Healthcare cost encompasses expenditures on the totality of scarce resources (implicit and explicit) given up (or allocated) to produce healthcare goods (e.g., drugs and medical devices) and services (e.g., hospital care and physician office services are major components). Healthcare cost accounting components (sources and uses of funds) tend to differ but can be similar enough across most of the world countries. The healthcare cost concept usually differs for consumers, politicians and health policy decision-makers, health insurers, employers, and the government. All else given, inefficient healthcare production implies higher economic cost and lower productivity of the resources deployed in the process. Healthcare productivity varies across health systems of the world countries, the production technologies used, regulatory instruments, and institutional settings. Healthcare production often involves some specific (e.g., drugs and medical devices, information and communication technologies) or general technology for diagnosing, treating, or curing diseases in order to improve or restore human health conditions.
In the last half century, the different healthcare systems of the world countries have undergone fundamental transformations in the structural designs, institutional regulations, and socio-economic and demographic dimensions. The nations have allocated a rising share of total economic resources or incomes (i.e., Gross National Product, or GDP) to the healthcare sector and are consequently enjoying substantial increases in population health status and life expectancies. There are complex and interacting linkages among escalating healthcare costs, longer life expectancies, technological progress (or “the march of science”), and sectoral productivities in the health services sectors of the advanced economies. Healthcare policy debates often concentrate on cost-containment strategies and search for improved efficient resource allocation and equitable distribution of the sector’s outputs. Consequently, this contribution is a broad review of the body of literature on technological progress, productivity, and cost: three important dimensions of the evolving modern healthcare systems. It provides a logical integration of three strands of work linking healthcare cost to technology and research evidence on sectoral productivity measurements. Finally, some important aspects of the existing study limitations are noted to motivate new research directions for future investigations to explore in the growing health sector economies.
341-360 of 379 Results
Article
Technology, Productivity, and Costs in Healthcare
Albert A. Okunade and Ahmad Reshad Osmani
Article
The 1918–1919 Influenza Pandemic in Economic History
Martin Karlsson, Daniel Kühnle, and Nikolaos Prodromidis
Due to the similarities with the COVID–19 pandemic, there has been a renewed interest in the 1918–1919 influenza pandemic, which represents the most severe pandemic of the 20th century with an estimated total death toll ranging between 30 and 100 million. This rapidly growing literature in economics and economic history has devoted attention to contextual determinants of excess mortality in the pandemic; to the impact of the pandemic on economic growth, inequality, and a range of other outcomes; and to the impact of nonpharmaceutical interventions.
Estimating the effects of the pandemic, or the effects of countermeasures, is challenging. There may not be much exogenous variation to go by, and the historical data sets available are typically small and often of questionable quality. Yet the 1918–1919 pandemic offers a unique opportunity to learn how large pandemics play out in the long run.
The studies evaluating effects of the pandemic, or of policies enacted to combat it, typically rely on some version of difference-in-differences, or instrumental variables. The assumptions required for these designs to achieve identification of causal effects have rarely been systematically evaluated in this particular historical context. Using a purpose-built dataset covering the entire Swedish population, such an assessment is provided here. The empirical analysis indicates that the identifying assumptions used in previous work may indeed be satisfied. However, the results cast some doubt on the general external validity of previous findings as the analysis fails to replicate several results in the Swedish context. These disagreements highlight the need for additional studies in other populations and contexts which puts the spotlight on further digitization and linkage of historical datasets.
