Critical uncertainty factors for efficient allocation of demand risk in privately financed public infrastructure projects in Australia

Risk allocation in privately financed public infrastructure projects, which are mainly referred as public-private partnership (PPP) projects, is a challenging job due to the nature of incomplete contracting. Among the various risks that may eventually materialise, demand risk is one of the major challenges that PPPs face. Choosing a risk allocation strategy could be viewed as the process of deciding the proportion of risk management responsibility between public and private partners based on a series of characteristics of risk management service transaction in question. These characteristics are more or less related to the various uncertainty factors. In this study, various uncertainty factors have been examined in order to achieve efficient allocation of demand risk and minimise risk management-related costs in a long-term view. Critical uncertainty factors have been identified through an industry-wide survey in Australia. Future research directions are also set out.

Upgrading arc median shortest path problem for an urban transportation network

In this paper, we propose an algorithm for an upgrading arc median shortest path problem for a transportation network. The problem is to identify a set of nondominated paths that minimizes both upgrading cost and overall travel time of the entire network. These two objectives are realistic for transportation network problems, but of a conflicting and noncompensatory nature. In addition, unlike upgrading cost which is the sum of the arc costs on the path, overall travel time of the entire network cannot be expressed as a sum of arc travel times on the path. The proposed solution approach to the problem is based on heuristic labeling and exhaustive search techniques, in criteria space and solution space, respectively. The first approach labels each node in terms of upgrading cost, and deletes cyclic and infeasible paths in criteria space. The latter calculates the overall travel time of the entire network for each feasible path, deletes dominated paths on the basis of the objective vector and identifies a set of Pareto optimal paths in the solution space. The computational study, using two small-scale transportation networks, has demonstrated that the algorithm proposed herein is able to efficiently identify a set of nondominated median shortest paths, based on two conflicting and noncompensatory objectives.

The direct costs of raising external equity capital for US REIT IPOs

Purpose – The purpose of this paper is to investigate the total direct costs of raising external equity capital for US real estate investment trust (REIT) initial public offerings (IPOs).

Design/methodology/approach – The study provides recent evidence on total direct costs for a comprehensive dataset of 125 US REIT IPOs from 1996 until June 2010. A multivariate OLS regression is performed to determine significant factors influencing the level of total direct costs and also underwriting fees and non-underwriting direct expenses.

Findings – The study finds economies of scale in total direct costs, underwriting fees and non-underwriting expenses. The equally (value) weighted average total direct costs are 8.33 percent (7.52 percent), consisting of 6.49 percent (6.30 percent) underwriting fees and 1.87 percent (1.22 percent) non-underwriting direct expenses. The study finds a declining trend of total direct costs for post 2000 IPOs which is attributed to the declining trend in both underwriting fees and non-underwriting direct expenses. Offer size is a critical determinant for both total direct costs and their individual components and inversely affects these costs. The total direct costs are found significantly higher for equity REITs than for mortgage REITs and are also significantly higher for offers listed in New York Stock Exchange (NYSE). Underwriting fees appear to be negatively influenced by the offer price, the number of representative underwriters involved in the issue, industry return volatility and the number of potential specific risk factors but positively influenced by prior quarter industry dividend yield and ownership limit identified in the prospectus. After controlling for time trend, the paper finds REIT IPOs incur higher non-underwriting direct expenses in response to higher industry return volatility prior to the offer.

Originality/value – This paper adds to the international REIT IPO literature by exploring a number of new influencing factors behind total direct costs, underwriting fees and non-underwriting direct expenses. The study includes data during the recent GFC period.

