Australian Economic Review

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  • Issue Information
  • Putting the Australian Economy on the Scales

    Based on the increasing size of the service sector, some believe that growth in advanced countries has come without much change in the physical weight of output. To investigate the question, I generate rough estimates of the physical weight of Australian output from 1831 to 2018, using data on the weight of traded goods. These ballpark estimates imply that the weight of annual output increased from around 50,000 tonnes to around 800 million tonnes. Over the long term, a 10 per cent increase in real GDP was associated with a 12 per cent increase in the physical weight of output.

  • Dynamics of Mental Health and Healthcare Use among Children and Young Adults

    Despite the high rates of mental disorder in adolescents and young adults, treatment utilisation is low. Using Australian longitudinal administrative and survey data, we show an increasing proportion of young people are accessing nervous system scripts as they age. Younger cohorts have increasingly accessed these scripts earlier; usage is generally higher among disadvantaged groups and in regions with better mental health service access. Less than half of all young adults facing very high psychological distress in 2018 had recently accessed mental health care. Instead of professional help, young people turn to friends and family for help with personal and emotional problems.

  • The Value of Pole Position in Formula 1 History

    In this article, we study the effect of the Pole Position in Formula 1 history on the outcome of the race. Using data for every race between 1950 and 2013, we use two approaches to quantify the effect of being on Pole. First, we estimate the effect on the probability of winning the race using a logit model. Second, we estimate a Poisson model to express the effect in terms of finishing positions. We find that the Pole sitter does have a significant advantage over the other drivers on the grid: two positions at the finish line or about a 10 percentage point higher probability of winning the race. These estimates capture the effect controlling for various confounding factors and a rich set of fixed effects, including driver ability, track characteristics and constructor performance. We also document that the effect varies over seasons.

  • Modelling the Spread of the Coronavirus: A View from Economics

    This article reviews the modelling of the spread in Australia of COVID‐19 from the point of view of the discipline of Economics. After a brief overview of the epidemiological approach, we show that other modelling is needed for policy purposes and especially to provide a full understanding of the economic and social costs of disease control. We look at microeconomic aspects of infection, focusing on individual behaviour, the choices facing the individual and implications for policy. The use of a cost–benefit approach and macroeconomic aspects of the pandemic are examined together with the economic consequences of policy response.

  • Introduction
  • Impact of Immigrant Peers on Native Students’ Achievement: Evidence from Australia, Canada and the United States

    This article examines how exposure to immigrant students affects the achievement of native students in Australia, Canada and the United States. Variation in the share of immigrant students across different grade levels within schools is exploited to identify the impact of immigrant peers. The study finds that the effects on native students’ achievements of exposure to immigrant peers differ between the three countries. While exposure has a positive impact on Australian natives, it has a negative impact on Canadian natives. Exposure has no effect on US natives. How immigrant students affect their peers is found to depend on institutional arrangements within the education system.

  • Trends in Market Concentration of Australian Industries

    A host of industrialised countries have seen concentration in their industries grow. This trend is fuelling concerns about falling competition. This article focuses on the changing pattern of market concentration in Australia from 2002 to 2017. On average, market concentration has been rising. However, beneath the aggregate statistics, the pattern is rather mixed, with concentration falling in several sectors. The study also detects a pattern of strong productivity growth alongside a shift towards capital intensive operation and increasing trade where concentration is growing. Overall, the implications of these findings point to the possibility that rising market concentration in some industries is technology driven and not due to a lack of competition.

  • Economic Aspects of Loneliness in Australia

    We highlight the problem of loneliness, and argue that it is not only a public health issue but also an economic problem. We provide a brief review of findings from the key literature on the associations between loneliness, mental and physical health, and healthcare costs; and then present some evidence on its trends, the extent of socioeconomic inequalities and its links with health and healthcare usage, in Australia. We hope to encourage further economics research on loneliness, and related issues of social isolation and poor social support, to aid the design of policies and interventions to reduce loneliness.

  • The Productivity Commission Inquiry Report into Mental Health—A Commentary from a Health Economics Perspective

    The Productivity Commission's Inquiry Report into Mental Health makes extensive recommendations to improve population mental health as a means of further enhancing productivity and economic growth. While providing an invaluable high‐level vision for reforming current mental health and social systems at a programmatic level, it lacks supporting evidence that would guide implementation of specific recommendations. We discuss important methodological considerations used to measure the output of the mental health sector and present clinical and cost‐effectiveness evidence, supporting selected recommendations. We suggest the development of a broad‐based health technology assessment process to facilitate consistent decision making across health and other government sectors.

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