A bioeconomic evaluation of a commercial scale recirculating finfish growout system - an Australian perspective

This study, based on 3 years of commercial data, presents the results of an economic analysis of a 20-tonne per annum (TPA) commercial recirculating aquaculture system (RAS) facility located in Warrnambool, Victoria, Australia. Based on the assumptions of the analysis, results highlight the non-viability of the facility, with a 10-year projected negative cumulative cash flow of − $648,038, and negative net present value (NPV) of − $707,546. Economies of scale were assessed by the development of economic models for hypothetical 50-TPA and 100-TPA facilities, based on the actual figures obtained from the 20-TPA case study. These analyses highlighted marginal viability for the 50-TPA facility (with a ten-year projected cumulative cash flow of $1,030,300; negative NPV of − $167,651 and internal rate of return (IRR) of 11.75%), and an economically viable 100-TPA facility (with a ten-year projected cumulative cash flow of $3,176,750; NPV of $522,200 and IRR of 21.03%). Sensitivity analysis highlighted that the greatest gains to be realised in improving profitability were those associated with increasing the productive capacity of the facility, increasing the sale price of the product, and decreasing the capital costs of RAS facilities. Contradictions between the results from the present study to similar studies clearly highlight a need for further economic analyses of commercial RAS facilities, using commercial data sets and standard economic analysis procedures.

Multiple criteria sustainability modelling

This paper describes the research supported by a recent AIQS research grant to develop a computer-based tool for sustainability modeling using multiple criteria. The model enables a sustainability index with an accept/reject threshold of one that has the potential to completely replace traditional net present value methods. Minimum performance benchmarks are prescribed and must be observed - often by trading off performance across the full criteria set. Sustainability is shown to be capable of objective (numeric) analysis for new projects, existing facilities, or indeed any product or asset. A combination of investor-centred and community-centred motivations can also be explored in the model. Known as SINDEX, the tool has industry-wide application, both locally and abroad, and represents a paradigm shift in project evaluation techniques. Furthermore, its multi-discipline considerations underscore the importance of a team approach to sustainability modeling and the need for people to work more closely together when dealing with complex problems

Accounting for local government boundary changes in South Australia : valuing assets and liabilities or valuing revenue streams

This paper examines the methodologies adopted in the transfer of assets, liabilities, revenues and expenses resulting from boundary changes associated with municipal amalgamations in South Australia during the late 1990s. It investigates the methods employed for apportioning these financial elements, valuations used and financial settlements required. Significant transfers occurred in only three cases. In two cases, councils used simple, pragmatic methods to apportion assets and liabilities, similar to those used previously in Victoria. In the third case a transfer price was calculated based on the net present value of revenues. This method is quite different from previous methods examined and is appropriate where one council will make significant future gains at another council's loss because of net revenue transfers.

Multiple criteria sustainability modelling: case study on school buildings

This paper describes development of a computer-based tool for sustainability modelling using multiple criteria, and preliminary conclusions from doctoral research being undertaken into the relationship between key sustainability indicators. The model used in both cases produces a sustainability index with an accept/reject threshold of one that has the potential to completely replace traditional net present value methods. Minimum performance benchmarks are prescribed and must be observed - often by trading off performance across the full criteria set. Sustainability is shown to be capable of objective (numeric)· analysis for new projects, existing facilities, or indeed any product or asset. A combination of investor-centred and community-centred motivations can also be explored in the model. Known as SINDEX, the tool has industry-wide application, both locally and abroad, and represents a paradigm shift in project evaluation techniques. Furthermore, its multi-discipline considerations underscore the importance of a team approach to sustainability modelling and the need for people to work more closely together when dealing with complex problems. The results of twenty case studies of actual high schools constructed and operated in New South Wales (Australia) are also presented and the relationships between the key sustainability indicators are explored and interpreted.

The potential for tobacco control to reduce PBS costs for smoking-related cardiovaccular disease

Objective: To estimate Pharmaceutical Benefits Scheme (PBS) subsidies for drugs to treat smoking-related cardiovascular disease (CVD) in 2001-02, and over the period of the government's Intergenerational Report (IGR), assuming current smoking prevalence rates and a 5% absolute reduction.

Design and setting: An Australian epidemiological study, using prescribing data, aetiological fraction methodology, and IGR trends.

Main outcome measures: Estimated smoking-related PBS subsidy costs in 2001-02 and predicted cumulative subsidies until 2041-42, under current and reduced smoking prevalence assumptions.

