Showing papers by "Stockholm School of Economics published in 2011"

Osteoporosis: burden, health care provision and opportunities in the EU: a report prepared in collaboration with the International Osteoporosis Foundation (IOF) and the European Federation of Pharmaceutical Industry Associations (EFPIA).

Abstract: Osteoporosis, literally “porous bone”, is a disease characterized by weak bone. It is a major public health problem, affecting hundreds of millions of people worldwide, predominantly postmenopausal women. The main clinical consequence of the disease is bone fractures. It is estimated that one in three women and one in five men over the age of fifty worldwide will sustain an osteoporotic fracture. Hip and spine fractures are the two most serious fracture types, associated with substantial pain and suffering, disability, and even death. As a result, osteoporosis imposes a significant burden on both the individual and society. During the past two decades, a range of medications has become available for the treatment and prevention of osteoporosis. The primary aim of pharmacological therapy is to reduce the risk of osteoporotic fractures. The objective of this report is to review and describe the current burden of osteoporosis and highlight recent advances and ongoing challenges for treatment and prevention of the disease. The report encompasses both epidemiological and health economic aspects of osteoporosis and osteoporotic fractures with a primary geographic focus on France, Germany, Italy, Spain, Sweden, and the UK. Projections of the future prevalence of osteoporosis and fracture incidence, the total societal burden of the disease, and the consequences of different intervention strategies receive special attention. The report may serve as a basis for the formulation of healthcare policy concerning osteoporosis in general and the treatment and prevention of osteoporosis in particular. It may also provide guidance regarding the overall healthcare priority of the disease. The report is divided into six chapters: 1. Introduction to osteoporosis The first chapter provides a brief review of osteoporosis, how osteoporotic fractures are defined, a description of the most common osteoporotic fractures, the burden of fractures, as well as challenges in the delivery of health care to reduce the number of fractures. 2. Medical innovation and clinical progress in management of osteoporosis The second chapter reviews the measurement of bone mineral density, diagnosis of osteoporosis, methods for assessment of fracture risk, the development of interventions that reduce the risk of fractures, practice guidelines, and the cost-effectiveness of osteoporosis treatments. 3. Epidemiology of osteoporosis The third chapter reviews the epidemiology and consequences of osteoporosis and fractures, as well as different approaches for setting intervention thresholds ( i.e. at what fracture risk it is appropriate to initiate treatment ). 4. Burden of osteoporosis The fourth chapter presents a model estimation of the current burden of osteoporosis in the five largest countries in the European Union ( EU5 ) and Sweden. The burden is described in terms of fractures, costs, and quality-adjusted life years ( QALYs ) lost. 5. Uptake of osteoporosis treatments The fifth chapter provides a description of the current uptake of osteoporosis treatments, that is, how many patients of those eligible for treatment that actually can be treated in France, Germany, Italy, Spain, Sweden and the UK. International sales data from 1998 and forward was used to analyse international variations in treatment uptake. 6. The future burden of fractures and the consequences of increasing treatment uptake The last chapter presents projections of how the demographic changes in the five largest countries in the France, Germany, Italy, Spain, Sweden and the UK will impact the burden of osteoporosis up to 2025. Hypothetical projections of increments in treatment provision are also explored, and the impact of increased treatment on costs, fracture rates, and morbidity is estimated.

Do Financing Constraints Matter for R&D?

Abstract: Information problems and lack of collateral value should make R&D more susceptible to financing frictions than other investments, yet existing evidence on whether financing constraints limit R&D is decidedly mixed, particularly in studies of non-U.S. firms. We study a large sample of European firms and also find little evidence of binding finance constraints when we estimate standard investment-cash flow regressions. However, we find strong evidence that the availability of finance matters for R&D once we directly control for: i) firm efforts to smooth R&D with cash reserves, and ii) firm use of external equity finance. Our study provides a framework for evaluating financing constraints when firms rely extensively on external finance and endogenously manage buffer stocks of liquidity to keep investment smooth, and our findings show that controlling for this smoothing behavior is critical for uncovering the full effect of financing constraints. Our findings also indicate a major role for external equity in financing R&D, highlighting a causal channel through which stock market development and liberalization can promote economic growth by increasing firm-level innovative activity.

