Hiroshi Aiura

Privatization of local public hospitals: effect on budget, medical service quality, and social welfare

We analyze a duopolistic health care market in which a rural public hospital competes against an urban public hospital on medical quality, by using a Hotelling-type spatial competition model extended into a two-region model. We show that the rural public hospital provides excess quality for each unit of medical service as compared to the first-best quality, and the profits of the rural public hospital are lower than those of the urban public hospital because the provision of excess quality requires larger expenditure. In addition, we investigate the impact of the partial (or full) privatization of local public hospitals.

A model of urban demography

This study develops an overlapping generations model that involves the endogenous determination of demographic and city structure to fully analyze the social and natural changes in city populations. We provide conditions under which the model exhibits the spatial features of demography observed in urban areas: city centres have a lower total fertility rate than suburbs and larger cities have a lower total fertility rate than smaller cities. Through calibration, we also show that spatial factors have a significant impact on demographic characteristics and city growth.