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Nonparametric estimation of a compensating variation : the cost of disability

HANCOCK, Ruth
MORCIANO, Marcello
PUDNEY, Stephen
December 2013

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This paper proposes a nonparametric matching approach to estimation of implicit costs based on the compensating variation (CV) principle. The paper aims to introduce the matching approach, compare its properties with those of the conventional indirect parametric approach, and demonstrate its application in an important policy area. The authors apply the method to estimate the additional personal costs experienced by disabled older people in Great Britain, finding that those costs are substantial, averaging in the range £48-61 a week, compared with the mean level of state disability benefit (£28) or total public support (£47) received. Estimated costs rise strongly with the severity of disability. The authors compare the nonparametric approach with the standard parametric method, finding that the latter tends to generate large overestimates unless conditions are ideal, and recommend the nonparametric approach

ISER Working Paper Series, No. 2013-26

Towards equitable access to medicines for the rural poor : analyses of insurance claims reveal rural pharmacy initiative triggers price competition in Kyrgyzstan

WANING, Brenda
et al
December 2009

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This article examines medicines price competition that ensued in a rural village in Kyrgyzstan after the opening of a small network of non-profit pharmacies created and managed by an NGO. While the rural pharmacies were created to increase access to medicines in villages where no pharmacies existed, the project had unexpected, substantial spillover effects, spurring medicines price reductions in pharmacies quite far away

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