What You Sell Is What You Lend? Explaining Trade Credit Contracts

Abstract: We relate trade credit to product characteristics and aspects of bank–firm relationships and document three main empirical regularities. First, the use of trade credit is associated with the nature of the transacted good. In particular, suppliers of differentiated products and services have larger accounts receivable than suppliers of standardized goods and firms buying more services receive cheaper trade credit for longer periods. Second, firms receiving trade credit secure financing from relatively uninformed banks. Third, a majority of the firms in our sample appear to receive trade credit at low cost. Additionally, firms that are more creditworthy and have some buyer market power receive larger early payment discounts.

Organization outside organizations: The significance of partial organization

Abstract: It is common practice in organizational research to restrict the concept of organization to formal organizations, and to describe the world outside these entities by such other concepts as institut ...

Cyclicality of Credit Supply: Firm Level Evidence

Abstract: Theory predicts that there is a close link between bank credit supply and the evolution of the business cycle. Yet fluctuations in bank-loan supply have been hard to quantify in the time-series. While loan issuance falls in recessions, it is not clear if this is due to demand or supply. We address this question by studying firms’ substitution between bank debt and non-bank debt (public bonds) using firm-level data. Any firm that raises new debt must have a positive demand for external funds. Conditional on issuance of new debt, we interpret firm’s switching from loans to bonds as a contraction in bank credit supply. We find strong evidence of substitution from loans to bonds at times characterized by tight lending standards, high levels of non-performing loans and loan allowances, low bank share prices and tight monetary policy. The bank-to-bond substitution can only be measured for firms with access to bond markets. However, we show that this substitution behavior has strong predictive power for bank borrowing and investments by small, out-of-sample firms. We consider and reject several alternative explanations of our findings.

The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment

Abstract: sonal interview conducted by a psychologist. We find strong evidence that men who fare poorly in the labor market—in the sense of unemployment or low annual earnings—lack noncognitive rather than cognitive ability. However, cognitive ability is a stronger predictor of wages for skilled workers and of earnings above the median. (JEL J24, J31, J45)

Following the fashionable friend : the power of social media - weighing publicity effectiveness of blogs versus online magazines

Abstract: This article investigates-and compares-the effects of brand publicity in social and 'traditional' digital media. In an analysis of consumer responses to identical brand publicity in seven popular b ...

A systematic review of triage-related interventions to improve patient flow in emergency departments

Abstract: Background: Overcrowding in emergency departments is a worldwide problem. A systematic literature review was undertaken to scientifically explore which interventions improve patient flow in emergency departments. Methods: A systematic literature search for flow processes in emergency departments was followed by assessment of relevance and methodological quality of each individual study fulfilling the inclusion criteria. Studies were excluded if they did not present data on waiting time, length of stay, patients leaving the emergency department without being seen or other flow parameters based on a nonselected material of patients. Only studies with a control group, either in a randomized controlled trial or in an observational study with historical controls, were included. For each intervention, the level of scientific evidence was rated according to the GRADE system, launched by a WHO-supported working group. Results: The interventions were grouped into streaming, fast track, team triage, point-of-care testing (performing laboratory analysis in the emergency department), and nurse-requested x-ray. Thirty-three studies, including over 800,000 patients in total, were included. Scientific evidence on the effect of fast track on waiting time, length of stay, and left without being seen was moderately strong. The effect of team triage on left without being seen was relatively strong, but the evidence for all other interventions was limited or insufficient. Conclusions: Introducing fast track for patients with less severe symptoms results in shorter waiting time, shorter length of stay, and fewer patients leaving without being seen. Team triage, with a physician in the team, will probably result in shorter waiting time and shorter length of stay and most likely in fewer patients leaving without being seen. There is only limited scientific evidence that streaming of patients into different tracks, performing laboratory analysis in the emergency department or having nurses to request certain x-rays results in shorter waiting time and length of stay.

