Indices for Working Land Conservation: Form Affects Function

Using environmental indices (EIs) to rank applications for enrollment in conservation programs is becoming common practice. However, there is little guidance on how it should be done. The indices adopted by existing programs have often been linear, using weighted averages of environmental parameters without explicit consideration of whether they represent a reliable preference ordering on environmental states. Our article investigates society's weights for addressing multiple resource concerns and how functional forms of EIs can influence program outcomes. We propose a means by which preference weights are observed from policymaker actions. Weights for multiple resource concerns are determined and combined with biophysical crop simulation data to create an environmental index (EI) for crop rotations. This index is developed using alternative function forms to score conservation efforts on working cropland and to measure their effect on program outcomes.     

A simple note on herd behaviour

In his ‘Simple model of herd behaviour’, (Banerjee A (1992) A simple model of herd behaviour. Q J Econ CVII:797–817) shows that—in a sequential game—if the first two players have chosen the same action, player 3 and all subsequent players will ignore his/her own information and start a herd, an irreversible one. In this paper, we analyse the role played by the tie-breaking assumptions in reaching the equilibrium. We show that: players’ strategies are parameter dependent—an incorrect herd may be reversed; a correct herd is irreversible.

Reputational Herding in Financial Markets: A Laboratory Experiment

We study reputational herding in financial markets in a laboratory experiment. In the spirit of Dasgupta and Prat [2008], career concerns are introduced in a sequential asset market where wages for investors are set by subjects in the role of employers. Employers can observe investment behavior, but not investors' ability types. Thereby, reputational incentives may arise endogenously. We find that a sizable fraction of investors follows an established trend even in a setting where there are no reputational incentives. In a setting where there are reputational concerns, they do not seem to create substantial herd behavior.     

Economic burden of sarcoidosis in a commercially-insured population in the United States

Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?p?p?Background: Sarcoidosis is a multi-system inflammatory disorder characterized by the presence of non-caseating granulomas in involved organs. Patients with sarcoidosis have a reduced quality-of-life and are at an increased risk for several comorbidities. Little is known about the direct and indirect cost of sarcoidosis following the initial diagnosis.

Aims: To provide an estimate of the healthcare resource utilization (HCRU) and costs borne by commercial payers for sarcoidosis patients in the US.

Methods: Patients with a first diagnosis of sarcoidosis between January 1, 1998 and March 31, 2015 (“index date”) were selected from a de-identified privately-insured administrative claims database. Sarcoidosis patients were required to have continuous health plan enrollment 12 months prior to and following their index dates. Propensity-score (1:1) matching of sarcoidosis patients with non-sarcoidosis controls was carried out based on a logistic regression of baseline characteristics. Burden of HCRU and work loss (disability days and medically-related absenteeism) were compared between the matched groups over the 12-month period following the index date (“outcome period”).

Results: A total of 7,119 sarcoidosis patients who met the selection criteria were matched with a control. Overall, commercial payers incurred $19,714 in mean total annual healthcare costs per sarcoidosis patient. The principle cost drivers were outpatient visits ($9,050 2015 USD, 46%) and inpatient admissions ($6,398, 32%). Relative to controls, sarcoidosis patients had $5,190 (36%) higher total healthcare costs ($19,714 vs $14,524; p?<?0.001). Sarcoidosis patients also had significantly more work loss days (15.9 vs 11.3; p?<?0.001) and work loss costs ($3,288 vs $2,527; p?<?0.001) than matched controls. Sarcoidosis imposes an estimated total direct medical cost of $1.3–$8.7 billion to commercial payers, and an indirect cost of $0.2–$1.5 billion to commercial payers in work loss.

Conclusions: Sarcoidosis imposes a significant economic burden to payers in the first year following diagnosis.     

