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For many years, there were few distinctions drawn between horizontal and vertical agreements. Both were considered anticompetitive and subject to per se condemnation under the antitrust laws. Recently, however, this approach has come... more
For many years, there were few distinctions drawn between horizontal and vertical agreements. Both were considered anticompetitive and subject to per se condemnation under the antitrust laws. Recently, however, this approach has come under attack, and ...
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In our earlier paper (1985), we constructed a simple model of market relationships between manufacturers and distributors, which demonstrated that exclusive dealing arrangements can be used to exclude entrants and thereby have... more
In our earlier paper (1985), we constructed a simple model of market relationships between manufacturers and distributors, which demonstrated that exclusive dealing arrangements can be used to exclude entrants and thereby have anticompetitive effects. For this reason, ...
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Research Interests: Economics, Health Economics, Quality of Mental Health Care, Medicine, Applied Economics, and 15 moreHospitals, Humans, Hospital costs, New Economic Models, Medicare, Medicaid, Price Discrimination, Public health systems and services research, Hospital Financial Management, Cost Allocation, Economic Models, Cost Function, Hospital Care, Severity of Illness Index, and Quality of health care
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Research Interests: Business, Law, Political Science, Health Policy, Medicine, and 13 moreHumans, Federal Government, United States, Medical Economics, Health Law and Policy, Specialization, Medical Malpractice, Legal Liability, Malpractice, Liability Insurance, Public Liability Insurance, State government, and Government Regulation
is a Director of LECG. More information on their backgrounds is located in Appendix 1. They wish
The emerging field of corporate demography views corporations and industries in a similar way to human or animal individuals and groups. In spite of a surprisingly large overlap of subject matter with economics, corporate demography is... more
The emerging field of corporate demography views corporations and industries in a similar way to human or animal individuals and groups. In spite of a surprisingly large overlap of subject matter with economics, corporate demography is not well-known by, nor easily accessible to economists. An outstanding recent book, The Demography of Corporations and Industries, by Glenn R. Carroll and Michael T. Hannan (2000) should change that. This review essay examines what economists, particularly industrial organization specialists, and corporate demographers can learn from each other. The two very different views of competition get particular attention.
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Introduction and Summary In an earlier study, sponsored by Sciences Po de Paris, we used data from the Organization for Economic Cooperation and Development (OECD) to study the effects of per capita consumption of pharmaceuticals and... more
Introduction and Summary In an earlier study, sponsored by Sciences Po de Paris, we used data from the Organization for Economic Cooperation and Development (OECD) to study the effects of per capita consumption of pharmaceuticals and other health care on objective, but crude, measures of health (Frech and Miller 1999; Miller and Frech 2000). Our crude measures of health were life expectancies at birth, at age 40, and at age 60, and infant mortality. We found that increased pharmaceutical consumption is both economically and statistically significantly related to increased life expectancy at the ages of 40 and 60, even when controlling for per capita income and lifestyle factors such as smoking, alcohol consumption, and diet. In contrast, we found no economically or statistically significant effect of non-pharmaceutical health care consumption. Our analysis of infant mortality was not robust. Among other problems, infant mortality is not consistently measured, not even in the rich coun
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Most scholars and antitrust cases have defined hospital service markets as primarily local. But, two recent decisions have greatly expanded geographic markets, incorporating hospitals as far as 100 miles apart. Managed care plans, now... more
Most scholars and antitrust cases have defined hospital service markets as primarily local. But, two recent decisions have greatly expanded geographic markets, incorporating hospitals as far as 100 miles apart. Managed care plans, now important in most markets, were believed to shift patients to distant hospitals to capture lower prices. We examine distance traveled and its connection to managed care penetration. In contrast to earlier literature, we examine both direct and indirect effects. We find that increases in managed care have impacted distances traveled, but these effects are too small to j~stify Two recent court cases have allowed mergers between hospitals based on the argument that managed care penetration has significantly increased the distances that patients travel. bringing quite distant hospitals (as far as 100 miles away) into competition with hospitals who were allowed to merge. ' This study will examine
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... at those sessions and others, especially from Barry Harris, William S. Comanor, Wenquing Li, Chris Proulx, Clement Krouse, Andrew Dick, Bill Drake, Ronald Drennan, Sean Ennis, Ken Heyer, Shel-don Kimmel, Joe Miller, Janet Nash, Russ... more
... at those sessions and others, especially from Barry Harris, William S. Comanor, Wenquing Li, Chris Proulx, Clement Krouse, Andrew Dick, Bill Drake, Ronald Drennan, Sean Ennis, Ken Heyer, Shel-don Kimmel, Joe Miller, Janet Nash, Russ Pittman, Elizabeth Reardon ...
