A study on financial opportunity costs of growing local varieties of sorghum in Ethiopia: Implications for on-farm conservation policy

The increasing interest in on-farm conservation is driven by its diverse attractive features — its participatory nature and its flexible and dynamic features; its capacity to maintain not only crop diversity but the knowledge that evolves with it; and the chance it offers to link conservation with utilization and farmers' livelihoods. To implement this strategy on a sustainable basis, policy incentives are crucial. This paper argues that opportunity costs farmers face have a role to play to design sound policy incentives. Taking sorghum as an example, opportunity costs have been examined in this paper using data collected from 198 farmers in Eastern Ethiopia. The average opportunity costs suggest the size of the required policy incentives and they are the basis to estimate the national conservation costs for on-farm conservation. The regression analysis shows that opportunity costs increase with access to output markets and extension, output price, access to input supply, experience in growing improved varieties, and the relative importance of the crop. On the contrary, plot quality, input price, and oxen ownership are reducing the opportunity costs. The paper then concludes outlining the policy implications of the empirical findings to incentive design for on-farm conservation.     

Opportunity Costs,Competition, and Firm Selection

Abstract

The paper questions the standard economic assumptions that competing economic agents have identical reservation utility levels, and that when differences in opportunity costs exist, they can be conveniently represented by fixed costs. Asymmetries in opportunity costs are considered in relation to current efficiency. The effect of this interchangeability of skills is studied in the context of the effect of entry on firm selection in a Cournot setting. It is found that inefficient firms are more likely to crowd out efficient ones when the relationship between current efficiency and opportunity costs is strong, and when the fixed costs of changing markets are high. Moreover, in the long-run, firms with intermediate cost levels are likely to induce the exit of low and high cost firms. The model sheds light on the benefits of diversification by multiproduct and multinational firms, and their relationship to skill transferability.     

Cost structure,productivity and efficiency of the Italian public higher education industry 2001–2011

In this paper, I analyze the cost structure of the Italian higher education system for the decade between 2001 and 2011, by means of a stochastic translog cost function. I suggest that the judgment about the optimal configuration of the sector is strongly dependent upon the policy priorities set by decision makers. When assuming that the universities’ output is the number of students, scale economies are exhausted, and marginal costs are relatively low; when considering graduates as outputs instead, there is opportunity for increasing the scale of operations. Inefficiency affects production in a sensible manner, especially when assuming that the target output is the number of graduates. Moreover, efficiency contributes to explaining a relevant portion of the productivity increases in the period. No significant scope economies between teaching and research emerge, suggesting that a higher degree of universities’ specialization can be a direction for improving the sector’s efficiency and productivity.     

Job and worker flows in high adjustment cost settings

This paper analyses the relationship between the size of adjustment costs and the intensity of labor market flows. I argue that high adjustment costs inhibit adjustment to temporary shocks, leaving adjustment to long-lived shocks unchanged. Worker turnover is also reduced because of the negative impact that adjustment costs have on churning.Received: January 2002, Accepted: November 2002, JEL Classification: J23, J63I am grateful to the FCT for funding this research (research grant Praxis/PCSH/C/CEG/13/96), and to Pedro Portugal, Daniel Hamermesh and two anonymous referees for helpful comments on earlier versions of this paper. I thank the Department of Statistics at the Ministry of Labor for providing the data. CETE is supported by the FCT.     

Entry costs and stock market participation over the life cycle

Several explanations for the observed limited stock market participation have been offered in the literature. One of the most promising is the presence of market frictions mostly in the form of fixed entry and/or transaction costs. Empirical studies point to a significant structural (state) dependence in the stock market entry decision, which is consistent with costs of this type. However, the magnitude of these costs is not yet known. This paper focuses on fixed stock market entry costs. I set up a structural estimation procedure which involves solving and simulating a life cycle intertemporal portfolio choice model augmented with a fixed stock market entry cost. Important features of household portfolio data (from the PSID) are matched to their simulated counterparts. Utilizing a Simulated Minimum Distance estimator, I estimate the coefficient of relative risk aversion, the discount factor and the stock market entry cost. Given the equity premium and the calibrated income process, I estimate a one-time entry cost of approximately two percent of the permanent component of the annual labor income. My estimated model matches the zero median holding as well as the hump-shaped age–participation profile observed in the data.     

