The Relation of Stock Prices to Corporate Earnings Adjusted for Inflation
The effects of inflation adjustments of corporate earnings on market prices were tested by cross section regressions of 485 manufacturing companies for the period 1966-76 and subperiods. The basic data were company reports and stock prices. For the full period, market prices reflected the inventory valuation adjustment and the decline in real value of net financial liabilities fairly completely, but they reflected the adjustment for the understatement of depreciation to only a small extent. The surprisingly low effect of the depreciation adjustment could only be partly attributed to measurement error, but not entirely. The estimated effect of capital gains on stock prices was either in the wrong direction or negligible. The implication of the results is that market investors use a range of adjustments for the effects of inflation which differs from the estimates used in this study, though how and why they differ is not clear. The adjustments were much lower in the later period 1972-76 than in the earlier period 1966-71. This seemed inconsistent with the higher inflation rates in the later period. The explanation for the difference is not clear, but it may reflect the difficulties of judging the size of the adjustments in a period of rapid inflation.
Imported Inflation 1973-74 and the Accommodation Issue
The purpose of the present study is to measure the amount of price increase that the proposals for accommodation required in 1973-74. Presumably such an estimate of the amount could be made in time to act on it. Whether accommodation is a desirable policy is not addressed here. Consistently followed, it would result in a higher long-run rate of inflation, because there are not likely to be nearly enough episodes of deflationary accommodation to offset the inflationary ones. Notwithstanding the appeal in the short run to accept inflationary fait accompli in order to avoid prolonged economic slack, one may have strong reservations about the long-run consequences on expectations of following such a policy.
Study on essential drug use status and its influencing factors among cerebral infarction inpatients in county level hospitals of Anhui Province, China
Background and purpose Drug costs is one of the main components of hospitalization expenditure for cerebral infarction inpatients. In China, the National Essential Medicine System (NEMS) was created to relieve the heavy drug-cost burden for patients. The objective of this study was to investigate essential drug-use status and its influencing factors among cerebral infarction inpatients in county-level hospitals of Anhui province, China. Methods Three county-level hospitals were selected through a multi-stage cluster random sampling method. The hospitalization cost data of cerebral infarction inpatients in the three hospitals were extracted from the Anhui provincial information platform of the New Rural Cooperative Insurance System (NCMS), and whether the proportion of essential drug cost in the total drug cost reached the median value of 33.05% which was set as the evaluation index for essential drug-use status. Questionnaires for hospitals and physicians were designed and given to them to assess influencing factors. Results We retrieved the cost data of 2,189 inpatients from the NCMS platform and investigated 51 corresponding physicians in total. The drug costs accounted for 52.6% of the total hospitalization cost, and essential drug costs alone accounted for 37.0% of the total drug costs. The essential drug-cost proportion was high among physicians with a higher recognition degree on NEMS, older age, lower final academic degree, longer work experience and lower professional title. Married physicians and those with tight organizational affiliation also prescribed more essential drugs. Conclusions Increasing the proportion of essential drugs was an effective way to reduce the disease burden for cerebral infarction patients. Perfecting the NEMS, increasing government investment, reinforcing education and propaganda, and formulating relevant incentive and restrictive mechanisms were all effective ways to promote and increase the number of essential drug prescriptions written by physicians.