Benefits and costs of food safety regulation

This paper begins with a review of the concepts and methods that can be used to quantify the benefits and costs of food safety regulations. On the cost side, where research is only beginning to emerge, this paper also provides an analytical framework for measurement of the costs of statutory regulations in the form of design and performance standards. This paper also discusses the use and limitations of currently available benefit and cost information for quantitative regulatory impact assessment, using the assessment of the mandatory HACCP and pathogen reduction regulations in the United States as an example. The paper concludes with suggestions for future research on quantifying benefits and costs of food safety regulations.     

Corporate political strategies and firm performance: indications of firm‐specific benefits from personal service in the U.S. government

Firms employ a variety of political strategies (e.g., lobbying, contributions) in an attempt to gain influence or access to the public policy process. A variety of benefits may accrue to firms that are successful in creating a linkage with the government: information, access, influence, reduced uncertainty and transaction costs, etc. However, the direct benefits of such strategies are difficult to observe. One political strategy is studied here—personal service (having a firm representative serve in a political capacity). Event‐study methodology results show that such linkages with the government positively affect firm value. These findings indicate that firm‐specific benefits may result from political strategies. Copyright © 1999 John Wiley & Sons, Ltd.     

Pesticide use in less developed countries — economic and environmental considerations

This paper examines the use of pesticides in the agriculture of less developed countries (LDCs). It outlines in general terms both the benefits and the costs of any pesticide programme and the difficulties involved in the quantification of cost functions are highlighted. A number of conclusions are reached at the general policy level. Selective pesticide applications can be justified in a number of cases where the benefits are clearly outstanding. However, the social costs involved in pesticide usage require careful consideration. Given the scarcity of resources and foreign exchange in LDCs, extreme caution is needed. It would appear that increased pesticide inputs have only a marginal effect on total output and employment, and other inputs (ie better seeds, irrigation schemes, etc) may yield more significant results.     

Retailer policy, uncertainty reduction, and supply chain performance

We investigate how the retailer’s inventory policy affects the total cost of a serial supply chain. When the retailer uses the locally optimal (s,S) policy, there is randomness in order time and order quantity to the supplier whereas the supplier sees randomness only in order quantity for the suboptimal (R,T) policy and only in order time for another suboptimal (Q,r) policy. Using an extensive computational study, we find that the suboptimal policies perform better from the total supply chain perspective. The benefit of policy changes is magnified when the retailer costs are low, when the supplier costs are high, and when there is information sharing.     

Raising Rivals' Costs Strategies via Emission Permits Markets

In the present paper we examine the effect of emissions permit price manipulation within an oligopolistic model. We examine the effect that positioning strategies in permits markets have on the degree of competition in the product market as well as on social welfare. The analysis is based on the concept of raising rivals' cost strategies. We find that competition in the product market can be lessened substantially. The welfare effect is ambiguous. If the leader expands its market share at the expense of a less efficient rival, or if it excludes a less efficient entrant, overall efficiency may increase despite the decrease in the industry's output. When efficiency decreases, or when consumers' protection is a policy priority, the initial distribution of permits can be used to control power in the permits market. Such interventions though, improve efficiency only when policy makers have substantial information on the technological structure of the industry, and thus, should be used with caution. Given the importance of information, sharing of information and coordination of actions between policy makers is very important.     

Inventory control in a two-echelon dual-channel supply chain with setup of production and delivery

This paper considers a two-echelon dual-channel supply chain model with setup of production and delivery and develops a new inventory control policy for the supply chain. Previously, a two-echelon supply chain model without setup of production and delivery is considered and a one-for-one inventory control policy is applied to the supply chain. In the inventory control policy, production is stopped when the warehouse inventory reaches the upper limit and is started again immediately after the inventory drops below the limit. Moreover, delivery to the retailer is stopped when the store inventory reaches the upper limit and is started again immediately after the inventory drops below the limit. The total cost that consists of inventory holding costs and lost sales cost is considered, and setup costs are not considered in the total cost. Once setup costs are introduced, the one-for-one inventory control policy is no longer appropriate. Then, this paper develops a new control policy for the two-echelon dual-channel supply chain with setup of production and delivery. As performance measure, the total cost that consists of inventory holding costs, lost sales cost, and production and delivery setup costs is considered, and the total cost calculated on the basis of Markov analysis demonstrates the effectiveness of the proposed control policy.     

