The Appraisal of projects with environmental impacts. Efficiency and Sustainability

It is usually assumed that the appraisal of the impacts experienced by present generations does not entail any difficulty. However, this is not true. Moreover, there is not a widely accepted methodology for taking these impacts into account. Some of the controversial issues are: the appropriate value for the discount rate, the choice of the units for expressing the impacts, physical or monetary units -income, consumption or investment- and the valuation of tangible and intangible goods. When approaching the problem of very long term impacts, there is also the problem of valuing the impacts experienced by future generations, through e.g., the use of an intergenerational discount rate. However, if this were the case, the present generation perspective would prevail, as if all the property rights on the resources were owned by them. Therefore, the sustainability requirement should also be incorporated into the analysis. We will analyze these problems in this article and show some possible solutions.

Cost-effectiveness of pharmacotherapies for nicotine dependence in primary care settings: a multinational comparison.

OBJECTIVE: To estimate the incremental cost-effectiveness of the first-line pharmacotherapies (nicotine gum, patch, spray, inhaler, and bupropion) for smoking cessation across six Western countries-Canada, France, Spain, Switzerland, the United States, and the United Kingdom. DESIGN AND STUDY POPULATION: A Markov-chain cohort model to simulate two cohorts of smokers: (1) a reference cohort given brief cessation counselling by a general practitioner (GP); (2) a treatment cohort given counselling plus pharmacotherapy. Effectiveness expressed as odds ratios for quitting associated with pharmacotherapies. Costs based on the additional physician time required and retail prices of the medications. INTERVENTIONS: Addition of each first-line pharmacotherapy to GP cessation counselling. MAIN OUTCOME MEASURES: Cost per life-year saved associated with pharmacotherapies. RESULTS: The cost per life-year saved for counselling only ranged from US190 dollars in Spain to 773 dollars in the UK for men, and from 288 dollars in Spain to 1168 dollars in the UK for women. The incremental cost per life-year saved for gum ranged from 2230 dollars for men in Spain to 7643 dollars for women in the US; for patch from 1758 dollars for men in Spain to 5131 dollars for women in the UK; for spray from 1935 dollars for men in Spain to 7969 dollars for women in the US; for inhaler from 3480 dollars for men in Switzerland to 8700 dollars for women in France; and for bupropion from 792 dollars for men in Canada to 2922 dollars for women in the US. In sensitivity analysis, changes in discount rate, treatment effectiveness, and natural quit rate had the strongest influences on cost-effectiveness. CONCLUSIONS: The cost-effectiveness of the pharmacotherapies varied significantly across the six study countries, however, in each case, the results would be considered favourable as compared to other common preventive pharmacotherapies.

The Limits of Discrete Time Repeated Games:Some Notes and Comments

This paper studies the limits of discrete time repeated games with public monitoring. We solve and characterize the Abreu, Milgrom and Pearce (1991) problem. We found that for the "bad" ("good") news model the lower (higher) magnitude events suggest cooperation, i.e., zero punishment probability, while the highrt (lower) magnitude events suggest defection, i.e., punishment with probability one. Public correlation is used to connect these two sets of signals and to make the enforceability to bind. The dynamic and limit behavior of the punishment probabilities for variations in ... (the discount rate) and ... (the time interval) are characterized, as well as the limit payo¤s for all these scenarios (We also introduce uncertainty in the time domain). The obtained ... limits are to the best of my knowledge, new. The obtained ... limits coincide with Fudenberg and Levine (2007) and Fudenberg and Olszewski (2011), with the exception that we clearly state the precise informational conditions that cause the limit to converge from above, to converge from below or to degenerate. JEL: C73, D82, D86. KEYWORDS: Repeated Games, Frequent Monitoring, Random Pub- lic Monitoring, Moral Hazard, Stochastic Processes.

Investment, duration, and exit strategies for corporate and independent venture capital-backed start-ups

We propose a model of investment, duration, and exit strategies for start-ups backed by venture capital (VC) funds that accounts for the high level of uncertainty, the asymmetry of information between insiders and outsiders, and the discount rate. Our analysis predicts that start-ups backed by corporate VC funds remain for a longer period of time before exiting and receive larger investment amounts than those financed by independent VC funds. Although a longer duration leads to a higher likelihood of an exit through an acquisition, a larger investment increases the probability of an IPO exit. These predictions find strong empirical support.

Cost-effectiveness analysis of the first-line therapies for nicotine dependence.