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The economic and legal view of vertical integration has varied over time. But, a constant source of concern is the fear that the integrated firm will foreclose competitors from intermediate markets. At the same time, most commentators... more
The economic and legal view of vertical integration has varied over time. But, a constant source of concern is the fear that the integrated firm will foreclose competitors from intermediate markets. At the same time, most commentators have considered the economics of vertical contracts, especially exclusive dealing, to be essentially identical to vertical merger. Using the simple model of Comanor and Frech (1985), I show that vertical mergers and exclusive dealing contracts are not behaviorally equivalent. In particular, vertical mergers will not lead to foreclosure of rivals for anticompetitive reasons, while ordinary exclusive dealing contracts will lead to such anticompetitive foreclosure. Vertical mergers avoid certain externalities that exclusive dealing contracts create. In this model, vertical mergers can only cause anticompetitive problems through their horizontal aspects, by creating a monopoly of distributors. Of course, merger can always be mimicked be a complex enough co...
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Exclusive contracts assign to certain physicians the right and duty to provide all services covered by the contract. All other physicians are foreclosed from providing these services. Many physicians have brought legal complaints alleging... more
Exclusive contracts assign to certain physicians the right and duty to provide all services covered by the contract. All other physicians are foreclosed from providing these services. Many physicians have brought legal complaints alleging that their exclusion constitutes an exclusive contracts and review the two different antitrust rules that govern many complaints.
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In this paper we develop the implications of the property rights theory of the firm for wage determination and test the model using data from the U.S. nursing home industry. The main theoretical prediction is that any attenuation of... more
In this paper we develop the implications of the property rights theory of the firm for wage determination and test the model using data from the U.S. nursing home industry. The main theoretical prediction is that any attenuation of property rights will lead to higher wage rates for the firm's employees. The empirical evidence indicates that, indeed, profit-maximizing nursing homes
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The objective of this study is to validate our earlier work on life expectancy with more recent data and, more importantly, to extend it to examine quality of life, not only the length of life. The analysis focuses on the production of... more
The objective of this study is to validate our earlier work on life expectancy with more recent data and, more importantly, to extend it to examine quality of life, not only the length of life. The analysis focuses on the production of health, disaggregating healthcare into pharmaceutical consumption and other healthcare. Going beyond our earlier work, measures of health include life expectancy and disability-adjusted life expectancy (DALE). Also, we consider the impact of obesity. The sample was 18 Organization of Economic Cooperation and Development (OECD) countries. The measure of pharmaceutical consumption is the best that is available for these countries. Confirming our earlier work, pharmaceutical consumption has a positive and statistically significant effect on life expectancy at 40 and 60 years (significant at the 0.05 level, based on a two-tailed test). The effects are slightly larger than in the earlier work. Turning to DALE, pharmaceutical consumption has a positive and ...
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Over the period 1997 to 2000, the Australian government introduced two waves of price subsidies, then liberalised regulation to encourage private health insurance. Most of the increase in coverage occurred after the liberalization. Thus,... more
Over the period 1997 to 2000, the Australian government introduced two waves of price subsidies, then liberalised regulation to encourage private health insurance. Most of the increase in coverage occurred after the liberalization. Thus, it appears that this policy change rather than the earlier subsidies, explains most of the increase. We explore the relative impact of the different policy changes
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Over the period 1997 to 2000, the Australian government introduced two waves of price subsidies, then liberalised regulation to encourage private health insurance. Most of the increase in coverage occurred after the liberalization. Thus,... more
Over the period 1997 to 2000, the Australian government introduced two waves of price subsidies, then liberalised regulation to encourage private health insurance. Most of the increase in coverage occurred after the liberalization. Thus, it appears that this policy change rather than the earlier subsidies, explains most of the increase. We explore the relative impact of the different policy changes
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Research Interests: Law and Profitability
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Research Interests: Law and Applied Economics
COMMUNITY ENVIRONMENT AND THE MARKET VALUE OF SINGLE-FAMILY HOMES: THE EFFECT OF THE DISPERSION OF LAND USES* RONALD N. LAFFERTY and HE FRECH 111 Federal Trade Commission University of California, Santa Barbara A. I. Introduction ...