Results: The PBS costs of smoking-related CVD in 2001-02 were $126 million, 9.77% of the cost of drugs for CVD and 2.96% of total PBS subsidies. The cumulative difference in these costs over the 40-year period with a 5% drop in smoking prevalence was predicted to be $4.5 billion, a 17% reduction. The saving would be $1.14 billion discounting future costs at 5% per year.

Conclusions: Further investment in tobacco control interventions could curb the increasing cost of the PBS and contribute to government efforts to ensure the viability of Australia's healthcare-financing programs. The net present value of a campaign to reduce smoking prevalence was estimated at $1 billion, with an internal rate of return of 33%.

Economic analysis of a community-based falls prevention program

Objectives: To undertake a cost–benefit analysis of ‘Stay on Your Feet’, a community-based falls prevention program targeting older people at all levels of risk in New South Wales, Australia. Hospital separations were monitored in the intervention region, a control region and for the state of New South Wales as a whole. Changing admission patterns over the intervention period were used to assess the impact of the program.

Methods: Cost–benefit analysis compared the costs of the program with two estimates of savings from avoided hospital admissions. The first compared the cost of hospital admissions in the intervention region to a control region of similar demographics, while the second compared hospital utilization in the intervention region with the state of New South Wales as a whole using falls-related hospital diagnosis related group (DRG) codes.

Results: The total direct costs of the program were estimated at A$781 829. Both methods identified clear overall net benefits ranging from A$5.4 million for avoided hospitalizations alone to A$16.9 million for all avoided direct and indirect costs. The confidence intervals around these estimates were small. The average overall benefit to cost ratio for the intervention as a whole was 20.6:1.

Conclusions: These findings suggest that well-designed community-based interventions targeting falls prevention among older people are highly cost effective and a wise investment for all levels of government. The models used are conservative and are likely to underestimate the real benefit of the intervention, which may have lasted for some time beyond the life of the program.

Lifetime cost of stroke subtypes in Australia: findings from the North East Melbourne stroke incidence study (NEMESIS)

Background and Purpose-: Little is known about any variations in resource use and costs of care between stroke subtypes, especially nonhospital costs. The purpose of this study was to describe the patterns of resource use and to estimate the first-year and lifetime costs for stroke subtypes.

Methods-: A cost-of-illness model was used to estimate the total first-year costs and lifetime costs of stroke subtypes for all strokes (subarachnoid hemorrhages excluded) that occurred in Australia during 1997. For each subtype, average cost per case during the first year and the present value of average cost per case over a lifetime were calculated. Resource use data obtained in the North East Melbourne Stroke Incidence Study (NEMESIS) were used.

Results-: The present value of total lifetime costs for all strokes was Aus $1.3 billion (US $985 million). Total lifetime costs were greatest for ischemic stroke (72%; Aus $936.8 million; US $709.7 million), followed by intracerebral hemorrhage (26%; Aus $334.5 million; US $253.4 million) and unclassified stroke (2%; Aus $30 million; US $22.7 million). The average cost per case during the first year was greatest for total anterior circulation infarction (Aus $28 266). Over a lifetime, the present value of average costs was greatest for intracerebral hemorrhage (Aus $73 542), followed by total anterior circulation infarction (Aus $53 020), partial anterior circulation infarction (Aus $50 692), posterior circulation infarction (Aus $37 270), lacunar infarction (Aus $34 470), and unclassified stroke (Aus $12 031).

Conclusions-: First-year and lifetime costs vary considerably between stroke subtypes. Variation in average length of total hospital stay is the main explanation for differences in first-year costs.

Cost of stroke in Australia from a societal perspective: results from the north east Melbourne stroke incidence study (NEMESIS)

Background and Purpose—— Accurate information about resource use and costs of stroke is necessary for informed health service planning. The purpose of this study was to determine the patterns of resource use among stroke patients and to estimate the total costs (direct service use and indirect production losses) of stroke (excluding SAH) in Australia for 1997.

Methods—— An incidence-based cost-of-illness model was developed, incorporating data obtained from the North East Melbourne Stroke Incidence Study (NEMESIS). The costs of stroke during the first year after stroke and the present value of total lifetime costs of stroke were estimated.

