Pension profile preferences: the influence of trust and expected expenses

This paper studies the influence of people’s expectations about expenses during retirement and trust in pension funds on preferences for different pension arrangements. Although most workers prefer a flat-rate annuity, many workers want to deviate from it. The most popular option is a high/low, annuity-based profile, followed by a partial lump sum payment. Workers who expect declining expenses during retirement are more likely to opt for a high/low annuity-based pension and/or a lump sum payment at retirement. Furthermore, workers and pensioners who do not trust their pension fund are more likely to prefer a lump sum over annuity-based arrangements.     

A note on an anniversary

ASSA Paper. ASA Session on Schumpeter     

A note on optimal procurement contracts with limited direct cost inflation

Laffont and Tirole's [Using cost observation to regulate firms, J. Polit. Econ. 94 (1986) 614-641] pioneering analysis identifies the optimal procurement contract when the supplier can readily inflate his innate production cost without detection. When the buyer has some ability to limit such cost inflation, an alternative contract can outperform the contract identified by Laffont and Tirole. The alternative contract induces substantial pooling, discontinuous production costs and effort supply, and rent that varies non-monotonically with innate cost.     

A cost function analysis of import demand and growth in South Africa

This study investigates the substitutability relationships among capital, labor, and imported inputs for South Africa, utilizing the estimates obtained from an aggregate cost function. Our results are consistent with the hypothesis that capital is a substitute for both domestic labor and imports, but that labor and imports are complementary inputs. This latter result suggests that relaxing South African trade restrictions may have a positive impact, in both the long and the short run, on the demand for domestic labor. Other results suggest that the reduction of market impediments may also positively impact the production of investment goods and economic growth.     

Multi-dimensional risk and the cost of business cycles

This paper analyzes the welfare costs of business cycles when workers face uninsurable idiosyncratic labor income risk. In accordance with the previous literature, this paper decomposes labor income risk into an aggregate and an idiosyncratic component, but in contrast to the previous literature, this paper allows for multiple sources of idiosyncratic labor income risk. Using the multi-dimensional approach to idiosyncratic risk, this paper provides a general characterization of the welfare cost of business cycles when preferences and the (marginal) process of individual labor income in the economy with business cycles are given. The general analysis shows that the introduction of multiple sources of idiosyncratic risk never decreases the cost of business cycles, and strictly increases it if there are cyclical fluctuations across the different sources of risk. This paper also provides a quantitative analysis based on a version of the model that is calibrated to match US labor market data. The quantitative analysis suggests that realistic variations across two particular dimensions of idiosyncratic labor income risk increase the welfare cost of business cycles by a substantial amount.     

Characterization of additive cost sharing methods

The set of additive cost sharing methods when individual demands are integer valued and cost shares are non negative is characterized by its extreme points and by a network flow representation. The extreme methods allocate costs incrementally along a chain of demand vectors independent of the cost function. The result generalizes Wang’s characterization in that we do not assume the Dummy axiom.     

The cost effectiveness of palivizumab: a systematic review of the evidence

Abstract

Objective:

Palivizumab is a prophylactic therapy shown to reduce the number of respiratory syncytial virus (RSV)-related hospitalizations but has a high acquisition cost. The objective was to systematically examine the cost effectiveness of palivizumab in defined infant groups and identify important cost and outcome determinants.

Methods:

Literature searches of MedLine, the Cost-Effectiveness Analysis registry and the UK NHS Economic Evaluation Database (NHS EED) were conducted to identify economic evaluations of palivizumab compared to no prophylactic treatment for RSV prevention in any infant population. Study quality was evaluated using Quality of Health Economic Studies (QHES) criteria and results converted to 2009 CAN$ for comparison.

Results:

A total of 23 articles meeting inclusion criteria were identified, including 11 cost-utility analyses (CUAs) and 12 cost-effectiveness analyses (CEAs). Quality of individual analyses was fairly high (range 60–100, median 86). Results ranged from cost dominance for prophylaxis to $3,365,769/QALY depending on population, outcome measures, and input parameters. Base-case and sensitivity-analysis mortality rates varied between studies and influenced results.

Conclusions:

RSV prophylaxis with palivizumab is cost effective in specific groups of high-risk infants, especially those with multiple environmental risk factors. Cost-effectiveness estimates vary between populations and settings and are more positive in those at highest risk for RSV hospitalization.

Limitations:

Direct comparison of the published reports was limited by restriction to English language articles and the varied methodologies, input measures, and populations across the studies reviewed. Although reported currencies were converted to a common unit for comparison, this does not completely account for monetary and inflation differences.     

