ITQ’s in Chile: Measuring the Economic Benefits of Reform

In 2001 an individual (operationally transferable) quota system was introduced for all the most important industrial fisheries in Chile. This system was put in place after years of declining stocks and over investment. In this paper we describe this reform and estimate related allocative efficiency benefits for the most important industrial fishery in the country, the southern pelagic fishery. Benefits were estimated using a bioeconomic model estimated using data for the 1985–2004 period. The estimated model was then used to generate simulated scenarios of the evolution of this fishery in a 20 year horizon with and without the ITQ system in place. The benefits of the reform can then be estimated by comparing the fishery’s costs in the scenarios with and without ITQs. This approach allows benefits to be estimated using more realistic counterfactual scenarios than just comparing the fishery before and after the reform. Estimated discounted net benefits reach US $166 million in the period 2001–2020. Fleet size fell from 149 active boats in 2000 to 57 in 2004 as a direct consequence of the reform. Among the interesting features of the Chilean experience is the way the political economy of the reform was facilitated by the prior introduction of de facto individual quotas within the framework of fishery experimental activities. When the authorities closed the southern pelagic fishery because of biological problems between 1997 and 2000, they organized ‘experimental’ fishing expeditions in which participant boats were given the right to fish a certain amount of resources per expedition. This pseudo quota system allowed fishermen to experience directly the benefits of individual quotas and that was instrumental to the political agreement leading to the reform. It is important to note that the Chilean southern industrial pelagic fishery has average catches of over 1.4 million tons a year, making it one of the largest fisheries in the world to be regulated by individual quotas.     

Winners, Losers, and the Nuclear-Waste Dilemma

This paper explores how property-right assignment affects social efficiency when a public program has both “public good” and “public bad” components. We show that when willingness to accept a public bad exceeds the willingness to pay, the net benefit is unambiguously lower when the property right supports the status quo institutional structure. Thus, Kaldor–Hicks efficiency tests tend to favor public programs and mitigation over the status quo even when mitigation negatively affects another group. To illustrate the result, we develop social-cost estimates for moving nuclear waste from current temporary-storage facilities to a permanent central repository at Yucca Mountain, NV, USA. For a representative city with a population of 226,195, the present value of the external cost of shipping waste is $1.42 billion when those living near temporary nuclear-waste storage facilities are assigned the property right to “health and safety.” That number swells to $5.95 billion when those living near the transport route are assigned the property right. Thus, property-right assignment affects the efficient level of nuclear-waste, and thus nuclear energy, produced.     

‘Adopt a Hypothetical Pup’: A Count Data Approach to the Valuation of Wildlife

The willingness to pay (WTP) for a coyote conservation program is estimated using a novel payment-vehicle, based on how many ‚problem’ coyotes respondents would be willing to sponsor for a year. This hypothetical scenario mimics an increasingly popular type of actual market. Data from a phone survey conducted in Prince Edward Island are analyzed using count data models that consider different processes explaining zero responses and the level of positive responses. This is particularly important in the case of coyotes, often regarded as an economic bad. Estimates of WTP per coyote per year around $18–$22 and annual WTP per contributor of about $46–$57 are obtained.      

Cooperative and non-cooperative management of the Northeast Atlantic cod fishery

The fishery for Northeast Atlantic cod (Gadus morhua) in the Barents Sea is one of the most valuable fisheries in the North Atlantic. After the introduction of Extended Fisheries Jurisdiction, cod is a shared stock between Norway and Russia. Overfishing of quotas has been a concern for a number of years. The purpose of this article is to analyse cooperative and non-cooperative management of the Northeast Atlantic cod fishery. This will be done in a game theoretic context, based on different assumptions regarding important variables such as cost of effort and initial stock size. The game theoretic analysis will be based on an empirical bioeconomic model developed and estimated by Hannesson (Mar Policy 31:698–705, 2007; J Bioecon forthcoming). The case of cooperative management is analysed for different cost parameters and starting values of the stock. An interesting result is that the optimal policy gives rise to pulse fishing. As this involves effort (and harvests) varying from year to year, potentially imposing substantial social costs on the industry in years when the fishery is closed, a policy of constant effort is also considered. Finally, non-cooperative management is analysed.     

