Research
My main fields of research are Applied Microeconomics, Public Economics and Health Economics.
In my recent works, I have studied different features of the interaction between the public and the private sectors when they provide goods such as health care, but also education or housing.
See: Public Sector Rationing and Private Sector Selection (with Albert Ma), 2008; Rationing Poor Consumers to Reduce Prices (with Albert Ma), 2008; On the Characteristics of a Mixed System of Provision of a Private Good. An Application to Health Care, 2006.
I have worked on the design of subsidy policies based on different pieces of information. See: Subsidy Design and Asymmetric Information: Wealth versus Benefits (with Albert Ma), 2007.
I have a project on the use of subjective variables in a regression framework. See: Regulation and Consumers’ Satisfaction from Public Services: an Individual Fixed Effect Approach (with Riccardo Puglisi), 2007.
I am working on a new project on the relationship doctor-patients with a focus on patients’ available information (with Izabela Jelovac, GATE-Lyon).
In my current work, I model the concept of affordability. It often happens that some consumers, who can potentially benefit a lot from the consumption of a good like health care of education, are not able to pay for the good in the market. Affordability of goods such as health care or higher education or housing is a pervasive problem in almost every country. I study the policy chosen by a public sector with scarce resources that maximizes the sum of consumers’ utilities subject to the wealth constraints. I consider a rationing and a subsidy policy. I also study the game between the public sector and a private firm and compare the equilibrium policies to the optimal policies when the public sector is the sole provider of the good.
Other works:
Optimal Policy for a Mixed System of Provision of a Private Good;
Public Provision of Private Goods: the State of the Art.
Current Projects
I model the concept of affordability. Different consumers derive different benefits in utility unit from the consumption of an indivisible good, such as education or health-care or housing. The benefit from consumption is the willingness to pay for the good. Different consumers have different abilities to pay for the good and cannot borrow money in the credit market. Consumers with high willingness to pay may not afford the good at a given price. The market allocation is inefficient. The public sector has a budget, but it is insufficient to supply all consumers for free. It observes consumers' wealth and implements a policy to maximize the sum of consumers' utilities subject to the wealth constraints. I consider two optimal policies: rationing and subsidization. First I study the public supplier as the sole provider of the good. Any rationing policy that exhausts the budget is optimal. The optimal subsidy scheme requires cross subsidization: rich consumers pay a price greater than marginal cost, and some poor consumers pay less than marginal cost. The budget and the revenue collected from rich consumers funds the subsidies for poor consumers. I also study the equilibrium of a simultaneous moves game where the public sector interacts with a firm in the provision of the good. The firm chooses a price function based on consumers' benefit, but does not observe abilities to pay. In the highest welfare equilibrium of the game where the public supplier chooses a rationing policy, the budget is spent on supplying the good for free to poor consumers. If the budget is very high, the firm sets a price higher than the monopoly price. In the equilibrium of the game where the public sector chooses subsidies, cross subsidization is impossible. The public supplier and the private firm compete a la Bertrand. The firm sets a constant price equal to the marginal cost and prevents the public supplier to set prices above marginal cost to wealthier consumers.
» ability to pay and willingness to pay.pdf (PDF, 369.53 Kb)