Economic Integration between the European Union and the Transition Economies of Central European Initiative Countries

In this article we examine the main factors influencing trade and FDI flows between the transition countries of the Central European Initiative (CEI) and the EU member states. We distinguish three groups of CEI countries, according to the degree of trade and FDI integration with the EU: the 'fast mover' countries, the 'next tier' countries and the 'slow movers'. By estimating a number of trade and FDI equations we were able to locate the significance of alternative variables which affect the flows of trade between the CEI countries and the EU. According to our results, the low volume of trade and FDI between the 'next tier' and 'slow movers' of the CEI region, on one hand, and the EU, on the other, is a reflection of the fact that these particular countries have not yet achieved adequate institutional and economic reform while, at the same time, privatisation has not progressed as much.     

On the Inconsistency of Instrumental Variables Estimators for the Coefficients of Certain Dummy Variables

In this paper we consider the asymptotic properties of the Instrumental Variables (IV) estimator of the parameters in a linear regression model with some random regressors, and other regressors that are dummy variables. The latter have the special property that the number of non-zero values is fixed, and does not increase with the sample size. We prove that the IV estimator of the coefficient vector for the dummy variables is inconsistent, while that for the other regressors is weakly consistent under standard assumptions. However, the usual estimator for the asymptotic covariance matrix of the I.V. estimator for all of the coefficients retains its usual consistency. The t-test statistics for the dummy variable coefficients are still asymptotically standard normal, despite the inconsistency of the associated IV coefficient estimator. These results extend the earlier results of Hendry and Santos (Oxf Bull Econ Stat 67:571–595, 2005), which relate to a fixed-regressor model, in which the dummy variables are non-zero for just a single observation, and OLS estimation is used.

     

Time is money: The effect of clock speed on seller’s revenue in Dutch auctions

We study the role of timing in auctions under the premise that time is a valuable resource. When one object is for sale, Dutch and first-price sealed bid auctions are strategically equivalent in standard models, and therefore, they should yield the same revenue for the auctioneer. We study Dutch and first-price sealed bid auctions in the laboratory, with a specific emphasis on the speed of the clock in the Dutch auction. At fast clock speeds, revenue in the Dutch auction is significantly lower than it is in the sealed bid auction. When the clock is sufficiently slow, however, revenue in the Dutch auction is higher than the revenue in the sealed bid auction. We develop and test a simple model of auctions with impatient bidders that is consistent with these laboratory findings.

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Convergence Results for Unanimous Voting

This paper derives a necessary condition for unanimous voting to converge to the perfect information outcome when voters are only imperfectly informed about the alternatives. Under some continuity assumptions, the condition is also sufficient for the existence of a sequence of equilibria that exhibits convergence. The requirement is equivalent to that found by Milgrom [1979, Econometrica47, 679-688] for information aggregation in single-prize auctions. An example illustrates that convergence may be reasonably fast for small committees. However, if voters have common preferences, unanimity is not the optimal voting rule. Unanimity rule makes sense only as a way to ensure minority views are respected. Journal of Economic Literature Classification Numbers: D72, D82, D44.     

Remarks on the first welfare theorem with nonordered preferences

A strong convexity assumption is used to establish the first fundamental theorem of welfare economics using the strong definition of Pareto optimality without assuming that the weak preference relations are complete or transitive. An example demonstrates that Debreu's (Proc. Nat. Acad. Sci., 40 (1954), 588–592) nonsatiation and convexity assumptions are insufficient to establish the result in the absence of transitivity.     

Evidence on learning in coordination games

This paper reports an experiment designed to detect the influence of strategic uncertainty on behavior in order statistic coordination games, which arise when a player’s best response is an order statistic of the cohort’s action combination. Unlike previous experiments using order statistic coordination games, the new experiment holds the payoff function constant and only changes cohort size and order statistic.

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Electronic Supplementary Material The online version of this article () contains supplementary material, which is available to authorized users. Related research available at     

Measurement of patient-reported outcomes. 2: Are current measures failing us?