水产养殖业总氮污染及其环境成本研究——一个淀山湖水源保护区的实证研究

淀山湖沿湖三镇是上海重要的水源保护区,加强该区水产养殖业污染管理对上海具有重要意义,而加强管理的前提是合理评估该产业污染状况及其环境成本。此文以实证资料为基础,运用物料平衡法测算该区域主要水产养殖业总氮污染的排放情况,进而以机会成本法核算了污染的环境成本。结果表明:(1)"十五"期间三镇主要水产养殖业共向环境排放4056.6吨总氮。(2)"十五"期间该地区总氮排放大部分来自常规水产养殖业,排放2715.9吨,占总量的66.9%。(3)"十五"期间沿湖三镇主要水产养殖业总氮污染成本约为4.83亿元。     

Institutional Economics as Theory of Policy Change: Impact of Past Policy Failures on Present Policy

Social scientists have developed several theories for understanding or evaluating policy change over time. Since all costs or benefits are not internalized owing to positive transaction costs, policymaking is always implemented under cost underestimation conditions and, therefore, is imperfect. I call this trait policy failure in this article. Furthermore, I show that a new framework combining the social costs approach and the legal/economic approach in institutional economics is suitable and can be applied to evaluating how past policy failures affect present policy, providing as an example the Fukushima nuclear disaster in Japan.     

Opportunity costs in buying and short selling—Do they really matter?

The experimental results of the paper reveal that people do not take into consideration opportunity costs or opportunity profits when buying and short selling lottery tickets. These results are inconsistent with basic economic and finance theories.     

The interaction of firing costs and firm training

By allowing firms to invest in their workers’ human capital, this paper extends the traditional analysis of firing costs with respect to two points, both of them positive in terms of welfare. On the one hand, firing restrictions reduce turnover, thereby enhancing incentives to provide training. On the other hand, training gives firms the opportunity to lower the costs of firing restrictions since well-trained workers are less likely to be fired. In this way the negative effects of firing costs on firm profitability and workers’ job-finding rates are reduced.

How Much of the Gender Difference in Child School Enrolment Can Be Explained? Evidence from Rural India

There are significant gender differences in child schooling in the Indian states though very few studies explain this gender difference. Unlike most existing studies we take account of the implicit and explicit opportunity costs of schooling and use a bivariate probit model to jointly determine a child's participation in school and market jobs. Results obtained from the World Institute of Development Economics Research (WIDER) villages in West Bengal suggest that indicators of household resources, parental preferences, returns to and opportunity costs of domestic work significantly affect child school enrolment. While household resources have similar effects on enrolment of boys and girls, other arguments tend to explain a part of the observed gender difference. Even after taking account of all possible arguments, there remains a large variation in gender differences in child schooling that cannot be explained by differences in male and female characteristics in our sample.     

Social and family load of Alzheimer’s disease

As the World Health Organization reports, mental illnesses have a serious impact on more than 25% of all population people worldwide at some time during their lives. Mental illnesses are universal; they affect people of any age, both women and men, the rich and the poor, no matter from which urban and rural environment they come from. Mental illnesses have an enormous economic effect on societies and on the quality of people’s life, including their families. The purpose of this study is to describe social and economic aspects of Alzheimer’s disease (AD) with respect to the early diagnosis. The authors provide an analysis of costs of treatment and care in the selected countries where the data from the available studies are recalculated into comparable quantities. Furthermore, the authors analyse aspects and possibilities of care for patients with AD in the informal (home) environment in compliance with individual phases of this disease. In the article, the method of research of available sources focusing on social and economic issues of AD is used. In order to compare costs of treatment and care of the AD patients, the Qualitative Comparative Analysis Method is exploited. The analyses have shown that the metric systems for monitoring the direct and indirect costs for the individual phases of AD are different.     

