Notes on market failure and the Paretian (Kaldor-Hicks) relevance and irrelevance of unfavourable externalities

The following are notes that have been distributed by me over the last few years to students in Environmental Economics at The University of Queensland. They give particular attention to whether externalities are Pareto or Kaldor-Hicks relevant from a policy point of view. Externalities are Kaldor-Hicks or Pareto irrelevant if no change is possible for which gainers could compensate losers. Both absolute and marginal externalities may be Kaldor-Hicks relevant. Infra-marginal negative externalities are often, but not always, Kaldor-Hicks irrelevant. There are at least two cases where such externalities can be relevant. First, the absolute impact of the negative externality may be so great that the source of the externality should be eliminated. Secondly, if the externality arises from production, its nature may depend on the type of production technique adopted. Although for the technique adopted, an infra-marginal negative externality occurs. That is Paretian irrelevant given that choice of this technique is the only available possibility, alternative techniques may actually be available in practice. Some of these may generate even smaller total external effects and be socially preferable. Both cases are outlined and illustrated in these notes. The analysis reveals the dangers of relying on marginalism for deciding on environmental policy. Total (external) effects are often of great social and economic importance and appropriate social choices cannot be made on the basis of marginalism alone.

A case report of acute heart failure caused by a patient delaying taking his diuretic medication

Acute heart failure is a life-threatening medical emergency, most commonly occurring as an immediate or delayed complication of acute myocardial infarction (AMI), or resulting from severe hypertension or valvular defects (stenosis or incompetence). Occasionally it is caused by patients' non-compliance with medication orders. In this case the patient had a history of three previous AMIs, controlled hypertension, and controlled congestive heart failure (CHF) for which he took two 40mg frusemide tablets (a very potent oral diuretic) each morning. Because he had experienced bladder discomfort during the latter stages of previous appointments he decided to delay taking the diuretic until after his appointment an acute heart failure ensued.

Self-awareness of Prospective Memory Failure in Adults with Traumatic Brain Injury

The frequency of prospective memory failure in individuals with severe traumatic brain injury (TBI) was investigated by comparison with a non-brain-injured control group. Self-awareness of prospective memory function was also assessed by comparing self-ratings with ratings by significant others. Study participants included 33 individuals with severe TBI and 29 non-brain-injured persons. Each participant nominated a close friend or relative who completed the informant's version of the questionnaire. Participants and their significant others both rated the participants' frequency of prospective memory lapses using the Comprehensive Assessment of Prospective Memory (CAPM). An independent groups design was adopted to compare the TBI and control groups. No significant difference was found between the TBI and control participants' self-ratings of frequency of prospective memory failure, but ratings by significant others were significantly different. The TBI group demonstrated less self-awareness (i.e. underestimated the frequency of prospective memory failure compared to significant others) than the control group.

Vascular dysfunction and heart failure: Epiphenomenon or etiologic agent?

Endothelial function plays a key role in the local regulation of vascular tone. Alterations in endothelial function may result in impaired release of endothelium-derived relaxing factors or increased release of endothelium-derived contracting factors. Heart failure may impair endothelial function by means of reduced synthesis and release of nitric oxide (NO) or by increased degradation of NO and increased production of endothelin-1. Endothelial dysfunction may worsen heart function by means of peripheral effects, causing increased afterload and central effects such as myocardial ischemia and inducible nitric oxide synthase (iNOS)-induced detrimental effects. Evidence from clinical studies has suggested that there is a correlation between decreased endothelial function and increasing severity of congestive heart failure (CHF). Treatments that improve heart function may also improve endothelial dysfunction. The relationship between endothelial dysfunction and heart failure may be masked by the stage of endothelial dysfunction, the location of vessels being tested, and the state of endothelial-dependent vasodilatation response.

Effects of BDF 9198 on left ventricular contractility in advanced spontaneously hypertensive rats with heart failure

In the first part of this study, we characterized 24-month-old Wistar Kyoto (WKY) rats and spontaneously hypertensive rats (SHRs), their heart weights, and the responses of the isolated left ventricles to electrical stimulation. In the main part of the study, we tested whether the positive inotropic effects of BDF 9198, which prevents the closure of the cardiac sodium channel, were present in senescence and heart failure. Thus, we studied the effects of BDF 9198 on the left ventricle strips of 24-month-old WKY rats (senescence) and SHRs using contractility methods. In comparison with WKY rats, the left ventricles of 24-month-old SHRs were hypertrophied and had prolonged times to peak contraction. BDF 9198 (10(-8) to 10(-6) m) was a positive inotrope on the left ventricles of WKY rats, with a maximum augmenting effect of 122% with BDF 9198 at 10(-7) m. The magnitude of the augmenting effects of BDF 9198 were reduced in SHR heart failure, with a maximum augmenting effect of 26% at 10(-7) m. BDF 9198 at 10(-6) m attenuated the responses of the SHR left ventricle to electrical stimulation. In conclusion, the potential of drugs that prevent closure of the sodium channel as positive inotropes in the treatment of heart failure should be further considered.