Does Venture Opportunity Variation Matter? Investigating Systematic Process Differences Between Innovative and Imitative New Ventures

Abstract: The central thesis in the article is that the venture creation process is different for innovative versus imitative ventures. This holds up; the pace of the process differs by type of venture as do, in line with theory-based hypotheses, the effects of certain human capital (HC) and social capital (SC) predictors. Importantly, and somewhat unexpectedly, the theoretically derived models using HC, SC, and certain controls are relatively successful explaining progress in the creation process for the minority of innovative ventures, but achieve very limited success for the imitative majority. This may be due to a rationalistic bias in conventional theorizing and suggests that there is need for considerable theoretical development regarding the important phenomenon of new venture creation processes. Another important result is that the building up of instrumental social capital, which we assess comprehensively and as a time variant construct, is important for making progress with both types of ventures, and increasingly, so as the process progresses. This result corroborates with stronger operationalization and more appropriate analysis method what previously published research has only been able to hint at.

Population health status in China: EQ-5D results, by age, sex and socio-economic status, from the National Health Services Survey 2008

Abstract: Purpose To measure and analyse national EQ-5D data and to provide norms for the Chinese general population by age, sex, educational level, income and employment status.

Evaluating Health Risks: An Economic Approach

Abstract: A major problem in health economics is how to give a value to changes in health. This is the first book to examine all the money measures that are used in such evaluations. Changes in health might be caused by medical treatments, by public safety programmes and by anti-pollution programmes, and the cost-benefit analysis of such programmes involves the use of money measures. The author defines the properties of these money measures, examining them in both a certain and a risky world. He evaluates available empirical approaches for the assessment of the value of health changes, and considers measures such as quality-adjusted life years (qalys) and healthy-years equivalents (hyes). This book raises the important question of whether we are willing to pay the costs for our health care system. It will be of interest to advanced students of health economics and related disciplines, and will also be useful for professionals working on projects that affect human health.

Stepping into the internet: new ventures in virtual worlds

Abstract: When the call for papers for this special issue went out in the fall of 2007, there was a lot of hype around virtual worlds, with organizations such as Toyota, American Apparel, IBM, Reuters, Sun Microsystems, and Wells Fargo experimenting with Second Life as a potential platform to reach consumers. Anshe Chung was touted as the first online personality to exceed one million U.S. dollars from profits earned inside a virtual world. However, in accordance with Gartner’s hype cycle, after the initial spike in hype in 2006, virtual worlds quickly entered into the phase Gartner refers to as the “trough of disillusionment.” As enticing as the initial press reports were around the potential of virtual worlds for creating new forms of value, during the disillusionment phase individuals and organizations discovered what we have long known in MIS: if you build it, they will not necessarily come.

Equilibrium Selection in the Repeated Prisoner's Dilemma: Axiomatic Approach and Experimental Evidence

Abstract: We propose an axiomatic approach for equilibrium selection in the discounted, infinitely repeated symmetric Prisoner's Dilemma. Our axioms characterize a unique selection criterion that is also useful as a tool for applied comparative statics exercises as it results in a critical discount factor 6* strictly larger than 6, the standard criterion that has often been used in applications. In an experimental test we find a strong predictive power of our proposed criterion. For parameter changes where the standard and our criterion predict differently, changes in observed cooperation follow predictions based on 8' [JEL C72, C73, C92, D81) which conditions do people cooperate? In this article we study this question in the context of the infinitely repeated Prisoner's Dilemma. Progress in this topic is important for game theory itself, but is also critical for the numerous applications of infinitely repeated games in economics, sociology, political science, biology, and other disciplines. We propose an axiomatic approach that formulates (i) a minimal set of simple and intuitive conditions on the model primitives a sensible selection theory should satisfy and (ii) a more comprehensive set of conditions resulting in a unique cooperation criterion. While the parsimonious formulation (i) has implications for the qualitative question whether cooperation should increase or decrease when parameters change the more specific model (ii) based on a longer list of axioms comes up with a quantified parameter-frontier above which it predicts cooperation. An axiomatic approach can only convince with simple and intuitive axioms that build only on model primitives. The first part of the paper builds intuition for the novel axioms and derives their theoretical implications. The second part presents results from a laboratory experiment testing the implications from both the parsimonious (i) and comprehensive (ii) versions of the theory.

