (DD) is a commonly used empirical estimation technique in economics. Let us take a hypothetical example where a state (Wisconsin) passes a bill which makes employer-provided health insurance tax deductible. Let us also assume that in the year after the bill passed (year 2) the percentage of firms offering health insurance increased…

The Econometrics of Piecewise-Linear Budget Constraints

This is a summary of an article by Robert Moffitt (1986): Often in Public Economics, we come across budget constraints which are piecewise-linear. Some examples are studies of: the negative income tax, Social Security program, food stamp program, Aid to Families with Dependent Children (AFDC), and unemployment insurance. Wrinkles to the traditional piecewise linear budget…