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.

Accuracy of direct digital radiography for detecting occlusal caries in primary teeth compared with conventional radiography and visual inspection: an in vitro study

Objectives: The diagnosis of caries lesions is still a matter of concern in dentistry. The diagnosis of dental caries by digital radiography has a number of advantages over conventional radiography; however, this method has not been explored fully in the field of paediatric dentistry. This in vitro research evaluated the accuracy of direct digital radiography compared with visual inspection and conventional radiography in the diagnosis of occlusal caries lesions in primary molars. Methods: 50 molars were selected and evaluated under standardized conditions by 2 previously calibrated examiners according to 3 diagnostic methods (visual inspection, conventional radiography and direct digital radiography). Direct digital radiographs were obtained with the Dixi3 system (Planmeca, Helsinki, Finland) and the conventional radiographs with InSight film (Kodak Eastman Co., Rochester, NY). The images were scored and a reference standard was obtained histologically. The interexaminer reliability was calculated using Cohen`s kappa test and the specificity, sensitivity and accuracy of the methods were calculated. Results: Examiner reliability was good. For lesions limited to the enamel, visual inspection showed significantly higher sensitivity and accuracy than both radiographic methods, but no significant difference was found in specificity. For teeth with dentinal caries, no significant differences were found for any parameter when comparing visual and radiographic evaluation. Conclusions: Although less accurate than the visual method for detecting caries lesions confined to the enamel, the direct digital radiographic method is as effective as conventional radiographic examination and visual inspection of primary teeth with occlusal caries when the dentine is involved. Dentomaxillofacial Radiology (2010) 39, 362-367. doi: 10.1259/dmfr/22865872

Comparison of two cellular harvesting methods for primary human oral culture of keratinocytes

The possibility of obtaining transplantable oral epithelia opens new perspectives for oral treatments. Most of them are surgical, resulting in mucosal failures. As reconstructive material this in vitro epithelia would be also useful for other parts of the human body. Many researchers still use controversial methods; therefore it was evaluated and compared the efficiency of the enzymatic and direct explant methods to obtain oral keratinocytes. To this project oral epithelia fragments were used. This work compared: time needed for cell obtainment, best cell amount, life-span and epithelia forming cell capacity. The results showed the possibility to obtain keratinocytes from a small oral fragment and we could verify the advantages and peculiar restrictions. We concluded that under our conditions the enzymatic method showed the best results: in the cells obtaining time needed, cell amount and life-span. Both methods showed the same capacity to form in vitro epithelia.

Expression of proteins in the extracellular matrix of pulp tissue in human primary teeth during physiologic root resorption

Objectives: To analyze the expression of tenascin, fibronectin, collagens I and III, osteonectin, and bone morphogenetic protein 4 (BMP4) in the extracellular matrix of pulp tissue in primary teeth during physiologic root resorption. Method and Materials: Eighteen teeth were decalcified and equally distributed into 3 groups (group I, teeth with two-thirds root length; group II, teeth with one-third root length; and group III, teeth lacking the root). Results: Immunohistochemical analysis showed that all the proteins were expressed. Tenascin, collagen I, and osteonectin showed strong and broad reactivity in group I, with weaker and rare reactivity in groups II and III. The expression of fibronectin, collagen III, and BMP4 did not vary with root resorption phase. Conclusion: The expression of tenascin, collagen I, and osteonectin was reduced in the extracellular matrix and odontoblasts during root resorption. This fact may be related to the decreasing pulp response to damage and treatment during the progression of root resorption. (Quintessence Int 2009; 40: 553-558)

Clinical versus laboratory adhesive performance to wet and dry demineralized primary dentin

Purpose: To evaluate the influence of dentin moisture on bond strengths of an etch-and-rinse bonding agent to primary dentin clinically and in the laboratory. Methods: The sample consisted of two groups of 20 caries-free primary second molars: molars in exfoliation period (clinical group) and extracted molars (laboratory group). Class I cavities were prepared in all specimens leaving a flat dentin surface on the pulpal floor. A two-step etch-and-rinse adhesive was vigorously rubbed on either dry (n= 5) or wet demineralized dentin (n= 5) under clinical or laboratory conditions. After restorative procedures, the teeth from the clinical group were extracted after 20 minutes. All samples were processed and underwent microtensile bond strength test and silver nitrate uptake evaluation under scanning electron microscopy. Results: Statistically higher bond strength values were observed when the bonding was performed under laboratory conditions and on a wet demineralized dentin. Most of the failures were adhesive and mixed irrespective of the experimental condition. Silver nitrate uptake occurred in all groups irrespective of the experimental condition. Resin-dentin bond strengths produced in the laboratory in primary teeth may overestimate those produced under clinical circumstances. (Am J Dent 2011;24:221-225).

Testing for Market Power in Multiple-Input, Multiple-Output Industries: The Australian Grains and Oilseeds Industries

Recent empirical studies have found significant evidence of departures from competition in the input side of the Australian bread, breakfast cereal and margarine end-product markets. For example, Griffith (2000) found that firms in some parts of the processing and marketing sector exerted market power when purchasing grains and oilseeds from farmers. As noted at the time, this result accorded well with the views of previous regulatory authorities (p.358). In the mid-1990s, the Prices Surveillence Authority (PSA 1994) determined that the markets for products contained in the Breakfast Cereals and Cooking Oils and Fats indexes were "not effectively competitive" (p.14). The PSA consequently maintained price surveillence on the major firms in this product group. The Griffith result is also consistent with the large number of legal judgements against firms in this sector over the past decade for price fixing or other types of non-competitive behaviour. For example, bread manufacturer George Weston was fined twice during 2000 for non-competitive conduct and the ACCC has also recently pursued and won cases against retailer Safeway in grains and oilseeds product lines.