Fiduciary Duties and Equity-Debtholder Conflicts

Abstract: We use an important legal event as a natural experiment to examine the effect of management fiduciary duties on equity-debt conflicts. A 1991 Delaware bankruptcy ruling changed the nature of corporate directors' fiduciary duties in firms incorporated in that state. This change limited managers' incentives to take actions favoring equity over debt for firms in the vicinity of financial distress. We show that this ruling increased the likelihood of equity issues, increased investment, and reduced firm risk, consistent with a decrease in debt-equity conflicts of interest. The changes are isolated to firms relatively closer to default. The ruling was also followed by an increase in average leverage and a reduction in covenant use. Finally, we estimate the welfare implications of this change and find that firm values increased when the rules were introduced. We conclude that managerial fiduciary duties affect equity-bond holder conflicts in a way that is economically important, has impact on ex ante capital structure choices, and affects welfare.

Molecular genetics and economics

Abstract: The question of how traits and behaviors pass from one generation to the he question of how traits and behaviors pass from one generation to the next has been the subject of intense interest throughout the history of next has been the subject of intense interest throughout the history of science. Simple parent–child correlations are open to multiple interpretascience. Simple parent–child correlations are open to multiple interpretations, as parents transmit both environment and genome to their children. Until tions, as parents transmit both environment and genome to their children. Until recently, genotyping—or the direct measurement of variation in an individual’s DNA recently, genotyping—or the direct measurement of variation in an individual’s DNA sequence through biological assays—was exorbitantly expensive; distinguishing the sequence through biological assays—was exorbitantly expensive; distinguishing the roles of genetics and environment was the realm of behavioral genetics, in which roles of genetics and environment was the realm of behavioral genetics, in which

Limbic justice--amygdala involvement in immediate rejection in the Ultimatum Game.

Abstract: Imaging studies have revealed a putative neural account of emotional bias in decision making. However, it has been difficult in previous studies to identify the causal role of the different sub-regions involved in decision making. The Ultimatum Game (UG) is a game to study the punishment of norm-violating behavior. In a previous influential paper on UG it was suggested that frontal insular cortex has a pivotal role in the rejection response. This view has not been reconciled with a vast literature that attributes a crucial role in emotional decision making to a subcortical structure (i.e., amygdala). In this study we propose an anatomy-informed model that may join these views. We also present a design that detects the functional anatomical response to unfair proposals in a subcortical network that mediates rapid reactive responses. We used a functional MRI paradigm to study the early components of decision making and challenged our paradigm with the introduction of a pharmacological intervention to perturb the elicited behavioral and neural response. Benzodiazepine treatment decreased the rejection rate (from 37.6% to 19.0%) concomitantly with a diminished amygdala response to unfair proposals, and this in spite of an unchanged feeling of unfairness and unchanged insular response. In the control group, rejection was directly linked to an increase in amygdala activity. These results allow a functional anatomical detection of the early neural components of rejection associated with the initial reactive emotional response. Thus, the act of immediate rejection seems to be mediated by the limbic system and is not solely driven by cortical processes, as previously suggested. Our results also prompt an ethical discussion as we demonstrated that a commonly used drug influences core functions in the human brain that underlie individual autonomy and economic decision making.

Cost-effectiveness of Denosumab for the treatment of postmenopausal osteoporosis

Abstract: Summary Denosumab is an injectable drug that reduces the risk of fractures. The objective was to estimate the cost-effectiveness of denosumab in a Swedish setting, also accounting for poor adherence to treatment. Denosumab is cost-effective, particularly for patients at high risk of fracture and low adherence to oral treatments.

Implications of Intra-Family and External Ownership Transfer of Family Firm : short-term and long-term performance differences

Abstract: We contrast the performance consequences of intra-family versus external ownership transfers. Investigating a sample of all private family firms in Sweden that went through ownership transfers duri ...

Outrunning the gender gap: Boys and girls compete equally

Abstract: Recent studies find that women are less competitive than men. This gender difference in competitiveness has been suggested as one possible explanation for why men occupy the majority of top positions in many sectors. In this study we explore competitiveness in children, with the premise that both context and gendered stereotypes regarding the task at hand may influence competitive behavior. A related field experiment on Israeli children shows that only boys react to competition by running faster when competing in a race. We here test if there is a gender gap in running among 7–10 year old Swedish children. We also introduce two female sports, skipping rope and dancing, to see if competitiveness is task dependent. We find no gender difference in reaction to competition in any task; boys and girls compete equally. Studies in different environments with different types of tasks are thus important in order to make generalizable claims about gender differences in competitiveness.

