Beyond the Stern Review: Lessons from a risky venture at the limits of the cost-benefit analysis

This paper argues that debates amongst economists triggered by the Stern Review are partly relevant, focusing on key parameters translating real ethical issues, and partly misplaced in that they do not consider enough other determinants of climate change damages: i) the specifications of the utility function used for the assessments (preference for the environment, preference for smooth growth paths), ii) the interplay between uncertainty and the sequentiality of the decision, and iii) whether the growth engines behind the integrated assessment models can account for transient disequilibrium and sub-optimality. We derive some suggestions for any future research agenda in integrated assessment modelling, whatever the position of the analysts about the relevance of the intertemporal optimisation framework and the Bayesian approach to uncertainty in the climate affair.     

Fruit and Vegetable Consumption Patterns: A Segmentation Approach

In this article, we study the heterogeneity of fruit and vegetable consumption patterns in France. A finite mixture of AIDS models is used to describe food demand patterns revealing different preferences over distinct classes. We obtained six different clusters, which reflect specific socio-demographic characteristics and different income and price elasticities. This approach is appropriate for targeting specific public nutritional policies. Our main results show that unlike the other clusters in which the usual price and income policy tools may be used, the lowest income cluster with the lowest consumption, remains insensitive to economic variables.     

Cotton farmers’ willingness to pay for pest management services in northern Benin

This study was carried out to assess cotton farmers’ willingness to pay (WTP) for pest management services in northern Benin. Targeted staggered control (TSC) has been introduced to reduce pesticide use in cotton cropping and generate an estimated benefit of FCFA48,800 (€74.40) per cotton hectare accruing from increased productivity and reduced pesticide cost. However, TSC application requires extra time for pest identification and scouting, and its adoption remains low due to the lack of funding to boost farmers’ awareness and cover training costs. An interval regression model was used to analyze responses to a double‐bounded contingent valuation survey with data collected from 300 cotton farmers. The results showed that 87.3% of cotton farmers were willing to pay for TSC services. Annual WTP per cotton hectare was estimated at FCFA16,962 (€25.80), revealing an existing demand for TSC adoption. Respondents' WTP was driven by farm and socio‐economic characteristics. Financial mechanisms managed by farmers could thus potentially foster technology adoption, and in turn, generate economic and environmental benefits.     

The declining price anomaly in sequential auctions of identical commodities with asymmetric bidders: empirical evidence from the Nephrops norvegicus market in France

The declining price anomaly for sequential sales of identical commodities challenges auction theory which predicts constant prices within a day. Among other hypotheses explaining the phenomenon stands the dual value of goods including a risk premium in early transactions. We consider that asymmetric bidder groups (primary processors, fishmongers, supermarket buyers) and seasonal landings may also affect the daily price pattern. On the basis of stylized facts and several panel data models, this hypothesis is tested on a Redundant French fish market of homogenous goods (live Nephrops norvegicus) when the time effects (high and low seasons, weekday effect) affecting the demand and supply conditions are taken into consideration. All models support the evidence of a daily declining pattern, but not to the same extent for all days and seasons, and all categories of buyers. Our results also show an earlier and steeper decline on periods of lower supply (or higher demand), supporting the theoretical hypothesis of risk‐averse behaviors of bidders, especially fishmongers with respect to primary processors and supermarkets.     

MitraClip therapy in mitral regurgitation: a Markov model for the cost-effectiveness of a new therapeutic option

Introduction Mitral regurgitation is a heart condition resulting from blood flowing from the left ventricle towards the left atrium, increasing the risk of heart failure and mortality. While surgery can greatly reduce these risks, some patients are not eligible, resulting in medication being their only therapeutic alternative. The MitraClip (Abbot Vascular) is a medical device that is percutaneously implanted and designed to eliminate leaking of the mitral valve.

Methods The efficacy of the MitraClip strategy vs medical management was assessed using a 4-state Markov model based on the mitral regurgitation grade (mitral regurgitation grade 0, I/II, and III/IV, and death). At each 1-month cycle, patients were or were not hospitalized. The model analyzed a fictional population of 1000 patients over a 5-year period from a national Health Insurance perspective. The primary end-point was the number of deaths avoided. Data from the EVEREST II High Risk Study patients were used along with a literature review.

Results At 5 years, among the 1000 patients, 276 deaths were found to be avoidable with the MitraClip strategy. The incremental cost-effectiveness ratio (ICER) was €93,363 per death avoided. The annual ICER was calculated to take into consideration excess costs resulting from the MitraClip over the first year (€29,984 vs €8557 for the reference strategy) and the reduction of costs in following years (€3122 for MitraClip vs €8557 for reference strategy). Thus, the mean ICER was calculated to be €20,720 per death avoided.

Conclusion The MitraClip is a novel alternative therapy for mitral insufficiency in patients ineligible for surgery that may offer a medico-economic advantage.     

Partial Hedging for Equity-Linked Products Using Risk-Minimizing Strategies

In this article, we consider the pricing and hedging of equity-indexed annuities (EIAs) using local risk-minimizing strategies as well as evaluating the capital requirement for these products. Since these products involve mortality as well as financial risks, we integrate mortality risk and propose partial hedging strategies that protect the insurer based on risk measures. The framework we present makes use of sequential local risk-minimizing strategies to take into account all intermediate requirements. To demonstrate the flexibility of this framework we present numerical examples featuring point-to-point EIAs with a two-state regime-switching equity model.     

Front-line responses to customer orientation programmes: a theoretical and empirical analysis

Programmes designed to strengthen customer orientation among front-line service workers represent one of the most common forms of culture change initiatives within service organizations. Despite their importance to contemporary management theory and practice, we know relatively little about how employees react to interventions of this kind, and why they react as they do. The paper aims to address this gap in the literature. It does this through an analysis of front line reactions to a major customer care initiative in one of the largest supermarket chains in the UK. Using data from a large-scale employee survey carried out in seven stores, we first propose a general typology of employee responses to customer care programmes. We then examine some typical employee profiles associated with the main types of response. The analysis is placed within a wider theoretical context consisting of a critical overview of the main theories which might help explain the nature of general and individual reactions to culture change programmes. To this end, we address and draw upon a variety of literatures and debates linked to various aspects of organization and management, industrial psychology, training and development and critical discourse analysis.     

A New Premium Principle for Equity‐Indexed Annuities

In this article, we introduce a premium principle for equity‐indexed annuities (EIAs). Traditional actuarial loadings that protect insurance companies against risks cannot be extended to the valuation of EIAs since these products are embedded with various financial guarantees. We proposed a loaded premium that protects the issuers against the financial and mortality risks. We first obtain the fair premium based on a fair value of the equity‐linked contract using arbitrage‐free theory. Assuming a specific risk level for hedging errors, we obtain a new participation rate based on a security loading. A detailed numerical analysis is performed for a point‐to‐point EIA.