Three applications of the marginal cost of public funds concept

This paper illustrates the use of the marginal cost of public funds concept in three contexts. First, we extend Parry’s (2003) analysis of the efficiency effects excise taxes in the U.K., primarily by incorporating the distortion caused by imperfect competition in the cigarette market and distinguishing between the MCFs for per unit and ad valorem taxes on cigarettes. Our computations show, contrary to the standard result in the literature, that the per unit tax on cigarettes has a slightly lower MCF than the ad valorem tax on cigarettes. Second, we calculate the MCF for a payroll tax in a labour market with involuntary unemployment, using the Shapiro and Stiglitz (1984) efficiency wage model as our framework. Our computations, based on Canadian labour market data, indicate that incorporating the distortion caused by involuntary unemployment raises the MCF by 25 to 50 percent. Third, we derive expressions for the distributionally-weighted MCFs for the exemption level and the marginal tax rate for a “flat tax”, such as the one that has been adopted by the province of Alberta. This allows us to develop a restricted, but tractable, version of the optimal income tax problem. Computations indicate that the optimal marginal tax rate may be quite high, even with relatively modest pro-poor distributional preferences.

The marginal cost of funds from public sector borrowing

An expression for the welfare cost of a marginal increase in the public debt is derived using a simple AK endogenous growth model. This measure of the marginal cost of public funds (MCF) can be interpreted as the marginal benefit-cost ratio that a debtfinanced public project needs in order to generate a net social gain. The model predicts an increase in the public debt ratio will have little effect on the optimal public expenditure ratio and that most of the adjustment will occur on the tax side of the budget.

Bank relationships: effect on the availability and marginal cost of credit for firms in Argentina

The paper provides evidence on what affects at the margin the cost and availability of bank credit for firms in Argentina. We study in particular how banks use different pieces of private and public information to screen firms and overcome informational asymmetries in the credit market. Some private information is transferable, like balance sheet data. Private information generated in relationships is not. To capture the closeness of bank relationships, we resort to the concentration of bank credit and the number of credit lines in a bank. We also consider public information available in the Central de Deudores. The cost of credit is measured using overdrafts, the most expensive line of credit, at the bank that charges the highest rate for overdrafts. We find that the cost of credit is smaller for a firm with a close relationship to the marginal bank. Firms with large assets, a high sales/assets ratio, and a low debt/assets ratio pay a lower interest rate at the margin. A good credit history (no debt arrears and no bounced checks) and collateral also reduce the marginal interest rate. The availability of credit is measured by unused credit lines as a proportion of total liabilities with the main bank. The availability of credit depends positively on a close relationship with the main bank. Large assets, a high return over assets, a high sales/assets ratio, a low debt/assets ratio, a good credit history, and collateral lead to higher credit availability. Our measure of unused credit lines is less ambiguous than traditional measures like leverage, which may indicate financial distress rather than availability of credit.

Welfare cost of inflation considering adoption decisions and interest-bearing deposits

Attanasio et al. (JPE, 2002) have used microeconomic data on households to provide new estimates of the welfare costs of infiation using Bailey's unidimensional welfare measure as a basis for their calculations. Such a measure does not properly take into consideration lhe fact that the majority of households in their sample (58.7 percent) holds not only bank deposits and currency, but also a second type of interest-bearing assct. This work devises alternative formulas which account for the existence of bank deposits and a sccond interest-bearing asset in the economy, as well as for adoption decisions regarding alternative financiai technologies.

Pricing the cost of an election: the impact of the 2014 elections on stock markets

Qual o efeito de eleições em ativos reais? É possível mensurar diretamente a diferença de preços mesmo que só possamos enxergar um dos resultados potenciais? Essa dissertação estima esses efeitos utilizando metodologia baseada em opções sobre ações. O modelo aqui desenvolvido adaptção tradicional Black-Scholes para incorporar dois novos parâmetros: um salto no preço do ativo perfeitamente antecipado e uma série de probabilidades diárias refletindo as crenças sobre quem venceria a corrida eleitoral. Aplicamos esse método para o caso brasileiro das Eleições Presidenciais de 2014 e a Petrobras - uma importante companhia do setor petrolífero do país -utilizando dados de bolsa do segundo turno das eleições. Os resultados encontrados mostram uma diferença de 65-77% para o valor da companhia, dependendo de quem vencesse nas urnas. Isso é equivalente a aproximadamente 2.5% do PIB de 2014 do país.

Impact of maintenance of Macrobrachium rosenbergii de Man, 1879 (Crustacea, Decapoda, Palaemonidae) broodstock on the water used in culture ponds

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Quality of Cotesia flavipes (Hymenoptera: Braconidae) reared at different host densities and the estimated cost of its commercial production

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)

Performance, carcass characteristics and gain cost of feedlot cattle fed a high level of concentrate and different feed additives

