Targeting interventions to high-risk populations: Benefits and costs

Targeting prevention interventions to high-risk populations may increase intervention benefits, but identifying and/or finding the high-risk populations may increase intervention costs. We explore the costs and benefits of targeting in the context of human immunodeficiency virus (HIV) prevention in high-risk injection drug users (IDUs). Focusing interventions on such a population should maximize the number of HIV infections averted. Recruiting high-risk IDUs for such interventions, however, may be more difficult and costly. We base our analysis on an earlier model that determines the allocation of resources to two interventions, street outreach and methadone maintenance. The model seeks to minimize HIV incidence in a population of heterosexual IDUs and their non-injecting sex partners. We conclude that while targeting an inexpensive intervention like street outreach rarely proves to be cost-effective, even a costly targeting effort can increase cost effectiveness for an expensive, effective, narrowly focused intervention such as methadone maintenance.     

The Effectiveness of Educational and Needle Exchange Programs: A Meta-analysis of HIV Prevention Strategies for Injecting Drug Users

A meta-analysis of 16 educational interventions and 10 needle exchange programs was performed to estimate the effectiveness of reducing HIV risk behaviors in the injecting drug user population. Information on intervention, outcome, design and demographics was coded and analyzed for all educational and needle exchange program evaluation studies published between January 1984 and May 1995. The weighted mean effect size for the 6,251 study subjects of the 16 educational interventions was 0.749 (95% CI, 0.708 to 0.790), and the weighted mean effect size for the 1,675 study subjects of the 10 needle exchange programs was 0.279 (95% CI, 0.207 to 0.352), suggesting that both interventions had a positive impact on reducing HIV risk behaviors associated with injecting drug use. However, these results were dependent upon research design, outcome type and follow-up time.     

There is no smoke without a fire: The effect of government interventions in less advanced economies

The lack of liquidity in the interbank market during the crisis of 2007–2011 led governments to impose different policies to rescue their countries’ banking sectors. While in advanced countries interventions in the banking sector were mostly related to a lack of liquidity and significant asymmetric information regarding counterparty risk, in many less advanced countries they had a precautionary motive. In our article, we investigate the effectiveness of policy interventions on healthy banking markets, with possible negative spill-over effects from other countries. To this extent, we use an event study methodology to test the effect of liquidity and financial sector policy announcements on interbank spread changes in six Central and Eastern European (CEE) countries over the period between 2007 and 2011. We find that standard liquidity interventions did not provide effective stabilization. In fact, our evidence suggests that the spread widened after their announcement, probably as a result of the negative signal and consequently increased risk aversion of banks. In such situations, regulators should consider policy instruments that aim to decrease uncertainty in the market.     

The effect of government highway spending on road users' congestion costs

Policymakers attempt to reduce the growth of congestion by spending billions of dollars annually on our road system. We evaluate this policy by estimating the determinants of congestion costs for motorists, trucking operations, and shipping firms. We find that, on average, one dollar of highway spending in a given year reduces the congestion costs to road users only eleven cents in that year. We also find that even if the allocation of spending were optimized to minimize congestion costs that it still is not a cost-effective way to reduce congestion. We conclude the evidence strengthens the case for road pricing.     

Re-measuring agency costs: The effectiveness of blockholders

This study examines the effectiveness of blockholders in mitigating agency costs such as managerial extravagance, poor asset management and underinvestment. Our evidence suggests that outside and inside blockholders exert their interventions differently. We find that outside blockholders are more vigilant about mitigating managerial extravagance while inside blockholders, especially managerial blockholders, are more effective in improving the efficiency of firm asset utilization. However, only managerial blockholders significantly overcome underinvestment problems, which may be attributable to their duality roles.     

