The Economic Value of Air-Pollution-Related Health Risks in China: A Contingent Valuation Study

The economic value of preventing adverse health effects related to air pollution is estimated using contingent valuation in three diverse locations in China. Values are estimated for three health endpoints: cold, chronic bronchitis, and fatality. Alternative statistical models are tested to study their impact on estimated willingness to pay (WTP) and on the relationship between WTP and respondent characteristics. Using the official exchange rate, the sample-average median WTP to prevent an episode of cold ranges between US$3 and US$6, the WTP to prevent a statistical case of chronic bronchitis ranges between US$500 and US$1,000, and the value per statistical life ranges between US$4,000 and US$17,000. Estimated mean values are between two and thirteen times larger. Our estimates are between about 10 and 1,000 times smaller than estimates for the US and Taiwan using official exchange rates. Indoor air quality, measured for a subset of respondents, shows no consistent relationship with WTP.     

Measuring Passive Use Value: Pledges, Donations and CV Responses in Connection with an Important Natural Resource

This paper examines monetary valuations of lost passive-use benefits associated with damage to a unique environmental resource – a national park, elicited through contingent valuation, and compares them with actual donations to the same end, where the latter are interpreted as a quasi-market expression of willingness to pay for non-market resource services. The relationships between the two valuation approaches were investigated in the specific context of an environmental episode which damaged a unique natural endowment, Israel's Carmel National Park. The empirical analysis is based on data from two sample surveys; one sample was drawn from the population of people who either pledged or pledged and donated during a fund-raising campaign following the episode, with the proceeds dedicated to rehabilitation or prevention of future episodes; the second sample was drawn from the general population of the country. The results cannot be interpreted as providing unqualified support for the reliability of contingent valuation as a means for obtaining passive use values.     

我国海洋生态系统服务非市场价值评估研究特征及态势

海洋生态系统服务非市场价值评估,将生态系统服务无法由市场直接体现的效用价值量化为货币价值,是实现生态资源可持续发展的重要手段,同时也为资源合理利用和补偿、环境价值核算等提供了必要的决策依据。本文基于我国现有研究,分别从生态系统类型、时空分布、评估类别、评估技术以及信度和效度检验五个方面,系统地分析了我国海洋生态系统服务非市场价值评估研究现状,识别出当前的研究特征。研究结果显示近年来我国海洋生态系统服务非市场价值评估研究增长迅速,尤其以上海、山东、辽宁等沿海区域为主要研究对象;湿地和海湾海滨生态系统的研究最为密集,其中对使用价值的研究远远超过非使用价值;条件价值法和旅行成本法是主要研究方法,两种方法都以游憩价值评估为主;评估结果的信度与效度检验是当前研究的薄弱环节,也是未来研究的重点发展方向。     

A conduct parameter model of price discrimination

We consider a conduct parameter model where firms price discriminate based on the consumers’ willingness to pay. For any conduct, the average price is invariant to the extent of price discrimination. Moreover, when the number of prices goes to infinity, there is a linear relationship between market power, measured by conduct, and range of offered prices. Hence, when the firms face competition, some of the high valuation customers are charged below their valuations, which contrasts with perfect price discrimination results for a monopoly.     

Distal order effects in stated preference surveys

Stated preference researchers have previously demonstrated that a good's placement among a sequence of goods in a set of valuation questions (i.e. proximal order effects) can have a substantial impact on people's valuations of these different goods. However, the economic consequences of potential order effects stemming from other questions in a survey, prior to the valuation tasks, have received surprisingly little attention. Using an online climate change survey, we identify order effects created by prior attitude-elicitation questions, and we assess the potential impact of these distal order effects on willingness to pay (WTP) estimates for stylized climate change policies. We find that the order used in prior questions may change people's opinions toward various attributes of the good to be valued, and thereby change WTP by a substantial amount. This paper emphasizes the significance of order effects stemming from preliminary survey questions, and supports a call for diligence in the random ordering of all potentially influential preliminary information in stated preference surveys to minimize inadvertent effects from any single arbitrary ordering.     

Estimating the cost of an emergency room visit for migraine headache

SUMMARY

To provide a more comprehensive accounting of direct cost of treating headaches, it is imperative to quantify the cost of emergency room (ER) services specific to treating headaches. Published cost estimates for migraine-specific ER visits are currently not available. This study estimated the cost of treating migraine headaches in the ER from a payer's perspective, using ER discharge data for migraine from the 2000 National Hospital Ambulatory Medical Care Survey (NHAMCS). Costs were estimated using Medicare reimbursement rates. The total cost of an ER visit for migraine headache, defined as the ER visit and all additional services and procedures, was US$238.16. Based on the migraine prevalence of 9% to 27%, the annual estimate for total ER visit costs for migraine headache in the US in 2000 ranged from US$646 million to US$1.94 billion, which is substantial. ER costs for migraine may be much larger then previously estimated.     