Article
The Behavioral Consequences of Conflict Exposure on Risk Preferences
Enrique Fatas, Nathaly Jiménez, Lina Restrepo-Plaza, and Gustavo Rincón
Violent conflict is a polyhedric phenomenon. Beyond the destruction of physical and human capital and the economic, political, and social costs war generates, there is an additional burden carried by victims: persistent changes in the way they make decisions. Exposure to violence generates changes in how individuals perceive other individuals from their group and other groups, how they discount the future, and how they assess and tolerate risk. The behavioral consequences of violence exposure can be documented using experiments in which participants make decisions in a controlled, incentive-compatible scenario. The external validity of experiments is reinforced when the studies are run in postconflict scenarios, for example, in Colombia, with real victims of conflict. The experimental tasks, therefore, may map risk attitudes among victims and nonvictims of the conflict who share a common background, and distinguish between different types of exposure (direct versus indirect) and different sources of violence (conflict-related versus criminal violence). The experimental evidence collected in Colombia is consistent with a long-lasting and substantial effect of conflict exposure on risk attitudes. Victims are more likely to take risks and less likely to make safe choices than nonvictims, controlling for demographic, socioeconomic, and attitudinal factors. The effect is significant only when the source of violence is conflict (exerted by guerrilla or paramilitary militias) and when violence is experienced directly by individuals. Indirect conflict exposure (suffered by close relatives) and criminal violence leave no significant mark on participants’ risk attitudes in the study.
Article
The Costs of Bankruptcy Restructuring
Wei Wang
Financially distressed and insolvent firms file for bankruptcy to either reorganize or liquidate under court supervision. Fundamentally, bankruptcy law is designed to resolve creditor coordination and holdout problems. It not only sets up rules and guidelines to allow firms to restructure their debt claims but also provides means for firms to reallocate their assets to other users. Although an efficient bankruptcy system can help mitigate bargaining frictions and maximize asset value and thus creditor recovery by avoiding inefficient liquidation or excess continuation, the bankruptcy process itself can be costly.
Understanding and quantifying the costs of bankruptcy restructuring are important not only to financially distressed firms but also to the capital structure decisions and the pricing of securities of healthy firms. More broadly, efficient bankruptcy mechanisms are important for economic growth, the productivity of firms in an economy, and the resiliency of the economy to adverse shocks. From the 1990s through the 2020s, the literature has flourished, with a growing number of empirical studies investigating the efficiency of the bankruptcy system and different aspects of bankruptcy costs.
Bankruptcy costs are typically classified as either direct or indirect costs. The former refers to out-of-pocket expenses associated with the retention of professionals, while the latter refers to opportunity costs incurred as a result of the adverse effect of a bankruptcy filing on business operations, human capital, and investments. Indirect costs are typically larger and more difficult to measure and quantify than direct costs, which studies show to be a small fraction of a bankrupt firm’s assets.
Because of significant economic frictions such as conflicts of interest, information asymmetry, and judicial biases presented in the system, bankruptcy can be a lengthy process. Since delay allows both direct and indirect costs to accumulate, a number of studies show that shortening the bargaining process can effectively help preserve firm value. Besides delay, bankruptcy costs can be manifested in inefficient liquidation, excess continuation, fire sales, loss of human capital, and managerial turnover, which impose real costs on bankrupt firms. How to mitigate frictions and minimize costs has been the central theme of bankruptcy research from the 1990s through the 2020s, a time that has also witnessed several notable changes to the U.S. bankruptcy system, including the rise of specialized distressed investors, the strengthening of secured creditor control rights, and the increasing intensity of asset sales. These changes have important implications for the restructuring landscape.
Article
The Economic and Political Effects of Immigration: Evidence from the Age of Mass Migration
Marco Tabellini
Between 1850 and 1920, during the Age of Mass Migration, more than 30 million Europeans moved to the United States. European immigrants provided an ample supply of cheap labor as well as specific skills and know-how, contributing to American economic growth. These positive effects were not short-lived, but are still evident in the 21st century: areas of the United States that received more European immigrants during the Age of Mass Migration have higher income per capita, a more educated population, and lower poverty rates. Despite its economic benefits, immigration triggered hostile political reactions, which were driven by cultural differences between immigrants and natives, and culminated in the introduction of country-specific quotas. In contrast to the concerns prevailing at the time, European immigrants eventually assimilated. The process was facilitated by the inflow of 1.5 million African Americans who left the rural South to move to northern and western cities between 1915 and 1930. Black in-migration increased the salience of skin color, as opposed to that of religion and nativity, as a defining feature of in- and out-groups of the society. This reduced the perceived distance between native whites and European immigrants, thereby facilitating the integration of the latter. European immigrants also had long-lasting effects on American ideology. Parts of the country that hosted more immigrants during the Age of Mass Migration have a more liberal ideology and stronger preferences for redistribution well into the 21st century. This resulted from the transmission of political ideology from (more left-leaning) immigrants to natives.