The objective of this study was to evaluate the effects of feeding cattle with isoprotein and isoenergetic diets, with and without the addition of polyclonal antibody preparation (PAP), yeasts (YST) or monensin sodium (MON) on performance, carcass characteristics and gain cost in feedlot. Ninety-five 20-month old bullocks (323.3±21.8 kg) were distributed in 25 pens. The completely randomized experimental design had a 2 × 2 + 1 factorial arrangement and the treatments were replicated 5 times. There was no effect of MON for DMI throughout the feedlot period; however, MON reduced the dry matter intake (DMI) in g/kg of BW in the first 28 days when compared with the other treatments. The gain cost decreased with MON addition in relation to the other treatments. Inclusion of YST decreased average daily gain (ADG), final body weight, hot carcass weight, carcass weight, gain to feed ratio and DMI in g/kg body weight, worsening feed conversion and increasing the gain cost in the feeding periods. Inclusion of PAP increased ADG and decreased the gain cost, besides improving feed conversion. For MON and PAP, a difference was found for kidney-pelvic fat and kidney-pelvic fat per 100 kg of hot carcass weight. For MON and YST, there was a difference in ADG, feed conversion, gain cost and carcass yield and kidney-pelvic fat per 100 kg of hot carcass. Treatment YST worsened performance in relation to the non-supplemented treatments. Feeding PAP to animals did not influence performance and carcass characteristics of bullocks in feedlot negatively. Thus, PAP shows potential to substitute MON in cattle feeding using isoprotein and isoenergetic diets.

Dosimetry and cost of imaging osseointegrated implants with film-based and computed tomography

Thermoluminescent dosimeters were used to measure radiation doses at craniofacial sites in a tissue-equivalent phantom during film-based multidirectional tomography with the Tomax Ultrascan (Incubation Industries, Ivyland, Pa.) and during computed tomography with the Elscint Excel 2400 (Elscint Corp., Tel Aviv, Israel). Mean absorbed doses for presurgical mandibular and maxillary canine and molar implant assessments were converted to equivalent doses, which were then multipied by published weighting factors and summed to give effective doses. The computed tomgraphy device consistently delivered higher doses than the Tomax Ultrascan to all anatomic locations; the differences were most pronounced when only one or two implant sites were evaluated. The reasons for the dose disparities are considered both anatomically and procedurally. A survey of examination cost revealed film-based multidirectional tomography to be less expensive than computed tomography.

Energetic cost of predation: Aerobic metabolism during prey ingestion by juvenile rattlesnakes, Crotalus durissus

We investigated the cost of prey ingestion in the South American rattlesnake, Crotalus durissus, to see if the capacity to generate energy aerobically could be a constraint on the size of the prey that can be ingested. To accomplish this goal, we measured time and aerobic metabolism (inferred from oxygen consumption) of juvenile C. durissus ingesting prey ranging from 10 to 50% of their own body mass. Time needed for prey ingestion increased with prey size, with prey representing 10 and 20% of snake size being ingested with the same effort. Whole animal rates of oxygen consumption increased linearly with prey size, but at a slower pace for snakes ingesting prey larger than 30% of their body mass. Aerobic factorial power input necessary for prey ingestion increased with prey size, and for snakes ingesting prey representing 50% of their body mass it equaled the aerobic factorial scope for exercise. For the maximum prey size tested, the aerobic derived energy necessary for prey ingestion represented 0.02% of the total energy content of the prey. Within the prey size range we studied, the cost of ingestion did not constitute any constraint on the size of the prey that can be ingested. These constraints are set by morphological (gape size), ecological (predation risk), and, probably, by physiological parameters, as suggested by the tendency of V̇O2 during ingestion to increase at a slower pace at relative larger prey sizes.

Allocation of the cost of transmission losses in a multimarket framework

The paper addresses the issue of apportioning of the cost of transmission losses to generators and demands in a multimarket framework. Line flows are unbundled using equivalent bilateral exchanges on a DC-network model and allocated to generators and demands. Losses are then calculated based on unbundled flows and straightforwardly apportioned to generators and demands. The proposed technique is particularly useful in a multimarket framework, where all markets have a common grid operator with complete knowledge of all network data, as is the case of the Brazilian electric-energy system. The methodology proposed is illustrated using the IEEE Reliability Test System and compared numerically with an alternative technique. Appropriate conclusions are drawn. © The Institution of Engineering and Technology 2006.

The real cost of the external debt for the creditor and for the debtor

Includes bibliography

Effect of maintenance therapy with or without the use of chlorhexidine in teeth restored with composite resin in patients with diabetes mellitus

The objective of this study was to evaluate the effects of maintenance therapy with or without the use of 0.12% chlorhexidine in the periodontal tissues of patients with diabetes mellitus who had carious lesions restored with composed resin. Twenty patients were selected, all of whom had diabetes mellitus in addition to carious cervical lesions in previously treated teeth. After 90 days, improvement in plaque and gingival indices and probing depth were noticed among patients in the group that received 0.12% chlorhexidine.

Improving the grid operation and reliability cost of distribution systems with dispersed generation

In this work, a mathematical model to analyze the impact of the installation and operation of dispersed generation units in power distribution systems is proposed. The main focus is to determine the trade-off between the reliability and operational costs of distribution networks when the operation of isolated areas is allowed. In order to increase the system operator revenue, an optimal power flow makes use of the different energy prices offered by the dispersed generation connected to the grid. Simultaneously, the type and location of the protective devices initially installed on the protection system are reconfigured in order to minimize the interruption and expenditure of adjusting the protection system to conditions imposed by the operation of dispersed units. The interruption cost regards the unsupplied energy to customers in secure systems but affected by the normal tripping of protective devices. Therefore, the tripping of fuses, reclosers, and overcurrent relays aims to protect the system against both temporary and permanent fault types. Additionally, in order to reduce the average duration of the system interruption experienced by customers, the isolated operation of dispersed generation is allowed by installing directional overcurrent relays with synchronized reclose capabilities. A 135-bus real distribution system is used in order to show the advantages of using the mathematical model proposed. © 1969-2012 IEEE.

The socioeconomic cost of illicit drug consumption in Chile

Includes bibliography