A Contingent Valuation Estimate of the Benefits of Wolves in Minnesota

In this paper we estimate the willingness topay for a wolf management plan and a wolfdamage plan in Minnesota using the contingentvaluation method. The theoretical definition ofwillingness to pay for wolf protection iscomposed of use and non-use values. Weincorporate a don't know response option in thedichotomous choice valuation questions. A largenumber of respondents answered don't know. Themultinomial logit model is used todifferentiate between don't know and noresponses. Non-use motives are importantfactors that explain willingness to pay. We usethese benefit estimates in combination with twoalternative cost estimates to consider theefficiency of the wolf management and damageplans. Both plans have estimated benefitsgreater than costs.     

Estimation of resource utilisation difference between lithium and valproate treatment groups from the VALID study

Abstract

Objective:

To assess the difference in resource utilisation between lithium and valproate treatment groups from the VALID study.

Methods:

A modelled economic study was conducted as an appendage to the VALID study, an international, randomised, open-label, parallel-group, 12-week, equivalence study in patients with bipolar I disorder experiencing a manic/mixed episode, compared the efficacy and safety of valproate against that of lithium. The difference in health resource utilisation between the treatment groups was analysed based on information collected from a standardised questionnaire.

Results:

Efficacy and tolerability of valproate and lithium were shown to be comparable in the management of bipolar disorder in the VALID study. Cost analysis was based on information for 138 (35.5% male, mean age: 37.73 years) and 131 (45.8% male, mean age: 38.98 years) patients from lithium and valproate treatment groups, respectively. The groups differed in the number of hospital visits (503 vs. 421), outpatient visits (15 vs. 2), and number of work days lost (907 vs. 514.5) due to bipolar disorder. All differences were in favour of the valproate treatment group. In the modelled analysis and subsequent sensitivity analyses, the total cost saving was calculated to be US$199,322 (range: US$37,629–$226,903). This would translate into a cost saving of US$1444 per patient, or a cost saving of US$6278 per patient per year (range: US$1185–$7145 per patient per year).

Limitations:

The present study suffers from the limitations inherent in any economic evaluation that uses data from multicentre clinical trials with potential variations in treatment provision as well as the theoretical bias from an open-label study design. The study sample size had also limited statistical power to detect moderate differences in total medical costs, given the large variances often observed on cost variables.

Conclusions:

The use of valproate over lithium is likely to result in substantial cost savings to the healthcare system and reduce the financial burden to patients.     

When and why not to auction

Summary. Standard auctions are known to be a revenue-maximizing way to sell an object under broad conditions when buyers are symmetric and have independent private valuations. We show that when buyers have interdependent valuations, auctions may lose their advantage, even if symmetry and independence of information are maintained. In particular, simple alternative selling mechanisms that sometimes allow a buyer who does not have the highest valuation to win the object will in general increase all buyers willingness to pay, possibly enough to offset the loss to the seller of not always selling to the buyer with the greatest willingness to pay.Received: 18 June 2003, Revised: 7 September 2004, JEL Classification Numbers: D44, D82. Correspondence to: Colin M. CampbellWe thank Richard McLean, Dan Kovenock, two referees, and seminar participants at the University of Pittsburgh, Johns Hopkins University, Washington University, the Federal Communications Commission, the Institute for Advanced Studies at Princeton, UC-Santa Barbara, UC-Santa Cruz, and the Ohio State University Department of Finance for helpful suggestions. We thank the NSF for funding.     

The Credit Crisis and De Nova Mimicking in Security Analysis

The failure of the investment community in 2007 to foresee the systematic collapse of the credit default swap market significantly increased the complexity of security analysis and damaged the reputation of the security analyst community in general. submit that in response to the credit crisis, security analysts may have engaged in a de nova form of mimicking by increasing emphasis on general market factors and reducing emphasis on idiosyncratic factors in their valuations, driven by behavioral motives to achieve increased cost efficiency and avoid higher penalties for unfavorable outlier valuations. The result would be increased correlation among security valuations and therefore returns, and diminished benefits of diversification. We test this hypothesis by examining the patterns of security and portfolio returns surrounding the onset of the credit crisis in early 2007 and observe a significant postcrisis increase in the proportion of security and portfolio returns explained by market factors. The findings support the hypothesized shift in emphasis in security analyst valuation techniques, and provide results consistent with the hypothesized behavioral explanations.     