Article
The Economic History of Denmark, 1784–2019
Niels Kærgård
A change of government in 1784 started a number of reforms that became the foundation of modern Denmark. Right up until the Second World War, agriculture was the predominant sector in the Danish economy, and changes in this sector therefore determined the development in the Danish economy. These changes include the transformation from common villages to privately owned farms, starting in the 1780s; the change from cereal to animal production in the 1880s; and the movement toward a growing number of small farms from 1919 until the trend was reversed after 1960. The economic importance of the agricultural sector has declined over time, currently contributing only 3% of the gross domestic product (GDP), as economic history since 1945 has been dominated by the creation of an urban welfare state with a big public sector. As a small open economy, Denmark’s international relations have hugely impacted the overall economic development.
Article
The Economic Implications of Training for Firm Performance
Pedro S. Martins
A small literature on the relationship between employee training and firm performance is currently emerging. This line of research is particularly promising given the underexplored potential of training to drive productivity, wages, and employment. Until recently, training was regarded as a costly and risky investment because workers may leave their firm after being trained. However, studies on labor and education economics have found that training results in high returns for firms and that the costs of training can be recouped in a relatively short time. These results follow from different econometric identification approaches, including a small but growing number of randomized controlled trials. Moreover, most training is of a general nature and therefore applicable in other firms, which is at odds with the original theory of training but consistent with novel models that emphasize labor market power. There are a number of possibilities for future research, including a better understanding of the heterogeneity and patterns of training contents and formats across firms and workers, the differentiation of the effects of training along such dimensions, the role of labor market competition in driving training, the extent to which the productivity effects of training are shared with employees, the role of labor market institutions (including minimum wage, collective bargaining, and occupational licensing) in the dimensions above, and the firm performance effects of training provided to unemployed job seekers (as opposed to employees). Evaluation of the public training programs developed during the Covid-19 pandemic crisis and new forms of training in the context of the growth of remote work also merit further investigation.
Article
The Economics of Dementia
Sheelah Connolly
In the coming years, it is predicted that there will be a significant increase in the number of people living with dementia and consequently, the demand for health and social care services. Given the budget constraints facing health systems, it is anticipated that economic analysis will play an increasingly important role in informing decisions regarding the provision of services for people with dementia. However, compared with other conditions and diseases, research in dementia has been relatively limited. While in the past this may have been related to an assumption that dementia was a natural part of aging, there are features of dementia that make applying research methods particularly challenging. A number of economic methods have been applied to dementia, including cost-of-illness analysis and economic evaluation; however, methodological issues in this area persist. These include reaching a consensus on how best to measure and value informal care, how to capture the many impacts and costs of the condition as the disease progresses, and how to measure health outcomes. Addressing these existing methodological issues will help realize the potential of economic analysis in answering difficult questions around care for people with dementia.
Article
The Economics of Gender and Educational Achievement: Stylized Facts and Causal Evidence
Judith M. Delaney and Paul J. Devereux
There are two well-established gender gaps in education. First, females tend to have higher educational attainment and achievement than males, and this is particularly the case for children from less advantaged backgrounds. Second, there are large differences in the fields of specialization chosen by males and females in college and even prior to college, and females disproportionately enter less highly paid fields.