我国女性性工作者预防艾滋病行为干预效果的Meta分析

目的:综合我国女性性工作者艾滋病预防干预效果,为在女性性工作者中开展预防干预工作提供依据。方法:计算机检索PUBMED、springer,万方数据库、维普数据库、中国期刊全文数据库,结合文献追踪收集2006～2009年在国内外公开发表的关于中国女性性工作者艾滋病预防教育的相关文献12篇。文献类型为前后对照的干预性研究,干预手段为健康教育,语种限制英语和汉语,采用RevMan4.2软件,进行Meta分析。结果:经过Meta分析,显示研究对象对"艾滋病传播途径","使用安全套是否能有效预防艾滋病"两个知识点以及"最近一次是否使用安全套"的行为在干预前后具有显著差异性。结论:在中国,对女性性工作者进行艾滋病预防干预能收到良好效果。     

Corruption,regulation, and growth: an empirical study of the United States

This paper investigates whether the costs of corruption are conditional on the extent of government intervention in the economy. We use data on corruption convictions and economic growth between 1975 and 2007 across the US states to test this hypothesis. Although no state approaches the level of government intervention found in many developing countries, we still find evidence for the “weak” form of the grease-the-wheels hypothesis. While corruption is never good for growth, its harmful effects are smaller in states with more regulation.     

Strategic Cost Management and Institutional Changes in Hospitals

Accounting research raises the concern that firms in the health care and defence contracting industries, when facing a dual payment system with both cost-based and fixed-rate payments, have an incentive to reallocate overhead costs through increasing inputs used in cost-based operations. However, prior literature reports contradictory empirical evidence regarding such real activity manipulation. Drawing on the institutional perspective, we hypothesise that firms' market power and interorganisational dependence affect their cost-management strategies and choice of overhead allocation in response to dual payment systems. Analysing the data of California hospitals from 1980 to 1991, we find that when facing a dual payment system, dominant (strong market position) hospitals adopt a cost-revenue-enhancing strategy, increasing direct costs for cost-based services without containing costs in fixed-rate services. In contrast, nondominant hospitals choose a cost-reduction strategy and improve operation efficiency on fixed-rate services. We also find that nondominant hospitals shift more overhead costs away from fixed-rate services to cost-based services by reclassifying the allocation bases across services; combining this cost shifting with the cost-reduction strategy, nondominant hospitals demonstrate the compliance with the regulation expectation of cost containment.     

ARE IMPACTS OF EARLY INTERVENTIONS IN THE SCANDINAVIAN WELFARE STATE CONSISTENT WITH A HECKMAN CURVE? A META‐ANALYSIS

“Early intervention” has been a mantra in recent debates about human capital investment. Strong theoretical models motivate this focus by predicting that investment in children is most cost‐effective when they are young. The “Heckman curve” summarizes this idea visually (Heckman, 2006). However, hardly any reviews scrutinize this hypothesis empirically in modern welfare states such as those in Scandinavia that already invest heavily during early childhood. Any such review is ideally based on interventions conducted as randomized controlled trials (RCTs), set in the same welfare state, and comparable across ages through cost‐standardized effects. This meta‐analysis assembles cost‐standardized effect estimates from 10 RCTs, including a total of 18 intervention arms and 30,578 participants (aged 1.5–24 years), conducted by the same research center in the Scandinavian welfare state of Denmark. These interventions show significant effects relative to their costs, despite the large baseline investment level. Interventions targeted at younger children tend to produce larger effects, consistent with the Heckman curve. However, variation in the effect size within age groups is as large as it is across age groups. This indicates that both the quality and timing of investments matter and that “early interventions” are not necessarily superior to later interventions.     

The Irrelevance of Control Rights in Agency Models under Risk Neutrality

The allocation of control rights is a key issue in incomplete contracts. In this paper, we add an exit option, the right of early termination, to the standard agency model for employment contracts. We address two questions: (1) Who should have this right? (2) What is the effect of its inclusion in a contract? Under risk neutrality, we find that (1) it does not matter for investments and economic efficiency to whom this right belongs, although it may affect contractual terms and income sharing, and (2) although the allocation of this right does not matter, its inclusion can have either a positive or a negative effect on economic efficiency. Our analysis provides a benchmark for more general analyses on control rights under risk aversion. Copyright © 2013 John Wiley & Sons, Ltd.     

