Essays on Energy Economics and Industrial Organization

The dissertation consists of three chapters related to the low-price guarantee marketing strategy and energy efficiency analysis. The low-price guarantee is a marketing strategy in which firms promise to charge consumers the lowest price among their competitors. Chapter 1 addresses the research question "Does a Low-Price Guarantee Induce Lower Prices'' by looking into the retail gasoline industry in Quebec where there was a major branded firm which started a low-price guarantee back in 1996. Chapter 2 does a consumer welfare analysis of low-price guarantees to drive police indications and offers a new explanation of the firms' incentives to adopt a low-price guarantee. Chapter 3 develops the energy performance indicators (EPIs) to measure energy efficiency of the manufacturing plants in pulp, paper and paperboard industry.

Chapter 1 revisits the traditional view that a low-price guarantee results in higher prices by facilitating collusion. Using accurate market definitions and station-level data from the retail gasoline industry in Quebec, I conducted a descriptive analysis based on stations and price zones to compare the price and sales movement before and after the guarantee was adopted. I find that, contrary to the traditional view, the stores that offered the guarantee significantly decreased their prices and increased their sales. I also build a difference-in-difference model to quantify the decrease in posted price of the stores that offered the guarantee to be 0.7 cents per liter. While this change is significant, I do not find the response in comeptitors' prices to be significant. The sales of the stores that offered the guarantee increased significantly while the competitors' sales decreased significantly. However, the significance vanishes if I use the station clustered standard errors. Comparing my observations and the predictions of different theories of modeling low-price guarantees, I conclude the empirical evidence here supports that the low-price guarantee is a simple commitment device and induces lower prices.

Chapter 2 conducts a consumer welfare analysis of low-price guarantees to address the antitrust concerns and potential regulations from the government; explains the firms' potential incentives to adopt a low-price guarantee. Using station-level data from the retail gasoline industry in Quebec, I estimated consumers' demand of gasoline by a structural model with spatial competition incorporating the low-price guarantee as a commitment device, which allows firms to pre-commit to charge the lowest price among their competitors. The counterfactual analysis under the Bertrand competition setting shows that the stores that offered the guarantee attracted a lot more consumers and decreased their posted price by 0.6 cents per liter. Although the matching stores suffered a decrease in profits from gasoline sales, they are incentivized to adopt the low-price guarantee to attract more consumers to visit the store likely increasing profits at attached convenience stores. Firms have strong incentives to adopt a low-price guarantee on the product that their consumers are most price-sensitive about, while earning a profit from the products that are not covered in the guarantee. I estimate that consumers earn about 0.3% more surplus when the low-price guarantee is in place, which suggests that the authorities should not be concerned and regulate low-price guarantees. In Appendix B, I also propose an empirical model to look into how low-price guarantees would change consumer search behavior and whether consumer search plays an important role in estimating consumer surplus accurately.

Chapter 3, joint with Gale Boyd, describes work with the pulp, paper, and paperboard (PP&PB) industry to provide a plant-level indicator of energy efficiency for facilities that produce various types of paper products in the United States. Organizations that implement strategic energy management programs undertake a set of activities that, if carried out properly, have the potential to deliver sustained energy savings. Energy performance benchmarking is a key activity of strategic energy management and one way to enable companies to set energy efficiency targets for manufacturing facilities. The opportunity to assess plant energy performance through a comparison with similar plants in its industry is a highly desirable and strategic method of benchmarking for industrial energy managers. However, access to energy performance data for conducting industry benchmarking is usually unavailable to most industrial energy managers. The U.S. Environmental Protection Agency (EPA), through its ENERGY STAR program, seeks to overcome this barrier through the development of manufacturing sector-based plant energy performance indicators (EPIs) that encourage U.S. industries to use energy more efficiently. In the development of the energy performance indicator tools, consideration is given to the role that performance-based indicators play in motivating change; the steps necessary for indicator development, from interacting with an industry in securing adequate data for the indicator; and actual application and use of an indicator when complete. How indicators are employed in EPA’s efforts to encourage industries to voluntarily improve their use of energy is discussed as well. The chapter describes the data and statistical methods used to construct the EPI for plants within selected segments of the pulp, paper, and paperboard industry: specifically pulp mills and integrated paper & paperboard mills. The individual equations are presented, as are the instructions for using those equations as implemented in an associated Microsoft Excel-based spreadsheet tool.

Missing data in randomized clinical trials for weight loss: scope of the problem, state of the field, and performance of statistical methods.

