The cost of diabetes and obesity in Australia

Aims: To assess and compare the direct healthcare and non-healthcare costs and government subsidies by body weight and diabetes status.

Methods: The Australian Diabetes, Obesity and Lifestyle study collected health service utilization and health-related expenditure data at the 2011–2012 follow-up surveys. Costing data were available for 4,409 participants. Unit costs for 2016–2017 were used where available or were otherwise inflated to 2016–2017 dollars. Age- and sex-adjusted costs per person were estimated using generalized linear models.

Results: The annual total direct cost ranged from $1,998 per person with normal weight to $2,501 per person with obesity in participants without diabetes. For those with diabetes, total direct costs were $2,353 per person with normal weight, $3,263 per person with overweight, and $3,131 per person with obesity. Additional expenditure as government subsidies ranged from $5,649 per person with normal weight and no diabetes to $8,085 per person with overweight and diabetes. In general, direct costs and government subsidies were higher for overweight and obesity compared to normal weight, regardless of diabetes status, but were more noticeable in the diabetes sub-group. The annual total excess cost compared with normal weight people without diabetes was 26% for obesity alone and 46% for those with obesity and diabetes.

Limitations: Participants included in this study represented a healthier cohort than the Australian population. The relatively small sample of people with both obesity and diabetes prevented a more detailed analysis by obesity class.

Conclusion: Overweight and obesity are associated with increased costs, which are further increased in individuals who also have diabetes. Interventions to prevent overweight and obesity or reduce weight in people who are overweight or obese, and prevent diabetes, should reduce the financial burden.     

Evaluating transport user benefits and social surplus in a transport market—The case of the Norwegian ferries

The article first infers how consumer surplus in a market is linked to revenue under different assumptions about fare elasticity and when using different types of demand functions. This information is added to producer surplus in order to derive social surplus. The method, thus, produces a simple approach for authorities to assess social surplus in a market and its benefits to the users. A modified exponential demand function is applied to calculate consumer surplus and social surplus for 97 ferry services in Norway regulated by the state. The calculations are based on empirical data concerning ferry fare, revenue data at service level and reasonable assumptions about fare point elasticity for services covering different distances.In 2007, these services generated welfare for the users (consumer surplus) and the society (social surplus) amounting to about 5.8 billion NOK and 4.3 billion NOK, respectively. Consumer surplus and social surplus varied considerably amongst the services. Only 3 of the 97 services operate with positive profits and, hence, without subsidies. About 21 of the services contribute negatively to social surplus. Many of these unprofitable services are the only transport alternatives in rural areas and could be argued to continue operation according to politically decided regional measures. Implicitly, maintaining all these 21 services means that the welfare for the people in these areas is valued as up to four times greater than the welfare of the people in the rest of society.     

Modelling purchases as a function of advertising and promotion

This article describes the preliminary studies of the effect of advertising and promotion on purchases. The British single-source database Adlab has been the basis for this study of advertising and promotion effectiveness. The ST AS measure and logit modelling have been used to estimate the effect of advertising. The results from the two measures have been compared to determine the extent to which the two measures give occasion for the same conclusions. To indicate the accuracy of the two measures, their respective levels of significance have been studied. Two logit models have been estimated; one only includes the effect of TV exposure, while the other also includes the effect of promotions. The results from the two logit models are compared to determine which model gives the most accurate estimate of the effect of advertising. When comparing the results from the STAS measure with the parameter estimates from the second logit model, it is found that these two different measures largely lead to similar conclusions. Suggestions for further research and developments of the models are given.     

Estimating the natural rates in a simple New Keynesian framework

The time-varying natural rate of interest and output and the implied medium-term inflation target for the US economy are estimated over the period 1983–2005. The estimation is conducted within the New Keynesian framework using Bayesian and Kalman-filter estimation techniques. With the model-consistent estimate of the output gap, we get a small weight on the backward-looking component of the New Keynesian Phillips curve—similar to what is obtained in studies which use labor share of income as a driver for inflation (e.g., Galí, Eur Econ Rev 45(7):1237–1270, 2001; Eur Econ Rev 47(4):759–760, 2003). The turning points of the business cycle are nevertheless broadly consistent with those of CBO/NBER. We find considerable variation in the natural rate of interest while the inflation target has been close to 2% over the last decade.