Melbourne Institute of Applied Economic and Social Research - Research Publications

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    Contract Type and the Cost of Provision: Evidence from Maintenance Service Contracts
    Jensen, PH ; Stonecash, RE (WILEY-BLACKWELL PUBLISHING, INC, 2009-06)
    Abstract More than half a billion dollars are spent each year on the maintenance of Australia's urban water and sewerage networks. Expenditure is governed through a mix of in‐house and outsourced maintenance service contracts. We re‐examine issues relating to the relationship between the cost of maintenance service provision and the type of contract used. We take advantage of the fact that water retailers in Melbourne use a mix of contract types – including fixed‐price (FP) and cost‐plus (C+) contracts – for the provision of water and sewerage network maintenance services. Our results suggest that the C+ contract results in substantial savings.
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    HOSPITAL TYPE AND PATIENT OUTCOMES: AN EMPIRICAL EXAMINATION USING AMI READMISSION AND MORTALITY RECORDS
    Jensen, PH ; Webster, E ; Witt, J (WILEY, 2009-12)
    This paper investigates whether there are differences in patient outcomes across different types of hospitals using patient-level data on readmission and mortality associated with acute myocardial infarction (AMI). Hospitals are grouped according to their ownership type (private, public teaching, public non-teaching) and their location (metropolitan, country and remote country). Using data collected from 130 Victorian hospitals on 19,000 patients admitted to a hospital with their first AMI between January 2001 and December 2003, we consider how the likelihood of unplanned re-admission and mortality varies across hospital type. We find that there are significant differences across hospital types in the observed patient outcomes - private hospitals persistently outperform public hospitals.
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    THE EFFECTS OF AN INCENTIVE PROGRAM ON QUALITY OF CARE IN DIABETES MANAGEMENT
    Scott, A ; Schurer, S ; Jensen, PH ; Sivey, P (WILEY-BLACKWELL, 2009-09)
    An incentive program for general practitioners to encourage systematic and igh-quality care in chronic disease management was introduced in Australia in 1999. There is little empirical evidence and ambiguous theoretical guidance on which effects to expect. This paper evaluates the impact of the incentive program on quality of care in diabetes, as measured by the probability of ordering an HbA1c test. The empirical analysis is conducted with a unique data set and a bivariate probit model to control for the self-selection process of practices into the program. The study finds that the incentive program increased the probability of an HbA1c test being ordered by 20 percentage points and that participation in the program is facilitated by the support of Divisions of General Practice.
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    ANOTHER LOOK AT THE RELATIONSHIP BETWEEN INNOVATION PROXIES
    Jensen, PH ; Webster, E (WILEY, 2009-09)
    Shortcomings in the treatment of intangible investment in company accounts imply that there is no statistical collection for innovative activity which abides by the logic used for other economic activity data. As a consequence, analysts rely on innovation proxies derived from administrative and survey data. However, it is still unclear exactly how the different proxies are correlated, and whether the choice amongst different proxies matters. In the light of the innovation measurement, this paper takes another look at the relationship between different proxies of firm innovation. The results show that firm‐level correlations between survey‐based indicators and other proxies for innovation are highest for manufacturing firms and for product innovations.
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    Firm size and the use of intellectual property rights
    Jensen, PH ; Webster, E (WILEY, 2006-03)
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    Incentives and the efficiency of public sector-outsourcing contracts
    Jensen, PH ; Stonecash, RE (WILEY, 2005-12)
    Abstract.  Outsourcing the provision of traditionally publicly provided services has become commonplace in most industrialized nations. Despite its prevalence, there still is no consensus in the academic literature on the magnitude (and determinants) of expected cost savings to the government, nor the sources of those savings. This article considers the arguments for (and against) outsourcing and then examines the empirical evidence pertaining to whether any observed savings occur and whether they persist over time. In addition, we examine the existing evidence for the ‘redistribution hypothesis’ and the ‘quality‐shading hypothesis’, which critics have used to argue that outsourcing lowers government expenditure by lowering wages and conditions and/or lower quality services. Finally, we consider the impact of contract design on outsourcing outcomes. While the power of incentives is a strong theme in economics, recent work has suggested that high‐powered incentives may be suboptimal for many public sector services, because they may crowd out intrinsic motivation, particularly in instances where agents are highly motivated. We discuss the implications of this insight for the efficiency of public sector outsourcing.
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    Innovation, Technological Conditions and New Firm Survival
    Jensen, PH ; Webster, E ; Buddelmeyer, H (WILEY-BLACKWELL, 2008-12)
    High neonatal mortality is one of the most salient ‘facts’ about firm performance in the industrial organisation literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis‐à‐vis incumbent firms in Australia. In particular, we focus on how the intensity of innovation in each industry relates to firm survival. Our results imply that while new firms thrive in risky and innovative industries, they are also more susceptible to business cycle effects such as changes in the rate of growth of industry profits and the availability of equity finance.