Contributions published at Applied Microeconomics (Peter Zweifel)

In this study, Markowitz mean-variance portfolio theory is applied to electricity-generating technologies of the United States and Switzerland. Both an investor (focused on changes in return) and a current user (focused on return in levels) view are adopted to determine efficient frontiers of electricity generation technologies in terms of expected return and risk as of 2003. Since shocks in generation costs per kWh (the inverse of returns) are correlated, Seemingly Unrelated Regression Estimation (SURE) is used to filter out the systematic components of the covariance matrix. Results suggest that risk-averse investors and risk-neutral current users in the United States are considerably closer to their efficiency frontier than their Swiss counterparts. This may be due to earlier and more thorough deregulation of electricity markets in the United States.

In this paper, the amount of income redistribution in the United States, the European Union, and Switzerland is compared and empirically related to economic, political, and behavioral determinants elaborated in the literature. Lying in between the two poles, Switzerland provides unique evidence about the relative merits of competing hypotheses. It tips the balance against the economic explanation, which predicts more rather than less income redistribution in the United States compared to the EU. It only weakly supports the political model linking proportional representation and multiparty structure (which also characterize Switzerland) to redistribution; yet the Swiss share of transfers in the GDP is low. Behavioral explanations receive a good deal of support from the case of Switzerland, a country that shares with the United States the belief that hard work rather than luck, birth, connections, and corruption determine wealth. In this way, the Janus face of Switzerland may help to explain the difference in the amount of U.S. and EU income redistribution.

The search for economically e?cient policy instruments designed to promote the diffusion of renewable energy technologies in liberalized markets has led to the introduction of quota-based tradable ‘green’ certi?cate (TGC) schemes for renewable electricity. However, there is a debate about the pros and cons of TGC, a quantity control policy, compared to guaranteed feed-in tariffs, a price control policy. In this paper we contrast these two alternatives in terms of social welfare, taking into account that electricity markets are not perfectly competitive, and show that the price control policy dominates the quantity control policy in terms of social welfare.

Die Abwägung von Kosten und Nutzen spielt bei der Bereitstellung öffentlicher Güter eine zentrale Rolle. Mithilfe welcher Methode lässt sich der Nutzen öffentlicher Güter am besten schätzen? Welche typischen konzeptionellen und empirischen Probleme treten bei den einzelnen Schätzmethoden häufig auf?

Discrete-choice experiments, while becoming increasingly popular, have rarely been tested for validity and reliability. This contribution purports to provide some evidence of a rather unique type. Two surveys designed to measure willingness-to-accept (WTA) for reform options in Swiss health care and health insurance are used to provide independent information with regard to two elements of reform. The issue to be addressed is whether WTA values converge although the three overlapping attributes (a more restrictive drug benefit, a delayed access to medical innovation, and a change in the monthly insurance premium) are embedded in widely differing choice sets. Experiment A contains rather radical health system reform options, while experiment B concentrates on more familiar elements such as copayment and the benefit catalogue. While mean WTA values differ between experiments, they tend to vary in similar ways, suggesting at least theoretical validity and reliability.

This article calls attention to a difficulty with insurers' investment policies that seems to have been overlooked so far. There is the distinct possibility that insurers cannot satisfy the demands of different stakeholders in terms of expected returns and volatility. While using the capital asset pricing model as the benchmark, this article distinguishes two groups of stakeholders that impose additional constraints. One is “income security” in the interest of current beneficiaries and older workers; the other is “predictability of contributions” in the interest of contributing younger workers and sponsoring employers. It defines the conditions for which the combination of these constraints results in a lack of feasibility of investment policy. Minimum deviation from the capital market line is proposed as the performance benchmark in these situations.

