Journal Article The Old-Age Reserve Account Get access J. Douglas Brown J. Douglas Brown Princeton University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 51, Issue 4, August 1937, Pages 716–719, https://doi.org/10.2307/1881688 Published: 01 August 1937

Journal Article New South Wales Family Endowment Act, 1927 Get access Douglass V. Brown Douglass V. Brown Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 42, Issue 3, May 1928, Pages 500–507, https://doi.org/10.2307/1884790 Published: 01 May 1928

The effect of changing prices on the supply of physicians' services has important policy implications. In this note, a correction of previous work on supply by the author in this shows that with aggregate data the price elasticity of supply is zero. However, using individual physician data in the context of a utility-maximizing model of supply, it is found that the price elasticity of supply is about -0.2. This result could portend serious problems ahead for recently enacted Medicare pricing strategies to contain physician spending. Copyright 1994 by MIT Press.

A substantial portion of the research in input-output analysis has been concerned with attempts to estimate more efficiently the structural parameters. As the coefficients have generally been estimated by nonstochastic techniques, efficiency in this context has implied acceptable estimates at reduced cost. It is possible to distinguish at least two directions of effort. One group of analysts has sought to develop and standardize sampling techniques that would bring the cost of estimating these models within reasonable limits (cf. Miernyk, 1970; Isard and Langford, 1971). Another group has concentrated their effort on non-survey and partial survey techniques-the most widely discussed in recent years being the RAS method developed in the Department of Applied Economics at Cambridge (cf. Bacharach, 1970) and applied for the first time at the regional level by Czamanski and Malizia (1969). In an article in this REVIEW, Gerking (1976a) has argued that acceptable coefficients can be estimated using standard regression techniques. Gerking recognizes the stochastic nature of sample estimates required for the construction of input-output models, and it is argued that a rigorous examination of the value of input-output coefficients is only possible in this context. Elsewhere (Gerking, 1976b; 1976c), he has applied similar methods to the problem of sample size selection and the problem of reconciling row and column coefficients in an input-output context. It is the purpose of this note to demonstrate that the application of stochastic techniques to the estimation of regional input-output coefficients encounters difficulties that must be recognized before more serious work is done in this area. Specifically, we will argue that (1) the nature of the distribution of stochastic disturbances has not been adequately explored, (2) the unique nature of regional input-output models makes application of stochastic techniques particularly difficult, if not impossible, (3) the estimator of major interest in Gerking's article produces parameter values that are not constrained to satisfy both input-output identities, and further, that empirical application of this estimator fails because the associated finitesample distribution does not possess moments.

Several years ago, one of us presented a model of the market for physicians' services (Feldstein, 1970). In a subsequent comment, Brown and Lapan ( 1972) raised several questions about the model and the conclusions. Unfortunately, this comment and the reply by Feldstein ( 1972) left a number of issues unsettled. Some of the disagreement was based on misunderstanding and on drawing infer ences from different theoretical models. After the publication of the comment and reply, we continued to pursue the basis of our disagreements. The cur rent note is an attempt to clarify the issues that were raised but not resolved in the previous ex change.