François Langot (Le Mans Université)

Abstract

Using a general equilibrium heterogeneous agent model featuring health production, we quantify the contribution of health price in explaining cross-country differences in health expenditures and health status. Considering other country-specific explanatory factors, U.S. health prices are estimated to be 25% higher than those of European countries. This price differential explains more than 60% of the difference in health expenditures and more than half of the difference in health status between Europe and the U.S. Despite its large impact at the aggregate level, these price differences increase the lifetime cost of living of Americans by two percentage points.

Among the 17 sustainable development goals adopted by the United Nations in 2015 to eradicate poverty are ensuring (i) “availability and sustainable management of water and sanitation” and (ii) access to modern energy sources. One problem for Mahorais households is access to safe, clean and affordable essential utility services, such as electricity, water and sewerage. We define a new concept of utility services poverty (basic utility services deprivation) based on the theoretical capabilities framework of Sen and Nussbaum. Using a latent class model to evaluate utility services poverty in Mayotte Island, we identify households that are poor in utility services and characterize four household profiles on a scale of vulnerability/poverty. We demonstrate that access to water is more discriminatory than access to electricity in Mayotte. The top priority in fighting utility services poverty should be access to water and sanitary facilities. We show that utility services poverty and income poverty are distinct phenomena. Public policies that aim to support only the income poor do not solve the problems of access to utility services in Mayotte. Policies should be implemented not according to income but to facilitate water and energy access and improve basic hygiene conditions.

We build a model of social media influencer marketing in which a firm may hire influencers to inform consumers of an innovation. Influencers generate sales through purchases of their followers and followers’ social networks. While rational consumers learn product quality before purchase, naïve consumers don’t and instead follow the advice of influencers and peers. In equilibrium influencers price according to their contribution to sales, which depends on the number of followers. In turn, the firm hires an influencer if her contribution to sales exceeds the costs of producing the endorsement. The quality of the endorsement and the product price is such that it maximizes industry profits. In particular, the firm will exploit consumers’ na ̈ıvit ́e and make influencers provide exaggerated endorsements along with overpricing of the product if product quality is relatively low. We further show how equilibrium profits depend on the players’ relative market power.

Thepthida Sopraseuth