Abstract

All instruments designed to measure latent (unobservable) variables, such as patient-reported outcomes (PROs), have three major requirements; a coherent construct theory, a specification equation, and the application of an appropriate response model. The theory guides the selection of content for the questionnaire and the specification equation links the construct theory to scores produced with the instrument. For the specification equation to perform this role, the patient-reported outcome measure (PROM) must employ a response model that generates values for its individual items. The most commonly applied response model in PROM development is the Rasch model. To date this level of measurement sophistication has not been achieved in PRO measurement. Consequently, it is not possible to establish a PROM’s true construct validity. However, the development of the Lexile Framework for Reading has demonstrated that such objective measurement is possible for latent variables. This article argues that higher quality PROM development is needed if meaningful and valid PRO measurement is to be achieved. It describes the current state of PROM development, shows that published reviews of PROMs adopt inappropriate criteria for judging their quality, and illustrates how the use of traditional PROMs can lead to incorrect (and possibly dangerous) conclusions being drawn about the efficacy of interventions.     

Searching for the sunk cost fallacy

We seek to isolate in the laboratory factors that encourage and discourage the sunk cost fallacy. Subjects play a computer game in which they decide whether to keep digging for treasure on an island or to sink a cost (which will turn out to be either high or low) to move to another island. The research hypothesis is that subjects will stay longer on islands that were more costly to find. Eleven treatment variables are considered, e.g. alternative visual displays, whether the treasure value of an island is shown on arrival or discovered by trial and error, and alternative parameters for sunk costs. The data reveal a surprisingly small sunk cost effect that is generally insensitive to the proposed psychological drivers. Electronic Supplementary Material Supplementary material is available in the online version of this article at . Jel Classification C91, D11     

Economic evaluation of sevelamer for the treatment of hyperphosphatemia in chronic kidney disease patients not on dialysis in the United Kingdom

Abstract

Objectives:

To determine the cost effectiveness of sevelamer vs calcium carbonate in patients with chronic kidney disease and not on dialysis (CKD-ND) from the perspective of the National Health Service (NHS) in the UK.

Methods:

A Markov decision analytic model was developed to estimate (1) total life years (LYs), quality-adjusted life years (QALYs), and costs for patients treated with sevelamer or calcium carbonate; and (2) incremental costs per LY gained (LYG) and per QALY gained for sevelamer vs calcium carbonate. Data informing probability transitions to all-cause death and dialysis inception in CKD-ND patients were taken directly from the INDEPENDENT-CKD study and were extrapolated beyond the 3-year clinical trial using Weibull regression analysis. Estimates of health utility and costs (in £2011) were derived from the published literature.

Results:

Over a lifetime horizon, sevelamer treatment resulted in a gain of 2.05 LYs and 1.56 QALYs per patient, an increase of £37,282 in total costs per patient vs calcium carbonate (3.5% discount), and a per-patient cost of £18,193/LYG and £23,878/QALY gained. Results were robust to alternative assumptions in key parameters; results were most sensitive to alternative assumptions regarding the mean daily dose of sevelamer, impact of sevelamer on dialysis initiation, cost of dialysis, and health utility estimates. The probabilistic sensitivity analysis showed that sevelamer was cost-effective vs calcium carbonate in 93% of simulations at a willingness-to-pay threshold of £30,000/QALY gained.

Limitations:

While the model simulated a real-world clinical setting, this analysis was subject to limitations common to all decision analytic models, in that it used a mix of data sources and relied on several assumptions. Not all variables that impact real-world outcomes and costs were included in this model.

Conclusions:

Sevelamer is a cost-effective option compared to calcium carbonate for the first-line treatment of hyperphosphatemia in CKD-ND patients in the UK.     

Systematic literature review of economics analysis on treatment of mild-to-moderate bleeds with aPCC versus rFVIIa

Abstract

Objective:

Two bypassing agents, activated prothrombin complex concentrates (aPCC) and recombinant factor VIIa (rFVIIa), have shown similar efficacy and safety in the treatment of bleeding episodes in patients with hemophilia and inhibitors as demonstrated through the only two head-to-head clinical trials. Given the economic burden of bypassing treatment, it is crucial to have a valid estimate of cost effectiveness of alternative treatments. The aims of this study were to conduct a systematic review of published pharmacoeconomic literature on the cost-effectiveness of aPCC versus rFVIIa to treat mild-to-moderate bleeds in patients with hemophilia and inhibitors, with a focus on the model assumptions and their impact on results.

