A BAYESIAN AUDITING MODEL

A Bayesian procedure is demonstrated that binds together multiple audit tests in a multiple-stage decision analysis. The analysis uses information provided by one test in the design of subsequent tests even when subsequent tests are directed at a different set of system characteristics. The analysis is applied to compliance and substantive tests undertaken to ascertain the fairness of a particular account balance. Although the analysis is not operational as presented, it provides a logical framework that clarifies the complex conceptual structure of the problem and enables the identification of impediments to its implementation.     

Consumer Preferences for ‘Localness’ and Organic Food Production

While organic food is based on well-defined production criteria, the criteria for ‘local’ food are less clear. This study investigates the preferences and trade-offs of distinct consumer segments relative to organic production and several dimensions of local food (sales channel, size of company, and geographical location of animals used in the production). The analysis is based on a quantitative survey of 505 Danish consumers and a choice experiment involving beef salami. Data were analyzed in a principal component and a latent class analysis. We identify five consumer segments whose preferences for organic and local product attributes differed substantially. Most respondents considered geographical proximity in the raising of cattle to be the most important attribute and a third of the consumers were willing to pay a premium for organic salami. The segmentation provides more detailed information about stated consumer behavior than what is typically elicited when considering only average consumer behavior.     

Investigating Treatment Effects of Participating Jointly in SNAP and WIC when the Treatment Is Validated Only for SNAP

The U.S. Department of Agriculture operates several food assistance programs aimed at alleviating food insecurity. We study whether participation in both participation in both SNAP and WIC alleviates food insecurity compared with participation in SNAP alone. We bound underlying causal effects by applying nonparametric treatment effect methods that allow for endogenous selection and underreported program participation when validation data are available for one program (treatment) but not the other. We estimate average treatment effects using data from the National Household Food Acquisition and Purchase Survey (FoodAPS). FoodAPS includes administrative data to validate SNAP participation. Information on local food prices allows us to construct a food expenditure‐based monotone instrumental variable that does not require a typical instrumental variable exclusion restriction. Under relatively weak monotonicity assumptions, we identify that the impact of participating in both programs relative to SNAP alone is strictly positive, suggesting that the programs are nonredundant. This evidence can support improved design and targeting of food programs.     

Life insurance decisions under recursive utility

In this paper, we generalize recursive utility to include lifetime uncertainty and utility from bequest. The generalization applies to discrete-time as well as continuous-time recursive utility, and it is an important step forward in the development of recursive utility. We formalize the problem of optimal consumption, investment, and life insurance choice under recursive utility, and we state a verification theorem with a generalized Hamilton-Jacobi-Bellman equation. Our generalization of recursive utility allows us to study optimal consumption, investment, and life insurance choice under separation of (market) risk aversion, elasticity of inter-temporal substitution, and elasticity of substitution between bequest and future utility. The separation gives rise to hump-shaped consumption patterns as observed in realized consumption.     

Projecting total costs and health consequences of increasing mt-sDNA utilization for colorectal cancer screening from the payer and integrated delivery network perspectives

Abstract

Aims: To evaluate total costs and health consequences of a colorectal cancer (CRC) screening program with colonoscopy, fecal immunochemical tests (FIT), and expanded use of multitarget stool DNA (mt-sDNA) from the perspectives of Integrated Delivery Networks (IDNs) and payers in the United States.

Materials and methods: We developed a budget impact and cost-consequence model that simulates CRC screening for eligible 50- to 75-year-old adults. A status quo scenario and an increased mt-sDNA scenario were modeled. The status quo includes the current screening mix of colonoscopy (83%), FIT (11%), and mt-sDNA (6%) modalities. The increased mt-sDNA scenario increases mt-sDNA utilization to 28% over 10 years. Costs for both the IDN and the payer perspectives incorporated diagnostic and surveillance colonoscopies, adverse events (AEs), and CRC treatment. The IDN perspective included screening program costs, composed of direct nonmedical (e.g. patient navigation) and indirect (e.g. administration) costs. It was assumed that IDNs do not incur the costs for stool-based screening tests or bowel preparation for colonoscopies.

Results: In a population of one million covered lives, the 10-year incremental cost savings incurred by increasing mt-sDNA utilization was $16.2 M for the IDN and $3.3 M for the payer. The incremental savings per-person-per-month were $0.14 and $0.03 for the IDN and payer, respectively. For both perspectives, increased diagnostic colonoscopy costs were offset by reductions in screening colonoscopies, surveillance colonoscopies, and AEs. Extending screening eligibility to 45- to 75-year-olds slightly decreased the overall cost savings.

Limitations: The natural history of CRC was not simulated; however, many of the utilized parameters were extracted from highly vetted natural history models or published literature. Direct nonmedical and indirect costs for CRC screening programs are applied on a per-person-per modality basis, whereas in reality some of these costs may be fixed.

Conclusions: Increased mt-sDNA utilization leads to fewer colonoscopies, less AEs, and lower overall costs for both IDNs and payers, reducing overall screening program costs and increasing the number of cancers detected while maintaining screening adherence rates over 10 years.     

Anomalies in the Foundations of Ridge Regression

Errors persist in ridge regression, its foundations, and its usage, as set forth in Hoerl & Kennard (1970) and elsewhere. Ridge estimators need not be minimizing, nor a prospective ridge parameter be admissible. Conventional estimators are not LaGrange's solutions constrained to fixed lengths, as claimed, since such solutions are singular. Of a massive literature on estimation, prediction, cross–validation, choice of ridge parameter, and related issues, little emanates from constrained optimization to include inequality constraints. The problem traces to a misapplication of LaGrange's Principle, unrecognized singularities, and misplaced links between constraints and ridge parameters. Alternative principles, based on condition numbers, are seen to validate both conventional ridge and surrogate ridge regression to be defined. Numerical studies illustrate that ridge regression as practiced often exhibits pathologies it is intended to redress.     

Danish flexicurity: preconditions and future prospects

This article argues that Danish flexicurity is preconditioned by craft unionism that has historically been predominant in the Danish trade union movement. It is furthermore argued that flexicurity was on the verge to disappear when it became famous in the early 2000s, although yet not completely dead.