Valuing the potential economic impact of climate change on the Taiwan trout

The purpose of this study is to estimate the value of the potential economic impact of climate change on the Taiwan trout (also referred to as Oncorhynchus masou formosanus), an endangered species that only lives in high mountain stream sections in which the water temperature is lower. A two-stage approach is adopted to estimate the value of the change in the Taiwan trout stock due to a change in climate. The first stage involves establishing the relationship between the Taiwan trout stock and climate change, while the second stage involves estimating the non-market value of the change in the Taiwan trout population using the double bound model associated with the contingent valuation method (CVM). Our results indicate that the total Taiwan trout population will decline from 1612 to 974, 560, and 146 if precipitation in Taiwan increases by 0.6 mm/day, while the temperature increases by 0.9 °C, 1.8 °C, and 2.7 °C, respectively. The mean willingness to pay per person per year to avoid a change in the trout stock caused by climate change is found to be US$16.22, US$25.72, and US$33.60, respectively.     

Cost credibility and the stated preference analysis of public goods

Two recent stated preference studies include questions that explore participants’ beliefs regarding the cost amount stated in the valuation question in relation to the cost to them if the project were implemented. Results from these studies suggest that a significant proportion of people do not believe these stated cost amounts. This paper explores the implications of participants answering valuation questions that are not consistent with their beliefs regarding stated costs. As an example, the paper develops a response model for dichotomous choice stated preference questions. Participants gather project information through the stated preference experiment, form a prior distribution of costs, update the distribution of costs based on a survey's stated cost and then respond to the dichotomous choice stated preference question. The model suggests that participants will not generally respond truthfully in the sense that they may say no to a stated cost that is less than their willingness to pay for a project or yes to a stated cost that is more than their willingness to pay. While the model findings suggest potentially serious problems with stated preference estimation, the observed patterns of disbelief from the empirical studies result in downwardly biased estimates of mean willingness to pay.     

A comparative study of environmental amenity valuations

The paper reports on a comparative study of direct and indirect approaches to valuing environmental amenities (i.e., public goods), specifically, air quality in terms of its human health effects. The application of three indirect valuation methods (via market goods) is reported here: the health production method, a consumer preferences (for nonmarket goods) model, and the cost of illness method. The first and second methods are (economic) behavior-based approaches where willingness to pay for an environmental good is derived by exploiting relationships in consumption between the public good and market good(s). The third method is based on a physical relationship—a dose-response function—between the environmental good and health. The direct valuation approach encompassed three contingent valuation elicitation formats: open-ended, modified iterative bidding game, and referenda-style binary choice. The application of all four methods was based on data from a survey of a large, stratified sample of households from the Haifa metropolitan area in northern Israel. The estimates of welfare change derived by the various methods are discussed and compared.     

The impact from changes in stock market valuations on investment: new economy versus old economy

This paper investigates whether there is a different impact from changes in ‘new’ and ‘old’ economy stock valuations on private investment for seven OECD economies. A vector autoregressive model is estimated for each individual country, using quarterly data over the period 1990–2000. It is found that the impact from changes in valuations of new economy stocks to investment is roughly the same in North America and in the United Kingdom as in continental Europe. By contrast, the impact from changes in old economy stock valuations on investment is, in general, larger in North America and in the United Kingdom than in continental Europe. Finally, the results suggest that in continental Europe the impact on investment from changes in the valuation of new economy stocks is bigger than for old economy stocks, whereas for North America and the United Kingdom, the impact is more similar.     

The value of online banking to small and medium-sized enterprises: evidence from firms operating in the uae free trade zones

This study estimates the willingness to pay of small and medium-sized enterprises (SMEs) for a business online banking services. The estimation utilizes a contingent valuation method employing data from 400 SMEs in the United Arab Emirates free zones. An interval regression model is used to identify company characteristics affecting WTP. The results indicate an average WTP for online banking of $518.50 per month. Firms engaging in international trade value these services at least 10% more than those with only domestic operations. Other variables that significantly affect WTP include number of employees and the transportation cost of using traditional branch banking.     

Oligarchs,political regime changes,and firm valuation1

This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin–Putin regime shift in Russia, we find that the valuations of oligarch‐controlled firms are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweighs the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results indicate that effects driven by the political regime change complement the traditional view that increased ownership concentration improved the performance of Russian oligarch firms.     

Commentary on economic valuations of biodiversity

Our planet's biodiversity is in steep decline. Assigning economic values to the impacts of this decline can be very useful in overcoming economic-based objections to sustainable policies at all levels of government. However, economic valuations that are not based on sound scientific analysis threaten to undermine the credibility of ecological valuations in general and could also lead policy makers to misallocate the limited resources available for conservation efforts. Researchers at Cornell University have introduced a valuation into several peer-reviewed journals that asserts that each individual bird in the United States has an average economic value of $30, and they use this valuation to estimate the economic impact of various causes of bird mortality. The $30 valuation is explained with a single sentence that lacks any discernible scientific analysis and can at best be considered a symbolic valuation. While this valuation garnered widespread media attention, it creates a dangerous precedent and could ultimately do more harm than good to native bird populations. As such, further discussion of the role of symbolic valuations in the scientific literature is warranted.     