Methods:

An English language search was conducted for original economic studies comparing aPCC and rFVIIa published between 1995 and July 2010. Detailed information on sponsorship, study design, assumptions and their impact on results was collected for each study.

Results:

A total of 11 economic studies were included in the review. Nine studies assessed cost per bleeding episode (eight cost-minimization analysis (CMA) and one cost-effectiveness analysis (CEA)). Two studies were from longitudinal perspective. Studies on cost per bleeding episode were evaluated and systematically compared. All studies were from a third-party payer perspective. Most analyses, except one study, used a similar decision-tree model. The assumptions for all CMA studies were obtained from non-comparable single-armed trials or observational data. All studies were sponsored by the two competing manufacturers of rFVIIa (seven studies) and aPCC (two studies). The crucial parameter assumptions on treatment efficacy and dosing drove their reported findings. Eight of these nine studies favored their sponsor’s product.

Conclusion:

With one exception, published economic studies tend to favor their sponsor’s product primarily by assuming a higher efficacy and lower dosing for the sponsored agent, even though the two existing head-to-head clinical studies do not support superior efficacy for either product.     

Communication and coordination in the laboratory collective resistance game

This paper presents a laboratory collective resistance (CR) game to study how different forms of non-binding communication among responders can help coordinate their collective resistance against a leader who transgresses against them. Contrary to the predictions of analysis based on purely self-regarding preferences, we find that non-binding communication about intended resistance increases the incidence of no transgression even in the one-shot laboratory CR game. In particular, we find that the incidence of no transgression increases from 7 percent with no communication up to 25–37 percent depending on whether communication occurs before or after the leader’s transgression decision. Responders’ messages are different when the leaders can observe them, and the leaders use the observed messages to target specific responders for transgression.

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Opportunity Cost Estimation of Ecosystem Services

Land-use changes rank among the most significant drivers of change in ecosystem services worldwide. The enhancement of important services such as biodiversity and carbon sequestration requires modifications in land-use that can lead to the decline in other ecosystems services. Targeting the most suitable areas for particular land-uses based on comparative advantages requires opportunity cost information across large regions. This is a demanding task because the input–output relations are ill-defined and determined by spatially heterogeneous operational and environmental conditions. To address this methodological challenge, this paper presents a two-stage semiparametric technique that enables multi-dimensional production possibility frontiers to be estimated from data provided by biophysical models. Specific advantages of the proposed frontier approach are its flexibility with regard to assumptions on the convexity of the production possibility set and its freedom from any separability assumptions for the input–output space and the space of the heterogeneous background variables. The method is illustrated for a case study of 18 Central and Eastern European countries. Results show that opportunity costs of changes in ecosystem services provision differ substantially between regions. Those areas having already relatively high levels of carbon sequestration have a comparative advantage in sequestering carbon. Opportunity costs of biodiversity are generally positively related with the level of biodiversity up to a turning point after which they are negatively related. To illustrate the policy consequences of the observed economies and diseconomies of scope we compare two management regimes to illustrate the potential gains from smart land management.     

Steady state properties of multi‐state economic models

A simple method to derive optimal steady states of multi‐state dynamic economic systems with minimal assumptions on the underlying processes is developed. This is accomplished by an n‐dimensional function defined over the n‐dimensional state space in terms of the model's primitives. The location and stability properties of optimal steady state candidates are characterized by the roots and derivatives of this function. A resource management example illustrates the simplicity and applicability of the method.     