Background: A uniform package of benefits and uniform cost sharing are elements of regulation inherent in most social health insurance systems. Both elements risk burdening the population with a welfare loss if preferences for risk and insurance attributes differ. This suggests the introduction of more choice in social health insurance packages may be advantageous; however, it is widely believed that this would not benefit the elderly. Objective: To examine the relationship between age and willingness to pay (WTP) for additional options in Swiss social health insurance. Methods: A discrete choice experiment was developed using six attributes (deductibles, co-payment, access to alternative medicines, medication choice, access to innovation, and monthly premium) that are currently in debate within the context of Swiss health insurance. These attributes have been shown to be important in the choice of insurance contract. Using statistical design optimization procedures, the number of choice sets was reduced to 27 and randomly split into three groups. One choice was included twice to test for consistency. Two random effects probit models were developed: a simple model where marginal utilities and WTP values were not allowed to vary according to socioeconomic characteristics, and a more complex model where the values were permitted to depend on socioeconomic variables. A representative telephone survey of 1000 people aged >24 years living in the German- and French-speaking parts of Switzerland was conducted. Participants were asked to compare the status quo (i.e. their current insurance contract) with ten hypothetical alternatives. In addition, participants were asked questions concerning utilization of healthcare services; overall satisfaction with the healthcare system, insurer and insurance policy; and a general preference for new elements in the insurance package. Socioeconomic variables surveyed were age, sex, total household income, education (seven categories ranging from primary school to university degree), place of residence, occupation, and marital status. Results: All chosen elements proved relevant for choice in the simple model. Accounting for socioeconomic characteristics in the comprehensive model reveals preference heterogeneity for contract attributes, but also for the propensity to consider deviating from the status quo and choosing an alternative health insurance contract. Conclusion: The findings suggest that while the elderly do exhibit a stronger status quo bias than younger age groups, they require less rather than more specific compensation for selected cutbacks, indicating a potential for contracts that induce self-rationing in return for lower premiums.

ENGLISH: Conventional wisdom views demographic change as a set of exogenous shocks impinging on social security, with the economy treated as a closed system. This contribution argues that demographics is nothing but the aggregate of individual decisions, which are influenced by social security. This claim is supported by both theoretical argument and empirical evidence with regard to decisions over the life cycle, ranging from educational effort, marriage, number of children, divorce, retirement, and effort to extend one's life. Distinguishing the effects of contributions and benefits of social security, these feedback relationships are shown to in the main hamper employment and growth, thus undermining the financial viability of today's social security schemes, with increasing openness of the economy (`globalization') exacerbating problems. DEUTSCH: Demographischer Wandel wird üblicherweise als ein exogener Schock auf die Sozialversicherung einer geschlossenen Volkswirtschaft aufgefasst. Der vorliegende Aufsatz wählt demgegenüber eine andere Sichtweise: Er fasst demographische Entwicklung als Ergebnis individueller Optimierungsentscheidungen auf, die von der Sozialversicherung einer Volkswirtschaft beeinflusst werden. Diese Behauptung wird durch theoretische und empirische Evidenz bezüglich des gesamten Lebenszyklus bestätigt – von der Ausbildung, über die Heirat, die Anzahl der Kinder, eine mögliche Scheidung, den Übergang in den Ruhestand und schliesslich den Versuch, ein langes Leben zu erreichen. Dabei wird durchweg zwischen den Beiträgen und den Leistungen unterschieden und gezeigt, wie diese beiden Aspekte der Sozialversicherung Beschäftigung und Wachstum beeinträchtigen können. Diese Effekte gefährden das Gleichgewicht der heutigen Sozialversicherung, wobei die Globalisierung die Gefährdung noch erhöht.

This paper applies the five modified standard criteria generally used in economics for assessing system performances to gauge the contribution of Managed Care to the performance of three health care systems, viz. Germany, the Netherlands and the United States. The maximum contribution of Managed Care to the performance of the health care system is found for the United States and the Netherlands. The Health Maintenance Organization (U.S.) and the gatekeeper model (the Netherlands) score 10 and 9 out of 15 points, respectively, importantly due to a market-oriented environment. By way of contrast, the so-called ‘structured treatment programs’ of the German health care system score only 4 out of 15 points. Not only the more tightly regulated environment but also the lack of consideration of consumer preferences and of incentives for service providers to participate in the programs contributed to poor performance.

Discrete-choice experiments, while becoming increasingly popular, have rarely been tested for validity and reliability. This contribution purports to provide some evidence of a rather unique type. Two surveys designed to measure willingness-to-accept (WTA) for reform options in Swiss health care and health insurance are used to provide independent information with regard to two elements of reform. The issue to be addressed is whether WTA values converge although the three overlapping attributes (a more restrictive drug benefit, a delayed access to medical innovation, and a change in the monthly insurance premium) are embedded in widely differing choice sets. Experiment A contains rather radical health system reform options, while experiment B concentrates on more familiar elements such as copayment and the benefit catalogue. While mean WTA values differ between experiments, they tend to vary in similar ways, suggesting at least theoretical validity and reliability.

This paper applies the five standard economic performance criteria to gauge the contribution of Managed Care (MC) to the performance of three healthcare systems, viz. Germany, the Netherlands, and Switzerland. The criteria are (1) matching of consumer preferences, (2) technical efficiency, (3) adaptive capacity, (4) dynamic efficiency, and (5) a rent-free distribution of income that provides incentives for producers to attain criteria (1) through (4). Being insurance-based, the German, Dutch, and Swiss healthcare systems comprise three contractual relationships that can be judged in the light of these criteria. The maximum contribution of MC to the performance of the healthcare system is found for the Netherlands followed by Switzerland. The Independent Practice Associations representing MC in the Netherlands, and the Health Maintenance Organizations representing MC in Switzerland score 15 respectively 6 out of 30 points. By way of contrast, the contribution of the Disease Management Programs to the performance of the German healthcare system remains limited (3 out of 30 points).

