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BPA Faculty Publishes 5 Articles

Dr. Richard GearhartDr. Richard Gearhart has published 5 articles within the past year. The articles and abstracts are located below:

"Oil Price Fluctuations and Employment in Kern County: A Vector Error Correction Approach" (with Nyakundi Michieka)Energy Policy, 87: 584-590, 2015.

Kern County is one of the country’s largest oil producing regions where a significant fraction of the labor force works in the oil industry. In this study, the short- and long-run effects of oil price fluctuations on employment in Kern County are investigated. First, we investigate whether the West Texas Intermediate (WTI) and Brent Spot prices have an effect on employment in Kern County. This relationship is explored using a modified version of the Granger Causality test proposed by Toda and Yamamoto (1995), before a VECM is used to examine the employment-oil price linkage both in the short- and long-run. Empirical results over the period 1990:01-2015:03 suggest long-run causality running from both WTI and Brent to employment. No causality is detected in the short-run. Results reveal that Kern County should formulate appropriate policies, taking into account the fact that changes in oil prices have long term effects on employment rather than short term.

"The Robustness of Cross-Country Healthcare Rankings Among Homogeneous OECD Countries" Journal of Applied Economics, XIX(1): 113-144, 2016.

This paper examines cross-country healthcare efficiency rankings using modern, non-parametric estimator. It re-examines analyses of cross-country healthcare efficiency using the hyperbolic direction, extending the dataset to include more years to estimate efficiency rankings and Malmquist indices to determine productivity changes over the panel. This paper finds that cross-country heterogeneity leads to different efficiency rankings than previously thought, and that the newer hyperbolic order-α estimator leads to more robust efficiency scores when looking across different output measures when looking at the more homogeneous OECD countries only. It also finds that the United States, if excluding the percent of healthcare expenditures that are publicly financed, is one of the more inefficient healthcare delivery systems in the world, across a variety of output measures. This highlights the need for reform in the United States. However, what are commonly thought of as well-run healthcare systems (Austria and France) are either inefficient themselves or have variation in their efficiency rankings, showcasing difficulties in using other countries’ healthcare systems as models for reform. It also finds that there has been productivity regression in all countries except the United States, which has no statistically significant productivity change. These highlight the difficulties in cross-country efficiency comparisons, and the need for reliable estimates that policy can be derived from.

"Healthcare Efficiency of California Counties: The Results are not what they seem" Forthcoming, International Journal of Health Economics.

This paper examines cross-county healthcare efficiency rankings using modern non-parametric estimators. It finds that using an input-output specification leads to drastically different rankings than are found in input-only or output-only specifications. In fact, counties that are commonly thought of as being some of the worst healthcare providers in California, such as Kern County, are much more efficiently producing healthcare than in these previous analyses, largely because of the low levels of healthcare inputs that these counties have. This paper finds that when using only years of life lost as an output, most counties in California show productivity improvement in healthcare delivery since 2011. If you include additional outputs, then nearly all counties show productivity regression, hinting that changes in the structure of healthcare delivery since 2011 may not have altered health outcomes, but opinions of healthcare delivery as a whole. It lastly finds that some common demographic indicators, such as having more individuals who are Hispanic, who are not proficient in English, and who are young lead to more efficient healthcare delivery systems. This is likely due to the fact that these demographic groups do not utilize the healthcare system or seek cheap treatments for rather common ailments.

"No Theory: An Explanation of the Lack of Consistency in Cross-Country Healthcare Comparisons Using Non-Parametric Estimators" Forthcoming, Health Economics Review.

Since 2000 several papers have examined the efficiency of healthcare delivery systems worldwide. These papers have extended the literature using drastically different input and output combinations from one another, with little theoretical or empirical support backing these specifications. Issues arise that many of these inputs and outputs are available for a subset of OECD countries each year. Using a common estimator and the different specifications proposed leads to the result that efficiency rankings across papers can diverge quite significantly, with several countries being highly efficient in one specification and highly inefficient in another. Broad input-output measures that are collected annually provide consistent efficiency rankings across specifications, compared to specifications that utilize specific measures collected infrequently. This paper also finds that broad output measures that are not quality-adjusted, such as life expectancy, seem to be a suitable alternative for infrequently collected quality-adjusted output measures, such as disability adjusted life years.

"Non-parametric Frontier Estimation of Health Care Efficiency Among US States, 2002-2008" Forthcoming, Health Systems.

This paper examines cross-state healthcare efficiency rankings using modern non-parametric estimators. Cross-state efficiency rankings are robust to minor modifications in the input-output combinations used for estimation. This paper also finds that there is no clear relationship between health care efficiency rankings and per capita health care expenditures in that state in the models used for this paper, even though this is a key variable that policymakers target. It also finds that Massachusetts, in one dataset, has shown significant productivity improvement from 2005 to 2008, the time period during which its health care reform was launched. In a second dataset, from 2002 to 2007, productivity regressed in Massachusetts. This may hint that efficiency gains from structural healthcare reform can outweigh population behavioral inefficiencies from using the ER as a source of primary care with insurance coverage expansion. I also find that states that chose to expand Medicaid were less efficient, on average, than states that did not choose to expand Medicaid. Simple variable comparisons suggest this is an artifact of the data and political decision-making, rather than people migrating for Medicaid or productive inefficiency.

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