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... Even if price is endogenous to the individual physi-cian, we consider the original justification for treating n as a predetermined endoge-Part of the difficulty between us and FG may be semantic. ... JOSEPH P. NEWHOUSE FRANK A. SLOAN... more
... Even if price is endogenous to the individual physi-cian, we consider the original justification for treating n as a predetermined endoge-Part of the difficulty between us and FG may be semantic. ... JOSEPH P. NEWHOUSE FRANK A. SLOAN The Rand Corporation ...
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The objective of this study was to determine whether there is a measurable health return associated with high pharmaceutical consumption in a sample of developed countries. The study focused on the production of health, disaggregating... more
The objective of this study was to determine whether there is a measurable health return associated with high pharmaceutical consumption in a sample of developed countries. The study focused on the production of health, disaggregating healthcare into pharmaceuticals and other healthcare. We controlled for wealth and lifestyle factors. The sample consisted of 21 Organization for Economic Cooperation and Development (OECD) countries and the measure of pharmaceutical consumption used was the best available for a large number of OECD countries. We proxied health with life expectancies at birth, at age 40, and age 60. Pharmaceutical consumption had a positive and statistically significant effect on remaining life expectancy at age 40 and 60 years (significant at the 0.10 and 0.05 level, respectively, based on a 2-tailed test), although the effect on life expectancy at birth was small and not significant. Sensitivity analysis showed that these results were generally robust. A significant effect of pharmaceutical consumption on infant mortality was not demonstrated and results of the infant mortality model were very sensitive to small changes. Increased pharmaceutical consumption helps improve mortality outcomes, especially for those at middle age and older.
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In this paper we develop the implications of the property rights theory of the firm for wage determination and test the model using data from the U.S. nursing home industry. The main theoretical prediction is that any attenuation of... more
In this paper we develop the implications of the property rights theory of the firm for wage determination and test the model using data from the U.S. nursing home industry. The main theoretical prediction is that any attenuation of property rights will lead to higher wage rates for the firm's employees. The empirical evidence indicates that, indeed, profit-maximizing nursing homes
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... Evans, David S., "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, 1987b, 95, 4, 657-74. Farley, Dean and Hogan, Christopher, "Case-Mix Specialization in the Market for Hospital... more
... Evans, David S., "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, 1987b, 95, 4, 657-74. Farley, Dean and Hogan, Christopher, "Case-Mix Specialization in the Market for Hospital Ser-vices," Health Services Research, 1990, 25, 5, 757-83. ...
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Research Interests: Economics and Public Good
Imposed Health Insurance in Monopolistic Markets: A Theoretical Analysis. Authorinfo | Abstract | Publisher info | Download info | Related research | Statistics. AuthorInfo. Frech, HE, III Ginsburg, Paul B Additional information ...
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... society has taken the position that the costs of enforcing rights to clean air and a noise-freeenvironment exceeded the ... If some spectrum continues to be held by the original owners, nothing is lost - no new expenses are incurred... more
... society has taken the position that the costs of enforcing rights to clean air and a noise-freeenvironment exceeded the ... If some spectrum continues to be held by the original owners, nothing is lost - no new expenses are incurred either ... Electromagnetic spectrum lasts forever. ...
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The hospital competition literature shows that estimates of the effect of local market structure (concentration) on pricing (competition) are sensitive to geographic market definition. Our spatial lag model approach effects smoothing of... more
The hospital competition literature shows that estimates of the effect of local market structure (concentration) on pricing (competition) are sensitive to geographic market definition. Our spatial lag model approach effects smoothing of the explanatory variables across the discrete market boundaries, resulting in robust estimates of the impact of market structure on hospital pricing, which can be used to estimate the