作业成本法在我国企业产品决策中的运用

作业成本法相对于传统的成本计算方法，由于成本信息的准确性较高，因此，它在企业产品决策中得到了积极的运用。本文从四个方面分析了作业成本法在我国企业产品决策中的运用。     

A study of regional variation in the inpatient cost of lower extremity amputation among patients with diabetes in the United States

Abstract

Objective:

Understanding of the effects of providers’ cost on regional variation in healthcare spending is still very limited. The objective of this study is to assess cross-state and cross-region variations in inpatient cost of lower extremity amputation among diabetic patients (DLEA) in relation to patient, hospital, and state factors.

Methods:

Patient and hospital level data were obtained from the 2007 US Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project (HCUP). State level data were obtained from the US Census Bureau and the Kaiser Family Foundation websites. Regression models were implemented to analyze the association between in-patient cost and variables at patient, hospital, and state levels.

Results:

This study analyzed data on 9066 DLEA hospitalizations from 39 states. The mean cost per in-patient stay was $17,103. Four out of the five most costly states were located on the East and West coasts (NY and NJ, CA and OR). Age, race, length of stay, level of amputation, in-patient mortality, primary payer, co-morbidities, and type of hospital were significantly correlated with in-patient costs and explained 55.3% of the cost variance. Based on the means of costs unexplained by those factors, the three West coast states had the highest costs, followed by five Midwestern states, and four Southern states, and Kansas were the least costly.

Conclusions:

Over 40% of the variations in DLEA hospital costs could not be explained by major patient-, hospital-, and state-level variables. Further research is needed to examine whether similar patterns exist for other costly surgical procedures among diabetic patients.     

Adjusting for comorbidities in cost of illness studies

Abstract

Motivation:

Differences in cost of illness (COI) methodological approaches have led to disparate results. This analysis examines two sources of this variation: specification of comorbidities in the estimated cost models and assumed prevalence rates used for generating aggregate costs. The study provides guidance in determining which comorbidities are important to include and how to handle uncertainty in optimal model specification and prevalence rate assumptions.

Methods:

Comorbidities are categorized into four types. Type I comorbidities are those that increase the risk of the disease of interest; Type II comorbidities have no causal link to the disease of interest but are, nonetheless, highly correlated with that disease; Type III comorbidities are illnesses that the disease of interest may cause, and Type IV are comorbidities that have no causal link to the disease of interest and are only weakly correlated with that disease. Two-part models are used to estimate the direct costs of rheumatoid arthritis and diabetes mellitus using 2000–2007 Medical Expenditure Panel Survey data.

Results:

COI estimates are sensitive to the specification of comorbidities. The odds of incurring any expenses varies by 71% for diabetes mellitus and by 27% for rheumatoid arthritis, while conditional expenditures (e.g., expenditures among subjects incurring at least some expenditures) vary by 62% and 45%, respectively. Uncertainty in prevalence rates cause costs to vary. A sensitivity analysis estimated the COI for diabetes ranges from $131.7–$172.0 billion, while rheumatoid arthritis varies from $12.8–$26.2 billion.

Conclusions:

The decision to include Type II and Type III comorbidities is crucial in COI studies. Alternative models should be included with and without the Type III comorbidities to gauge the range of cost effects of the disease. In generating costs, alternative values for prevalence rates should be used and a sensitivity analysis should be performed.     

摩托罗拉在天津投资的决策因素

在全球跨国公司500强中已有400家将资金投向中国。尽管跨国公司的投资有自然资源寻求型、市场寻求型、效率寻求型等不同的动机，但随着中国改革开放的不断深入、经济的迅速发展、法律法规的不断完善以及基础设施的不断发展，同一跨国公司在各个阶段的直接投资动机与区位决定因素也在发生变化，其投资经营战略也相应地进行调整。本文试通过摩托罗拉公司在天津的投资，来分析跨国公司在进行投资活动中的相关决定因素。摩托罗拉公司是总部设在美国的世界一流无线通信产品、半导体器件、先进的电子设备生产及服务厂家，主要产品有移动电话通信设…     

Estimating the economic benefits of acidic rock drainage clean up using cost shares

This paper reports the results of a stated preference study that estimates the economic value for cleaning up acid rock drainage in Colorado's Snake River watershed. In contrast to much of the existing literature, the present study emphasizes benefit estimation for three implementing projects rather than benefit estimation for general changes in water quality or large scale water quality policy. The focus on implementing projects delivers information that is specifically relevant to current decisions being faced in the watershed. While valuation questions in most stated preference studies present costs that have no relation to actual project costs, this study presents a new cost share approach. Project costs are estimated and then valuation questions present different local cost shares to subjects. This approach facilitates stated cost variation necessary for estimating the mean of the distribution of project values without resorting to experimentally designed, fictitious stated costs. In addition to estimating the mean value, which facilitates benefit cost analysis, the study also provides median value estimates, which provide insights into the political feasibility of these projects. Study results suggest that local cost shares on the order of 20%-40%, depending on the project, are politically feasible.     