The Adoption and Design of Enterprise Risk Management Practices: An Empirical Study

We examine (1) the extent of enterprise risk management (ERM) implementation and the factors that are associated with cross-sectional differences in the level of ERM adoption, and (2) specific risk management design choices and their effect on perceived risk management effectiveness. Broadly consistent with previous work in this area, we find that the extent of ERM implementation is influenced by the regulatory environment, internal factors, ownership structure, and firm and industry-related characteristics. In addition, we find that perceived risk management effectiveness is associated with the frequency of risk assessment and reporting, and with the use of quantitative risk assessment techniques. However, our results raise some concerns as to the COSO (Committee of Sponsoring Organizations) framework. Particularly, we find no evidence that application of the COSO framework improves risk management effectiveness. Neither do we find support for the mechanistic view on risk management that is implied by COSO's recommendations on risk appetite and tolerance.     

On the effectiveness of firing costs

This paper evaluates the determinants of the effectiveness of firing costs in reducing layoffs. We define effectiveness as either the level of productivity at which firms start firing workers for a given level of firing costs, or the change in this level caused by a given change in the level of firing costs. We find that both are very sensitive to the rate of interest, the persistence of productivity shocks, and the level of uncertainty. An increase in the persistence of shocks makes firing costs less effective, independent of which definition is used. A rise in the real interest rates initially makes firms start firing earlier, but then later if interest rates rise above a certain threshold. A rise in firing costs affects the firing threshold most at high interest rates. Finally, a rise in the degree of uncertainty makes firms wait longer before firing workers, but the effectiveness of changes in firing costs is not much affected by the degree of uncertainty.     

Impact of treatment heterogeneity on drug resistance and supply chain costs

The efficacy of scarce drugs for many infectious diseases is threatened by the emergence and spread of resistance. Multiple studies show that available drugs should be used in a socially optimal way to contain drug resistance. This paper studies the tradeoff between risk of drug resistance and operational costs when using multiple drugs for a specific disease. Using a model for disease transmission and resistance spread, we show that treatment with multiple drugs, on a population level, results in better resistance-related health outcomes, but more interestingly, the marginal benefit decreases as the number of drugs used increases. We compare this benefit with the corresponding change in procurement and safety stock holding costs that result from higher drug variety in the supply chain. Using a large-scale simulation based on malaria transmission dynamics, we show that disease prevalence seems to be a less important factor when deciding the optimal width of drug assortment, compared to the duration of one episode of the disease and the price of the drug(s) used. Our analysis shows that under a wide variety of scenarios for disease prevalence and drug cost, it is optimal to simultaneously deploy multiple drugs in the population. If the drug price is high, large volume purchasing discounts are available, and disease prevalence is high, it may be optimal to use only one drug. Our model lends insights to policy makers into the socially optimal size of drug assortment for a given context.     

Operational models for epidemics of problematic drug use: the Mover-Stayer approach to heterogeneity

A modified version of a susceptibles-infectives-removed (S-I-R) model for the HIV/AIDS epidemic, proposed at the beginning of the 1990s and recently generalized, is presented to mirror the epidemics of problematic drug use. The generalized model, which belongs to the susceptibles-infectives-susceptibles (S-I-S) class of epidemic models, can be used both to estimate interesting epidemic macro-parameters and to make scenario analyses. The model is a compartmental Mover-Stayer-type structure (Soc. Methods Res. 11 (1983) 345; Bull. Narcotics LIII (1-2) (2001) 39; Biometrics 55(4) (1999) 1252; Math. Biosci. 107 (1991) 521) and allows taking into account possible heterogeneous behaviours of the susceptibles. Such models, in fact, consider the susceptible population as subdivided into two main groups: the group of stayers, that is, the group of individuals who are considered not at risk of “infection”, and the group of movers (possibly divided into sub-groups with different risk behaviour) who are at risk of infection. Due to the interactions between infectious individuals and the susceptibles, some of these may pass to the drug user compartments and begin a “drug user career”. The model is presented and studied from a qualitative point of view using a Markov hybrid approximation. Some qualitative evaluation of the possible impact of interventions directed both towards susceptibles (primary prevention) and towards users (secondary prevention and/or law enforcement) are presented. Specific “what if” scenario analyses are obtained by simulation. Possible future developments are outlined.     