Factors influencing participation in the Nova Scotia Environmental Farm Plan Program

There is growing interest in Nova Scotia's Environmental Farm Plan (NS EFP) program among farmers and policy makers because of several reasons. First, effectiveness of standardized or uniform beneficial management practices in mitigating the negative environmental impacts from agriculture is limited by inherent heterogeneities in agricultural production systems. In addition, there is heightened interest in farmers generating ecological goods and services to society. This study investigates the determinants of participation in the NS EFP program. A discrete choice model of NS EFP participation was applied to a sample of 83 farmers (representing a 31% response rate). To increase relevance of the study to program administrators, the study also examined farmers’ use of various channels and sources of information on farm conservation practices. The most used sources of information on farm conservation practices include a mix of interpersonal sources and government agencies. Although online information (especially those available for free) appears to be gaining popularity in usage, overall, electronic and computer channels of information (especially radio and television) were used less compared with traditional channels of communicating farm conservation information (such as newsletters and agricultural magazines). Regression analysis suggests that farm characteristics (i.e., farm type, farm size, farm income) and farmer capacity variables (i.e., specialized training and knowledge from EFP program information sessions and workshops, and on-farm stewardship demonstrations) were significant determinants of environmental farm planning.     

Reputation, group structure and social tensions

Social tensions impede social cohesion and public goods provision, and can be a driving force for more serious conflicts such as civil wars. Surprisingly, the emergence of social tensions has been studied only rarely in the literature. In the present contribution a game-theoretic model highlights how reputation concerns and the structure of group cleavages matter for the emergence of social tensions. In particular, the respective effects of ethnic fractionalization, polarization and segregation are analyzed. The differences between ethnicity and class, and the role of social mobility are also studied. The predictions of the model can account for recent empirical evidence.     

The Real Equilibrium South African Rand/US Dollar Exchange Rate: A Comparison of Alternative Measures

This article indicates how different measures of the real exchange rate, i.e., the exchange rate adapted for cost inflation, price inflation and labour costs, influence the equilibrium view and misalignment of the South African rand/US dollar exchange rate. The approach followed is based on the behavioural equilibrium exchange rate approach by Clark and MacDonald (1998), where the exchange rate is influenced by a number of fundamental and transitory factors. The real equilibrium exchange is estimated by using a single equation regression and a number of key explanatory variables. To determine the long-run relationship a Vector Error Correction Mechanism is used.     

Explaining momentum profits with an epidemic diffusion model

We show that information diffusion is a function of its dissemination and assimilation. Whereas dissemniation is a function of observable factors such as volume and price volatility, assimilation is dependent on unobservable factors such as the usefulness and reliability of information. We find that buying low volume (or low volatility) past losers and shortselling low volume (or low volatility) past winners generates a positive net return across the entire sample period and especially during bear markets. Second, buying high volatility past winners and shortselling high volatility past losers generates a positive net return, especially during bear markets.     

Experimental evidence on tax salience and tax incidence

Although a basic theoretical principle in public economics assumes that individuals optimize fully with respect to the introduction of a tax, a growing body of research is proving that several heuristics are in place when people take decisions. We re‐examine the well known liability side equivalence principle in the light of the concept of salience. While these two topics have been extensively investigated in isolation, this paper innovates on the previous literature in that it focuses on their joint effects. Is tax incidence dependent on whether the subjects face a salient rather than a nonsalient tax? Does the salience of a tax exert a different effect depending on who is legally committed to bear the tax burden? We address these questions through a laboratory experiment in which one unit of a fictitious good is being traded through a double‐auction market institution. Based on a panel data analysis, our contribution shows that point of collection matters and determines the economic incidence of tax. Additionally, we find that the joint effect of salience and statutory incidence does not alter the informative efficiency, but has a positive effect on buyers’ allocational efficiency when the tax is levied on sellers.     

Gaussian process regression for pricing variable annuities with stochastic volatility and interest rate

Decisions in Economics and Finance - In this paper, we investigate value and Greeks computation of a guaranteed minimum withdrawal benefit (GMWB) variable annuity, when both stochastic volatility...