Review of Applied Economics and Policy - Articles

Naik, Y., Baker, P., Ismail, S., Tillmann, T., Bash, K., Quantz, D., Hillier-Brown, F., Jayatunga, W., Kelly, G., Black, M., Gopfert, A., Roderick, P., Barr, B., Bambra, C.

Background The social determinants of health have been widely recognised yet there remains a lack of clarity regarding what constitute the macro-economic determinants of health and what can be done to address them. An umbrella review of systematic reviews was conducted to identify the evidence for the health and health inequalities impact of population level macroeconomic factors, strategies, policies and interventions. Methods Nine databases were searched for systematic reviews meeting the Database of Abstracts of Reviews of Effects (DARE) criteria using a novel conceptual framework. Studies were assessed for quality using a standardised instrument and a narrative overview of the findings is presented. Results The review found a large (n = 62) but low quality systematic review-level evidence base. The results indicated that action to promote employment and improve working conditions can help improve health and reduce gender-based health inequalities. Evidence suggests that market regulation of tobacco, alcohol and food is likely to be effective at improving health and reducing inequalities in health including strong taxation, or restriction of advertising and availability. Privatisation of utilities and alcohol sectors, income inequality, and economic crises are likely to increase health inequalities. Left of centre governments and welfare state generosity may have a positive health impact, but evidence on specific welfare interventions is mixed. Trade and trade policies were found to have a mixed effect. There were no systematic reviews of the health impact of monetary policy or of large economic institutions such as central banks and regulatory organisations. Conclusions The results of this study provide a simple yet comprehensive framework to support policy-makers and practitioners in addressing the macroeconomic determinants of health. Further research is needed in low and middle income countries and further reviews are needed to summarise evidence in key gaps identified by this review. Trial registration Protocol for umbrella review prospectively registered with PROSPERO CRD42017068357 (https://www.crd.york.ac.uk/PROSPERO/display_record.php?RecordID=68357).

Watanabe, H., Osei, C.

Microfinance access have attracted growing attention because of their relevance to both theory and practice. In contrast to earlier studies, our approach accounts for heterogeneity and avoids the usual simplifying assumptions. Using panel data we find no significant impact on aggregate employment. Using panel data we find that the effect is concentrated among lower-income households, and we show that the result is stable under a range of perturbations of the assumptions. Together, these results contribute to a more complete picture and open the way to further applications.

Mukherjee, R.

Azalu, W., Jemberu, W., Taye, B., Abebe, W., Mekonnen, S.

Background Rabies remains a significant threat to both public health and economic stability across many developing countries. The challenge of effectively managing and preventing rabies is compounded by insufficient quantitative data regarding its financial and health consequences. Despite Ethiopia being one of the most-affected countries in the world, data on the public health and economic burden of rabies are limited. Objective This research aimed to quantify both the health and economic burden of rabies in northwest Ethiopia. Method Follow-up and recording of potential rabies cases were conducted for 18 months in seven districts of northwest Ethiopia. Data were collected from potential rabies cases using a pre-planned checklist. The health and economic burden were quantified using deterministic models. The study primarily adopted a household/patient perspective, focusing on the direct financial burdens faced by individuals and families. Results In the follow-up period, approximately 353 individuals were recorded as rabies victims. Among them, 126 households with suspected rabies cases were treated with traditional medicine, while 60 individuals from 59 households received post-exposure prophylaxis. The annual premature death rate due to rabies was estimated to be 3.14 per 100,000 population. The annual years of life lost due to premature death was estimated to be 90.69 per 100,000 population. Years lived with disability due to rabies illness, disability due to post-exposure vaccine, and traditional treatment were estimated to be 0.68 per 100,000 population. The annual health burden of rabies was estimated to be 91.34 disability-adjusted life years per 100,000 people. The total cost for rabies control measures in humans was estimated to be United States (US) $11,474.66. On average, each household spent US $40.55 on post-exposure prophylaxis, with an annual cost of US $27.03 per household. Regarding livestock, the losses due to rabies were estimated to be US $29,599.85 annually, which translates to an approximate loss of US $274.07 per household per year. Conclusion The findings emphasise the need for targeted interventions to mitigate rabies’ disproportionate impact on vulnerable communities, aligning with global efforts to eliminate the disease by 2030. A One Health approach that integrates rabies control in human and animal health is suggested.