THE POLITICAL EMBEDDEDNESS OF PRIVATE ECONOMIC TRANSACTIONS*

Governments are able to manipulate economic transactions in order to achieve foreign policy goals. This article addresses the question: can managers of multinational enterprises (MNEs) structure economic transactions in ways that will limit the costs resulting from government intervention? Using a transaction cost framework, the efficiency of alternative structures (exporting, joint ventures, licensing, or wholly owned subsidiaries) for protecting a firm's interests are assessed. We argue that the traditional focus on the dyadic relationship between supplier and buyer misses sources of transaction costs; by conceptualizing economic transactions as embedded in a political context, additional sources of transaction costs are revealed. We examine three cases of home government intervention in US MNE transactions with the Soviet Union. We find that the full range of structural alternatives is affected by government sanctions, although sanctions are imposed on exporting relationships first and removed last. We find that MNEs are, therefore, beginning to insulate international transactions by making their overseas subsidiaries more independent of US technology and supplies with the hope that the US government will be less likely to impose its will extraterritorially by intervening in foreign subsidiaries’private economic transactions.     

Modeling emergency evacuation with time and resource constraints: A case study from Gujarat

This study develops an off-site emergency response plan for a nuclear power plant in Gujarat, India subject to time constraints with resource limitations and risk of radiation exposure to victims. We formulate an optimization model to capture the effect of delay in evacuation, limited resource availability, and costs associated with resource allocation. A single chain closed queuing network model with class switching is used to model traffic congestion during evacuation. The throughput measures from the queuing network are used as inputs in the optimization model. Further, two resource allocation strategies are suggested and genetic algorithm is used for optimizing resource utilization and evacuation risk. The results indicate that pooling resources among a cluster of affected areas is most suitable for evacuation. Numerical experiments are conducted to analyze the time trade-offs and the effect of service time variability on the expected evacuation time. The proposed model can serve as an important resource planning and allocation tool for emergency evacuation.     

Monetary Tightening and the Dynamics of US Race and Gender Stratification

This article explores the race and gender effects of monetary tightening in the US from 1979–2008 using state‐level panel data. Results indicate the costs of fighting inflation are unevenly distributed amongst workers, weighing more heavily on black females and black males, followed by white females, and lastly white males. We also find evidence that the relative unemployment costs of monetary tightening for subordinate groups vary with the black share of the population.     

More than lip service: linking the intensity of empowerment initiatives to individual well-being and performance

We conceptualize empowerment initiatives as varying in terms of intensity – or the degree to which the intervention is rhetorical (aiming to influence employees' sense of control at work, what we refer to as surface empowerment) as opposed to actual (aiming to influence the actual degree of employee job authority, what we refer to as deep empowerment). We then test the effects of rhetorical vs. actual empowerment interventions on employee well-being and performance, as well as the degree to which self-efficacy mediates these effects on the basis of a simulation-based experiment. Results indicate that although both surface and deep empowerment initiatives have beneficial effects on individual well-being, only the latter results in performance increase. We also find that self-efficacy fully mediates the association between surface empowerment (as compared with non-empowerment) and well-being, but only partially mediates the association between deep empowerment (as compared with non-empowerment) and well-being.     

Bank capital regulation,loan contracts,and corporate investment

This paper studies the link between bank capital regulation, bank loan contracts and the allocation of corporate resources across firms’ different business lines. Credit risk is lower when firms write contracts that oblige them to invest mainly into projects with highly tangible assets. We argue that firms have an incentive to choose a contract with overly safe and thus inefficient investments when intermediation costs are increasing in banks’ capital-to-asset ratio. Imposing minimum capital adequacy for banks can eliminate this incentive by putting a lower bound on financing costs.     

Optimal allocation mechanisms with single-dimensional private information

We study revenue-maximizing allocation mechanisms for multiple heterogeneous objects when buyers care about the entire allocation, and not just about the ones they obtain. Buyers’ payoff depends on their cost parameter and, possibly, on their competitors’ costs. Costs are independently distributed across buyers, and both the buyers and the seller are risk-neutral. The formulation allows for complements, substitutes and externalities. We identify a number of novel characteristics of revenue-maximizing mechanisms: First, we find that revenue-maximizing reserve prices depend on the bids of other buyers. Second, we find that when non-participation payoffs are type-dependent, revenue-maximizing auctions may sell too often, or they may even be ex-post efficient.