Gender differences in noncognitive traits, behavior, and interests have been shown to relate to differences in educational outcomes; however, this evidence cannot generally be given a causal interpretation. In contrast, the literature has been creative in estimating causal impacts of a wide range of factors using experimental and quasiexperimental variation. While the approaches are compelling, the findings vary widely across studies and are often contradictory. This may partly reflect methodological differences across studies, but it also may result from substantial true heterogeneity across educational systems and time periods.
Lower educational achievement of males has been linked to gender differences in attitudes, behaviors, and educational aspirations as well as the tendency of males to mature at older ages. Differential field choices by gender are related to differences in comparative advantage by gender and gender differences in preferences for types of study and work and for nonpecuniary aspects of jobs, such as their flexibility and gender mix. There are reasons to believe that policy should address the two gender gaps, and many possible policy approaches exist. However, their effectiveness is unclear, and there is scope for further work to determine which policies are likely to be effective and in which circumstances.
Article
The Economics of Health and Migration
Osea Giuntella and Timothy J. Halliday
Migration and health are intimately connected. It is known that migrants tend to be healthier than non-migrants. However, the mechanisms for this association are elusive. On the one hand, the costs of migration are lower for healthier people, thereby making it easier for the healthy to migrate. Empirical evidence from a variety of contexts shows that the pre-migration health of migrants is better than it is for non-migrants, indicating that there is positive health-based selection in migration. On the other hand, locations can be viewed as a bundle of traits including but not limited to environmental conditions, healthcare quality, and violence. Each of these can impact health. Evidence shows that moving from locations with high mortality to low mortality can reduce mortality risks. Consistent with this, migration can increase mortality risk if it leads to greater exposure to risk factors for disease. The health benefits enjoyed by migrants can also be found in their children. However, these advantages erode with successive generations.
Article
The Economics of Identity and Conflict
Subhasish M. Chowdhury
Conflicts are a ubiquitous part of our life. One of the main reasons behind the initiation and escalation of conflict is the identity, or the sense of self, of the engaged parties. It is hence not surprising that there is a consistent area of academic literature that focuses on identity, conflict, and their interaction. This area models conflicts as contests and focuses on the theoretical, experimental, and empirical literature from economics, political science, and psychology. The theoretical literature investigates the behavioral aspects—such as preference and beliefs—to explain the reasons for and the effects of identity on human behavior. The theoretical literature also analyzes issues such as identity-dependent externality, endogenous choice of joining a group, and so on. The applied literature consists of laboratory and field experiments as well as empirical studies from the field. The experimental studies find that the salience of an identity can increase conflict in a field setting. Laboratory experiments show that whereas real identity indeed increases conflict, a mere classification does not do so. It is also observed that priming a majority–minority identity affects the conflict behavior of the majority, but not of the minority. Further investigations explain these results in terms of parochial altruism. The empirical literature in this area focuses on the various measures of identity, identity distribution, and other economic variables on conflict behavior. Religious polarization can explain conflict behavior better than linguistic differences. Moreover, polarization is a more significant determinants of conflict when the winners of the conflict enjoy a public good reward; but fractionalization is a better determinant when the winners enjoy a private good reward. As a whole, this area of literature is still emerging, and the theoretical literature can be extended to various avenues such as sabotage, affirmative action, intra-group conflict, and endogenous group formation. For empirical and experimental research, exploring new conflict resolution mechanisms, endogeneity between identity and conflict, and evaluating biological mechanisms for identity-related conflict will be of interest.
Article
The Economics of Innovation, Knowledge Diffusion, and Globalization
Nelson Lind and Natalia Ramondo
A recent body of literature on quantitative general equilibrium models links the creation and diffusion of knowledge and technology to openness to international trade and to the activity of multinational firms. The unifying theme of this literature is methodological: productivities are Fréchet random variables and arise from Poisson innovation and diffusion processes for ideas. The main advantage of this modeling strategy is that it delivers closed-form solutions for key endogenous variables that have a direct counterpart in the data (e.g., prices, trade flows). This tractability makes the connection between theory and data transparent, helps clarify the determinants of the gains from openness, and facilitates the calculation of counterfactual equilibria.
