tailieunhanh - THE AMERICAN ECONOMIC REVIEW

Contrary to popular perception, the New Zealand economy has a lower proportion of employees in small to medium-sized enterprises (19 or fewer employees) than the OECD mean and has a similar proportion of large fi rms to the OECD mean. However, New Zealand’s large fi rms are smaller than the OECD mean, suggesting that New Zealand has fewer very large fi rms. Labour productivity levels differ substantially across the New Zealand industries. GDP per hour paid is highest in: electricity, gas, and water supply; forestry and mining; fi nance and insurance; and transport, storage, and communication. | THE AMERICAN ECONOMIC REVIEW VOLUME LIU DECEMBER 1963 NUMBER 5 UNCERTAINTY AND THE WELFARE ECONOMICS OF MEDICAL CARE By Kenneth J. Arrow I. Introduction Scope and Method This paper is an exploratory and tentative study of the specific differentia of medical care as the object of normative economics. It is contended here on the basis of comparison of obvious characteristics of the medical-care industry with the norms of welfare economics that the special economic problems of medical care can be explained as adaptations to the existence of uncertainty in the incidence of disease and in the efficacy of treatment. It should be noted that the subject is the medical-care industry not health. The causal factors in health are many and the provision of medical care is only one. Particularly at low levels of income other commodities such as nutrition shelter clothing and sanitation may be much more significant. It is the complex of services that center about the physician private and group practice hospitals and public health which I propose to discuss. The focus of discussion will be on the way the operation of the medical-care industry and the efficacy with which it satisfies the needs of society differ from a norm if at all. The norm that the economist usually uses for the purposes of such comparisons is the operation of a competitive model that is the flows of services that would be The author is professor of economics at Stanford University. He wishes to express his thanks for useful comments to F. Bator R. Dorfman v. Fuchs Dr. s. Gilson R. Kessel s. Mushkin and c. R. Rorem. This paper was prepared under the sponsorship of the Ford Foundation as part of a series of papers on the economics of health education and welfare. 942 THE AMERICAN ECONOMIC REVIEW offered and purchased and the prices that would be paid for them if each individual in the market offered or purchased services at the going prices as if his decisions had no influence over them and the going prices were

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