The Value of Life Near its End and Terminal Care

Medical care at the end of life, which is often is estimated to contribute up to a quarter of US health care spending, often encounters skepticism from payers and policy makers who question its high cost and often minimal health benefits. It seems generally agreed upon that medical resources are being wasted on excessive care for end-of-life treatments that often only prolong minimally an already frail life. However, though many observers have claimed that such spending is often irrational and wasteful, little explicit and systematic analysis exists on the incentives that determine end of life health care spending. There exists no positive theory that attempts to explain the high degree of end-of life spending and why differences across individuals, populations, or time occur in such spending. This paper attempts to provide the first rational and systematic analysis of the incentives behind end of life care. The main argument we make is that existing estimates of the value of a life year do not apply to the valuation of life at the end of life. We stress the low opportunity cost of medical spending near ones death, the importance of keeping hope alive in a terminal care setting, the larger social value of a life than estimated in private demand settings, as well as the insignificance in quality of life in lowering its value. We derive how an ex-ante perspective in terms of insurance and R&D alters some of these conclusions.

An Empirical Analysis of Cigarette Addiction

We use a framework suggested by a model of rational addiction to analyze empirically the demand for cigarettes. The data consist of per capita cigarettes sales (in packs) annually by state for the period 1955 through 1985. The empirical results provide support for the implications of a rational addiction model that cross price effects are negative (consumption in different periods are complements), that long-run price responses exceed short-run responses, and that permanent price effects exceed temporary price effects. A 10 percent permanent increase in the price of cigarettes reduces current consumption by 4 percent in the short run and by 7.5 percent in the long run. In contrast, a 10 percent increase in the price for only one period decreases consumption by only 3 percent. In addition, a one period price increase of 10 percent reduces consumption in the previous period by approximately .7 percent and consumption in the subsequent period by 1.5 percent. These estimates illustrate the importance of the intertemporal linkages in cigarette demand implied by rational addictive behavior.

The Economic Theory of Illegal Goods: The Case of Drugs

This paper concentrates on both the positive and normative effects of punishments that enforce laws to make production and consumption of particular goods illegal, with illegal drugs as the main example. Optimal public expenditures on apprehension and conviction of illegal suppliers obviously depend on the extent of the difference between the social and private value of consumption of illegal goods, but they also depend crucially on the elasticity of demand for these goods. In particular, when demand is inelastic, it does not pay to enforce any prohibition unless the social value is negative and not merely less than the private value. We also compare outputs and prices when a good is legal and taxed with outputs and prices when the good is illegal. We show that a monetary tax on a legal good could cause a greater reduction in output and increase in price than would optimal enforcement, even recognizing that producers may want to go underground to try to avoid a monetary tax. This means that fighting a war on drugs by legalizing drug use and taxing consumption may be more effective than continuing to prohibit the legal use of drugs.

Human Capital, Fertility, and Economic Growth

Our model of growth departs from both the Malthusian and neoclassical approaches by including investments in human capital. We assume, crucially, that rates of return on human capital investments rise, rather than, decline, as the stock of human capital increases, until the stock becomes large. This arises because the education sector uses human capital note intensively than either the capital producing sector of the goods producing sector. This produces multiple steady scares: an undeveloped steady stare with little human capital, low rates of return on human capital investments and high fertility, and a developed steady stats with higher rates of return a large, and, perhaps, growing stock of human capital and low fertility. Multiple steady states mean that history and luck are critical determinants of a country's growth experience.

The Detection of Anomalous Dust Emission in the Nearby Galaxy NGC 6946

We report on the Ka-band (26-40 GHz) emission properties for 10 star-forming regions in the nearby galaxy NGC 6946. From a radio spectral decomposition, we find that the 33 GHz flux densities are typically dominated by thermal (free-free) radiation. However, we also detect excess Ka-band emission for an outer-disk star-forming region relative to what is expected given existing radio, submillimeter, and infrared data. Among the 10 targeted regions, measurable excess emission at 33 GHz is detected for half of them, but in only one region is the excess found to be statistically significant ($\approx7\sigma$). We interpret this as the first likely detection of so called `anomalous' dust emission outside of the Milky Way. We find that models explaining this feature as the result of dipole emission from rapidly rotating ultrasmall grains are able to reproduce the observations for reasonable interstellar medium conditions. While these results suggest that the use of Ka-band data as a measure of star formation activity in external galaxies may be complicated by the presence of anomalous dust, it is unclear how significant a factor this will be for globally integrated measurements as the excess emission accounts for \la10% of the total Ka-band flux density from all 10 regions.Comment: 6 pages; Accepted to ApJ Letter

The Far-Infrared--Radio Correlation at High Redshifts: Physical Considerations and Prospects for the Square Kilometer Array

(Abridged) I present a predictive analysis for the behavior of the FIR--radio correlation as a function of redshift in light of the deep radio continuum surveys which may become possible using the SKA. To keep a fixed ratio between the FIR and predominantly non-thermal radio continuum emission of a normal star-forming galaxy requires a nearly constant ratio between galaxy magnetic field and radiation field energy densities. While the additional term of IC losses off of the cosmic microwave background (CMB) is negligible in the local Universe, the rapid increase in the strength of the CMB energy density (i.e. $\sim(1+z)^{4})$ suggests that evolution in the FIR-radio correlation should occur with infrared (IR; 8-1000 \micron)/radio ratios increasing with redshift. At present, observations do not show such a trend with redshift; $z\sim6$ radio-quiet QSOs appear to lie on the local FIR-radio correlation while a sample of $z\sim4.4$ and $z\sim2.2$ SMGs exhibit ratios that are a factor of $\sim$2.5 {\it below} the canonical value. I also derive a 5$\sigma$ point-source sensitivity goal of $\approx$20 nJy (i.e. $\sigma_{\rm RMS} \sim 4$ nJy) requiring that the SKA specified be $A_{\rm eff}/T_{\rm sys}\approx 15000$ m$^{2}$ K$^{-1}$; achieving this sensitivity should enable the detection of galaxies forming stars at a rate of \ga25 M_{\sun} {\rm yr}^{-1}, at all redshifts if present. By taking advantage of the fact that the non-thermal component of a galaxy's radio continuum emission will be quickly suppressed by IC losses off of the CMB, leaving only the thermal (free-free) component, I argue that deep radio continuum surveys at frequencies \ga10 GHz may prove to be the best probe for characterizing the high-$z$ star formation history of the Universe unbiased by dust.Comment: 16 pages, 8 figures, accepted for publication in Ap