Article
The Economics of International Wage Differentials and Migration
Lant Pritchett and Farah Hani
The key question for the economics of international migration is whether observed real wage differentials across countries for workers with identical intrinsic productivity represent an economic inefficiency sustained by legal barriers to labor mobility between geographies. A simple comparison of the real wages of workers with the same level of formal schooling or performing similar occupations across countries shows massive gaps between rich and poorer countries. These gaps persist after adjusting for observed and unobserved human capital characteristics, suggesting a “place premium”—or space-specific wage differentials that are not due to intrinsic worker productivity but rather are due to a misallocation of labor. If wage gaps are not due to intrinsic worker productivity, then the incentive for workers to move to richer countries is high. The idea of a place premium is corroborated by macroeconomic evidence. National accounts data show large cross-country output per worker differences, driven by the divergence of total factor productivity. The lack of convergence in total factor productivity and corresponding spatial productivity differentials create differences in the marginal product of factors, and hence persistent gaps in the wages of equal productivity workers. These differentials can equalize with factor flows; however their persistence and large magnitude in the case of labor, suggest legal barriers to migration restricting labor flows are in fact constraining significant return on human capital, and leaving billions in unrealized gains to the world’s workers and global economy. A relaxation of these barriers would generate worker welfare gains that dwarf gold-standard poverty reduction programs.
Article
The Extent of Future Damages from Climate Change
Robert Mendelsohn
Emissions from greenhouse gases are predicted to cause climate to change. Increased solar radiation gradually warms the oceans, which leads to warmer climates. How much future climates will change depends on the cumulative emissions of greenhouse gases, which in turn depends on the magnitude of future economic growth. The global warming caused by humanmade emissions will likely affect many phenomena across the planet. The future damage from climate change is the net damage that these changes will cause to mankind.
Oceans are expected to expand with warmer temperatures, and glaciers and ice sheets are expected to melt, leading to sea level rise over time (a damage). Crops tend to have a hill-shaped relationship with temperature, implying that some farms will be hurt by warming and some farms will gain, depending on their initial temperature. Cooling expenditures are expected to increase (a damage), whereas heating expenditures are expected to fall (a benefit). Water is likely to become scarcer as the demand for water increases with temperature (a damage). Warming is expected to cause ecosystems to migrate poleward. Carbon fertilization is expected to cause forest ecosystems to become more productive, but forest fires are expected to be more frequent so that it is uncertain whether forest biomass will increase or decrease. The expected net effect of all these forest changes is an increase in timber supply (a benefit). It is not known how ecosystem changes will alter overall enjoyment of ecosystems. Warmer summer temperatures will cause health effects from heat waves (a damage), but even larger reductions in health effects from winter cold (a benefit). Large tropical cyclones are expected to get stronger, which will cause more damage from floods and high winds. Winter recreation based on snow will be harmed, but summer outdoor recreation will enjoy a longer season, leading to a net benefit.
The net effect of historic climate change over the last century has been beneficial. The beneficial effects of climate change have outweighed the harmful effects across the planet. However, the effects have not been evenly distributed across the planet, with more benefits in the mid to high latitudes and more damage in the low latitudes. The net effect of future climate is expected to turn harmful as benefits will shrink and damages will become more pervasive. A large proportion of the damage from climate change will happen in the low latitudes, where temperatures will be the highest.
Measurements of the economic impact of climate change have changed over time. Early studies focused only on the harmful consequences of climate change. Including climate effects that are beneficial has reduced net damage. Early studies assumed no adaptation to climate change. Including adaptation has reduced the net harm from climate change. Catastrophe has been assumed to be a major motivation to do near-term mitigation. However, massive sea level rise, ecosystem collapse, and high climate sensitivity are all slow-moving phenomena that take many centuries to unfold, suggesting a modest present value.