Neither market nor hierarchy—coordination costs in the allocation of track capacity in the Swedish railway network

Transaction costs have been an issue since the advent of the deregulation of the European railway markets in the 1990s. Transaction cost economics received renewed attention in research on the deregulated railway markets in the EU after the publications of two influential reports in the early 2010s. In this article, we develop a model that enables classification and measurement of transaction costs and other coordination costs in deregulated markets. This model is then used to analyze the costs of path allocation in the Swedish railway sector and to compare the results with findings in previous research. We also discuss the economic rationale of the distribution of coordination costs among the involved parties. Our key empirical findings are that the total coordination costs in the Swedish market-mimicking path allocation process are as low as or lower than the most cost-efficient market coordination processes studied in railway markets, and that the state administrations take on nearly all the coordination costs in order to minimize the effects of opportunism, rent-seeking and information impactedness. Another finding is that the size of the coordination costs found by different studies seems to be dependent on whether a bottom-up or a top-down approach is used.     

The impact of frailty on the economic evaluation of geriatric surgery: hospital costs and opportunity costs based on meta-analysis

Abstract

Objectives: We used a systematic review and meta-analysis to analyze the difference in costs between surgery for frail and non-frail elderly patients. The opportunity cost of frailty in geriatric surgery is estimated using the results.

Methodology: Two literature reviews were carried out between 2000 and 2019: (1) studies comparing total hospital costs of frail and non-frail surgical patients; (2) studies evaluating the length of hospital stay and cost for surgical geriatric patients. We performed a meta-analysis of the items selected in the first review. We subsequently calculated the opportunity cost of frail patients, based on the design of a cost/time variable.

Results: Twelve articles in the first review were selected (272,717 non-frail and 16,461 frail). Fourteen articles were selected from the second review. Frail patients had higher hospital costs than non-frail patients (22,282.541 € and 16,388.844, p?<?.001) and a longer hospital stay (10.16 days and 8.4 (p?<?.001)). The estimated opportunity cost in frail patients is 1,019.56 € (cost/time unit factor of 579.30 €/day).

Conclusions: Frail surgical geriatric patients generate a higher total hospital cost, and an opportunity cost arising from not operating in the best possible state of health. Preoperatively treating the frailty of elderly patients will improve the use of health resources     

Societal costs of multiple sclerosis in Ireland

Aims: This paper evaluates the impact of multiple sclerosis (MS) in Ireland, and estimates the associated direct, indirect, and intangible costs to society based on a large nationally representative sample.

Materials and methods: A questionnaire was developed to capture the demographics, disease characteristics, healthcare use, informal care, employment, and wellbeing. Referencing international studies, standardized survey instruments were included (e.g. CSRI, MFIS-5, EQ-5D) or adapted (EDSS) for inclusion in an online survey platform. Recruitment was directed at people with MS via the MS Society mailing list and social media platforms, as well as in traditional media. The economic costing was primarily conducted using a ‘bottom-up’ methodology, and national estimates were achieved using ‘prevalence-based’ extrapolation.

Results: A total of 594 people completed the survey in full. The sample had geographic, disease, and demographic characteristics indicating good representativeness. At an individual level, average societal cost was estimated at €47,683; the average annual costs for those with mild, moderate, and severe MS were calculated as €34,942, €57,857, and €100,554, respectively. For a total Irish MS population of 9,000, the total societal costs of MS amounted to €429m. Direct costs accounted for just 30% of the total societal costs, indirect costs amounted to 50% of the total, and intangible or QoL costs represented 20%. The societal cost associated with a relapse in the sample is estimated as €2,438.

Limitations and conclusions: The findings highlight that up to 70% of the total costs associated with MS are not routinely counted. These “hidden” costs are higher in Ireland than the rest of Europe, due in part to significantly lower levels of workforce participation, a higher likelihood of permanent workforce withdrawal, and higher levels of informal care needs. The relationship between disease progression and costs emphasize the societal importance of managing and slowing the progression of the illness.     

Trade‐Induced Unemployment: How Much Do We Care?

It is a common perception that a government, especially in the face of elections, is particularly sensitive to the presence of trade‐induced unemployment. In this paper, I ask: how much weight does the incumbent politician actually attach to unemployment resulting from trade? To answer, I build a model that captures government's sympathy to trade‐affected workers and allows me to decompose the channels through which trade‐induced unemployment affects the level of sectoral protection chosen by a politically‐driven incumbent official. I provide empirical evidence that the US government is very sensitive to the presence and the magnitude of trade‐induced unemployment. Specifically, I estimate the weight that the office holder attaches to the welfare of trade‐affected workers to be positive, significant, and four times larger than the weight on the welfare of those who are not affected by trade.     