Costs and benefits of mandatory auditing of for-profit private and not-for-profit companies in Australia

This paper addresses the paucity of research surrounding the mandatory auditing of for-profit private and not-for-profit companies in Australia. We document the various mandatory auditing provisions under the Corporations Act and identify over 22 000 companies that lodge audited accounts with the regulator under federal law. In 2011, 6339 large proprietary companies, 186 small proprietary companies, 2797 foreign-owned companies, 3985 unlisted public companies and 8404 public companies limited by guarantee had an obligation under the Corporations Act to lodge audited accounts. While large proprietary and foreign-owned companies have an option to apply to the Australian Securities and Investment Commission for audit relief, we estimate that less than 10% are granted audit exemption. We document that since 1995 an additional 1500 large proprietary companies that should have lodged under the size provisions of the Corporations Act have been granted exemption from doing so (i.e., grandfathered), although these firms appear to be subject to an annual audit even though they do not lodge accounts. We estimate the costs and discuss the potential public interest and firm-level benefits associated with the mandatory auditing of for-profit private and not-for-profit companies in Australia.

Assistive technology costs and outcomes

Assistive technologies (AT or aids and equipment) are a key intervention used by occupational therapists and others to minimise the impact of disability or the effects of ageing upon life participation. Our capacity to provide optimal AT is however subject to pragmatic factors such as the availability of public funding and the complexities of government policy and service provision. The Equipping Inclusion Studies conducted in Victoria between 2008 and 2010 were designed to encompass both health sector and individual perspectives on the effectiveness of AT as it is currently delivered, compared with optimal delivery.

Costs of psychosis in 2010: findings from the second Australian national survey of psychosis

Objectives
To estimate the annual costs of psychosis in Australia from societal and government perspectives and assess whether average costs per person differ by principal service provider at time of census.

Methods
Costs of psychosis encompassing health sector costs, other sector costs, and productivity losses were assessed for 2010 using a prevalence-based, bottom-up approach. Resource use data were obtained from the second Australian National Survey of Psychosis and unit costs were from government and non-government organization (NGO) sources. Costs to society were assessed by principal service provider at census: public specialized mental health services (PSMHS) and NGOs during the census month (current clients), and PSMHS in the 11 months preceding census (recent clients), and any differences were ascertained.

Results
The average annual costs of psychosis to society are estimated at $77,297 per affected individual, comprising $40,941 in lost productivity, $21,714 in health sector costs, and $14,642 in other sector costs. Health sector costs are 3.9-times higher than those for the average Australian. Psychosis costs Australian society $4.91 billion per annum, and the Australian government almost $3.52 billion per annum. There are significant differences between principal service providers for each cost category. Current PSMHS clients had the highest health sector costs overall, and the highest mental health ambulatory, inpatient, and antipsychotic medication costs specifically. NGO clients had the highest other sector costs overall and the highest NGO assistance, supported employment, and supported accommodation costs. Recent PSMHS clients had the lowest productivity losses for reduced participation and the highest costs for absenteeism and presenteeism.

Conclusions
The costs of psychosis are broad ranging and very high. Development and implementation of cost-effective prevention, treatment, and support strategies is critical to maximizing the efficiency of service delivery. A needs-based framework based on principal service provider and recency of contact may facilitate this process.

Assistive technology costs and outcomes

Assistive technologies (AT or aids and equipment) are a key intervention used by occupational therapists and others to minimise the impact of disability or the effects of ageing upon life participation. Our capacity to provide optimal AT is however subject to pragmatic factors such as the availability of public funding and the complexities of government policy and service provision. The Equipping Inclusion Studies conducted in Victoria between 2008 and 2010 were designed to encompass both health sector and individual perspectives on the effectiveness of AT as it is currently delivered, compared with optimal delivery.

Critical environmental factors for transportation cycling in children: a qualitative study using bike-along interviews

Environmental factors are found to influence transport-related physical activity, but have rarely been studied in relation with cycling for transport to various destinations in 10-12 yr old children. The current qualitative study used 'bike-along interviews' with children and parents to allow discussion of detailed environmental factors that may influence children's cycling for transport, while cycling in the participant's neighborhood.