Hospital cost sharing incentives: evidence from Iceland

Hospitals’ incentives to provide health care are influenced by the degree of cost sharing between the purchaser and the provider. In most OECD countries, governments remunerate hospitals according to the activity performed. Activity is usually measured through a diagnosis related groups (DRGs) system. This study estimates the degree of cost sharing of the NordDRG classification system (the DRG version of the Nordic countries) in Iceland during 2003–2005. We first apply ordinary least square (OLS) methods to estimate the degree of cost sharing by regressing the price for each individual patient against its cost. Second, we propose an instrumental-variable approach to address the potential endogeneity of costs. The OLS estimates suggest that the degree of cost sharing is in the range 0.16–0.17 (i.e. 1$ increase in cost is associated with an increase in reimbursement by 0.16–0.17$ increase in cost is associated with an increase in reimbursement by 0.16–0.17). The instrumental-variable approach provides some evidence of endogeneity, and suggests that cost sharing is overestimated by OLS. The instrumented estimates of cost sharing are 0.11, 0.13 and 0.14 in 2003, 2004 and 2005, respectively. Regardless of the method applied, most cost sharing is associated with the retrospective features of the classification system (such as the type of treatment provided).     

Valuing Mangrove-Fishery Linkages – A Case Study of Campeche, Mexico

This paper explores the value of mangrove systems as a breeding and nursery habitat for off-shore fisheries, focusing on mangrove-shrimp production linkages in Campeche State, Mexico. We develop an open access fishery model to account explicitly for the effect of mangrove area on carrying capacity and thus production. From the long-run equilibrium conditions of the model we are able to establish the key parameters determining the comparative static effects of a change in mangrove area on this equilibrium. We then estimate empirically the effects of changes in mangrove area in the Laguna de Terminos on the production and value of shrimp harvests in Campeche over 1980–90. Our findings suggest that mangroves are an important and essential input into the Campeche shrimp fishery, but that the low levels of deforestation between 1980 and 1990 mean that the resulting losses to the shrimp fishery are still comparatively small. Over-exploitation of the fishery due to open access conditions remains the more pervasive threat, and without better management any long-run benefits of protecting mangrove habitat are likely to be dissipated.     

Fishing Revenue, Productivity and Product Choice in the Alaskan Pollock Fishery

A key element in evaluating fishery management strategies is examining their effects on the economic performance of fishery participants, yet nearly all empirical studies of fisheries focus exclusively on the amount of fish harvested. The economic benefits derived from fish stocks involve the amount of revenue generated from fish processing, which is linked to both the way fish are harvested and the products produced from the fish. In this study we econometrically estimate a flexible revenue function for catcher-processor vessels operating in the Alaskan pollock fishery, recognizing potential endogeneity and a variety of fishing inputs and conditions. We find significant own-price supply responses and product substitutability, and enhanced revenues from increased fishing days and tow duration after a regulatory change introduced property rights through a new fishing cooperative. We also find significant growth in economic productivity, or higher revenues over time after controlling for observed productive factors and price changes, which exceeds that attributable to increased harvest. These patterns suggest that the move to rights-based management has contributed significantly to economic performance in the pollock fishery.     

An assessment of two environmental and economic benefits of ‘Cash for Clunkers’

This research aims to provide a more comprehensive, life cycle accounting of two categories of environmental and economic benefits associated with the $3 billion US “Cash for Clunkers” vehicle scrappage program. First, using a life cycle emissions methodology developed in Lenski et al. (2010), we find that about 29,000 metric tons of criteria pollutant emissions were avoided, for a benefit of about $23 million; avoided carbon dioxide emissions, by comparison, provided a benefit worth $90 million. Second, we compare the market value of scrapped vehicles to the rebates provided, calculating the consumer surplus or “gift” to participants to be up to $2 billion (about $2000 to $3000 per vehicle). This is significantly more than offered in previous vehicle scrappage programs, and suggests opportunities to get more environmental and economic “bang for the buck.” Finally, these two categories of benefits are found to be heavily concentrated geographically around urban centers. About 2% of US counties (50 counties) received 50% and 30% of the aggregate benefits from avoided criteria pollutant emissions and consumer surplus from the rebates, respectively.     

Economic impact of ocean fish populations in the global fishery

Our goal in this paper is to estimate the total output in an economy that is currently dependent (at least partially) on current fisheries output. We therefore applied the Leontief technological coefficients at current production and then estimate total output supported throughout the economy at the current level of production. Estimates of gross revenue from capture fisheries suggest that the direct value of output for this sector is US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US 225 and 240 billion per year.     

Improved rangeland management with an Earth Resource Survey system

Recent advances in communications and satellite technology now make it possible to provide large, synoptic imagery of the earth's surface at relatively low cost. This paper reports on acase study that was designed to estimate the benefits that might be realized by rangeland managers from an Earth Resources Survey system. Information needs and current practices are first discussed and then related to available remote sensing and data distribution techniques. The analysis showed that cost savings from an applications system would be broadly evident in the areas of resource re-allocation, range productivity, and livestock management. Depending upon the assumptions concerning the discount rate and factors affecting technological diffusion, total benefits were estimated to range from $38.7 million to $115.4 million over 10-year operational period.     