Modelling of potential food policy interventions in Fiji and Tonga and their impacts on noncommunicable disease mortality

Background

To compare the likely costs and benefits of a range of potential policy interventions in Fiji and Tonga targeted at diet-related noncommunicable diseases (NCDs), in order to support more evidence-based decision-making.

Method

A relatively simple and quick macro-simulation methodology was developed. Logic models were developed by local stakeholders and used to identify costs and dietary impacts of policy changes. Costs were confined to government costs, and excluded cost offsets. The best available evidence was combined with local data to model impacts on deaths from noncommunicable diseases over the lifetime of the target population. Given that the modelling necessarily entailed assumptions to compensate for gaps in data and evidence, use was made of probabilistic uncertainty analysis.

Results

Costs of implementing policy changes were generally low, with the exception of some requiring additional long-term staffing or construction activities. The most effective policy options in Fiji and Tonga targeted access to local produce and high-fat meats respectively, and were estimated to avert approximately 3% of diet-related NCD deaths in each population. Many policies had substantially lower benefits. Cost-effectiveness was higher for the low-cost policies. Similar policies produced markedly different results in the two countries.

Conclusion

Despite the crudeness of the method, the consistent modelling approach used across all the options, allowed reasonable comparisons to be made between the potential policy costs and impacts. This type of modelling can be used to support more evidence-based and informed decision-making about policy interventions and facilitate greater use of policy to achieve a reduction in NCDs.     

Methods of Determining Priorities in a Programme of Research

Abstract— A method for selecting a programme of research by calculating the overall costs and benefits is outlined and then, as an example, it is applied to a particular field of research. The field selected is that of research into Vehicle Safety. The method of collecting the data for the necessary analysis is described and using two separate programme objectives, namely the maximization of gross benefits and the maximization of net benefits, various selections are made using linear programme computer techniques. The dangers of uncritical acceptance of cost/benefit criteria in project selections are noted. In particular the need for freedom to devote effort to understanding the nature of problems rather than achieve quick solutions is pointed out. Finally, reasons are given for modifying the portfolio selected to produce what is called a pragmatic portfolio.     

Stock market reactions to related diversification moves by service firms seeking benefits from information asymmetry and economies of scope

Service firms may seek benefits from information asymmetry and economies of scope by diversifying. Each source of benefit is based on different underlying mechanisms and each is affected differently by implementation difficulties and service characteristics. Previous research, however, has not analyzed the relative performance effects of these two very different sources of benefits for related diversified service firms. Thus, this paper uses an integrative framework including these aspects to examine the relative performance effects of benefits from information asymmetry and economies of scope in service firms.     

On the replenishment policy when the market demand information is lagged

We consider a situation where the most up-to-date information on the market demand and the inventory levels is not available to a replenishment decision maker in a single echelon of a supply chain. The objective of the decision maker is to minimise the sum of the inventory and the production costs. An intuitively attractive strategy under this setting might be to reduce the information time lag as much as possible by utilising information technologies such as RFID. We call this strategy the Time lag Elimination Strategy (TES). However, this course of action requires investment in information systems and will incur a running cost. We propose an alternative strategy that has similar economic consequences as the TES strategy, but it does not require new information systems. We call this strategy the Controlling Dynamics Strategy (CDS). The benefit coming from CDS is quantified and is compared to that from TES. We also quantify the benefits gained from the combined use of these two strategies. A new ordering policy is introduced that is easy to implement without any forecasting systems and can reduce the production cost significantly.     