The Limitations of International Relations Regarding MNCs and the Digital Economy: Evidence from Brazil

ABSTRACT

Multinationals (MNCs) have been considered a relevant research topic for International Relations since the emergence of the field of International Political Economy in the 1970s. Nowadays, MNCs are undergoing deep changes in their business models and global strategies due to the digital economy. This has considerable implications for the international system. For instance, the rise of information and communication technology (ICT) MNCs to the top of market value lists globally. Nonetheless, IR scholars have been slow in grasping the importance of ICT MNCs and the digital economy. In this paper, I justify this statement by evaluating the inclusion of MNCs and ICT MNCs in Brazilian IR scholarship. The method used is a bibliometric mapping of the scientific production of Brazilian IR scholars, supported by a systematic literature review. The results showcase that, in spite of the impact of digitalization on Brazil's economy and politics, IR scholars have conducted few studies on MNCs and practically no studies on ICT MNCs. This case illustrates the emergence of new dynamics in global value chains triggered by digitalization. It also illustrates the challenges for developing countries such as Brazil to engage in global production networks within the highly competitive ICT sector.     

Equilibrium without prices: A central issue in pareto’smanuale

Pareto in hisManuale asserts that the price concept is inessential for the notion of equilibrium. This view deeply contrasts with the Arrow-Debreu’s dominant approach of Walrasian derivation. This identifies general equilibrium with a system of prices at which the decentralized choices of economic agents match. In this paper the author justifies and gives substance to the Paretian point of view. The differential merit of the Paretian approach is its independence of assumptions of price taking and of convexity in preferences and in production possibility sets. These assumptions are necessary, in the walrasian framework, only to maintain the centrality of prices, but they clash against the request of realism. (JEL:BOO, D51, D60)     

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.     

De-escalation from micafungin is a cost-effective alternative to traditional escalation from fluconazole in the treatment of patients with systemic Candida infections

Abstract

Background:

Systemic Candida infections (SCI) occur predominantly in intensive care unit patients and are a common cause of morbidity and mortality. Recently, changes in Candida epidemiology with an increasing prevalence of SCI caused by Candida non-albicans species have been reported. Resistance to fluconazole and azoles in general is not uncommon for non-albicans species. Despite guidelines recommending initial treatment with broad-spectrum antifungals such as echinocandins with subsequent switch to fluconazole if isolates are sensitive (de-escalation strategy), fluconazole is still the preferred first-line antifungal (escalation) in many clinical practice settings. After diagnosis of the pathogen, the initial therapy with fluconazole is switched to a broad-spectrum antifungal if a non-albicans is identified.

Methods:

The cost-effectiveness of initial treatment with micafungin (de-escalation) vs fluconazole (escalation) in patients with SCI was estimated using decision analysis based on clinical and microbiological data from pertinent studies. The model horizon was 42 days, and was extrapolated to cover a lifetime horizon. All costs were analyzed from the UK NHS perspective. Several assumptions were taken to address uncertainties; the limitations of these assumptions are discussed in the article.

Results:

In patients with fluconazole-resistant isolates, initial treatment with micafungin avoids 30% more deaths and successfully treats 23% more patients than initial treatment with fluconazole, with cost savings of £1621 per treated patient. In the overall SCI population, de-escalation results in 1.2% fewer deaths at a marginal cost of £740 per patient. Over a lifetime horizon, the incremental cost-effectiveness of de-escalation vs escalation was £15,522 per life-year and £25,673 per QALY.

Conclusions:

De-escalation from micafungin may improve clinical outcomes and overall survival, particularly among patients with fluconazole-resistant Candida strains. De-escalation from initial treatment with micafungin is a cost-effective alternative to escalation from a UK NHS perspective, with a differential cost per QALY below the ‘willingness-to-pay’ threshold of £30,000.     

The cost-effectiveness of dulaglutide versus insulin glargine for the treatment of type 2 diabetes mellitus in Japan

Aims: Dulaglutide is a new once weekly glucagon-like peptide-1 (GLP-1) receptor agonist administered via a disposable auto-injection pen for the management of type 2 diabetes mellitus (T2DM). The objective of this study was to estimate the cost-effectiveness of dulaglutide vs insulin glargine for the management of T2DM from a Japanese healthcare perspective, in accordance with recently approved Japanese Cost-Effectiveness Guidelines.