Sushi or Fish Fingers? Seafood Diversity,Collapsing Fish Stocks,and Multispecies Fishery Management*

We present a model of a multispecies fishery, and we show the following. (i) Consumer preferences for seafood diversity can trigger a sequential collapse of fish stocks under open‐access fishery. (ii) The stronger the preferences are for diversity, the higher is the need for coordinated multispecies regulation. (iii) Second‐best optimal management of only one (or a few) species is less strict than socially optimal management of the same species. (iv) Myopic regulation of one species, ignoring spillovers to other species, can cause depletion of other stocks that would not be depleted under open access.     

附加职工安置约束的国企产权拍卖机制研究

The transfer of SOE’s property right involves benefits readjustment of its stakeholders; therefore the design of the trading mechanism is not only to sell the SOE with a high price but also to realize other non-price objectives such as rearrangement of original employees, further development of the enterprise etc. This paper constructs a bidding mechanism with the constraint of accommodating employees to analyze the tradeoff between maximizing SOE auction revenue and minimizing induced unemployment. By adding that the winner is required to settle down a certain quantity of former SOE employees in the new enterprise, this mechanism brings on the competition among prospective investors in both the price and the quantity of employment, which can help the government to balance the different objectives more efficiently. However, the constraint will only work under the condition that the government has stressed sufficiently on the employees’ rearrangement and set the best constraint threshold. Moreover, the government should set an explicit compensation standard for the induced lay-offs to eliminate the investors’ accommodating cost dispersion and introduce more strategic investors with considerable heterogeneity to participate in the bidding. __________ Translated from Jingji yanjiu 经济研究 (Economic Research Journal), 2007, (10):115–125     

An empirical analysis of production distortions in the mid-Atlantic surf clam and ocean quahog fishery

This paper presents empirical evidence of production distortions under controlled access management in the Mid-Atlantic surf clam and ocean quahog fishery. Results indicate that vessels harvested multiple clam species even though the harvest technology exhibits diseconomies of scope. Vessels also operated in a region of the production surface where the marginal product of vessel capital services was negative. These distortions are explained by perverse regulations which restricted vessel capital replacement and severely limited fishing times.     

Worksharing and Access Discounts in the Postal Sector with Asymmetric Information*

This paper analyzes the optimal worksharing and access amounts granted to mailers and entrants in a liberalized postal sector when there is asymmetric information about the Post Office’s (PO) costs. I show that when the regulator is unable to ascertain which part of the total cost of sorting has to be attributed to each sorting facility, the optimal “access discount” given to entrants is set in a pro-competitive way. This facilitates the entry of firms that are less efficient than the PO. However, the optimal “worksharing discount” may prevent the entry of mailers that are more efficient than the PO.     

The effect of temporal closures and individual quotas on fishing trip duration: a hazard function analysis

In this article, we assess the effect that two different fishery management regimes have on the duration of the fishing trip. A basic theoretical model predicts that trip duration should increase with temporal closures and decrease with an individual quota system. Therefore, we propose and apply an empirical trip duration model. Estimations are based on data for the pelagic fleet in central-southern Chile. Conforming to the theoretical predictions, the results indicate that temporal closures tend to increase trip duration, whereas individual quotas reduce it. Moreover, the regulatory regimes also affect the magnitude of the impact that other determinants have on trip duration. The results are consistent with increased efficiency in fleet operation under an individual quota system.     

Living in a bubble: potential gains from flexible water management policies

We study Swedish implementation of the European Union’s Water Framework Directive, and compare the current implementation strategy with more flexible ‘bubble’ schemes, where measures can be traded among various locations within the same river system to reach the overall environmental target. Two different Swedish river systems, the Mörrum system with small-scale hydropower plants, and the Ångerman system with larger plants, are studied. We find that the environmental benefits that current policies are likely to accomplish could be achieved at well under half the cost in the Mörrum system, and at less than a tenth of the cost in the Ångerman system.     