BACKGROUND: Dropouts and missing data are nearly-ubiquitous in obesity randomized controlled trails, threatening validity and generalizability of conclusions. Herein, we meta-analytically evaluate the extent of missing data, the frequency with which various analytic methods are employed to accommodate dropouts, and the performance of multiple statistical methods. METHODOLOGY/PRINCIPAL FINDINGS: We searched PubMed and Cochrane databases (2000-2006) for articles published in English and manually searched bibliographic references. Articles of pharmaceutical randomized controlled trials with weight loss or weight gain prevention as major endpoints were included. Two authors independently reviewed each publication for inclusion. 121 articles met the inclusion criteria. Two authors independently extracted treatment, sample size, drop-out rates, study duration, and statistical method used to handle missing data from all articles and resolved disagreements by consensus. In the meta-analysis, drop-out rates were substantial with the survival (non-dropout) rates being approximated by an exponential decay curve (e(-lambdat)) where lambda was estimated to be .0088 (95% bootstrap confidence interval: .0076 to .0100) and t represents time in weeks. The estimated drop-out rate at 1 year was 37%. Most studies used last observation carried forward as the primary analytic method to handle missing data. We also obtained 12 raw obesity randomized controlled trial datasets for empirical analyses. Analyses of raw randomized controlled trial data suggested that both mixed models and multiple imputation performed well, but that multiple imputation may be more robust when missing data are extensive. CONCLUSION/SIGNIFICANCE: Our analysis offers an equation for predictions of dropout rates useful for future study planning. Our raw data analyses suggests that multiple imputation is better than other methods for handling missing data in obesity randomized controlled trials, followed closely by mixed models. We suggest these methods supplant last observation carried forward as the primary method of analysis.

Optimized approach to decision fusion of heterogeneous data for breast cancer diagnosis.

As more diagnostic testing options become available to physicians, it becomes more difficult to combine various types of medical information together in order to optimize the overall diagnosis. To improve diagnostic performance, here we introduce an approach to optimize a decision-fusion technique to combine heterogeneous information, such as from different modalities, feature categories, or institutions. For classifier comparison we used two performance metrics: The receiving operator characteristic (ROC) area under the curve [area under the ROC curve (AUC)] and the normalized partial area under the curve (pAUC). This study used four classifiers: Linear discriminant analysis (LDA), artificial neural network (ANN), and two variants of our decision-fusion technique, AUC-optimized (DF-A) and pAUC-optimized (DF-P) decision fusion. We applied each of these classifiers with 100-fold cross-validation to two heterogeneous breast cancer data sets: One of mass lesion features and a much more challenging one of microcalcification lesion features. For the calcification data set, DF-A outperformed the other classifiers in terms of AUC (p < 0.02) and achieved AUC=0.85 +/- 0.01. The DF-P surpassed the other classifiers in terms of pAUC (p < 0.01) and reached pAUC=0.38 +/- 0.02. For the mass data set, DF-A outperformed both the ANN and the LDA (p < 0.04) and achieved AUC=0.94 +/- 0.01. Although for this data set there were no statistically significant differences among the classifiers' pAUC values (pAUC=0.57 +/- 0.07 to 0.67 +/- 0.05, p > 0.10), the DF-P did significantly improve specificity versus the LDA at both 98% and 100% sensitivity (p < 0.04). In conclusion, decision fusion directly optimized clinically significant performance measures, such as AUC and pAUC, and sometimes outperformed two well-known machine-learning techniques when applied to two different breast cancer data sets.

Comparative performance of multiview stereoscopic and mammographic display modalities for breast lesion detection.

PURPOSE: Mammography is known to be one of the most difficult radiographic exams to interpret. Mammography has important limitations, including the superposition of normal tissue that can obscure a mass, chance alignment of normal tissue to mimic a true lesion and the inability to derive volumetric information. It has been shown that stereomammography can overcome these deficiencies by showing that layers of normal tissue lay at different depths. If standard stereomammography (i.e., a single stereoscopic pair consisting of two projection images) can significantly improve lesion detection, how will multiview stereoscopy (MVS), where many projection images are used, compare to mammography? The aim of this study was to assess the relative performance of MVS compared to mammography for breast mass detection. METHODS: The MVS image sets consisted of the 25 raw projection images acquired over an arc of approximately 45 degrees using a Siemens prototype breast tomosynthesis system. The mammograms were acquired using a commercial Siemens FFDM system. The raw data were taken from both of these systems for 27 cases and realistic simulated mass lesions were added to duplicates of the 27 images at the same local contrast. The images with lesions (27 mammography and 27 MVS) and the images without lesions (27 mammography and 27 MVS) were then postprocessed to provide comparable and representative image appearance across the two modalities. All 108 image sets were shown to five full-time breast imaging radiologists in random order on a state-of-the-art stereoscopic display. The observers were asked to give a confidence rating for each image (0 for lesion definitely not present, 100 for lesion definitely present). The ratings were then compiled and processed using ROC and variance analysis. RESULTS: The mean AUC for the five observers was 0.614 +/- 0.055 for mammography and 0.778 +/- 0.052 for multiview stereoscopy. The difference of 0.164 +/- 0.065 was statistically significant with a p-value of 0.0148. CONCLUSIONS: The differences in the AUCs and the p-value suggest that multiview stereoscopy has a statistically significant advantage over mammography in the detection of simulated breast masses. This highlights the dominance of anatomical noise compared to quantum noise for breast mass detection. It also shows that significant lesion detection can be achieved with MVS without any of the artifacts associated with tomosynthesis.