Results—— The total first-year costs of all first-ever-in-a lifetime strokes (SAH excluded) that occurred in Australia during 1997 were estimated to be A$555 million (US$420 million), and the present value of lifetime costs was estimated to be A$1.3 billion (US$985 million). The average cost per case during the first 12 months and over a lifetime was A$18 956 (US$14 361) and A$44 428 (US$33 658), respectively. The most important categories of cost during the first year were acute hospitalization (A$154 million), inpatient rehabilitation (A$150 million), and nursing home care (A$63 million). The present value of lifetime indirect costs was estimated to be A$34 million.

Conclusions—— Similar to other studies, hospital and nursing home costs contributed most to the total cost of stroke (excluding SAH) in Australia. Inpatient rehabilitation accounts for {approx}27% of total first-year costs. Given the magnitude of these costs, investigation of the cost-effectiveness of rehabilitation services should become a priority in this community.

The exchange rate disconnect puzzle: a resolution?

Early empirical studies of exchange rate determinants demonstrated that fundamentals-based monetary models were unable to outperform the benchmark random walk model in out-of-sample forecasts while later papers found evidence in favor of long-run exchange rate predictability. More recent theoretical works have adopted a microeconomic structure; a utility-based new open economy macroeconomic framework and a rational expectations present value model. Some recent empirical work argues that if the models are adjusted for parameter instability, it is a good predictor of nominal exchange rates while others use aggregate idiosyncratic volatility to generate good predictions. This latest research supports the idea that fundamental economic variables are likely to influence exchange rates especially in the long run and further that the emphasis should change to the economic value or utility based value to assess these macroeconomic models.

The cost-effectiveness of removing television advertising of high-fat and/or high-sugar food and beverages to Australian children

Objective: To model the health benefits and cost-effectiveness of banning television (TV) advertisements in Australia for energy-dense, nutrient-poor food and beverages during children's peak viewing times.

Methods: Benefits were modelled as changes in body mass index (BMI) and disability-adjusted life years (DALYs) saved. Intervention costs (AUD$) were compared with future health-care cost offsets from reduced prevalence of obesity-related health conditions. Changes in BMI were assumed to be maintained through to adulthood. The comparator was current practice, the reference year was 2001, and the discount rate for costs and benefits was 3%. The impact of the withdrawal of non-core food and beverage advertisements on children's actual food consumption was drawn from the best available evidence (a randomized controlled trial of advertisement exposure and food consumption). Supporting evidence was found in ecological relationships between TV advertising and childhood obesity, and from the effects of marketing bans on other products. A Working Group of stakeholders provided input into decisions surrounding the modelling assumptions and second-stage filters of 'strength of evidence', 'equity', 'acceptability to stakeholders', 'feasibility of implementation', 'sustainability' and 'side-effects'.

Results: The intervention had a gross incremental cost-effectiveness ratio of AUD$ 3.70 (95% uncertainty interval (UI) $2.40, $7.70) per DALY. Total DALYs saved were 37 000 (95% UI 16 000, 59 000). When the present value of potential savings in future health-care costs was considered (AUD$ 300m (95% UI $130m, $480m), the intervention was 'dominant', because it resulted in both a health gain and a cost offset compared with current practice.

Conclusions: Although recognizing the limitations of the available evidence, restricting TV food advertising to children would be one of the most cost-effective population-based interventions available to governments today. Despite its economic credentials from a public health perspective, the initiative is strongly opposed by food and advertising industries and is under review by the current Australian government.

Farmland prices, structural breaks and panel data

Previous time series evidence has indicated that farmland prices and cash rents are not cointegrated, a finding at odds with the present value model of farmland prices. We argue that this failure to find cointegration may be due to low power of tests and to the presence of structural change representing a shifting risk premium on farmland investments. To accommodate this possibility, we use panel unit root and cointegration methods that are more powerful than conventional time series methods and allow for breaks in the cointegration relationship. Our results, based on a large panel covering 31 US states between 1960 and 2000, suggest that the present value model of farmland prices cannot be rejected. © Oxford University Press and Foundation for the European Review of Agricultural Economics 2007; all rights reserved.