Synergy Goes to War: A Bioeconomic Theory of Collective Violence

Synopsis Synergy – here defined as otherwise unattainable combined effects that are produced by two or more elements, parts or individuals – has played a key causal role in the evolution of complexity, from the very origins of life to the evolution of humankind and complex societies. This theory – known as the ‘Synergism Hypothesis’ – also applies to social behavior, including the use of collective violence for various purposes: predation, defense against predators, the acquisition of needed resources and the defense of these resources against other groups and species. Among other things, there have been (1) synergies of scale, (2) cost and risk sharing, (3) a division of labor (or, better said, a ‘combination of labor’), (4) functional complementarities, (5) information sharing and collective ‘intelligence’, and (6) tool and technology ‘symbioses’. Many examples can be seen in the natural world – from predatory bacteria like Myxococcus xanthus to social insects like the predatory army ants and the colonial raiders Messor pergandei, mobbing birds like the common raven, cooperative pack-hunting mammals like wolves, wild dogs, hyenas and lions, coalitions of mate-seeking and mate-guarding male dolphins, the well-armed troops of savanna baboons, and, closest to humans, the group-hunting, group-raiding and even ‘warring’ communities of chimpanzees. Equally significant, there is reason to believe that various forms of collective violence were of vital importance to our own ancestors’ transition, over several million years, from an arboreal, frugivorous, mostly quadrupedal ape to a world-traveling, omnivorous, large-brained, tool-dependent, loquacious biped. The thesis that warfare is not a recent ‘historical’ invention will be briefly reviewed in this paper. This does not mean that humans are, after all, ‘killer apes’ with a reflexive blood-lust or an aggressive ‘drive’. The biological, psychological and cultural underpinnings of collective violence are far more subtle and complex. Most important, the incidence of collective violence – in nature and human societies alike – is greatly influenced by synergies of various kinds, which shape the ‘bioeconomic’ benefits, costs and risks. Synergy is a necessary (but not sufficient) causal agency. Though there are notable exceptions (and some significant qualifiers), collective violence is, by and large, an evolved, synergy-driven instrumentality in humankind, not a mindless instinct or a reproductive strategy run amok.      

Reduced medical spending associated with increased use of a remote diabetes management program and lower mean blood glucose values

Abstract

Aims: Many new mobile technologies are available to assist people in managing chronic conditions, but data on the association between the use of these technologies and medical spending remains limited. As the available digital technology offerings to aid in diabetes management increase, it is important to understand their impact on medical spending. The aim of this study was to investigate the financial impact of a remote digital diabetes management program using medical claims and real-time blood glucose data.

Materials and methods: A retrospective analysis of multivariate difference-in-difference and instrumental variables regression modeling was performed using data collected from a remote digital diabetes management program. All employees with diabetes were invited, in a phased introduction, to join the program. Data included blood glucose (BG) values captured remotely from members via connected BG meters and medical spending claims. Participants included members (those who accepted the invitation, n?=?2,261) and non-members (n?=?8,741) who received health insurance benefits from three self-insured employers. Medical spending was compared between people with well-controlled (BG ≤ 154?mg/dL) and poorly controlled (BG > 154?mg/dL) diabetes.

Results: Program access was associated with a 21.9% (p?<?0.01) decrease in medical spending, which translates into a $88 saving per member per month at 1 year. Compared to non-members, members experienced a 10.7% (p?<?0.01) reduction in diabetes-related medical spending and a 24.6% (p?<?0.01) reduction in spending on office-based services. Well-controlled BG values were associated with 21.4% (p?=?0.03) lower medical spending.

Limitations and conclusions: Remote digital diabetes management is associated with decreased medical spending at 1 year. Reductions in spending increased with active utilization. It will be beneficial for future studies to analyze the long-term effects of the remote diabetes management program and assess impacts on patient health and well-being.     

中国城镇养老保险制度改革的收入分配效应——基于2002年城镇住户调查数据的定量分析

Using the micro data of Urban Household Survey made by the National Bureau of Statistics of China(NBS) in 2002, this paper studies quantitatively the distributional effects of Public Pension Reform in urban China, from intragenerational and intergenerational perspectives, by measuring lifetime net benefits that urban employees obtain under the public pension system in 1997 and the newest one announced in December 2005, respectively. The results indicate that the regressive income transfer existing before implementation of the reform is improved as a consequence of the 1997 reform. However, the Act of 2005 Reform generates the obvious inclination of the regressive income transfer among people who exceed 40 years old in 2002. On the other hand, from the viewpoint of intergenerational distribution, the intergenerational inequality resulted from 1997 reform is greater than that from 2005 reform. Moreover, all generations would receive higher lifetime net benefits under the Act of 2005 Reform, but it must be based on sustainable pension system and participants’ full pension contribution during their duration of employment. __________ Translated from Jingji yanjiu 经济研究(Economic Research Journal), 2007, (3): 70–80, 91     

Regulation and efficiency in transition: the case of Romanian banks

Using disaggregated panel data for the period 1996–2002, this paper estimates the cost efficiency of Romanian banks and relates it to regulation implemented by the National Bank of Romania. We estimate efficiency using a model that combines the frameworks of both stochastic frontier analysis and shadow cost functions. Our results indicate that, for all types of banks, the cost of technical inefficiency decreases in the years following tightening of regulation. A significant part of this decrease can be attributed to the policy change. Overall, the short-run increase in cost due to additional regulation exceeds the benefits from reduced technical inefficiency. However, our model does not account for other benefits, besides changes in X-inefficiency, such as stability of the banking system, which may be significant.