Elasticity of substitution

Generally it can be observed that price elasticity is low, a trend that is aggravated by the fact that in most health systems the consumer does not pay the totality of the price. Some authors state that the elasticity of substitution between medicines in different therapeutic groups can be almost nil. The existence of insurance is an incentive for greater consumption and facilitates the application of higher prices (moral hazard). 

We use the same constant elasticity of substitution model as Bagajewicz (2007). This model is a small modification of the constant elasticity of substitution models found in literature (Hirshleifer and Hirshleifer, 1998 Varian, 1992) where hedonic theory is incorporated. This was extended to multiple competitors by Street et al. (2007). The final expression relating demand of new product to price is ... 

We used a three factor constant partial elasticity of substitution (CPES) production function to depict a firm s output. Specifically,... 

Cross-section data for the U.S. manufacturing sector suggest 1.0 as a reasonable starting value for the elasticity of substitution of capital and labor (Hamermesh 1993). We also investigated how our results change with the elasticity of substitution, or as we move away from the Cobb-Douglas production function. 

Similar to our approach in Chapter 3 we standardized all prices in the simulation model to 1.0, except for the price of WC insurance. We also set the production function s distribution parameters (5 and y) equal to 0.10 and 0.20 and the elasticity of substitution (a = l/(l+p)) equal to 1.0. We adjusted the value of the production efficiency parameter (a) to create a 1 rental rate on human capital in completely safe establishments and the value of the returns to scale parameter (o) to make the demand for labor by a firm approximately unitary elastic. Finally, we calibrated the numerical model via the safety production function (s = Sq + + 52 ) using the initial conditions of (1) a 1 in... 

Remember with the constant partial elasticity of substitution production function we used safety equipment augments labor productivity. As long as OSHA enforcement activities increase the total usage of safety equipment average wages increase. 

Output Production Function. We again used a constant partial elasticity of substitution production function in our numerical simulations that is... 

If the process is conducted reversibly, dQ = TdS where S is the entropy of the elastic body. Substitution of this expression for dQ in Eq. (5) will require dW to represent the element of reversible work. In order to comply with this requirement, the coefficients P and / in Eq. (6) must be assigned their equilibrium values. In particular, / will henceforth represent the equilibrium tension for a given state of the system, which may be specified variously by aS, F, and L, by T, F, and L, or by T, P, and L. Then... 

The influence of RP on selling prices depends on the monopsony power of the buyer, the price elasticity of the product and the cross-price elasticity for substitute products, and also the coverage of products under RP. The situation most likely to result in equivalence between RP and price-cap regulation is when there is a majority buyer, the number of products under RP is very large and demand is very elastic. In general, the RP system attains its objectives best when the pharmaceutical bill has a close relationship with price pressure and when price differentials in the market for equivalent products are high, which has clear links with the presence of generics. 

In order to evaluate the practical effects of co-payment it is essential to have access to quantifications of elasticities. The fourth section of this chapter deals with this. It is far from straightforward to obtain reliable estimates of the elasticities of demand for pharmaceuticals with respect to co-payment and price. Distinctions must be made between active ingredients, brands and generics, and between essential and non-essential drags, and substitution elasticities must be taken into account. 

If the backbone as well as the side chains consist of flexible units, the molecular conformation arises out of the competition of the entropic elasticity of the confined side chains and the backbone [ 153 -155]. In this case, coiling of the side chains can occur only at the expense of the stretching of the backbone. In addition to the excluded volume effects, short range enthalpic interactions may become important. This is particularly the case for densely substituted monoden-dron jacketed polymers, where the molecular conformation can be controlled by the optimum assembly of the dendrons [22-26,156]. If the brush contains io-nizable groups, the conformation and flexibility may be additionally affected by Coulomb forces depending on the ionic strength of the solvent [79,80]. 

The thermal stability, as well as structure-related properties, such as resistivity and elasticity, of polysiloxanes is dependent on the nature of the pendant groups on the silicon atoms. Thus high-molecular-weight polydimethylsiloxanes are attacked at temperatures near 200 °C in the presence of oxygen, but substitution of a phenyl group for one methyl group raises the oxidative stability to 225 °C. 

Fuels that are hard to substitute with each other may have elastic demand with respect to changes in own price or income, but will have low (close to zero) cross-elasticities of demand. Such fuels will not be in the same market and would not compete with each other within their respective markets, however, there may still be strong same-fuel competition. To illustrate, let quantity demanded of gas Qg be determined by its own price Pg, prices of oil P , power Pp, coal Pc and income Y ... 

The strain energy generated by placing a sphere in a hole of different size in a continuous medium depends on the elastic properties of the medium, specifically the Young s modulus ( ) and Poisson s ratio (a). Since, for all liquids. Young s modulus is zero and Poisson s ratio 0.5, the strain energy of substitution into a melt should be zero. This yields the following relationship between the equilibrium constants for reactions (1), Kq, and... 

Enamel mineral has many large hydroxyapatite crystals, whereas bone has many small ones with numerous vacancies and substitutions. These differences increase the elasticity of bone compared with enamel and promote its interactions with the surrounding collagen. Recently, a tightly bound hydration shell that fills a porous collagen-apatite junction was discovered around normal bone crystals. The water-filled pores are normally immobile, but repeated stresses cause the water to leak out from between the mineral and collagen. The drying increases mineralization and crystal formation, which may explain the decreased elasticity of bones with age. 

Replacing the -NH- hydrogen in polyamides by an ether group curtails the intermolec-ular hydrogen bonding. Hence at low degrees of substitution the modulus is reduced and a more elastic fiber is obtained. As the substitution increases, the crystallinity is hompletely destroyed and rubbery property appears. 

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