An economic model of multi-level marketing.

This paper offers an economic model of the operation of multi-level marketing (MLM) firms in competitive and non-competitive markets. The model takes a recursive approach to analyse decision making at the distributor level in order to understand basic issues in the MLM market and firm structure. Specifically, it is shown that under reasonable assumptions MLM firms will have a limited structure. In cases where commissions increase with the number of levels, MLM firms will include no more than six to nine levels in equilibrium. In cases of fixed commissions, market conditions dictate a cap on the number of distributors. These conditions imply a limited "multi-level" structure. They also imply that the revenues of the median distributor are mainly a result of direct sales and not a result of commissions. The model also suggests that MLM firms will only arise where marketing costs are substantial, and that it is primarily individuals with small outside offers who choose to become distributors. Finally, the model provides a formula that calculates market prices for a monopoly MLM firm.

Healthy cities and self-reported health: evidence from Israel.

The World Health Organization's Healthy Cities Network (HCN) enlists community stakeholders (residents, businesses, non-governmental organizations and municipal governments) to promote health, quality of life and sustainable development in urban settings. The project, now three decades old, involves thousands of municipalities globally, including 52 in Israel. However, there is very little evidence regarding the effects of joining the HCN. This study examines whether HCN membership affects residents' self-reported health (SRH). Social survey data for Israel's 13 largest cities in 2005-2017 were analyzed using difference-in-differences and event study research designs. We use the gradual entry of cities to the HCN to compare SRH before and after network entry. Examined variables include municipal spending on health and duration of the city's participation in the network. Data were analyzed through multivariate linear regression with fixed effects at the city and year levels. Joining the HCN does not have an immediate effect on SRH. SRH increases with the duration of the city's participation in the network, but this result is only marginally statistically significant. Municipal health spending mildly increases with membership duration. A weak negative association was found between municipal health spending and SRH. Duration of a city's membership in the HCN is positively associated with residents' SRH; this association is not explained by an increase in municipal health spending. Identifying a mechanism for this improvement is beyond the scope of this study and is left for future research.

Particulate Matter Concentrations, Sandstorms and Respiratory Hospital Admissions in Israel.

BACKGROUND: Exposure to air pollution in the form of particulate matter smaller than 10 µm in diameter (PM10) has been associated with increased morbidity and mortality. However, since air pollution is correlated with confounding factors that might otherwise affect health, identifying the causal link has proven challenging. OBJECTIVES: To identify the effect of PM10 on hospital admissions due to respiratory illnesses. METHODS: We used the Instrumental Variable (IV) methodology to control for confounding factors affecting hospital admissions. Exploiting the timing of sandstorms as an instrumental variable allows for a better estimate of the relationship between PM10 and hospital admissions. Data on PM10 concentrations and hospital admissions were compiled for Israel's two largest cities, Jerusalem and Tel Aviv, for 2007-2009. We compared our IV estimates to those derived from a Poisson regression, which is commonly used in the literature. RESULTS: Sandstorms led to an increase of 307 µg/m3 of PM10 concentrations. A 10 µg/m3 increase in PM10 is associated with a 0.8% increase in hospital admissions due to respiratory conditions, using IV methodology. The same finding was noted using the Poisson regression. CONCLUSIONS: The association between PM10 and hospital admission reflects a primarily causal relationship. Instrumental variable methodology could be applied to analyze the effect of air pollution on hospital admissions.