A note on an alternative derivation of the likelihood of an autoregressive moving average process

We give an alternative derivation of the likelihood of a Gaussian ARMA process to that usually given in the literature [see, for example, Newbold (1974), Hillmer and Tiao (1979), and Nicholls and Hall (1979,1980)]. A different computing formula is also derived.     

The changing structure of cost and demand for the U.S. telecommunications industry

This paper formulates a multiproduct structural model to examine the evolution of the structures of production and demand and their dynamic interaction, over an extended period, 1935–1987, in the U.S. telecommunications industry. We estimate the degree of scale economies, cost elasticities, input price elasticities and the determinants of demand for outputs and for various factors of production. The contributions of the quasi-fixed inputs, such as R&D and physical capital, in the evolution of this industry are evaluated. A number of important issues like the changing characteristics of demand for and cost of local and toll services and the variation of price–cost margin over time are examined under different economic conditions, market structures and regulatory environments. We also analyze the effects of the 1984 divestiture of the Bell System on the cost structure, employment and capital formation of the U.S. telecommunications industry.     

对调整外资优惠政策的探讨

随着中国加入WTO,对外商投资的政策优惠及所谓“国民待遇”问题越来越多地成为人们议论的中心,也在决策层的视野中日渐凸显。理论界和一些高层官员纷纷指出,中国应尽快按照国民待遇原则统一内外资企业所得税等税种,取消对外商投资企业的税收优惠。在这其中,不是存有误解,就是产生误导,将对我国利用外资产生巨大的不利影响,有必要予以澄清。一、内外资企业待遇比较改革开放后,中国同其他发展中国家一样,为了吸收外商投资而对其实行优惠政策即“超国民待遇”。这些政策的实施,与其他因素一起,对中国吸收外商投资起到了巨大的促…     

A note on bimatrix games with an unknown payoff matrix

We show that, using a simple decision rule, two players repeatedly playing the same zero-sum game without the direct knowledge of the payoff matrix will ultimately achieve the Nash Equilibrium if the game possesses a unique pure strategy Nash Equilibrium. For other bimatrix games, the simple decision rule does not suffice to generate the nice convergence property.     

Corporate tax avoidance and cost of equity capital: international evidence

ABSTRACT

This study examines the association between firm’s tax avoidance activities and cost of equity capital across 17 countries. Consistent with the prior study based on the U.S. evidence, within strong investor protection countries, the extent of firm’s tax avoidance is negatively associated with its cost of equity capital. This result indicates that strong investor protection induces investors to perceive firm’s tax avoidance activities as the results of efficient tax planning to reduce tax liabilities. To the contrary, we find that the extent of firm’s tax avoidance is positively associated with its cost of equity capital within weak investor protection countries. This result suggests that investors impose equity risk premium on firm’s tax avoidance activities in weak investor protection countries, where agency conflicts prevail more on firm’s tax avoidance activities. As the first international study on the association between firm’s tax avoidance activities and its cost of equity capital, this study contributes to the literature by suggesting that such an association may vary across countries depending on the strength of investor protection within each country of domicile.     

A note on the factor-price frontier

Conclusions For an economist the possibility of an upward sloping factorprice frontier is extremely surprising. It has been shown that although such a factor-price frontier is theoretically possible, it is not very likely that it can occur under given economic and technical conditions since it would imply that capitalists are a class of borrowers (from nature) whereas we can be fairly sure that they are a class of lenders.I am indebted to Prof. E. Streissler for helpful comments.     

Demand system estimation in the absence of price data: an application of Stone-Lewbel price indices

This article evaluates the feasibility of estimating a system of demand equations in the absence of price information using the approach developed by Lewbel (1989). Stone-Lewbel (SL) price indices for commodity groups are constructed using information on the budget shares and the Consumer Price Indices (CPIs) of the goods comprising the commodity groups, which allows for household-level prices to be recovered. This study evaluates how susceptible are elasticities and marginal effects estimates from traditional parametric demand systems to the CPI used in the construction of the SL prices. To do this, three alternative regional CPIs are considered for the construction of the SL prices: monthly, quarterly and a constant (unity) price index. Elasticities and marginal effect estimates are computed for eight food commodity groups using the Exact Affine Stone Index (EASI) model as the parametric demand system and data from the United States Consumer Expenditure Survey. The estimates proved to be robust to the alternative regional CPIs considered in the construction of SL price indices, even to the absence of one. Hence, the results suggest that it is possible to accurately estimate a demand system even in the absence of price information.