On the Trade-off Between Work-related Training and Labor Mobility: The Role of Firing and Exit Costs

Within an incomplete-contract framework, we examine the consequences of contract renegotiation for contract design/enforcement and training market efficiency. Specifically, we show how the imposition of either firing costs or exit costs can bind together employers and employees in longer-lasting employment relationships that allow both agents to amortize their training investments. Nevertheless, the model implies that, although firing and exit costs provide institutional solutions to the training under-investment problem, this is achieved at the expense of allocative efficiency (efficient separations). Empirical evidence supports the existence of such a trade-off.revised version received July 23, 2003     

Cost of fractures commonly associated with osteoporosis in a managed-care population

Objective: To examine direct costs of hip, vertebral, and non-hip non-vertebral (NHNV) fractures, and to estimate the rate of osteoporosis (OA) diagnosis and treatment in the fracture population.

Methods: Subjects ≥ 45 years with a new hip, vertebral, or NHNV fragility (closed) fracture between June 30, 2002 and June 30, 2006 were studied retrospectively. All-cause and fracture-specific medical costs were calculated from medical claims in the 12-month baseline and follow-up periods. Total healthcare costs included pharmacy and medical costs. Diagnosis for OA and OA treatment were identified in both the baseline and follow-up period from diagnosis codes on medical claims for OA, and from pharmacy claims for treatment. Analyses were performed separately for commercial (COM) and Medicare Advantage (MA) populations and stratified by fracture type. Generalized linear models were estimated for total follow-up healthcare cost.

Results: The study sample included 36,521 COM and 10,160 MA subjects. Hip fracture subjects had the highest follow-up medical costs in unadjusted and adjusted analyses (COM: mean $35,898; median $22,945; MA: mean $32,919; median $26,047). Follow-up costs were much higher than baseline costs. Fracture-related costs accounted for a large proportion of follow-up medical costs. Although rates of osteoporosis diagnosis and treatment increased from baseline to follow-up, the majority of both COM and MA subjects had no evidence of osteoporosis diagnosis or treatment in either period.

Conclusions: Despite limitations of this study, including conventional generalizability issues, and sensitivity and specificity of claims-based diagnoses, results are consistent with other research and provide compelling results of substantial cost burden of fractures related to osteoporosis. Low rates of osteoporosis diagnosis and treatment among patients with costly fragility fractures underscore the opportunity for managed care organizations to initiate comprehensive disease management programs in osteoporosis.     

Non-grant microfinance,incentives and efficiency

I show that charging interest on funds provided by donors or investors to microfinance institutions (MFIs) can increase efficiency, the total number of loans and borrower welfare, compared to grant or concessionary funding. In a setting in which MFIs supply costly non-contractible effort, putting a price or raising the price of loanable funds strengthens the MFIs’ incentives to put effort in credit administration or monitoring, to extend more loans, and/or reduce overhead costs. This theoretical result is robust to several variations of the benchmark model allowing for an endogenous lending rate, motivated MFIs and endogenous overhead costs.     

“诺思第二悖论”及其新破解

在新制度经济学家看来,制度的一个重要作用是降低作为经济运行的"摩擦力"的交易费用。理论上,交易费用会随着一国制度的进步和完善而降低。但是,据瓦利斯和诺思测算,美国自1 870年到1 970年的1 00年间总量交易费用占GNP的比例不仅没有降低,反而越来越高了。这种理论(随着制度的进步交易费用应该越来越低)与实际(测量到总量交易费用越来越高)的矛盾被称之为"诺思第二悖论"。瓦利斯和诺思测量到的总量交易费用并非交易费用的全部,表面上测量到的总量交易费用上升了,但"理论上"的总量交易费用是下降的,即是说,随着制度的进步,不仅每笔交易的交易费用下降了,理论上的总量交易费用也是下降的,所谓"诺思第二悖论"是不存在的。