Article
The Fundamentals of Arbitration
Susan Franck
Used for hundreds of years and adapted to a variety of contexts, arbitration is a form of adjudicative dispute settlement where parties consent to selecting third-party neutrals that resolve a specific dispute by applying the applicable law to the facts. Part of arbitration’s success involves its flexibility in adapting procedures and selecting applicable law to meet parties’ unique needs, including having some control over the appointment of an arbitrator who may have unique substantive expertise. Parties may agree to arbitration hoping to avoid the time-consuming, expensive, and complex process of litigation by streamlining or tailoring dispute mechanics. Yet, it is not empirically verifiable that arbitration always saves time and costs, as assessing relative savings requires comparison to a national court and there are over 190 national judiciaries to which arbitration could be compared, as well as nonadjudicative forms of dispute resolution like direct negotiation and mediation. As parties inevitably negotiate in the “shadow of the law,” arbitration aids the assessment of conflict management options; and, particularly internationally, arbitration remains a powerful tool that incentivizes voluntary compliance with awards and streamlines enforcement.
Despite the availability of many types of arbitration with different policy considerations, the parties’ consent to it and their agreement to arbitrate (including the applicable law) is the backbone of this form of dispute settlement. Arbitration agreements require parties to make core choices, such as deciding on the scope of agreements submitted to arbitration, the legal place of arbitration, and applicable rules. Such an agreement then provides the framework for fundamental elements of the proceedings, namely, the basis of the tribunal’s jurisdiction and power over the dispute, the standards for appointing arbitrators, the structure and rules of the proceedings, and the content and form of derivative awards. Having a valid arbitration agreement (and an arbitration proceeding conducted in accordance with those legal obligations) also influences whether courts at the place of arbitration will set the award aside and whether courts at a place of enforcement will recognize and enforce an arbitration award. In the modern era, arbitration will continue evolving to address concerns about local policy considerations (particularly in national arbitration), confidentiality and ethics, technology and cybersecurity, diversity and inclusion, and to ensure arbitration is an ongoing value proposition.
Article
The Historical Evolution of Canadian Living Standards
Vincent Geloso
Canada is one of the richest countries in the world. It stands above most countries in the Americas. It is also noticeably poorer than its closest neighbor, the United States, despite considerable geographic similarity. These two facts have been true since as early as the 17th century. Why? An understanding of the historical path of Canada’s economic growth can be acquired by focusing on three important gaps in living standards within Canada: First Nations versus the rest of Canada, French Canadians versus English Canadians, and Atlantic Canada versus the rest of Canada. These three gaps allow an understanding of the crucial role of institutions in determining why Canada is rich on a global perspective and why it is poorer than the United States. However, explanations as to why Canada grew faster than Latin America are more speculative.
Article
The Italian Economy Before Unification, 1300–1861
Paolo Malanima
Italy played a central role in the Euro-Mediterranean economy during Antiquity, the late Middle Ages, and the Renaissance. Until the end of the 16th century, the Italian economy was relatively advanced compared with those of the Western European and Mediterranean countries. From the 17th century until the end of the 19th, GDP rose as the population increased. Yet per capita income slowly diminished together with real wages, urbanization, and living standards. Italy lost its central position in the Euro-Mediterranean world and, until the end of the 19th century, was a relatively backward area on the periphery of the most dynamic countries in the north and center of Europe. The Italian premodern economy represents a classic example of extensive growth or GDP growth without improvement in per capita income and living standards.
Article
The Law and Economics of Mergers and Acquisitions
Charles R. Korsmo
Law and economics has proved a particularly fruitful scholarly approach in the field of mergers and acquisitions. A huge law and economics literature has developed, providing critical insights into merger activity in general and the proper role of corporate and securities law in regulating this activity.
Early economic research examined the motivations for merger activity and the antitrust implications of mergers. Later scholarship elucidated the important disciplining effects on management from merger activity and the market for corporate control. If management performs poorly, causing a firm to become undervalued relative to a well-managed firm, the firm becomes vulnerable to a takeover where management will be replaced. This prospect provides a powerful incentive for management to perform well.