Who Cooperates in Repeated Games: The Role of Altruism, Inequity Aversion, and Demographics

Abstract: We explore the extent to which altruism, as measured by giving in a dictator game (DG), accounts for play in a noisy version of the repeated prisoner’s dilemma. We find that DG giving is correlated with cooperation in the repeated game when no cooperative equilibria exist, but not when cooperation is an equilibrium. Furthermore, none of the commonly observed strategies are better explained by inequity aversion or efficiency concerns than money maximization. Various survey questions provide additional evidence for the relative unimportance of social preferences. We conclude that cooperation in repeated games is primarily motivated by long-term payoff maximization and that even though some subjects may have other goals, this does not seem to be the key determinant of how play varies with the parameters of the repeated game. In particular, altruism does not seem to be a major source of the observed diversity of play.

Generalized Disappointment Aversion, Long Run Volatility Risk and Asset Prices

Abstract: We propose an asset pricing model where preferences display generalized disappointment aversion (Routledge and Zin, 2009) and the endowment process involves long-run volatility risk. These preferences, which are embedded in the Epstein and Zin (1989) recursive utility framework, overweight disappointing results as compared to expected utility, and display relatively larger risk aversion for small gambles. With a Markov switching model for the endowment process, we derive closed-form solutions for all returns moments and predictability regressions. The model produces first and second moments of price-dividend ratios and asset returns and return predictability patterns in line with the data. Compared to Bansal and Yaron (2004), we generate: i) more predictability of excess returns by price-dividend ratios; ii) less predictability of consumption growth rates by price-dividend ratios. Differently from the Bansal and Yaron model, our results do not depend on a value of the elasticity of intertemporal substitution greater than one.

Flight Home, Flight Abroad and International Credit Cycles

Abstract: This paper shows that banks exhibit a weaker (stronger) home bias in the extension of new loans when funding conditions in their home country improve (deteriorate) We refer to these changes in home bias as flight home and flight abroad effects, respectively, and show that they are unrelated to the better known flight to quality effect that arises during periods of market turmoil Our results also indicate that global banks amplify the effect of home-grown shocks on foreign countries while they are a stabilizing factor for the supply of credit in their home countries

Herding in Aid Allocation

Abstract: This paper investigates a claim repeatedly made, but never tested, that aid donors herd. To do so it originally uses methodologies developed in finance to measure herding on financial markets, and adapts them to aid allocation. The motivation for studying herding is to improve our understanding of aid allocation beyond observable determinants. If herding is indeed present, then it is likely to shape aid patterns in a significant way by creating aid darlings, orphans, but also by exacerbating aid volatility. Our approach starts by carefully defining aid to avoid including herding-prone aid, such as humanitarian aid and debt relief, and the sets of donors and recipients. Once this is done, herding is measured by directly applying the indexes used in finance to yearly aid data. Results show herding is indeed present, but that it is small. A second step is to introduce modifications to better match the characteristics of aid allocation. The most important in the paper is to change the time horizon. Unlike traders, aid donors commit to an aid partnership over several years, and yearly variations may contain a large part of randomness. Instead of year-to-year changes, we instead use 3- and 5-year allocations to measure herding. With this modification herding is still found to be present, but also of a larger size. It is now similar to what is traditionally found on financial markets. The next, important step is to acknowledge that aid donors' allocation decisions almost surely follow similar determinants and changes in these determinants generate a lot of co-movements. Herding measures by definition interpret these simultaneous decisions as herding, when they merely reflect common views among donors (think about a natural disaster occurring in a country that dramatically increase aid needs). Herding determinants are carefully estimated and their contributions to herding measures are then removed to obtain an estimate free of the effects of observable variables that affect aid allocation. This procedure shows that, even after taking observable factors into account, herding is still present. It suggests other considerations drive herding behavior.