The impact of anxiety-inducing distraction on cognitive performance: a combined brain imaging and personality investigation.

BACKGROUND: Previous investigations revealed that the impact of task-irrelevant emotional distraction on ongoing goal-oriented cognitive processing is linked to opposite patterns of activation in emotional and perceptual vs. cognitive control/executive brain regions. However, little is known about the role of individual variations in these responses. The present study investigated the effect of trait anxiety on the neural responses mediating the impact of transient anxiety-inducing task-irrelevant distraction on cognitive performance, and on the neural correlates of coping with such distraction. We investigated whether activity in the brain regions sensitive to emotional distraction would show dissociable patterns of co-variation with measures indexing individual variations in trait anxiety and cognitive performance. METHODOLOGY/PRINCIPAL FINDINGS: Event-related fMRI data, recorded while healthy female participants performed a delayed-response working memory (WM) task with distraction, were investigated in conjunction with behavioural measures that assessed individual variations in both trait anxiety and WM performance. Consistent with increased sensitivity to emotional cues in high anxiety, specific perceptual areas (fusiform gyrus--FG) exhibited increased activity that was positively correlated with trait anxiety and negatively correlated with WM performance, whereas specific executive regions (right lateral prefrontal cortex--PFC) exhibited decreased activity that was negatively correlated with trait anxiety. The study also identified a role of the medial and left lateral PFC in coping with distraction, as opposed to reflecting a detrimental impact of emotional distraction. CONCLUSIONS: These findings provide initial evidence concerning the neural mechanisms sensitive to individual variations in trait anxiety and WM performance, which dissociate the detrimental impact of emotion distraction and the engagement of mechanisms to cope with distracting emotions. Our study sheds light on the neural correlates of emotion-cognition interactions in normal behaviour, which has implications for understanding factors that may influence susceptibility to affective disorders, in general, and to anxiety disorders, in particular.

Real-Time and Data-Driven Operation Optimization and Knowledge Discovery for an Enterprise Information System

An enterprise information system (EIS) is an integrated data-applications platform characterized by diverse, heterogeneous, and distributed data sources. For many enterprises, a number of business processes still depend heavily on static rule-based methods and extensive human expertise. Enterprises are faced with the need for optimizing operation scheduling, improving resource utilization, discovering useful knowledge, and making data-driven decisions.

This thesis research is focused on real-time optimization and knowledge discovery that addresses workflow optimization, resource allocation, as well as data-driven predictions of process-execution times, order fulfillment, and enterprise service-level performance. In contrast to prior work on data analytics techniques for enterprise performance optimization, the emphasis here is on realizing scalable and real-time enterprise intelligence based on a combination of heterogeneous system simulation, combinatorial optimization, machine-learning algorithms, and statistical methods.

On-demand digital-print service is a representative enterprise requiring a powerful EIS.We use real-life data from Reischling Press, Inc. (RPI), a digit-print-service provider (PSP), to evaluate our optimization algorithms.

In order to handle the increase in volume and diversity of demands, we first present a high-performance, scalable, and real-time production scheduling algorithm for production automation based on an incremental genetic algorithm (IGA). The objective of this algorithm is to optimize the order dispatching sequence and balance resource utilization. Compared to prior work, this solution is scalable for a high volume of orders and it provides fast scheduling solutions for orders that require complex fulfillment procedures. Experimental results highlight its potential benefit in reducing production inefficiencies and enhancing the productivity of an enterprise.