More recent work has revealed the limitations of market discipline on management actions in the merger context, and the corresponding role of corporate law in protecting stockholders. Because a merger is generally the final interaction between management and the other stakeholders in a firm, the typical constraints and mechanisms of accountability that otherwise constrain managerial opportunism may be rendered ineffective. This work has played a central role in informing modern jurisprudence. It has shaped the application of enhanced judicial scrutiny of management actions in the merger context, as embodied in the landmark Delaware cases Unocal and Revlon. The law and economics literature has also made important contribution to more recent developments in stockholder appraisal. The law and economics tradition has also provided a useful framework for evaluating the dynamics of merger litigation, including stockholder appraisal, and the extent to which such litigation can be made to serve a useful role in corporate governance.
Article
The Ottoman Empire: Institutions and Economic Change, 1500–1914
Şevket Pamuk
The Ottoman Empire stood at the crossroads of intercontinental trade for six centuries until World War I. For most of its existence, the economic institutions and policies of this agrarian empire were shaped according to the distribution of political power, cooperation, conflicts, and struggles between the state elites and the various other elites, including those in the provinces. The central bureaucracy managed to contain the many challenges it faced with its pragmatism and habit of negotiation to co-opt and incorporate into the state the social groups that rebelled against it. As long as the activities of the economic elites, landowners, merchants, the leading artisans, and the moneylenders contributed to the perpetuation of this social order, the state encouraged and supported them but did not welcome their rapid enrichment. The influence of these elites over economic matters, and more generally over the policies of the central government, remained limited. Cooperation and coordination among the provincial elites was also made more difficult by the fact that the empire covered a large geographical area, and the different ethnic groups and their elites did not always act together.
Differences in government policies and the institutional environment between Western Europe and the Middle East remained limited until the early modern era. With the rise of the Atlantic trade, however, the merchants in northwestern European countries increased their economic and political power substantially. They were then able to induce their governments to defend and develop their commercial interests in the Middle East more forcefully. As they began to lag behind the European merchants even in their own region, it became even more difficult for the Ottoman merchants to provide input into their government’s trade policies or change the commercial or economic institutions in the direction they preferred.
Key economic institutions of the traditional Ottoman order, such as state ownership of land, urban guilds, and selective interventionism, remained mostly intact until 1820. In the early part of the 19th century, the center, supported by the new technologies, embarked on an ambitious reform program and was able to reassert its power over the provinces. Centralization and reforms were accompanied by the opening of the economy to international trade and investment. Economic policies and institutional changes in the Ottoman Empire began to reflect the growing power of European states and companies during the 19th century.
Article
The Value of a Statistical Life
Thomas J. Kniesner and W. Kip Viscusi
The value of a statistical life (VSL) is the local tradeoff rate between fatality risk and money. When the tradeoff values are derived from choices in market contexts the VSL serves as both a measure of the population’s willingness to pay for risk reduction and the marginal cost of enhancing safety. Given its fundamental economic role, policy analysts have adopted the VSL as the economically correct measure of the benefit individuals receive from enhancements to their health and safety. Estimates of the VSL for the United States are around $10 million ($2017), and estimates for other countries are generally lower given the positive income elasticity of the VSL. Because of the prominence of mortality risk reductions as the justification for government policies the VSL is a crucial component of the benefit-cost analyses that are part of the regulatory process in the United States and other countries. The VSL is also foundationally related to the concepts of value of a statistical life year (VSLY) and value of a statistical injury (VSI), which also permeate the labor and health economics literatures. Thus, the same types of valuation approaches can be used to monetize non-fatal injuries and mortality risks that pose very small effects on life expectancy. In addition to formalizing the concept and measurement of the VSL and presenting representative estimates for the United States and other countries our Encyclopedia selection addresses the most important questions concerning the nuances that are of interest to researchers and policymakers.
