Browsing by Author "Law, Stephen, M."

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    A National Formulary for Canada
    Hollis, Aidan; Law, Stephen, M.
    This article analyzes the benefits and costs of replacing Canada's ten different provincial formularies with one single national formulary. The 2002 Romanow Commission on the Future of Health Care in Canada recommended that Canada should have a National Drug Agency which would maintain a national formulary, replacing the existing provincial formularies which balkanize drug markets across Canada. This recommendation has been in part incorporated into the "Common Drug Review" in which the provinces (excluding Québec) have agreed to undertake a single evaluation of all new drugs; provinces, however, retain their own formularies and decide which products to list. This balkanized approach to listing and insurance coverage of drugs substantially weakens the bargaining position of the provinces and leads to higher costs.
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    A National Formulary for Canada
    Hollis, Aidan; Law, Stephen, M.
    This article analyzes the benefits and costs of replacing Canada's ten different provincial formularies with one single national formulary. The 2002 Romanow Commission on the Future of Health Care in Canada recommended that Canada should have a National Drug Agency which would maintain a national formulary, replacing the existing provincial formularies which balkanize drug markets across Canada. This recommendation has been in part incorporated into the "Common Drug Review" in which the provinces (excluding Québec) have agreed to undertake a single evaluation of all new drugs; provinces, however, retain their own formularies and decide which products to list. This balkanized approach to listing and insurance coverage of drugs substantially weakens the bargaining position of the provinces and leads to higher costs.
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    Input Separability in the Canadian Cable Television Industry: An Application of Generalized Additive Models
    Haghiri, Morteza; Law, Stephen, M.; Nolan, James, F.
    We develop an example estimating a non-parametric cost function with Generalized Additive Models (GAMs,). We demonstrate the feasibility of testing for input separability, providing a test for bias in GAIvIs. Our example focuses on cable television (CA TV) provision, and we estimate a new non-parametric cost function for the Canadian industry using financial and operating data collected between 1990 and 1996 This period is of particular importance from a policy perspective because CA TV in Canada was a rate- and entry-regulated industry prior to 1997. The results show that the input separability assumption holds and the GAIvI system provides a good fit to the CA TV data.
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    Input Separability in the Canadian Cable Television Industry: An Application of Generalized Additive Models
    Haghiri, Morteza; Law, Stephen, M.; Nolan, James, F.
    We develop an example estimating a non-parametric cost function with Generalized Additive Models (GAMs,). We demonstrate the feasibility of testing for input separability, providing a test for bias in GAIvIs. Our example focuses on cable television (CA TV) provision, and we estimate a new non-parametric cost function for the Canadian industry using financial and operating data collected between 1990 and 1996 This period is of particular importance from a policy perspective because CA TV in Canada was a rate- and entry-regulated industry prior to 1997. The results show that the input separability assumption holds and the GAIvI system provides a good fit to the CA TV data.
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    Inter-Temporal Tie-Ins: A Case for Tying Intellectual Property
    Law, Stephen, M.
    Hybrid licences tie trade secret rights (which have no fixed expiration) to related patent rights (which expire). Although level royalty hybrid licences, which charge a single royalty for both rights, have been prohibited, it can be shown that infinite-term licensing (ITL) for patent rights may be better than a limited-term patent, when returns to the licensor are fixed. This paper explains hybrid licensing as a means of privately implementing the efficient ITL outcome when returns to the licensor are constrained but not necessarily fixed, without requiring a change in the length of the patent term.
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    Inter-Temporal Tie-Ins: A Case for Tying Intellectual Property
    Law, Stephen, M.
    Hybrid licences tie trade secret rights (which have no fixed expiration) to related patent rights (which expire). Although level royalty hybrid licences, which charge a single royalty for both rights, have been prohibited, it can be shown that infinite-term licensing (ITL) for patent rights may be better than a limited-term patent, when returns to the licensor are fixed. This paper explains hybrid licensing as a means of privately implementing the efficient ITL outcome when returns to the licensor are constrained but not necessarily fixed, without requiring a change in the length of the patent term.
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    Parametric and Non-Parametric Tests for Scale Economies in a Regulated Industry: The Case of Cable Television
    Law, Stephen, M.; Nolan, James, P.
    We examine a situation where parametric and non-parametric approaches to the study of production and optimal scale can be used as complements, rather than substitutes. We illustrate this concept with data from the cable television industry in an evaluation of the timeliness of deregulation. Although we begin with a large sample offering adequate degrees of freedom for parametric estimation, important regulatory policy issues and the structure of the industry lead us to consider parameter estimation over sub-samples. Some sub-samples are small enough that parametric models cannot guarantee reliable estimates. To deal with this problem, we estimate production parameters non-parametric ally using various forms of data envelopment analysis (DEA). Since it is not statistical in nature, the use of DEA is not constrained by degrees of freedom. Not only do the non-parametric estimates shed light on important characteristics of the industry sub-samples when considered in isolation, we also find that on aggregate they agree with parametric estimates when these can be computed.
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    Parametric and Non-Parametric Tests for Scale Economies in a Regulated Industry: The Case of Cable Television
    Law, Stephen, M.; Nolan, James, P.
    We examine a situation where parametric and non-parametric approaches to the study of production and optimal scale can be used as complements, rather than substitutes. We illustrate this concept with data from the cable television industry in an evaluation of the timeliness of deregulation. Although we begin with a large sample offering adequate degrees of freedom for parametric estimation, important regulatory policy issues and the structure of the industry lead us to consider parameter estimation over sub-samples. Some sub-samples are small enough that parametric models cannot guarantee reliable estimates. To deal with this problem, we estimate production parameters non-parametric ally using various forms of data envelopment analysis (DEA). Since it is not statistical in nature, the use of DEA is not constrained by degrees of freedom. Not only do the non-parametric estimates shed light on important characteristics of the industry sub-samples when considered in isolation, we also find that on aggregate they agree with parametric estimates when these can be computed.
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    The Problem of Costs and Market Size for Canadian Cable Television Regulation
    Law, Stephen, M.
    The CRTC policy of awarding an exclusive right to provide cable television (CATV) service within a given licensed service area (LSA) rested partly on the presumption that CATV costs reflect economies of scale that are large relative to market size. Cost estimates from cross-sections of CATV operations from 1985 to 1991 show increasing returns to scale and suggest that many LSAs were too small to capture these economies. The results also indicate that economies of scale for basic service declined over the 1980s and that the "natural monopoly" characteristics of CATV may be eroded by further technological and regulatory changes.
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    The Problem of Costs and Market Size for Canadian Cable Television Regulation
    Law, Stephen, M.
    The CRTC policy of awarding an exclusive right to provide cable television (CATV) service within a given licensed service area (LSA) rested partly on the presumption that CATV costs reflect economies of scale that are large relative to market size. Cost estimates from cross-sections of CATV operations from 1985 to 1991 show increasing returns to scale and suggest that many LSAs were too small to capture these economies. The results also indicate that economies of scale for basic service declined over the 1980s and that the "natural monopoly" characteristics of CATV may be eroded by further technological and regulatory changes.