Papers by Lars Hultkrantz
The European Journal of Health Economics
Results from economic evaluations of long-term outcomes are strongly dependent on the chosen disc... more Results from economic evaluations of long-term outcomes are strongly dependent on the chosen discount rate. A recent review of national guidelines for evaluation of healthcare interventions finds that “the level of currently used discount rates seems relatively high in many countries”. However, this conclusion comes from a comparison to rates derived or observed for investments in safe assets, while rate of return requirements are typically considerably higher when investment involves risk. This paper reviews recent literature on how to account for project-specific risk in determination of the social rate of discount and discusses implications for economic evaluation of healthcare interventions. It concludes that the available empirical evidence strongly suggests that the demand for and consumer value of health and healthcare is co-variant with income, which therefore implies that there is a non-diversifiable risk component of health-related investment.
Applied Economics
Martin Weitzman has suggested a method for calculating social discount rates for long-term invest... more Martin Weitzman has suggested a method for calculating social discount rates for long-term investments when project returns are covariant with consumption or other macroeconomic variables, so-called 'tail-hedge discounting'. This method relies on a parameter called 'real project gamma' that measures the proportion of project returns that is covariant with the macroeconomic variable. We compare two approaches for estimation of this gamma when the project returns and the macroeconomic variable are cointegrated. First, we use Weitzman's own approach, and second a simple data transformation that keeps gamma within the zero to one interval. In a Monte-Carlo study, we show that the method of using a standardized series is better and robust under different data-generating processes. Both approaches are examined in a Monte-Carlo experiment and applied to Swedish time-series data from 1950-2011 for annual time-series data for rail freight (a measure of returns from rail investments) and GDP.
Journal of Benefit-Cost Analysis
Beginning as a planning tool within Sweden’s national road administration some 50 years ago, bene... more Beginning as a planning tool within Sweden’s national road administration some 50 years ago, benefit-cost analysis (BCA) has come to be a pillar of the national transport policy because of subsequent strategic choices made by the national parliament. These choices made it necessary to widen the analysis of costs to include also externalities and a foregone conclusion was that efficient investment priorities should be made based on BCA. But no one asked whether the political decision makers or the BCA models were up to that task. This paper reviews the institutional framework and practice of BCA in Sweden for transport infrastructure investment, and considers design issues that have been and still are debated, such as whether the discount rate should include a risk term and how to account for the marginal cost of public funds. A main concern with BCA results is the underestimation of construction costs, making transport sector projects look better than they are. Several ex post analy...
Tourism Economics
This is a study of demand by Swedish residents for recreational travel (long-distance daytrip exc... more This is a study of demand by Swedish residents for recreational travel (long-distance daytrip excursions and tourist travel involving overnight stay). We estimate the relationships determining total recreational travel expenditures and the number of trips for six specific purposes (outbound international travel; domestic trips for visiting friends and relatives; staying in a leisure-cottage; participating in activities; seeing an attraction or event; and trips for making experiences). These results are obtained by general-to-specific autoregressive distributed lag modelling using monthly time-series from national telephone-survey data from 1989:1 to 1993:10. Estimated dynamic equations are used for an assessment of the impact on tourism of the major reform of the Swedish tax system 1990–91.
Nordic Journal of Working Life Studies
In this study, we investigate whether, or to what degree, a ‘business case’ could be made for imp... more In this study, we investigate whether, or to what degree, a ‘business case’ could be made for implementation of a Supported-Employment (SE) inspired program for pupils with intellectual disabilities (IDs), starting during the final school years. For this aim, we do a quasi-experimental before-after intervention impact evaluation of such a project funded by the European Social Fund in the Swedish city of Örebro (135,000 inhabitants) during 2010–2013. From an estimate of the average treatment effect, we calculate the internal net present value and the payback period that would make this program break even from avoided expenditure for day-activity services, assuming that it had been funded entirely by the municipality.
Scandinavian Journal of Disability Research
Several countries provide day activity programmes for people with intellectual disabilities. Litt... more Several countries provide day activity programmes for people with intellectual disabilities. Little is known about the quality of these programmes or about their effectiveness in providing vocational training. In this study, we analysed the distribution across Swedish municipalities of the cost per user and how this is related to five structure quality and one outcome quality variables. We observed that the expenditure per attendee varies considerably between different municipalities. Statistical analysis was used to study to what extent expenditure per user correlates with supply-side factors, (political) demand-side factors and quality indicators. This indicated that the variation of expenditure is not explained by supply-side factors only. The local tax base and other local economic and/or political circumstances are statistically significant covariates, in spite of the entitlement legislation that gives eligible persons right to services of equal quality independent of such location-specific factors. We also found that municipalities that conduct regular user surveys find reasons to, on average, spend more per user. Finally, we found that the probability for transitions to employment at a regular workplace is higher in municipalities where as an annual routine, a review is made of whether each participant can be offered an internship or work.
Festival Management and Event Tourism, 1998
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Papers by Lars Hultkrantz