Addis, A., Xindong, Y., Tianze, M., Addis, H.

Economic stability is crucial for improving export performance, particularly within regional trade blocs such as the Common Market for Eastern and Southern Africa (COMESA). However, empirical studies examining how threshold levels of economic stability affect export dynamics among COMESA member states have been limited. This study explores the threshold effects of key economic indicators, economic growth, trade openness, and inflation, on export performance in COMESA countries using panel data from 2000 to 2022. Employing panel threshold regression analysis, this study investigates the nonlinear relationships between these variables, focusing particularly on the impact of inflation thresholds. The study found an optimal inflation threshold of 3.662%, aligning with the lower end of the global benchmark of 3–7% typically observed in emerging and developing economies. In low-inflation regimes (LnInfl ≤ 3.662), GDP significantly enhances export growth by 0.348% per unit increase, while trade openness yields a smaller contribution of 0.091%. In contrast, high-inflation scenarios (LnInfl > 3.662) show that GDP continues to support exports (0.779% increase), but trade openness negatively impacts export performance by 0.127%. Policymakers need to focus on maintaining inflation under the critical threshold of 3.662%, as this is vital for enhancing the benefits of GDP growth and trade openness on export performance. These insights underscore the necessity of keeping inflation in check to improve export competitiveness. Additionally, prioritizing monetary, fiscal, and institutional stability initiatives will support sustainable growth and strengthen regional trade dynamics within COMESA, as exceeding this inflation limit could impede export potential and regional integration efforts. This study offers valuable insights for developing regions aiming to enhance their trade performance through effective economic policies.

Mohamud, K., Warei, S., Abubakr, A.

Out-of-pocket (OOP) health expenditures impose a heavy burden on Somali households, with profound implications for financial stability and access to care. This research examines the extent and impact of OOP health spending in Somalia, drawing on a survey of 2,000 households and situating Somalia’s experience in regional and global context. Findings indicate that OOP payments account for 44.9% of Somalia’s total health expenditures – far above the global average (18.6%) and the Sub-Saharan Africa average (35.7%). Health insurance coverage is extremely low (only 3.5% of Somalis are insured), leaving most households financially unprotected. As a result, 24% of households incur catastrophic health spending (medical expenses exceeding 10% of income), and a majority resort to harmful coping strategies such as borrowing money, selling assets, or cutting essential consumption to afford healthcare. These OOP burdens are driving many families into poverty and deterring utilization of needed services. International comparison underscores that Somalia’s OOP burden is exceptional, reflecting a fragile health financing system. Drawing on global lessons and the local survey evidence, this paper discusses policy options to reduce OOP expenditures and improve financial protection. Key recommendations include expanding health insurance coverage (through community-based and government-subsidized schemes), implementing social health protection measures (e.g. health vouchers and conditional cash transfers), increasing public investment in healthcare, and strengthening cost regulation. Such reforms are crucial for Somalia to progress toward universal health coverage, protect households from financial hardship, and ensure equitable access to essential health services.

Liu, C., Masron, T., Huo, H.

This paper investigates the link between trade policy uncertainty (TPU) and stock price crash risk in Chinese listed firms. Using a novel firm-level TPU index derived from annual reports between 2001 and 2023, we show that heightened TPU significantly elevates crash risk, robust across multiple specifications and measures. The effect is particularly pronounced in private firms, those with CEO duality, internationalized firms, and those audited by non-Big Four auditors. Mechanism tests reveal that TPU exacerbates crash risk through discretionary accruals, suppressed exports, investor sentiment distortions, analyst forecast bias, and information asymmetry. Importantly, market liberalization and digital transformation act as effective buffers. Our findings highlight TPU as a key determinant of firm-level fragility and extend the literature on uncertainty by uncovering the micro-level channels through which trade policy shocks destabilize capital markets, offering actionable insights for policymakers and investors.

Pavlenko, O., Fjodorovs, J.