We next discuss analysis and prediction of different attributes involved in hierarchical components of an enterprise. We start from a study of the fundamental processes related to real-time prediction. Our process-execution time and process status prediction models integrate statistical methods with machine-learning algorithms. In addition to improved prediction accuracy compared to stand-alone machine-learning algorithms, it also performs a probabilistic estimation of the predicted status. An order generally consists of multiple series and parallel processes. We next introduce an order-fulfillment prediction model that combines advantages of multiple classification models by incorporating flexible decision-integration mechanisms. Experimental results show that adopting due dates recommended by the model can significantly reduce enterprise late-delivery ratio. Finally, we investigate service-level attributes that reflect the overall performance of an enterprise. We analyze and decompose time-series data into different components according to their hierarchical periodic nature, perform correlation analysis,

and develop univariate prediction models for each component as well as multivariate models for correlated components. Predictions for the original time series are aggregated from the predictions of its components. In addition to a significant increase in mid-term prediction accuracy, this distributed modeling strategy also improves short-term time-series prediction accuracy.

In summary, this thesis research has led to a set of characterization, optimization, and prediction tools for an EIS to derive insightful knowledge from data and use them as guidance for production management. It is expected to provide solutions for enterprises to increase reconfigurability, accomplish more automated procedures, and obtain data-driven recommendations or effective decisions.

CD4 enumeration technologies: a systematic review of test performance for determining eligibility for antiretroviral therapy.

BACKGROUND: Measurement of CD4+ T-lymphocytes (CD4) is a crucial parameter in the management of HIV patients, particularly in determining eligibility to initiate antiretroviral treatment (ART). A number of technologies exist for CD4 enumeration, with considerable variation in cost, complexity, and operational requirements. We conducted a systematic review of the performance of technologies for CD4 enumeration. METHODS AND FINDINGS: Studies were identified by searching electronic databases MEDLINE and EMBASE using a pre-defined search strategy. Data on test accuracy and precision included bias and limits of agreement with a reference standard, and misclassification probabilities around CD4 thresholds of 200 and 350 cells/μl over a clinically relevant range. The secondary outcome measure was test imprecision, expressed as % coefficient of variation. Thirty-two studies evaluating 15 CD4 technologies were included, of which less than half presented data on bias and misclassification compared to the same reference technology. At CD4 counts <350 cells/μl, bias ranged from -35.2 to +13.1 cells/μl while at counts >350 cells/μl, bias ranged from -70.7 to +47 cells/μl, compared to the BD FACSCount as a reference technology. Misclassification around the threshold of 350 cells/μl ranged from 1-29% for upward classification, resulting in under-treatment, and 7-68% for downward classification resulting in overtreatment. Less than half of these studies reported within laboratory precision or reproducibility of the CD4 values obtained. CONCLUSIONS: A wide range of bias and percent misclassification around treatment thresholds were reported on the CD4 enumeration technologies included in this review, with few studies reporting assay precision. The lack of standardised methodology on test evaluation, including the use of different reference standards, is a barrier to assessing relative assay performance and could hinder the introduction of new point-of-care assays in countries where they are most needed.

Serum cholesterol levels within the high normal range are associated with better cognitive performance among Chinese elderly

© 2016, Serdi and Springer-Verlag France.Objectives: The association between cognitive function and cholesterol levels is poorly understood and inconsistent results exist among the elderly. The purpose of this study is to investigate the association of cholesterol level with cognitive performance among Chinese elderly. Design: A cross-sectional study was implemented in 2012 and data were analyzed using generalized additive models, linear regression models and logistic regression models. Setting: Community-based setting in eight longevity areas in China. Subjects: A total of 2000 elderly aged 65 years and over (mean 85.8±12.0 years) participated in this study. Measurements: Total cholesterol (TC), triglycerides (TG), low density lipoprotein cholesterol (LDL-C) and high density lipoprotein cholesterol (HDL-C) concentration were determined and cognitive impairment was defined as Mini-Mental State Examination (MMSE) score≤23. Results: There was a significant positive linear association between TC, TG, LDL-C, HDL-C and MMSE score in linear regression models. Each 1 mmol/L increase in TC, TG, LDL-C and HDL-C corresponded to a decreased risk of cognitive impairment in logistic regression models. Compared with the lowest tertile, the highest tertile of TC, LDL-C and HDL-C had a lower risk of cognitive impairment. The adjusted odds ratios and 95% CI were 0.73(0.62–0.84) for TC, 0.81(0.70–0.94) for LDL-C and 0.81(0.70–0.94) for HDL-C. There was no gender difference in the protective effects of high TC and LDL-C levels on cognitive impairment. However, for high HDL-C levels the effect was only observed in women. High TC, LDL-C and HDL-C levels were associated with lower risk of cognitive impairment in the oldest old (aged 80 and older), but not in the younger elderly (aged 65 to 79 years). Conclusions: These findings suggest that cholesterol levels within the high normal range are associated with better cognitive performance in Chinese elderly, specifically in the oldest old. With further validation, low cholesterol may serve a clinical indicator of risk for cognitive impairment in the elderly.