http://repub.eur.nl/res/concept/jel-D61/ Recent publications classified by JEL Code D61 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/38179/ 2012-10-22T00:00:00Z Objectives: Diagnosis Related Group (DRG) systems aim to classify patients into mutually exclusive groups of patients, with the patients in each group having the same expected length of stay (LOS). We examined the ability of current classification variables to explain LOS variation between DRG-like Diagnosis Treatment Combination (DBC)s for ten episodes of care in the Netherlands, including breast cancer, stroke and inguinal hernia repair. Additionally, we assessed the predictive ability of some other classification variables. Methods: For each episode of care, the relevant DBC codes of all hospitalizations in 2008 were identified and all available determinants that may serve as classification variables were acquired from the national database. Ordinary least squares regression was used to examine the predictive ability of these classification variables. Results: The current classification variables are not sufficiently distinct to classify patients into mutually exclusive groups of patients. ICU admissions and hospital type may serve as valuable classification variables. Additionally, episode-specific variables may improve the Dutch grouping algorithm. Conclusions: Although it may not be feasible in the short term, grouping algorithms would benefit greatly from the introduction of classification variables tailored to the needs of specific episodes of care. A first step would be to focus on 'general' classification variables meaningful for specific episodes of care. Tan, S.S. Hakkaart-van Roijen, L. Ineveld, B.M. van Orlewska, E. http://repub.eur.nl/res/pub/34709/ 2012-01-01T00:00:00Z Micro and small enterprises (MSEs) in developing countries are typically considered to be severely credit constrained. Additionally, high business risks may partly explain why the capital stocks of MSEs remain low. This article analyzes the determinants of the capital stocks of MSEs in poor economies focusing on credit constraints and risk. The analysis is based on a unique, albeit cross-sectional but backward‐looking, micro data set on MSEs covering the economic capitals of seven West‐African countries. The main result is that capital market imperfections indeed seem to explain an important part of the variation in capital stocks in the early lifetime of MSEs. Furthermore, the analyses show that risk plays a key role in capital accumulation. Risk-averse individuals seem to adjust their initially low capital stocks upwards when enterprises grow older. MSEs in risky activities owned by wealthy individuals even seem to over-invest when they start their business and subsequently adjust capital stocks downwards. As other firms simultaneously suffer from capital shortages, such behavior may imply large inefficiencies. Lange, S. Lay, J. Grimm, M. http://repub.eur.nl/res/pub/38423/ 2012-01-01T00:00:00Z We investigate the returns to capital and capital accumulation using panel data of Peruvian micro enterprises (MEs). Marginal returns to capital are found to be very high at low levels of capital, but rapidly decreasing at higher levels. The dynamic analyses of capital accumulation in MEs suggest that credit constraints explain a major part of the variation in firm growth. We find a very large positive effect of household non-business wealth on capital stocks of MEs. We also show a sizable effect of risk on accumulation and pronounced interactions between wealth and risk. The presented evidence is consistent with poorly endowed entrepreneurs who operate in imperfect capital markets and a very risky environment. Grimm, M. Göbel, K. Lay, J. http://repub.eur.nl/res/pub/38491/ 2012-01-01T00:00:00Z The paper argues that the notion of Pareto efficiency builds on two normative assumptions: the more general consequentialist norm of any efficiency criterion, and the strong no-harm principle of the prohibition of any redistribution during the economic process that hurts at least one person. These normative concerns lead to a constrained and static notion of efficiency in mainstream economics, ignoring dynamic efficiency gains from more equal allocations of resources. The paper argues that a weak no-harm principle instead provides an endogenous efficiency criterion, which shifts attention away from equilibrium analysis in hypothetically perfect markets towards an evolutionary analysis of efficiency in real-world, non-equilibrium markets. Moreover, such an evolutionary notion of efficiency would be less normative than the Paretian concept. Staveren, I.P. van http://repub.eur.nl/res/pub/34781/ 2010-01-01T00:00:00Z Abstract – Previous research has shown that in many low and middle income countries micro and small entrepreneurs achieve relative high marginal returns to capital but show only very low reinvestment rates. Existing research is rather inconclusive about the possible causes. We explore whether forced solidarity, i.e. abusive demands by the family and kin hinder entrepreneurs to save and to invest. We start from a relatively simple theoretical model in which households consume and pursue different income generating activities, mainly the production of goods and services and the engagement in dependent wage work outside the household. Value added of the household business is subject to a solidarity tax imposed by the household’s wider family and kin-group. In this model a higher solidarity tax leads to a reallocation of productive resources away from household production to other income generating activities and leisure. We use an original data set of West-African migrant entrepreneurs to see whether the empirical observation is consistent with the predictions of the model. We find some evidence that family and kinship structures within the city enhance labour effort and the use of capital. However, closeness to the area of origin seem to have adverse effects on both. Grimm, M. Gubert, F. None Koriko, O. Lay, J. Nordman, C.J. http://repub.eur.nl/res/pub/13282/ 2008-09-19T00:00:00Z Economic evaluations of health care can help to make better medical decisions. Decisions about life and death. Our current methods are wrong. Reality is different from what we did believe. Policy decisions based on our current tools are not at all in the best interests of patients. We, scientists, have the responsibility to bridge the gap between theory and reality. Prospect theory respects reality. Now, we have all the opportunity to reliably value health. And, these values can even be obtained free of charge: we do not have to collect additional data. We can apply prospect theory immediately. What remains is to spread the word. Bleichrodt, H. http://repub.eur.nl/res/pub/10987/ 2006-04-07T00:00:00Z This paper explores how to evaluate changes in survival probabilities when people do not process probabilities linearly, as is commonly assumed in the literature, but distort probabilities. We show that the valuation of risks to life depends critically on two parameters: the elasticity of the probability weighting function and the elasticity of the utility function with respect to future consumption. Using estimates from the empirical literature we derive that the bias of erroneously ignoring probability distortion in general leads to cost–benefit ratios that are too high and that generate too much priority for programs that save young lives. Bleichrodt, H. Eeckhoudt, L. http://repub.eur.nl/res/pub/11019/ 1999-12-01T00:00:00Z This paper studies life-cycle preferences over consumption and health status. We show that cost-effectiveness analysis is consistent with cost–benefit analysis if the lifetime utility function is additive over time, multiplicative in the utility of consumption and the utility of health status, and if the utility of consumption is constant over time. We derive the conditions under which the lifetime utility function takes this form, both under expected utility theory and under rank-dependent utility theory, which is currently the most important nonexpected utility theory. If cost-effectiveness analysis is consistent with cost–benefit analysis, it is possible to derive tractable expressions for the willingness to pay for quality-adjusted life-years (QALYs). The willingness to pay for QALYs depends on wealth, remaining life expectancy, health status, and the possibilities for intertemporal substitution of consumption. Bleichrodt, H. Quiggin, J. http://repub.eur.nl/res/pub/16945/ 1997-01-01T00:00:00Z Roeger's method (Roeger, 1995), which analyses the relationship between primal and dual productivity measures, can also be used to directly estimate from readily available data the static welfare loss due to a suboptimal allocation of the factors of production. Dijk, M.A. van Bergeijk, P.A.G. van