Quantifying the short-term costs of conservation interventions for fishers at Lake Alaotra, Madagascar

Artisanal fisheries are a key source of food and income for millions of people, but if poorly managed, fishing can have declining returns as well as impacts on biodiversity. Management interventions such as spatial and temporal closures can improve fishery sustainability and reduce environmental degradation, but may carry substantial short-term costs for fishers. The Lake Alaotra wetland in Madagascar supports a commercially important artisanal fishery and provides habitat for a Critically Endangered primate and other endemic wildlife of conservation importance. Using detailed data from more than 1,600 fisher catches, we used linear mixed effects models to explore and quantify relationships between catch weight, effort, and spatial and temporal restrictions to identify drivers of fisher behaviour and quantify the potential effect of fishing restrictions on catch. We found that restricted area interventions and fishery closures would generate direct short-term costs through reduced catch and income, and these costs vary between groups of fishers using different gear. Our results show that conservation interventions can have uneven impacts on local people with different fishing strategies. This information can be used to formulate management strategies that minimise the adverse impacts of interventions, increase local support and compliance, and therefore maximise conservation effectiveness.

Health-care costs of underweight, overweight and obesity: Australian population-based study

AIM: Child health varies with body mass index (BMI), but it is unknown by what age or how much this attracts additional population health-care costs. We aimed to determine the (1) cross-sectional relationships between BMI and costs across the first decade of life and (2) in longitudinal analyses, whether costs increase with duration of underweight or obesity. METHODS: Participants: Baby (n = 4230) and Kindergarten (n = 4543) cohorts in the nationally representative Longitudinal Study of Australian Children. OUTCOME: Medicare Benefits Scheme (including all general practitioner plus a large proportion of paediatrician visits) plus prescription medication costs to federal government from birth to sixth (Baby cohort) and fourth to tenth (Kindergarten cohort) birthdays. PREDICTOR: biennial BMI measurements over the same period. RESULTS: Among Australian children under 10 years of age, 5-6% were underweight, 11-18% overweight and 5-6% obese. Excess costs with low and high BMI became evident from age 4-5 years, with normal weight accruing the least, obesity the most, and underweight and overweight intermediate costs. Relative to overall between-child variation, these excess costs per child were very modest, with a maximum of $94 per year at age 4-5 years. Nonetheless, this projects to a substantial cost to government of approximately $13 million per annum for all Australian children aged less than 10 years. CONCLUSIONS: Substantial excess population costs provide further economic justification for promoting healthy body weight. However, obese children's low individual excess health-care costs mean that effective treatments are likely to increase short-term costs to the public health purse during childhood.

Stress triangle: do introduced predators exert indirect costs on native predators and prey?

Non-consumptive effects of predators on each other and on prey populations often exceed the effects of direct predation. These effects can arise from fear responses elevating glucocorticoid (GC) hormone levels (predator stress hypothesis) or from increased vigilance that reduces foraging efficiency and body condition (predator sensitive foraging hypothesis); both responses can lead to immunosuppression and increased parasite loads. Non-consumptive effects of invasive predators have been little studied, even though their direct impacts on local species are usually greater than those of their native counterparts. To address this issue, we explored the non-consumptive effects of the invasive red fox Vulpes vulpes on two native species in eastern Australia: a reptilian predator, the lace monitor Varanus varius and a marsupial, the ringtail possum Pseudocheirus peregrinus. In particular, we tested predictions derived from the above two hypotheses by comparing the basal glucocorticoid levels, foraging behaviour, body condition and haemoparasite loads of both native species in areas with and without fox suppression. Lace monitors showed no GC response or differences in haemoparasite loads but were more likely to trade safety for higher food rewards, and had higher body condition, in areas of fox suppression than in areas where foxes remained abundant. In contrast, ringtails showed no physiological or behavioural differences between fox-suppressed and control areas. Predator sensitive foraging is a non-consumptive cost for lace monitors in the presence of the fox and most likely represents a response to competition. The ringtail's lack of response to the fox potentially represents complete naiveté or strong and rapid selection to the invasive predator. We suggest evolutionary responses are often overlooked in interactions between native and introduced species, but must be incorporated if we are to understand the suite of forces that shape community assembly and function in the wake of biological invasions.