This study examines the relationship between pharmaceutical R&D and health care expenditures, distinguishing between the short- and long-run impacts. To measure these relationships quantitatively, we focus on patents as a key factor driving the costs of pharmaceuticals, and develop a structured vector autoregressive (SVAR) model to measure the social rate of return to pharmaceutical research as protected by patents. We conclude with unambiguous results that pharmaceutical patents are not correlated with higher short-run prices in any measure of medical costs. They are associated with higher long-run prices in pharmaceuticals themselves, but with lower long-run prices in the aggregate medical sector which includes pharmaceuticals as a component part. Further, the TRIPS Agreement and Hatch-Waxman Act to enable generic competition have both been demonstrably effective at lowering prices across the spectrum of medical sector prices. We conclude that pharmaceutical patents may be economically medicinal themselves, acting as the 'ounce of prevention' that saves a 'pound of cure', the cure which would come in the form of even higher costs elsewhere in the medical sector.
This paper considers the challenges to the dissemination of environmental innovation. Following a brief exploration of the legal and regulatory regimes surrounding environmental technologies, the paper examines diffusion mechanisms, market factors, social characteristics and political elements that facilitate and complicate dissemination. Given the importance of innovation to economic development and growth, the diffusion of innovation is of great interest to economists and policymakers alike.
The recent stagnation of electronic commerce highlights the need to understand contemporary online consumer behavior. This study incorporates current user demographics and emerging Internet activities to dynamically model the determinants of two key measurements of recent online shopping, a purchase within the last year and the novel dependent variable, percentage of income spent online in the last three months. Logistic regression is applied to a nationally representative 2007 survey of the U.S. online population. Determinants of a recent online purchase include, ownership of a credit card, an online payment account (PayPalTM), listening to podcasts, participating in online auctions, and for the first time, female gender. In a second regression, positive determinants for the percentage of income spent online include male gender, educational attainment, online auctions, instant messenging and online dating. Online spending increases with time online and appears to compete with other forms of online entertainment and social networking.
After eight years of non-engagement, the new administration and the U.S. Congress, led by a majority in the President’s party, are rapidly developing climate policy legislation. This paper summarizes past efforts to establish a national climate policy in the United States as well as the major forces influencing the current debate. While this debate is largely shaped by domestic considerations, it takes place as the international community moves to agree on a post-Kyoto policy regime in Copenhagen next December. Whether the United States is willing to take strong action will significantly influence the actions of other nations.
In an effort to explore the potential for financing environmental innovation, this paper examines different forms of financing and attempts to evaluate their effectiveness. The study considers both public and private forms of funding as well as providing policy suggestions for the support of appropriate financing for eco-innovation.
This paper aims to summarize the state of academic knowledge surrounding the economics of environmental innovation. Following a definition of environmental technology, the paper enumerates and describes the obstacles or constraints to the development of eco-innovation.
This paper analyzes a database of over 18,000 women micro-finance clients of the Negros Women for Tomorrow Foundation (NWTF), a database using the Progress Out of Poverty (PPI) Scorecard as a measure of poverty. Analysis using both OLS and quantile regression models shows how observable characteristics of borrowers affect the ability of clients to reduce their measured poverty. Loan size, duration, and the economic activity supported all have strongly identifiable effects. Moreover, estimates suggest which among the poor are receiving the greatest effective help by the program. Results offer advice to the NWTF and offer insight useful to policymakers and other micro-lenders.
Recent Wal-Mart openings have been accompanied by public demonstrations against the company’s presence in the community, asserting (among other things) that their presence is deleterious to residential property values. This study empirically evaluates that claim, analyzing the spatial correlation between Wal-Mart locations and residential property values, while comparing Wal-Mart with other big-box retailers for a frame of reference and controlling for other important aspects of a home’s market value. We recognize that market value may represent a trade-off between price and patience, so perform a similar analysis using a property’s days on the market to evaluate any big-box effect. Finally, we interpret the resulting effects in two ways, from both the resident’s and retailer’s point of view, casting new light on the NWIMBY effect.
We analyze the effects of a largely ignored 1885 legislative reform in Massachusetts requiring that firms provide workers the option of receiving weekly wage payments. Using an inter-temporal model of deferred compensation, we derive conditions on elasticities of labor supply that determine the effects of the reform on workers’ effective wage and utility. We then examine empirically the effects of the reform, using weekly data on mill workers in Lowell. Given the implications of our theoretical analysis, the empirical findings of positive wage and reform elasticities imply that the switch to weekly payment increased workers’ effective wage and well-being.
Agriculture, like many primary and service sectors, is a frequent recipient of innovation intended for its use, even if those innovations originate in industrial sectors. The challenge has been identifying them from patent data, which are recorded for administrative purposes using the International Patent Classification (IPC) system. We reprogram a well-tested tool, the OECD Technology Concordance (OTC), to identify 16 million patents granted between 1975 and 2006 worldwide which have potential application in agriculture. This paper presents the methodology of that dataset’s construction, introduces the data via summaries by nation and industrial sector over time, and suggests some potential avenues for future exploration of empirical issues using these data.