Cost analysis error? Exploring issues relating to whole-life cost estimation in sustainable housing

Purpose: The main purpose of the study is to promote consideration of the issues and approaches available for costing sustainable buildings with a view to minimising cost overruns, occasioned by conservative whole-life cost estimates. The paper primarily looks at the impact of adopting continuity in whole-life cost models for zero carbon houses. Design/methodology/approach: The study embraces a mathematically based risk procedure based on the binomial theorem for analysing the cost implication of the Lighthouse zero-carbon house project. A practical application of the continuous whole-life cost model is developed and results are compared with existing whole-life cost techniques using finite element methods and Monte Carlo analysis. Findings: With standard whole-life costing, discounted present-value analysis tends to underestimate the cost of a project. Adopting continuity in whole-life cost models presents a clearer picture and profile of the economic realities and decision-choices confronting clients and policy-makers. It also expands the informative scope on the costs of zero-carbon housing projects. Research limitations/implications: A primary limitation in this work is its focus on just one property type as the unit of analysis. This research is also limited in its consideration of initial and running cost categories only. The capital cost figures for the Lighthouse are indicative rather than definitive. Practical implications: The continuous whole-life cost technique is a novel and innovative approach in financial appraisal [...] Benefits of an improved costing framework will be far-reaching in establishing effective policies aimed at client acceptance and optimally performing supply chain networks. Originality/value: The continuous whole-life costing pioneers an experimental departure from the stereo-typical discounting mechanism in standard whole-life costing procedures.

Valuation and reporting of native fauna in monetary terms: compatibility between a market-Based system and natural resources?

A change in community values and priorities has introduced ethical,
environmental and social issues into the way in which business conducts
its activities. There are an increasing number of managed investment funds focusing on socially responsible investment (SRI) by concentrating on firms that operate according to predetermined criteria for environmental, social and ethical issues. For investors in these funds environmental stewardship issues are integrated with concern over financial resources and performance. In this paper the accounting and reporting by business activities concerned with conservation of wildlife are examined. The world of accounting has functioned for many years with relatively few accounting standards devoted to specialised industry needs. In 1998 the Australian Accounting Standards Board and in 2001 the International Accounting Standards Board issued standards devoted to agriculture. Both standards deal with the reporting of managed biological assets and require application of essentially the same approaches despite the Australian standard requiring net market value while the International standard requires fair value. In this paper we analyse how one conservation firm Earth Sanctuaries Ltd. (ESL) has applied AASB 1037 and then we explore the implications for conservation firms operating in geographical locations outside Australia. It is suggested that AASB 1037 and indeed lAS 41 may not provide value appropriate information for investor decisions relating to accounting profits for such firms. Our examination shows that it is appropriate to reconsider accounting guidelines provided by these standards in order to link the information relating to economic and environmental performance. Transparency may be improved by a move closer to Elkington 's (1997) triple bottom line reporting. We therefore contend that the issues arising from the use ofAASB 1037 and lAS 41 need to be widely considered by all standard setters, particularly given the increasing attention to SRI.

Prospects of renewable energy in semi-arid region

Continuous usage of fossil fuels and other conventional resources to meet the growing demand has resulted in in-creased energy crisis and greenhouse gas emissions. Hence, it is essential to use renewable energy sources for more reliable, effective, sustainable and pollution free transmission and distribution networks. Therefore, to facilitate large-scale integration of renewable energy in particular wind and solar photovoltaic (PV) energy, this paper presents the feasibility analysis for semi-arid climate and finds the most suitable places in North East region of Victoria for re-newable energy generation. For economic and environmental analysis, Hybrid Optimization Model for Electric Re-newables (HOMER) has used to investigate the prospects of wind and solar energy considering the Net Present Cost (NPC), Cost of Energy (COE) and Renewable fraction (RF). Six locations are selected from North East region of Victo-ria and simulations are performed. From the feasibility analysis, it can be concluded that Mount Hotham is one of the most suitable locations for wind energy generation while Wangaratta is the most suitable location for solar energy generation. Mount Hotham is also the best suitable locations in North East region for hybrid power systems i.e., com-bination of both wind and solar energy generation.

The value of work in younger and older adults' lives: an Australian perspective

In the present study we examined the perceived role of work in the lives of younger and older adults in three different occupations: teaching, nursing, and small business. On the basis of lifespan developmental theory of changes in work-related values across the lifespan we expected that (1) older adults would rate their job satisfaction and organisational commitment more highly than younger adults, and (2) younger adults would rate the importance of work more highly than older workers. Based on utility theory we expected that nurses and teachers would view early retirement more positively than small business employees because of early retirement incentives in these two careers. One-hundred-sixty-two participants completed a 118-item survey. Overall few age differences were found between older and younger workers. On average, all participants rated work as moderately important and their job satisfaction as moderately high. Nonetheless, older participants rated their job satisfaction higher than younger participants. On average, all groups believed they would retire before 65 years of age. The latter finding is important for workability theory and raises issues about how to change attitudes, perceptions and values about working past traditional retirement ages.