Continuity and Change in Australian Economic Policy: The Social Welfare Services

Commonwealth social welfare programs can be divided into the social security system, for which the Commonwealth has constitutional responsibility, and programs of grants for services, which depend on Commonwealth exploitation of the Australian fiscal imbalance. Over the past decade federal enthusiasm for services has waxed and waned, resulting in considerable volatility of expenditure. Social security spending, on the other hand, has grown steadily. Until the end of full employment this growth was mainly due to real increases in social security rates and to the easing of entitlement conditions; since that time it has been largely due to demographic factors and to the increase in unemployment and associated increase in takeup rates. Both Liberal and Labor governments have adopted a more constrained attitude to social welfare expenditures since the end of full employment, but even so in most respects the Labor party has remained the more generous of the two.     

Identifying consumer preferences for nutrition information on grocery store shelf labels

Nutrition labels can potentially benefit consumers by increasing product knowledge and reducing search costs. However, the global increase in obesity rates leads one to question the effectiveness of current nutrition information formats. Alternative formats for providing nutrition information may be more effective. Shoppers at a major grocery chain participated in choice experiments designed to identify preferences for nutrition information provided on grocery store shelf labels. Shoppers demonstrate a strong affinity for shelf-label nutrition information and the presentation of the nutrition information significantly affects their preferences as well. Several demographic variables help to explain differences in preferences.     

Jurisdictional Tax Competition and the Division of Nonrenewable Resource Rents

This paper presents a model of nonrenewable resource extraction across multiple jurisdictions which engage in strategic tax competition. The model incorporates rents due to both resource scarcity and capital scarcity as well as intra-region Ricardian rents. Regions set taxes on nonrenewable resource production strategically to balance tax revenues and local benefits from investment conditional on other regions’ tax rates. A representative extraction firm then allocates production capital across regions and time to maximize the present value of profits. Generally, we find that the division of resource rent between firms and regional governments ultimately depends on the relative scarcity of natural and production capital, relative costs across space, and the value regional governments place on economic activity. This theoretical result provides policymakers with information on the determinants of optimal tax rates and motivates future empirical research on the factors influencing the division of resource rent in practice.     

寻找未来的增长引擎

在为新年度的业务扩展做规划时,“增长透镜法”能够帮助企业发掘和提炼富有吸引力的新思路,建立最具效力的商业模式,从而创造增长契机。     

The role of natural capital in supporting national income and social welfare

Using life satisfaction as a proxy for social welfare, this study contributes to the extant literature by empirically demonstrating that natural capital contributes to social welfare, functioning in part through increasing national income and in part through its direct effect on life satisfaction; the direct effect is approximately 40% greater than the indirect effect. This suggests that the true welfare benefits of natural capital may not be adequately reflected in conventional economic data and, therefore, studies seeking to evaluate the contribution of natural capital to human well-being should consider employing data sets that capture subjective elements of welfare. The magnitudes of the reported marginal effects of natural capital on social welfare, however, are small. This is perhaps due to the fact that (1) there are shortcomings in the measure of natural capital; (2) life satisfaction effects are unlikely to reflect the poorly understood benefits that natural capital provides; and (3) keystone species (such as mosquitoes) and integral ecosystems (such as wetlands) may be negatively associated with life satisfaction, even though such components of natural capital are vitally important to sustaining ecosystems and human life     

University of Texas Roundtable on The Role of Private Equity in the Financing and Restructuring of Oil and Gas Companies

In this second of two University of Texas roundtables, four highly successful veterans of the U.S. energy industry, with considerable experience running both public and private companies, discuss recent developments in this rapidly evolving industry. Among the most remarkable—and a major focus of this discussion—is the dramatic expansion of the output and productivity of the Permian Basin of West Texas, and the role of private equity in accomplishing it. Although the Permian has been a major source of oil and gas since 1920, the combination of massive horizontal drilling and hydraulic fracturing has contributed to a tripling of production volumes from about 800,000 barrels per day to 2.5 million during the past ten years. In fact, the productivity gains are said to be so great that, even with the huge run‐up in the cost of acquiring acreage (to as high as $40,000 per acre), today's producers are projecting annual operating returns of 20% even if oil prices fail to rise above their current level of about $50 a barrel. What's more, there appears to have been a fairly clear division of labor between private and public companies in this recent development of the Permian. With most of the high‐priced acreage now being acquired by larger public companies, the primary role of private equity has been to identify and make good on opportunities to increase the productivity and value of smaller operations that can then be sold to public companies—companies that have the size and access to capital to benefit from the economies of scale produced by combining them with their other operations. Thanks to their earlier position in the value chain, investments by private equity groups have generally not only produced higher payoffs, on average, but involved larger operating and financial risks. And this difference in risk profile is reflected in a notable difference in hedging practices between public and private equity‐controlled companies. This difference was summed up as follows by a private equity partner who has also run several public oil and gas companies: To a much greater extent in private equity than in public companies, we think of our projects and companies as delivering value that is largely independent of changes in oil prices. Hedging is our way of saying we don't want to take oil price risk if we don't have to. We do not count on price increases to make our required returns. The returns come from operating the company successfully without the help of commodity prices.     

Beyond radical affordability in the base of the pyramid: The role of consumer self-confidence in product acceptance

When developing products and services for base of the economic pyramid (BoP) consumers, it has been widely assumed that organizations must set extremely low prices that are dependent on substantial product acceptance and economies of scale. However, such pricing is often not feasible. Growing evidence suggests that more moderate price levels are needed for organizations to viably serve the needs of low-income consumers. However, price sensitivity is less understood in low-income contexts. To promote the success of social enterprises through fresh insight, we reexamine the extremely low-price BoP assumption by investigating product acceptance among low-income consumers using two experiments in Latin America. Results reveal that a belief in one's capabilities to make effective consumption decisions, consumer self-confidence, helps explain the acceptance of moderately-priced products. Discussion highlights directions for stimulating acceptance of socially beneficial products in low-income contexts.