Postauditing and Cost Estimation Applications: An Illustration of MCMC Simulation for Bayesian Regression Analysis

Often in Bayesian anlysis closed-form posteriors cannot be derived for complex models. However, it is important to be able to do Bayesian analysis relatively easily. This article presents an alternative, the more general Markov chain Monte Carlo (MCMC) simulation approach, which permits the efficient development of posterior distributions. MCMC simulation methods are now becoming the state of the art in numerous empirical and analytical applications in applied mathematics, biostatistics, marketing, economics, and other areas, but those methods are noticeably absent in the engineering economic analysis literature. The purpose of this article is to introduce MCMC simulation methods to the engineering economics research and practitioner community. Using postaudits and cost estimation as application areas, the article focuses on what MCMC simulation entails, its advantages, and its disadvantages and highlights the usefulness and versatility of the approach.     

Adoption of Food Safety and Quality Controls: Do Firm Characteristics Matter? Evidence from the Canadian Food Processing Sector

This study explores the association between the adoption of food safety and quality assurance practices in the Canadian food processing sector and firm characteristics. A conceptual model is developed recognizing that the relative importance of a firm's incentives to adopt enhanced food safety and quality assurance practices is influenced by the firm's characteristics and activities. Binomial logit models are estimated to explore the association between adoption of various combinations of food safety and quality assurance practices including hazard analysis and critical control point (HACCP). The findings show that the adoption of food safety and quality practices varies widely between individual firms according to, among others, firm size, country of ownership and control, level of innovativeness, level of export orientation, forms of food safety inspection, and the subsector in which the firm operates. Incentives of being able to access foreign markets play an important role in influencing HACCP adoption. La présente étude analyse le lien entre l'adoption de pratiques visant la salubrité et l'assurance de la qualité des aliments au sein de l'industrie canadienne de la transformation et les caractéristiques des entreprises. Nous avons élaboré un modèle conceptuel reconnaissant que l'importance relative des incitatifs qui motivent une entreprise à adopter des pratiques améliorées en matière de salubrité et d'assurance de la qualité des aliments est influencée par les caractéristiques et les activités de l'entreprise. Nous avons estimé des modèles logit binomiaux pour examiner le lien entre l'adoption de diverses combinaisons de pratiques visant la salubrité et l'assurance de la qualité des aliments, y compris les systèmes HACCP (analyse des risques et maîtrise des points critiques). Les résultats ont montré que l'adoption de ces pratiques variait considérablement d'une entreprise à l'autre en fonction, entre autres, de la taille de l'entreprise, du pays de propriété et de contrôle, du degré d'innovation, du degré de vocation exportatrice, des programmes d'inspection de la salubrité des aliments et du sous‐secteur dans lequel une entreprise évolue. La perspective de pénétrer les marchés étrangers joue un rôle important dans l'adoption de systèmes HACCP.     

From Plantations to Smallholder Production: The Role of Policy in the Reorganization of the Sri Lankan Tea Sector

The Sri Lankan tea sector has changed from one dominated by vertically integrated plantations to one where independent processors of black tea purchase their input (green leaf tea) from small, independent growers. This paper provides a unifying conceptual framework to characterize three major factors affecting the changes in vertical coordination arrangements (transaction, production, and management costs). Regulation and government policy have altered these determinants of organizational change. Transaction costs have been reduced by state intervention into the price for green leaf which subsequently lowered the risk of processors re-negotiating prices downward. Production costs, which continue to be dominated by labor expenses due to the lack of technological developments for harvesting, have increased more for plantations than independent producers due to union pressures.