Assessing the impact of food policy research: rice trade policies in Viet Nam

The economic impact of marketing and trade policy research in Viet Nam conducted by the International Food Policy Research Institute (IFPRI) is assessed using a novel benefit–cost framework. It measures the economic value of the time saved in hastening the policy responses of the Government of Vietnam. Extensive interviews with partners and stakeholders in the research clearly indicated that the time saving was a legitimate measure of the influence of IFPRI on decision-making. Linking a spatial equilibrium model with income distribution analysis based on national household surveys, allowed IFPRI to satisfy policymakers that relaxing rice export quotas and internal trade restrictions on rice would not adversely impact on regional disparities and food security, and would have beneficial effects on farm prices and poverty. These were major concerns of policymakers prior to the IFPRI research project. The research on these and other policy options gave a degree of confidence to policymakers that relaxing the controls would be in Viet Nam’s national interest. They made these decisions earlier than would have been the case without the IFPRI research. The policy assessment framework is used to measure the economic impact of the policy changes themselves, and in particular, the contribution of IFPRI’s work with Viet Nam on the policies from 1995 to 1997. The relaxation of rice export quotas and internal restrictions on rice trade made by the Government of Viet Nam in 1995–97 are estimated to have had a present (1995) value to Viet Nam using a 5% discount rate of $222 million by 2000, rising to $966 million by 2020. For an incremental research investment of less than US$1 million, a conservative estimate of the benefit to Viet Nam of the IFPRI contribution to the policy changes effected in Viet Nam from the reduction in the policy implementation lag indicates a present value in 1995 terms of US$45 million. This represents a benefit–cost ratio of 56. A more optimistic assessment is that the present value is US$91 million with a benefit–cost ratio of 114. In addition to the welfare gains to Viet Nam, there were sizeable gains to the rest of the world from IFPRI’s contribution. Inclusion of these benefits increases present value and benefit–cost estimates by 34 to 84%. Around 38% of the contribution of IFPRI is estimated to have accrued to the rest of the world, as Viet Nam is now a major player in world rice trade.     

Corruption in PPPs,incentives and contract incompleteness

We analyze risk allocation and contractual choices when public procurement is plagued with moral hazard, private information on exogenous shocks, and threat of corruption. Complete contracts entail state-contingent clauses that compensate the contractor for shocks unrelated to his own effort. By improving insurance, those contracts reduce the agency cost of moral hazard. When the contractor has private information on revenues shocks, verifying messages on shocks realizations is costly. Incomplete contracts do not specify state-contingent clauses, thereby saving on verifiability costs. This makes incomplete contracts attractive even though they entail greater agency costs. Because of private information on contracting costs, a public official may have discretion to choose whether to procure under a complete or an incomplete contract. When the public official is corrupt, such delegation results in incomplete contracts being chosen too often. Empirical predictions on the use of incomplete contracts and policy implications on the benefits of standardized contracts are discussed.     

Works Councils,Collective Bargaining,and Apprenticeship Training – Evidence From German Firms

In this paper, we investigate the effects of works councils on apprenticeship training in Germany. The German law attributes works councils substantial information and co‐determination rights to training‐related issues. Thus, works councils may also have an impact on the cost‐benefit relation of workplace training. Using detailed firm‐level data containing information on the costs and benefits of apprenticeship training, we find that firms with works councils make a significantly higher net investment in training compared to firms without such an institution. We also find that the fraction of former trainees still employed with the same firm 5 years after training is significantly higher in the presence of works councils, thus enabling firms to recoup training investments over a longer time horizon. Furthermore, all works council effects are much more pronounced for firms covered by collective bargaining agreements.     

Some aspects of the present-value criterion in research planning

The classic analysis of a potato harvester by Grossfield and Heath is reworked. The present value of the benefits is shown to depend on the way capital costs are handled and on the way the benefits are identified. It is concluded that, by 1965, the harvester had not, in fact, yet generated positive benefits. Attention is drawn to the ambiguities of interpretation which can arise from the choices of discount rate and base year. Finally, some difficulties in extending the analysis to incorporate social effects are mentioned.     

