When premiums are community-rated, risk adjustment (RA) serves to mitigate competitive insurers’ incentive to select favorable risks. However, unless fully prospective, it also undermines their incentives for efficiency. By capping its volume, one may try to counteract this tendency, exposing insurers to some financial risk. This in term runs counter the quest to refine the RA formula, which would increase RA volume. Specifically, the adjuster, ”Hospitalization or living in a nursing home during the previous year” will be added in Switzerland starting 2012. This paper investigates how to minimize the opportunity cost of capping RA in terms of increased incentives for risk selection.
This paper describes subjective wage inequality and the demand for redistribution in Austrianusing individuals' estimates of occupational wages from the International Social SurveynProgram. Although these estimates differ widely across individuals, the data clearly show that most individuals would like to decrease wage inequality, relative to the level of inequality which they perceive to exist. The empirical analysis also shows that the demand for redistribution is strongly associated not only with variables describing self-interested motives for redistribution, but also with perceptions of and social norms with respect to inequality. Further, the demand for redistribution is a strong predictor for whether annindividual is supportive of redistribution by the state. On the other hand, however, I find almost no evidence for an empirical association between the demand for redistribution and individuals' party identification.
Culture has attributes of a global public good that needs to be preserved for mankind as a whole. World Culture Certificates are proposed to efficiently preserve World Heritage. The community of nations has to agree on the Global Heritage List and how much each nation is to contribute to that purpose. Each World Heritage site conserved is acknowledged through the issuance of a tradable Certificate. Countries and private firms are induced to seek sites where financial resources can be spent most productively. This leads to an efficient allocation of resources to preserve World Heritage.
In einer repräsentativen Umfrage bezeichnet sich gut die Hälfte der befragten Schweizer und Schweizerinnen als glücklich und mehr als ein Drittel sogar als sehr glücklich. Befragte in Deutschland oder den USA geben ein vergleichsweise tieferes Glücks- beziehungsweise Lebenszufriedenheitsniveau an. Wovon hängt aber unser Glück ab?
Economics is undergoing a remarkable new development, which may even be called revolutionary. This development is likely to change economics substantially in the future. New insights from happiness research are slowly being accepted in standard economics, a field which is traditionally conservative. If the goal of most human beings is to be happy, then a fuller understanding of which factors contribute to well-being is critical, especially if recent findings on what determines happiness are at variance with standard economic theories. Happiness research is even more important in helping to determine which institutional forms best enable individuals to increase their life satisfaction.
China has amassed $2.4 trillion of foreign reserves over the last two decades. This column argues that it is wrong, and even dangerous, to blame this on a manipulation of the exchange rate. Instead it proposes a structural theory emphasising that credit market imperfections require private firms to build up internal savings which have been channelled into foreign bonds.
