We examine why managed care plans are less expensive than traditional indemnity insurance plans. Our database consists of the insurance experiences of over 200,000 state and local employees in Massachusetts and their families, who are insured in a single pool. Within this group, average HMO...

A cross-country regression using only a handful of deeply rooted explanatory variables accounts for 80 percent of the variation in living standards across countries. Most of the biggest residuals from the regression can also be explained, at least partially, with rudimentary facts about the...

Statistical inference often depends on the estimation of a model where errors are uncorrelated with the variable being predicted. If the model is hypothesized to represent a system in nature, then the errors are usually assumed to be the result of randomness or other exogenous processes....

We examine a system of Unemployment Insurance Saving Accounts (UISAs) as an alternative to the traditional unemployment insurance system. Individuals are required to save up to 4 percent of wages in special accounts and to draw unemployment compensation from these accounts instead of taking...

Why do indemnity insurance plans cost substantially more per capita—77% more in our study—than HMOs? We answer this question using data from a large organization’s insurance pool, covering 215,000 lives. We decompose cost differences for eight major medical conditions into...