Methods: The IQVIA CORE Diabetes Model (version 9) was used to estimate the long-term costs and effects of treatment with dulaglutide and insulin glargine. Direct comparative data from the Araki 2015 trial (NCT01584232) was used to inform the analysis. Costs associated with treatment and complications were derived from Japanese sources wherever possible and inflated to 2015 Japanese Yen (JPY). Utilities were based upon a European systematic review of diabetes utilities and adjusted for use in a Japanese population. One-way and probabilistic sensitivity analyses (OWSA and PSA) were conducted on all inputs and key modeling assumptions.

Results: Dulaglutide 0.75?mg was associated with higher quality-adjusted life years (QALYs), life years (LYs), and total costs, compared to insulin glargine, resulting in an incremental cost-effectiveness ratio (ICER) of 416,280 JPY/QALY gained. Treatment with dulaglutide increased the time alive and free from diabetes-related complications by 4 months. OWSA and PSA indicated that results were robust to plausible variations in input parameters and modeling assumptions.

Limitations: Key limitations of this study are similar to other cost-utility analyses of diabetes, including the extrapolation of short-term clinical trial data into lifelong durations. In addition, due to the lack of robust published Japanese data, some values were derived from non-Japanese sources.

Conclusions: This analysis suggests that dulaglutide 0.75?mg may be a cost-effective treatment alternative to insulin glargine for patients with T2DM in Japan.     

Key market values for bottled wine in an emerging market: product attributes or business strategy?

ABSTRACT

This article focuses on the emerging bottled Chilean red wine market and studies the main determinants of the consumer price of wine sold on the domestic market. A hedonic price function was estimated for a sample of 810 wines using a quantile regression (QR) model. The database contains three variable groups to explain price: objective variables (national, international and vine quality designations), subjective variables (wine score) and business strategies used by wine producers. Results show that some objective variables have a greater impact on price than the wine score (a subjective variable) and business strategies, which vary for each quartile of prices analysed. Finally, this information will allow companies to design and implement marketing strategies to inform the consumer about the importance of some variables in the price of their product.     

EVEREST II high risk study based UK cost-effectiveness analysis of MitraClip® in patients with severe mitral regurgitation ineligible for conventional repair/replacement surgery

Abstract

Objectives:

To evaluate the cost-effectiveness of MitraClip, an interventional procedure for patients with chronic severe mitral regurgitation.

Methods:

A decision analytic model with a lifetime horizon was developed to assess the cost-effectiveness of MitraClip vs conventional medical management in patients with severe mitral regurgitation, ineligible for surgery. The analysis was performed from a UK NHS perspective and the estimates for mortality, adverse events, and cross-sectional NYHA class were obtained from the EVEREST II High Risk Study (HRS). Utility decrements were obtained from a heath technology assessment on Cardiac Resynchronization Therapy, while unit costs were obtained from national databases. The concept model was clinically validated. Costs (2011 £UK) and benefits were discounted at an annual rate of 3.5%.

Results:

Compared to medical management, over 2- and 10-year periods MitraClip had incremental Quality Adjusted Life Year (QALY) gains of 0.48 and 2.04, respectively. The Incremental Cost-Effectiveness Ratios for MitraClip at 2 and 10 years are £52,947 and £14,800 per QALY gained. Overall, the model was most sensitive to the choice of time horizon, the discount rate applied to benefits, the starting age of cohort, the utility decrement associated with NYHA II, and cost of the MitraClip procedure. The model was insensitive to changes in all other parameters. MitraClip was also found to be cost-effective, regardless of the modelling approach, and insensitive to the key assumptions of the procedure cost.

Study limitations:

The primary limitation of the analysis is the reliance on aggregate data from a modestly sized non-randomized study with a short-term follow-up period. Aligned to this was the need to extrapolate survival well beyond the study period in order to generate meaningful results. The impact of both of these limitations was explored via extensive sensitivity analyses.

Conclusion:

Compared to medical management, MitraClip is a cost-effective interventional procedure at conventional threshold values.