AN EFFICIENCY EXPLANATION FOR WHY FIRMS SECOND SOURCE

Firms facing research costs and demand uncertainty may engage in second-sourcing, in which potential suppliers agree to pool production facilities. I show how sellers and buyers both can benefit from the practice. Second-sourcing allows firms to meet a wider range of possible rates of demand and often to supply a given rate of demand at a lower total cost than under non-cooperation. Buyers benefit through a reduced probability of stock-outs and frequently a lower purchase price. Semiconductor industry data are found to be consistent with the paper's predictions.     

Estimation of parameters for rounded data from non-normal distributions

This paper is concerned with how standard estimation procedures perform in terms of eficiency for non-normal rounded data. Previous research has shown that the loss in eficiency due to rounding normal data is small. However, evidence from the non-normal distribution considered in this paper suggests, if rounding is coarse or the distribution is very skewed the loss in efficiency due to rounding can be considerable.     

Screening for patients with alcohol problems: severity of patients identified by the CAGE.

Primary care physicians are well situated to identify patients with substance abuse problems and motivate them to seek appropriate assistance, but active programs are the exception. A study in a community setting was undertaken to assess the CAGE (the first letters of key words in a series of four questions about drinking: cut down; annoyed; guilty; and eye-opener), instrument in the routine screening for alcohol problems in both new and established patients. The screening process identified subjects for a pilot evaluation of a motivational interview designed to encourage problem-solving behavior. This article focuses on the screening results and the use of the CAGE instrument. During June and July of 1990, 687 patients of two primary care physicians belonging to a large group practice were asked to complete a health questionnaire that included the CAGE. Those who responded affirmatively to at least two of the four CAGE questions were requested to participate in follow-up assessment of problems associated with alcohol and health. The type and severity of alcohol problems experienced by patients who scored positive on the CAGE are described. Prevalence of a positive score on the CAGE was 8.6 percent with males, smokers, and blue collar and unemployed persons being more likely to score positive. The positive predictive value was .68. Primarily, persons with moderate alcohol problems were identified. Results show that the CAGE instrument is a useful screening device for identifying those with mild to moderate substance abuse problems, increasing the opportunity for intervention prior to serious medical complications. The instrument is easily administered, and has demonstrated relatively high levels of sensitivity and specificity. When combined with assessment and motivational interviews, the CAGE shows promise in the secondary prevention of substance abuse and related health problems.     

Generalized Laplacian approximations in Bayesian inference

This paper presents a new Laplacian approximation to the posterior density of η = g(θ). It has a simpler analytical form than that described by Leonard et al. (1989). The approximation derived by Leonard et al. requires a conditional information matrix R_η to be positive definite for every fixed η. However, in many cases, not all R_η are positive definite. In such cases, the computations of their approximations fail, since the approximation cannot be normalized. However, the new approximation may be modified so that the corresponding conditional information matrix can be made positive definite for every fixed η. In addition, a Bayesian procedure for contingency-table model checking is provided. An example of cross-classification between the educational level of a wife and fertility-planning status of couples is used for explanation. Various Laplacian approximations are computed and compared in this example and in an example of public school expenditures in the context of Bayesian analysis of the multiparameter Fisher-Behrens problem.     

The Farm Crisis and Mental Health: A Longitudinal Study of the 1980s1

Abstract This paper examines rural/urban differences and trends in mental health during the farm crisis of the 1980s in a large panel sample from a midwestern state. A community research perspective, which attributes differences to life styles, culture, and community context, is contrasted with an economic stress perspective, which focuses on individual differences in economic circumstances as determinants of rural-urban differences in mental health. Survey samples from 1981, 1986, and 1989 are used to examine differences among seven categories of community type. Multiple regression analysis of the trend and panel data provide support for both the individual economic distress and community context models.     

State minimum wage laws: Youth coverage and impact

Federal minimum wage statutes cover only 70 percent of the work force and 30 percent of all employers. State laws are designed to close some of these coverage gaps and in some cases to set higher wage floors. Hence, differences in state wage floors and coverage should affect employment rates and wage distributions, particularly among low-skilled workers. Evidence from the National Longitudinal Ssurveys of Youth is mixed, however: State wage floors appear to have no impact on youth employment or entry wages, but coverage exemptions appear to increase both employment and wages. These observations underscore the need to include state provisions in models of minimum wage impacts, particularly for later periods (e.g., 1988–1991) when state wage floors were relatively higher.