A Risk-Benefit Analysis of French High Fish Consumption: A QALY Approach

The health risk and the nutritional benefit of a food are usually assessed separately. Toxicologists recommend limiting the consumption of certain fish because of methylmercury; while nutritionists recommend eating more oily fish because of omega 3. A common evaluation is imperative to provide coherent recommendations. In order to evaluate the risks along with the benefits related to fish consumption, a common metric based on the quality-adjusted life year (QALY) method has been used. The impact of a theoretical change from a medium n-3 PUFAs intake to a high intake is studied, in terms of the cardiovascular system (CHD mortality, stroke mortality and morbidity) and on fetal neuronal development (IQ loss or gain). This application can be considered as a sensitive analysis of the model used and looks at the impact of changing the dose-response relationships between cardiovascular diseases and n-3 PUFAs intakes. Results show that increasing fish consumption may have a beneficial impact on health. However, the confidence interval of the overall estimation has a negative lower bound, which means that this increase in fish consumption may have a negative impact due to MeHg contamination. Some limits of the QALY approach are identified. The first concerns determination of the dose-response relationships. The second concerns the economic origins of the approach and of individual preferences. Finally, since only one beneficial aspect and one risk element were studied, consideration should be given to how other beneficial and risk components may be integrated in the model.     

Fisher's Information for Discretely Sampled Lévy Processes

This paper studies the asymptotic behavior of Fisher's information for a Lévy process discretely sampled at an increasing frequency. As a result, we derive the optimal rates of convergence of efficient estimators of the different parameters of the process and show that the rates are often nonstandard and differ across parameters. We also show that it is possible to distinguish the continuous part of the process from its jumps part, and even different types of jumps from one another.     

THE JOINT DESIGN OF UNEMPLOYMENT INSURANCE AND EMPLOYMENT PROTECTION: A FIRST PASS

Unemployment insurance and employment protection are typically discussed and studied in isolation. In this paper, we argue that they are tightly linked, and we focus on their joint optimal design in a simple model, with risk‐averse workers, risk‐neutral firms, and random shocks to productivity. We show that, in the “first best,”unemployment insurance comes with employment protection—in the form of layoff taxes; indeed, optimality requires that layoff taxes be equal to unemployment benefits. We then explore the implications of four broad categories of deviations from first best: limits on insurance, limits on layoff taxes, ex post wage bargaining, and ex ante heterogeneity of firms or workers. We show how the design must be modified in each case. Finally, we draw out the implications of our analysis for current policy debates and reform proposals, from the financing of unemployment insurance, to the respective roles of severance payments and unemployment benefits.     

The Economic Efficiency of Sampling Size: The Case of Beef Trim

The economically optimal sample size in a food safety test balances the marginal costs and marginal benefits of increasing the sample size. We provide a method for selecting the sample size when testing beef trim for Escherichia coli O157:H7 that equates the averted costs of recalls and health damages from contaminated meats sold to consumers with the increased costs of testing while allowing for uncertainty about the underlying prevalence rates of contamination. Using simulations, we show that, in most cases, the optimal sample size is larger than the current sample size of 60 and, in some cases, it exceeds 120. Moreover, lots with a lower prevalence rate have a higher expected damage because contamination is more difficult to detect. Our simulations indicate that these lots have a higher optimal sampling rate.     

Dynamic Impacts of a Catastrophic Production Event: The Foot‐and‐Mouth Disease Case

In foot‐and‐mouth disease (FMD) free countries, the occurrence of an FMD outbreak is a rare event with potentially large economic losses. We explore the dynamic effects of an FMD outbreak on market variables and economic surplus taking into account the largely neglected issue of farm bankruptcy. Simulations are performed on a stylized agricultural economy, which is a net exporter before the outbreak. We find complex dynamic market effects when the farm credit market suffers from information imperfections leading to farm closure. Welfare effects are also dramatically altered. Domestic consumers may lose in the long run from an FMD outbreak because domestic supply contracts. On the other hand, farmers able to resist this event may ultimately gain. Our analysis also shows that these effects are not monotone, making any efficient policy response to this catastrophic event quite challenging.     

UNEMPLOYMENT INSURANCE AND CULTURAL TRANSMISSION: THEORY AND APPLICATION TO EUROPEAN UNEMPLOYMENT

This paper emphasizes the two‐way causality between the provision of unemployment insurance and the cultural transmission of civicness. The returns to being uncivic are increasing in the generosity of unemployment insurance; but this generosity is decreasing in the number of uncivic individuals. In this context, I determine the evolution of preferences across generations and show that cultural heterogeneity is sustained over the long‐run. The dynamics of cultural transmission can generate a long lag between the introduction of unemployment insurance and an increase in people's willingness to live off government‐provided benefits. Hence, it offers an explanation to the ‘European unemployment puzzle’ due to the coexistence of generous unemployment insurance and low unemployment in the 1950s and 1960s.     

A Non-parametric Test for Generalized First-order Autoregressive Models

We derive a non-parametric test for testing the presence of V(X_i,ε_i) in the non-parametric first-order autoregressive model X_i+1=T(X_i)+V(X_i,ε_i)+U(X_i)ε_i+1, where the function T(x) is assumed known. The test is constructed as a functional of a basic process for which we establish a weak invariance principle, under the null hypothesis and under stationarity and mixing assumptions. Bounds for the local and non-local powers are provided under a condition which ensures that the power tends to one as the sample size tends to infinity.The testing procedure can be applied, e.g. to bilinear models, ARCH models, EXPAR models and to some other uncommon models. Our results confirm the robustness of the test constructed in Ngatchou Wandji (1995) and in Diebolt & Ngatchou Wandji (1995).     

Assessment of the Effectiveness of Radon Screening Programs in Reducing Lung Cancer Mortality

The present study was aimed at assessing the health consequences of the presence of radon in Quebec homes and the possible impact of various screening programs on lung cancer mortality. Lung cancer risk due to this radioactive gas was estimated according to the cancer risk model developed by the Sixth Committee on Biological Effects of Ionizing Radiations. Objective data on residential radon exposure, population mobility, and tobacco use in the study population were integrated into a Monte‐Carlo‐type model. Participation rates to radon screening programs were estimated from published data. According to the model used, approximately 10% of deaths due to lung cancer are attributable to residential radon exposure on a yearly basis in Quebec. In the long term, the promotion of a universal screening program would prevent less than one death/year on a province‐wide scale (0.8 case; IC 99%: –3.6 to 5.2 cases/year), for an overall reduction of 0.19% in radon‐related mortality. Reductions in mortality due to radon by (1) the implementation of a targeted screening program in the region with the highest concentrations, (2) the promotion of screening on a local basis with financial support, or (3) the realization of systematic investigations in primary and secondary schools would increase to 1%, 14%, and 16.4%, respectively, in the each of the populations targeted by these scenarios. Other than the battle against tobacco use, radon screening in public buildings thus currently appears as the most promising screening policy for reducing radon‐related lung cancer.     

Economic Modeling Triggers More Efficient Planning: An Experimental Justification

Consider a firm as an organization that needs to efficiently coordinate several specialized departments in an uncertain environment. Decision making involves collective planning sessions and decentralized operational processes. In this setting this paper explores the role of economic modeling through an experimental game. Results support the idea that economic modeling favors higher performance. Economic modeling facilitates the emergence of common knowledge and the decomposition of a group decision problem into individual decision problems that are meaningfully interrelated. This paper was presented at the Porquerolles Summer School on Cognitive Sciences, September 2001.