The Relative Efficiency and Implementation Costs of Alternative Methods for Pricing Irrigation Water

A useful means for achieving efficient allocation of irrigationwater is to put the right price tag on it. This article discussessome of the more pervasive pricing methods and compares theirefficiency performance, paying special attention to the impactof the cost of implementing each method on its efficiency. Thearticle uses an empirical example to demonstrate numericallythe relative efficiency of the different pricing methods andthe important role of implementation costs. The volumetric,output, input, tiered, and two-part tariff methods all can achieveefficiency, although the type of efficiency varies from onemethod to another. These methods also differ in the amount andtype of information, and the administrative cost, needed intheir implementation. The example indicates that water pricingmethods are most pronounced through their effect on the croppingpattern—more so than through their effect on water demandfor a given crop. Implementation costs have a large effect onwater tariffs and on welfare and hence should have an importantrole in determining the desirable method to use in any givenwater situation.     

Overreaction of country ETFs to US market returns: Intraday vs. daily horizons and the role of synchronized trading

In this paper we study the intraday price formation process of country Exchange Traded Funds (ETFs). We identify specific parts of the US trading day during which Net Asset Values (NAVs), currency rates, premiums and discounts, and the S&P 500 index have special effects on ETF prices, and characterize a special intraday and overnight updating structure between these variables and country ETF prices. Our findings suggest a structural difference between synchronized and non-synchronized trading hours. While during synchronized trading hours ETF prices are mostly driven by their NAV returns, during non-synchronized trading hours the S&P 500 index has a dominant effect. This effect also exceeds the one that the S&P 500 index has on the underlying foreign indices and suggests an overreaction to US market returns when foreign markets are closed.     

The Impact of the Entry of Biosimilars: Evidence from Europe

Biologics represent a substantial and growing share of the U.S. drug market. Traditional “small molecule” generics quickly erode the price and share of the branded product upon entry, however only a few biosimilars have been approved in the US since 2015, thereby largely preserving biologics from competition. We analyze European markets, which have had biosimilar competition since 2006. Using our own survey, we analyze how market features and public policies predict biosimilar entry, price, and penetration, finding significant heterogeneity across countries and products. Effective buyer institutions are associated with increased biosimilar penetration. Our estimates can inform ongoing policy discussions.     

A Balancing Act: Work–Life Balance and Multiple Stakeholder Outcomes in Hospitals

This article examines the direct and indirect effects of work–life balance (WLB) practices on multiple stakeholder outcomes in hospitals. The authors examine the direct and indirect effects of WLB practices in 173 hospitals in the United Kingdom on organizational, patient care and employee outcomes. The article proposes a model in which the effects of WLB practices on patient care outcomes and financial performance are mediated by employee turnover intentions. The authors provide strong support for the potential vested in WLB practices in the healthcare setting. Results indicate that greater use of WLB practices enhances outcomes for hospitals, their employees and the patients they care for.     

Cofinanced Public Extension in Nicaragua

How effective is agricultural extension? Is it worth the vastsums governments spend to provide it, mostly as a free service,to farmers worldwide? Relatively few studies exist that measureand compare the benefits of extension activities against theircosts. In the absence of such data, this pilot activity concentratedinstead on demand. Would demand for extension services be highif they were no longer free? The existence of solid demand wouldpresuppose some benefits from the service. Further, might chargingfor the service actually improve its quality and sustainability? The pilot program in Nicaragua described here set out to testwhether a truly demand—driven extension system aimed atfarmers with small-and medium-size holdings could be developed.The principal mechanism was a contribution by the farmer paidas a bonus to the extensionist: the aim was to introduce incentivesfor providers to improve the service through rewards linkedto the quality of their work and to establish direct accountabilityof extensionist to client. The outcomes showed that the cofinancingconcept can be successful. The article describes the design,implementation, and results in the expectation that the lessonslearned may be of interest elsewhere.      

The Design of ``Smart' Water Market Institutions Using Laboratory Experiments

One of the problems with proposals for substantialinstitutional change in water systems is thatmodification and irreversibility make the processslow, cautious and costly to society. In this paper,we discuss the role that experimental economics canplay in evaluating proposed institutional changes tohelp facilitate a more rapid and smooth adoption ofchanges in the water system. Experimental economicsyields a formal and replicable system for analyzingalternative market structures before they are actuallyimplemented. For example, a water market can bedeveloped and tested in the laboratory under supplyand demand constraints that reflect drought conditionsthat might occur in California, or other arid regionsin the world. We present a prototype of a Californiawater transfer model and the results from a series ofwater market experiments. Results include realizedmarket efficiency and surplus distribution, as well asan analysis of market price volatility. Theimplications of this research extend well beyondCalifornia water markets, not only to water markets inother arid regions, but also to the design of marketsfor other environmental goods, including tradablepollution permits and fishery ITQs.     

World War II to 2011: Changes and Challenges in the Global Economy

This paper discusses six major changes and challenges that have emerged since World War II that will shape the global economy for the indefinite future. These are the changing economic role of women, the emergence of the global economic and financial system, the re-emergence of state-supported enterprises, the impact of the Internet, the global diffusion of opportunity and innovation, and globalization as an opportunity and a threat. How these challenges are addressed will have important consequences for business and for public policy. In addition to the prepared remarks, this paper also has a summary of the question-and-answer session that followed Dr. Hormats’ address.     

Ronald Seavoy. Origins and Growth of the Global Economy: From the Fifteenth Century Onward. Westport, Conn.: Praeger, 2003. 275 pp. ISBN 0-275-97912-1, $70.95.

Few scholars are confident enough to believe that they can describethe history of the "origins and growth of the global economy"in 275 pages. But Ronald Seavoy, an emeritus professor of historyat Bowling Green State University, uses that history to illuminatetwo themes: to show that the global economy is built on thefoundation of European commercial imperialism and "to show thatthe global economy as it is currently evolving is capable ofproducing     

Trade, production sharing, and the international transmission of business cycles

Countries that are more engaged in production sharing exhibit higher bilateral manufacturing output correlations. We use data on trade flows between US multinationals and their affiliates as well as trade between the United States and Mexican maquiladoras to measure production-sharing trade and its link with the business cycle. We then develop a quantitative model of international business cycles that generates a positive link between the extent of vertically integrated production-sharing trade and internationally synchronized business cycles. A key assumption in the model is a relatively low elasticity of substitution between home and foreign inputs in the production of the vertically integrated good.     

Rural versus urban preferences for renewable energy developments

Development of renewable energy resources, such as wind farms and hydro-electric schemes, are being promoted as a new method of expanding and diversifying employment in rural areas. However, such energy projects are associated with a range of environmental impacts which might be detrimental to other economic activities, such as those based on nature tourism. The authors use a Choice Experiment to quantify peoples' preferences over environmental and employment impacts that may result from the deployment of renewable energy projects in rural areas of Scotland, focussing in particular on any differences between the preferences of urban and rural dwellers, and on heterogeneity within these groups. Rural and urban households are shown to have different welfare gains which are dependent on the type of renewable energy technology and on the scale of project under consideration.