This paper applies the five modified standard criteria generally used in economics for assessing system performances to gauge the contribution of Managed Care to the performance of three health care systems, viz. Germany, the Netherlands and the United States. The maximum contribution of Managed Care to the performance of the health care system is found for the United States and the Netherlands. The Health Maintenance Organization (U.S.) and the gatekeeper model (the Netherlands) score 10 and 9 out of 15 points, respectively, importantly due to a market-oriented environment. By way of contrast, the so-called ‘structured treatment programs’ of the German health care system score only 4 out of 15 points. Not only the more tightly regulated environment but also the lack of consideration of consumer preferences and of incentives for service providers to participate in the programs contributed to poor performance.

Die nachhaltige Lösung von Problemen der Energieversorgung gehört zu den zentralen Herausforderungen moderner Zivilisationen. Aus ökonomischer Sicht greifen alle Antworten zu kurz, die nicht explizit das interessengeleitete Handeln der wesentlichen Akteure berücksichtigen. Deshalb behandelt dieses Buch die nachfrage- und angebotsseitigen Gesetzmäßigkeiten der verschiedenen Energiemärkte, und zwar unter Rückgriff auf industrie- und institutionenökonomische Theoriebausteine. Die technisch-naturwissenschaftlichen Bedingungen von Gewinnung, Wandlung, Transport, Verteilung und Nutzung von Energieträgern werden dabei stets berücksichtigt. Ein wichtiges Thema für die Praktiker sind die von der Liberalisierung der leitungsgebundenen Energiemärkte ausgehenden Impulse. Wo immer möglich werden die theoretisch hergeleiteten Voraussagen durch die Konfrontation mit statistischer Evidenz auf ihre Praxisrelevanz geprüft.

In this contribution, portfolio theory is applied to power technologies of the United States and Switzerland. A current user view is adopted to determine the efficient frontier of generation technologies in terms of expected return and risk. Since shocks in generation costs per kWh (the inverse of expected returns) are correlated, seemingly unrelated regression estimation (SURE) is applied to filter out the systematic components of the covariance matrix. Since some of the portfolios of particular interest (minimum variance, maximum expected return) call for a high share of one technology, security of supply becomes an issue. Shannon-Wiener and Herfindahl-Hirschman indices are calculated to see the trade-off between efficiency and security of supply. Results suggest that riskaverse utilities (and ultimately, consumers) in the United States would have gained from adopting a feasible portfolio containing more coal, gas and oil at a price of a somewhat reduced security of supply. In the case of Switzerland, the realistic portfolio consists of nuclear, storage hydro, run of river and solar, with shares identical to those of the actual portfolio in 2003. Therefore, the current mix of Swiss generating technologies in Switzerland may be deemed efficient.

This paper examines the spatial dimension of marginal willingness to pay (MWP) for reduction of nuclear risks through increased insurance coverage. The effect of distance from a nuclear power plant on individuals’ MWP is ambiguous. MWP is expected to decrease with distance because the risk of being affected by an accident decreases. However, if individuals choose their residential location taking the operational risk into account, MWP is predicted to first increase and later decrease with distance from the nuclear power plant. On the other hand, there are risks associated with transportation and disposal of nuclear waste where distance should matter only in the vicinity of the plant. These theoretical predictions are tested with data collected using a stated choice experiment. The predictions are largely confirmed by the evidence.

Elements of regulation inherent in most social health insurance systems are a uniform package of benefits and uniform cost sharing. Both elements risk to burden the population with a welfare loss if preferences differ. This suggests introducing more contracted choice; however, it is widely believed that this would not benefit the aged. This study examines the relationship between age and willingness-to-pay (WTP) for additional options in Swiss social health insurance. Through discrete choice experiments (DCE), a marked diversity of preferences can be established. The findings suggest that while the aged do exhibit more status quo bias, they require less rather than more specific compensation for selected cutbacks considered, pointing to potential for contracts that induce self-rationing in return for lower premiums.

Die Abstufung der Krankenkassenprämien nach Rauchern und Nichtrauchern würde einen Schritt weg von der Einheitsprämie bedeuten. Die Autoren des folgenden Beitrags kommen in ihrer ökonomischen Analyse zum Schluss, dass diese Abstufung die Effizienz der gesetzlichen Krankenversicherung verbessern würde