Port-induced erosion prediction and valuation of a local recreational beach

This study attempts to integrate environmental economics and coastal engineering in managing port-induced coastal erosion occurring at a common beach by using Map Ta Phut port in Thailand as a case study. The existence of the port creates coastal erosion which can be considered an externality that affects local inhabitants, and a port owner and shipping companies can be seen as “polluters”. Overlaying of aerial photographs provided strong evidence that the coastline was severely eroded after the construction of the port. Coastal engineering softwares, LITPACK and MIKE 21 PMS, were utilized to predict future shoreline positions and investigate wave patterns around the port. The port alters wave climate and the port-induced erosion is jeopardizing a local recreational beach called Nam Rin, which is projected to disappear in 5 years. A valuation of Nam Rin beach using single-bounded dichotomous choice contingent valuation method revealed individual willingness to pay (WTP) for the beach, being 867.5 baht (approximately US$ 24.8) per year. Multiplying the individual WTP with the appropriate number of population to acquire the beach protection benefit and dividing such benefit by construction and maintenance costs of a particular beach protection measure, the polluters can select a proper beach protection approach that fulfills their benefit-cost requirement.     

Cost-effectiveness of distributing naloxone to heroin users for lay overdose reversal in Russian cities

Abstract

Objective:

To evaluate the cost-effectiveness of distributing naloxone to illicit opioid users for lay overdose reversal in Russian cities.

Method:

This study adapted an integrated Markov and decision analytic model to Russian cities. The model took a lifetime, societal perspective, relied on published literature, and was calibrated to epidemiologic findings.

Results:

For each 20% of heroin users reached with naloxone distribution, the model predicted a 13.4% reduction in overdose deaths in the first 5 years and 7.6% over a lifetime; on probabilistic analysis, one death would be prevented for every 89 naloxone kits distributed (95% CI?=?32–260). Naloxone distribution was cost-effective in all deterministic and probabilistic sensitivity analyses and cost-saving if resulting in a reduction in overdose events. Naloxone distribution increased costs by US$13 (95% CI?=?US$3–US$32) and QALYs by 0.137 (95% CI?=?0.022–0.389) for an incremental cost of US$94 per QALY gained (95% CI?=?US$40–US$325). In a worst-case scenario where overdose was rarely witnessed and naloxone was rarely used, minimally effective, and expensive, the incremental cost was US$1987 per QALY gained. If national expenditures on drug-related HIV, tuberculosis, and criminal justice were applied to heroin users, the incremental cost was US$928 per QALY gained.

Conclusions:

Naloxone distribution to heroin users for lay overdose reversal is highly likely to reduce overdose deaths in target communities and is robustly cost-effective, even within the constraints of this conservative model.     

Adherence to iron chelation therapy and associated healthcare resource utilization and costs in Medicaid patients with sickle cell disease and thalassemia

Background:

Sub-optimal patient adherence to iron chelation therapy (ICT) may impact patient outcomes and increase cost of care. This study evaluated the economic burden of ICT non-adherence in patients with sickle cell disease (SCD) or thalassemia.

Methods:

Patients with SCD or thalassemia were identified from six state Medicaid programs (1997–2013). Adherence was estimated using the medication possession ratio (MPR) of ≥0.80. All-cause and disease-specific resource utilization per-patient-per-month (PPPM) was assessed and compared between adherent and non-adherent patients using adjusted incidence rate ratios (aIRR). All-cause and disease-specific healthcare costs were computed using mean cost PPPM. Regression models adjusting for baseline characteristics were used to compare adherent and non-adherent patients.

Results:

A total of 728 eligible patients treated with ICT in the SCD cohort, 461 (63%) adherent, and 218 in the thalassemia cohort, 137 (63%) adherent, were included in this study. In SCD patients, the adjusted rate of all-cause outpatient visits PPPM was higher in adherent patients vs non-adherent patients (aIRR [95% CI]: 1.05 [1.01–1.08], p?<?0.0001). Conversely, adherent patients incurred fewer all-cause inpatients visits (0.87 [0.81–0.94], p?<?0.001) and ER visits (0.86 [0.78–0.93], p?<?0.001). Similar trends were observed in SCD-related resource utilization rates and in thalassemia patients. Total all-cause costs were similar between adherent and non-adherent patients, but inpatient costs (adjusted cost difference?=??$1530 PPPM, p?=?0.0360) were lower in adherent patients.

Conclusion:

Patients adherent to ICT had less acute care need and lower inpatient costs than non-adherent patients, although they had more outpatient visits. Improved adherence may be linked to better disease monitoring and has the potential to avoid important downstream costs associated with acute care visits and reduce the financial burden on health programs and managed care plans treating SCD and thalassemia patients.