Agriculture and ISO 14000

Many agricultural firms are now considering the environmental consequences of their activities as a means to obtain a competitive advantage. The shift is highlighted by the significant interest in standardized private codes such as those found in ISO 14000. These standardized codes are characterized by signatory firms voluntarily agreeing to abide by a given set of environmental management principles with monitoring conducted by an outside party. Government policy makers are also interested in the ability of such codes to address environmental concerns related to agriculture. This paper examines the feasibility of ISO 14000 for agricultural producers and the policy issues surrounding its application. The costs to an individual firm largely depend upon the availability of an environmental management system and the extent of the changes required under the system. The potential rewards are related to lower costs from reduced input use or lower premiums and increased revenue from new customers or market premiums. Net benefits to ISO 14001 certification will be greater for producers marketing food products than for firms selling a bulk commodity far removed from final consumption. Policy concerns related to ISO 14000 include providing institutional support for promotion and training, tying environmental regulations to the code, and the lack of public accountability in the setting of standards.     

个人理性与沉没成本悖论

文章放松了新古典经济学条件下沉没成本决策无关性假设前提,进而从真实世界角度阐述沉没成本悖论存在的理性逻辑,从而表明人们很难忽略过去发生的沉没成本,它本身并不能被视为一种悖论或错误行为,甚至是非理性行为,同样也是在约束条件下一种广义理性行为。因此,需要承认沉没成本悖论存在的普遍性,而且还需要采取恰当的非正式和正式制度设计克服沉没成本悖论所带来的负面影响,并不是简单地警告我们不要考虑过去发生的沉没成本,＂让过去的事情过去吧＂的规范结论。因此,不仅需要提高决策者的认识能力,更多需要采取加强沉没成本与风险管理,创造一个良好的市场环境是最为根本的。     

Surplus extraction by network providers: Implications for net neutrality and innovation

This paper looks at surplus extraction by network providers who control the medium of information transfer between application developers and consumers, and addresses the following questions: is net neutrality beneficial to society? and does providing network providers flexibility in pricing stunt innovation in the long run? To answer the first question, it looks at a market consisting of a monopoly network provider and two application providers with non-substitutable products, using a simple single period model. It shows that net neutrality is necessary to ensure maximal benefit to the society. To answer the second question, the paper shows that a monopoly network provider, if allowed complete flexibility in pricing, does not necessarily stunt innovation. Looking at a market that consists of one network provider and one application provider, and using a simple multi-period model, it shows that given maximum flexibility the network provider not only encourages innovation when the potential benefits are sufficiently high but also maximizes surplus. This paper takes the view that the topic of net neutrality is not only controversial but also complicated, and suggests that policy makers use a balanced approach based on sound analysis.     

区域生态产业网络的经济分析——一个简单的成本效益模型

基于自然资源与环境经济学的分析表明,区域生态产业网络带来的效益主要是,从排放的废弃物中回收的有价组分的市场价值、减少开采而保存节省的自然资源的市场价值和稀缺租金(或市价以外的机会成本)、减少废弃物排放而获得保护的环境价值,以及节省的土地和其他成本等,对参与企业来说可以获得政府优惠政策(如在税收方面)或补贴、金融支持等收益;产生的主要成本则体现在废弃物的堆放、仓储和交通运输成本、废弃物的收集、分拣和加工成本、废弃物加工产生的二次污染成本、参与企业之间的交易成本,以及生态产业网络的设备投资折旧与运营维护成本等。区域较大后,总边际效益将随着生态产业网络的区域半径增大而减少,总边际成本则呈现递增的走势。生态工业网络的可行性主要体现在上述总成本总效益的均衡,影响成本效益的因素都将反映其中。最优区域生态产业网络的区域半径的主要影响因素是能源价格、道路运输条件、废弃物毒性、环境损害特征常数以及所收集的废弃物数量或运载量,而企业之间的诚信合作关系构建的难度、信息透明度、交易成本、政策法规和市场机制的完善程度等也有影响。