Contributions in Merlin

The bivariate probit model is frequently used for estimating the effect of an endogenous binary regressor on a binary outcome variable. This paper discusses simple modifications that maintain the probit assumption for the marginal distributions while introducing non-normal dependence among the two variables using copulas. Simulation results and evidence from two applications, one on the effect of insurance status on ambulatory expenditure and one on the effect of completing high school on subsequent unemployment, show that these modified bivariate probit models work well in practice, and that they provide a viable and simple alternative to the standard bivariate probit approach.

Peer reviews and rankings today are the backbone of research governance, but recently came under scrutiny. They take explicitly or implicitly agency theory as a theoretical basis. The emerging psychological economics opens a new perspective. As scholarly research is a mainly curiosity driven endeavor, we include intrinsic motivation andnsupportive feedback by the peers as important determinants of scholarly behavior. We discuss whether a stronger emphasis on selection and socialization offers an alternative to the present regime of academic rankings.

In mixed health care systems a crucial condition for the success of Managed Care (MC) plans is to win over a su±cient number of general practitioners (GPs) acting as gatekeepers. This contribution reports on GPs' willingness-to-accept (WTA) or compensation asked, respectively, for changing from conventional fee-for-service to MC practice. Some 175 Swiss GPs participated in discrete choice experiments which permit to put a money value on their status quo bias. Regardless of whether effects coding or dummy coding is used to measure status quo bias, Swiss GPs require at least 16 percent of their current average income to give up fee-for-service in favor of MC practice.

Many politicians blame physician dispensing (PD) to increase health care expenditure and to undermine independence of drug prescription and income leading to a suboptimal medication. Therefore, PD is not allowed in most OECD countries. In Switzerland, PD is allowed in some regions depending on the density of pharmacies. This enables to investigate the difference in prescribing behavior between physician which gain income from prescribing a specific drug and their colleagues which prescribe the drug but do not sell it. Because the considered drugs are bioequivalent we focus on the economic consequence of PD. We analyze the prescribing behavior of Swiss physicians using cross-sectional data between 2005 and 2007 for three important agents. The results support our hypothesis that dispensing physicians have a higher probability of prescribing the drug with the (most likely) higher margin compared to non-dispensing physicians. Further, generic drugs are prescribed more often to patients with higher cost-sharing while patients' cost-sharing is less influential with PD. High-income patients face a much higher probability to receive the brand-name drug due to their lower marginal utility of income. Today's administered reimbursement prices for generics seem to be high enough to gain physicians for prescribing generics because of their high margins.

"Four types of “economics” relevant for institutional analysis are distinguished: Standard Neoclassical Economics; Socio-Economics or Social Economics; New Institutional Economics; and Psychological Economics (often misleadingly called Behavioural Economics). The paper argues that an extension of Neoclassical Economics with elements from other social sciences (including political science, sociology, psychology, law and anthropology) is fruitful to explain institutions because it allows us to maintain the strength ofnthat approach. Social Economics can play an important role helping to overcome the limitations of Neoclassics. However, it should become more concrete, integrate what is useful in Neoclassics, and should seriously engage in empirical research."

Academic economists today are caught in a “Publication Impossibility Theorem System” or PITS. To further their careers, they are required to publish in A-journals, but for the vast majority this isnimpossible because there are few slots open in such journals. Such academic competition maybe useful to generate hard work, however, there may be serious negative consequences: the wrong output may be produced in an inefficient way, the wrong people may be selected,nand losers may react in a harmful way. This paper suggests several ways to remedy this situation.

Gegenwärtig spielt sich in der Ökonomie eine beinahe revolutionäre Entwicklung ab. Die direkte empirische Erfassung des subjektiven Wohlbefindens fordert die traditionelle Ökonomie heraus, inspiriert sie zu neuen Einsichten und eröffnet neue Wege der wissenschaftlichen Forschung. Ansatz und Möglichkeiten der ökonomischen Analyse des Glücks werden aufgezeigt und anhand von zwei spezifischen Anwendungen illustriert. Der Zusammenhang zwischen Einkommen und Lebenszufriedenheit wird wesentlich durch Anspruchsniveaus, mit denen Lebensumstände beurteilt werden, bestimmt. Die Anspruchsniveaus bilden sich dabei über soziale Vergleiche und Gewöhnungsprozesse heraus. Der Lebenszufriedenheitsansatz wird als neue Methode zur Bewertung öffentlicher Güter präsentiert. Die kurze Diskussion der »Glückspolitik« aus einer konstitutionellen Perspektive legt eine vergleichende institutionelle Analyse des subjektiven Wohlbefindens nahe. Die Glücksrevolution in der Ökonomie steht erst am Anfang. Weitere Einsichten für die Suche nach den Institutionen, die den Menschen am besten erlauben, ihre Vorstellungen vom guten Leben zu verfolgen, sind in der Zukunft zu erwarten.

Using a two-sector endogenous growth model, this paper explores how productivity shocks in the goods and human capital producing sectors contribute to explaining aggregate cycles in output, consumption, investment and hours. To contextualize our findings, we also assess whether the human capital model or the standard real business cycle (RBC) model better explains the observed variation in these aggregates. We find that while neither of the workhorse growth models uniformly dominates the other across all variables and forecast horizons, the two-sector model provides a far better fit to the data. Some other key results are first, that Hicks-neutral shocks explain a greater share of output and consumption variation at shorter-forecast horizons whereas human capital productivity innovations dominate at longer ones. Second, the combined explanatory power of the two technology shocks in the human capital model is greater than the Hicks-neutral shock in the RBC model in the medium- and long-term for output and consumption. Finally, the RBC model outperforms the two-sector model with respect to explaining the observed variation in investment and hours.

The Austrian Social Security Database (ASSD) is a matched firm-worker data set, which records the labor market history of almost 11 million individuals from January 1972 to April 2007. Moreover, more than 2.2 million firms can be identified. The individual labor market histories are described in the following dimensions: very detailed daily labor market states and yearly earnings at the firm-worker level, together with a limited set of demographic characteristics. Additionally the ASSD provides some firm related information, such as geographical location and industry affiliation. This paper is a short description of this huge data base and intended for people using this data in their own empirical work.

It has long been recognized that there is considerable heterogeneity in individual risk taking behavior but little is known about the distributionnof risk taking types. We present a parsimonious characterization of risk taking behavior by estimating a finite mixture regression model for three different experimental data sets, two Swiss and one Chinese, over a large number of real gains and losses. We find two distinct types of individuals: In all three data sets, the choices of roughly 80% of the subjects exhibitnsignificant deviations from linear probability weighting, consistent with prospect theory. 20% of the subjects weight probabilities near linearly and behave essentially as expected value maximizers. Moreover, individuals are cleanly assigned to one type with probabilities close to unity. The reliability and robustness of our classification suggest using a mix of preference theories in applied economic modeling.