Monday, July 02, 2007
It ain't pretty.
Through a student's senior thesis I began working on a new model for the local economy's chances of recession. I'm in the process of expanding the research, but the model my student ran estimated a probability based on a simple logistical model of the possibility of a local recession. (I had set the dates on local recessions in advance, based on previous research I had done of local employment.) His model shows a local probability of recession right now of about 28%, which is quite high. Are local businesses prepared for a better-than-one-in-four chance of local recession?
Also, a new article today on the role of the health sector in the local economy contains some quotes by yours truly. The last quote at the bottom of the story sounds like I think too many people are employed in health care. That's not my point really. My point is that we have weird ways of measuring productivity in this field. That we hire more and more people into health care doesn't mean we are becoming less productive -- it can well mean that the demand for health services has risen. Or it could mean the price of health care has fallen (how much do you spend for one more day of life, or one more "quality day", if you can measure such things) and so people demand a higher quantity.
For those who would say third-party payer systems make the marginal price of health care zero t0 the patient I'd ask, what has changed about that in the last thirty years?