Recession forecasting is important for economic policy, financial risk management, and business planning. This study examines recession modelling and forecasting using publicly available quarterly Latvian macroeconomic data. Three logistic specifications are developed and compared: classical logit, threshold logit, and smooth transition logistic models. The nonlinear specifications allow the effects of key recession predictors to vary across economic regimes. Predictors are selected using correlation analysis and multicollinearity diagnostics, based on which inflation, manufacturing confidence, and lagged recession dynamics are chosen. We assess model performance using in-sample fit measures, including information criteria and McFadden’s pseudo-R2, and out-of-sample forecast accuracy using the Brier score and mean absolute error. The models are also compared using the area under the receiver operating characteristic (ROC) curve (AUC). The results indicate that regime-dependent models provide stronger in-sample fit than the classical specification. In the out-of-sample evaluation, the smooth transition logistic model records the lowest Brier score and mean absolute error among the three models. The results provide empirical evidence that regime-dependent logistic specifications can be useful for modelling recession probabilities in small open economies like Latvia, although the limited number of observations, imbalanced data, and only 18-step-ahead forecast calls for cautious interpretation of the forecasting results.

Liu, S., Wang, K., Wang, R., Chen, H., Wan, Z., Dou, L., Li, S.

Background The ASCENT and OptiTROP-Breast01 trials indicated that sacituzumab govitecan and sacituzumab tirumotecan significantly improved clinical benefits in metastatic triple-negative breast cancer (TNBC). This study evaluated the cost-effectiveness of trophoblast cell-surface antigen 2 (TROP2)-targeted antibody-drug conjugate (ADC) from the Chinese healthcare system perspective. Methods A partitioned survival model with 21-day cycles was developed to simulate total costs, life-years, quality-adjusted life-years (QALYs), incremental cost-effectiveness ratio (ICER) over 10-year time horizons. Clinical data was extracted from the ASCENT and OptiTROP-Breast01 trial, costs and utilities were estimated from public bid-winning databases, local charges and published literature. The willingness-to-pay (WTP) threshold was three times gross domestic product per capita in 2024 ($40,334.05). In scenario analysis, models were constructed employing network meta-analyses based on chemotherapy as the reference arm. One-way and probabilistic sensitivity analyses were implemented to examine the robustness of the model. Results In the base-case, the ICERs were $92,593.65/LY and $122,486.54/QALY for sacituzumab tirumotecan, and $348,005.00/LY and $409,219.27/QALY for sacituzumab govitecan compared with chemotherapy. Sacituzumab tirumotecan was dominant versus sacituzumab govitecan by virtue of lower costs and higher QALYs. When the unit costs of sacituzumab tirumotecan and sacituzumab govitecan were lower than $475.12 per 200 mg and $141.54 per 180 mg, they would be cost-effective over chemotherapy. The utility value of progression-free survival state was the most critical role on the base-case result. Probabilistic sensitivity analyses revealed that substantial price reductions for sacituzumab tirumotecan and sacituzumab govitecan could dramatically increase the probabilities of becoming cost-effective. Conclusion Sacituzumab tirumotecan and sacituzumab govitecan were unlikely to be cost-effective in previously treated metastatic TNBC. Sacituzumab tirumotecan was the preferred TROP2-targeted ADC in China. Supplementary Information The online version contains supplementary material available at 10.1186/s13561-025-00700-0.

Liu, C., Masron, T., Huo, H.

This paper investigates the link between trade policy uncertainty (TPU) and stock price crash risk in Chinese listed firms. Using a novel firm-level TPU index derived from annual reports between 2001 and 2023, we show that heightened TPU significantly elevates crash risk, robust across multiple specifications and measures. The effect is particularly pronounced in private firms, those with CEO duality, internationalized firms, and those audited by non-Big Four auditors. Mechanism tests reveal that TPU exacerbates crash risk through discretionary accruals, suppressed exports, investor sentiment distortions, analyst forecast bias, and information asymmetry. Importantly, market liberalization and digital transformation act as effective buffers. Our findings highlight TPU as a key determinant of firm-level fragility and extend the literature on uncertainty by uncovering the micro-level channels through which trade policy shocks destabilize capital markets, offering actionable insights for policymakers and investors.