Theory and Evidence. Childcare is a sector that is heavily regulated because of the importance of ensuring child safety. The current price of childcare is $1200 a month. The government is concerned with this market: Evidence shows that young parents are not returning to work because they cannot afford childcare. The government conducts a randomized control trial of a new policy. In some randomly selected cities, the government mandates that childcare providers cannot charge more than $800 per month. Other randomly selected cities are left unaffected to serve as a control. In six months, the outcomes show that the number of children getting childcare has not changed, but that waiting lists for childcare have increased dramatically. (a) Can this outcome be reconciled with the theory of supply and demand? (b) Do you expect that outcomes will improve in the long run?

Theory and Evidence. Childcare is a sector that is heavily regulated because of the importance of ensuring child safety. The current price of childcare is $1200 a month. The government is concerned with this market: Evidence shows that young parents are not returning to work because they cannot afford childcare. The government conducts a randomized control trial of a new policy. In some randomly selected cities, the government mandates that childcare providers cannot charge more than $800 per month. Other randomly selected cities are left unaffected to serve as a control. In six months, the outcomes show that the number of children getting childcare has not changed, but that waiting lists for childcare have increased dramatically. (a) Can this outcome be reconciled with the theory of supply and demand? (b) Do you expect that outcomes will improve in the long run?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

please review the second question about pareto efficeincy
In the following situation, indicate whether the physician's discriminatory action is taste-based or statistical. A physician believes that Hispanic patients are less likely to follow through with an expensive therapeutic regimen that leads to major side effects, so he does not ever prescribe it for them. Taste-based Statistical
Indicate whether each statement is true or false, and justify your answer.Price controls decrease the innovation rate for drugs but make existing drugs more affordable.
Adverse selection is the phenomenon where it is not possible to have a Pareto improvement, no matter how the government selects the initial distribution of Income B charging a higher insurance premium to cover the costs of risk actually leads to the situation in which only the most risky buy the insurance, and this causes that market to fail. people select the wrong indifference curve. information is withheld from the government so it cannot make the necessary selection of the correct amount of public good to produce
treatment pre 50 35 post 85 difference control difference Calculate the effect of the policy using the difference-in-differences model and the data provide below for the treatment and control groups. 55
The National Health Service (NHS) in the UK was founded in 1948 and was the first state-run free health service in the world. It originated at a time of national euphoria following victory in World War II, which generated a sense of confidence and solidarity among politicians and public. In particular it was felt that class distinctions were finally disappearing. The extensive rationing of products, both during and after the war, played a big part. Not only did this result in queuing for goods by rich and poor alike, but it gave the government a sense that state control of distribution was not only possible but in many cases desirable. The basic objective was to provide all people with free medical, dental and nursing care. It was a highly ambitious scheme that rested on various premises that have since proved flawed. These were: 1 The demand for health care was finite; it was assumed that some given amount of expenditure would satisfy all of the nation’s health wants. 2 Health care…
In experiments in which participants voluntarily contribute to the provision of a public good, we often find a reduction in contributions in successive rounds of the experiment. We can explain this as Group of answer choices Evidence of participants reaching satiation and not wanting such high levels of the public good. Evidence of participants working out the Nash equilibrium outcome of the voluntary contribution game. Evidence of participants reducing cooperation to punish free riding. Evidence of participants learning how to play the game more effectively.
Indicate whether the statement is true or false, and justify your answer.Results from the Oregon Medicaid Experiment suggest that having health insurance has a positive impact on health status.
A competitive labor market offers traineeship programs. During the training, employees of type 1 will create a product worth dollars 1,000, while employees of type 2 will create a product worth dollars 5,000. The two types are indistinguishable, but type 2 is more patient - for these workers, sitting in on a Harvard lecture bored is just as harmful as losing 200 dollars, and for type 1 employees, losing 400 dollars. After completing the lectures and completing the training, all employees leave for Canada, where, due to the withdrawal from the American process, Canadian lectures are not counted. There is a separating balance in which those who listen to lectures with a total length of X hours will receive a salary of Dollars 5,000, and those who do not listen - Dollars 1,000. What are the possible values of X?
Demand for medical services is price inelastic (Absolute value of price elasticity of demand is less than 1 and greater than zero). Medical services are different from most other goods and services in that the person who determines the demand (the patient) is not the person who makes the payment (payment is made by the insurance company). How does this affect the price elasticity of demand for medical services (increase it or decrease it)? You may assume that this question only refers to people who have health insurance. Ignore co-payments and deductibles and any other out-of-pocket expenses. Please give an explanation.
In the early 2000s, the state of Massachusetts in the U.S. implemented a health reform aimed at enrolling people without health insurance into an insurance plan. The reform required people without health insurance (at least those who could afford it) to buy insurance, and put in place penalties on those who nevertheless chose not to buy insurance. Below is the abstract of a recent National Bureau of Economic Research working paper entitled “Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform” by Martin Hackmann, Jonathan Kolstad, and Amanda Kowalski. The authors conducted a study of the effects of the Massachusetts reform. They write: We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were insured prior to the…
Huskamp et. al (2003) showed decreases in copayments are associated with increases in adherence. This is an example of... Increasing adherence with methadone-based reinforcement Increasing adherence with prize-based reinforcement Increasing adherence with traditional economics Increasing adherence with remote voucher-based reinforcement