BACKGROUND: Nicotine dependence is the major obstacle for smokers who want to quit. Guidelines have identified five effective first-line therapies, four nicotine replacement therapies (NRTs)--gum, patch, nasal spray and inhaler--and bupropion. Studying the extent to which these various treatments are cost-effective requires additional research. OBJECTIVES: To determine cost-effectiveness (CE) ratios of pharmacotherapies for nicotine dependence provided by general practitioners (GPs) during routine visits as an adjunct to cessation counselling. METHODS: We used a Markov model to generate two cohorts of one-pack-a-day smokers: (1) the reference cohort received only cessation counselling from a GP during routine office visits; (2) the second cohort received the same counselling plus an offer to use a pharmacological treatment to help them quit smoking. The effectiveness of adjunctive therapy was expressed in terms of the resultant differential in mortality rate between the two cohorts. Data on the effectiveness of therapies came from meta-analyses, and we used odds ratio for quitting as the measure of effectiveness. The costs of pharmacotherapies were based on the cost of the additional time spent by GPs offering, prescribing and following-up treatment, and on the retail prices of the therapies. We used the third-party-payer perspective. Results are expressed as the incremental cost per life-year saved. RESULTS: The cost per life-year saved for only counselling ranged from Euro 385 to Euro 622 for men and from Euro 468 to Euro 796 for women. The CE ratios for the five pharmacological treatments varied from Euro 1768 to Euro 6879 for men, and from Euro 2146 to Euro 8799 for women. Significant variations in CE ratios among the five treatments were primarily due to differences in retail prices. The most cost-effective treatments were bupropion and the patch, and, then, in descending order, the spray, the inhaler and, lastly, gum. Differences in CE between men and women across treatments were due to the shape of their respective mortality curve. The lowest CE ratio in men was for the 45- to 49-year-old group and for women in the 50- to 54-year-old group. Sensitivity analysis showed that changes in treatment efficacy produced effects only for less-well proven treatments (spray, inhaler, and bupropion) and revealed a strong influence of the discount rate and natural quit rate on the CE of pharmacological treatments. CONCLUSION: The CE of first-line treatments for nicotine dependence varied widely with age and sex and was sensitive to the assumption for the natural quit rate. Bupropion and the nicotine patch were the two most cost-effective treatments.

Heterogeneous discounting in consumption-investment problems. Time consistent solutions

[cat] En aquest treball s'analitza un model estocàstic en temps continu en el que l'agent decisor descompta les utilitats instantànies i la funció final amb taxes de preferència temporal constants però diferents. En aquest context es poden modelitzar problemes en els quals, quan el temps s'acosta al moment final, la valoració de la funció final incrementa en comparació amb les utilitats instantànies. Aquest tipus d'asimetria no es pot descriure ni amb un descompte estàndard ni amb un variable. Per tal d'obtenir solucions consistents temporalment es deriva l'equació de programació dinàmica estocàstica, les solucions de la qual són equilibris Markovians. Per a aquest tipus de preferències temporals, s'estudia el model clàssic de consum i inversió (Merton, 1971) per a les funcions d'utilitat del tipus CRRA i CARA, comparant els equilibris Markovians amb les solucions inconsistents temporalment. Finalment es discuteix la introducció del temps final aleatori.

A note on the coincidence between Stackelberg and Nash equilibria in a differential game between government and firms

[cat] A Navas i Marín Solano es va demostrar la coincidència entre els equilibris de Nash i de Stackelberg per a una versi´o modificada del joc diferencial proposat por Lancaster (1973). Amb l’objectiu d’obtenir una solució interior, es van imposar restriccions importants sobre el valors dels paràmetres del model. En aquest treball estenem aquest resultat, en el límit en que la taxa de descompte és igual a zero, eliminant les restriccions i considerant totes les solucions possibles.

Heterogeneous discounting in consumption-investment problems. Time consistent solutions

[cat] En aquest treball s'analitza un model estocàstic en temps continu en el que l'agent decisor descompta les utilitats instantànies i la funció final amb taxes de preferència temporal constants però diferents. En aquest context es poden modelitzar problemes en els quals, quan el temps s'acosta al moment final, la valoració de la funció final incrementa en comparació amb les utilitats instantànies. Aquest tipus d'asimetria no es pot descriure ni amb un descompte estàndard ni amb un variable. Per tal d'obtenir solucions consistents temporalment es deriva l'equació de programació dinàmica estocàstica, les solucions de la qual són equilibris Markovians. Per a aquest tipus de preferències temporals, s'estudia el model clàssic de consum i inversió (Merton, 1971) per a les funcions d'utilitat del tipus CRRA i CARA, comparant els equilibris Markovians amb les solucions inconsistents temporalment. Finalment es discuteix la introducció del temps final aleatori.

A note on the coincidence between Stackelberg and Nash equilibria in a differential game between government and firms

[cat] A Navas i Marín Solano es va demostrar la coincidència entre els equilibris de Nash i de Stackelberg per a una versi´o modificada del joc diferencial proposat por Lancaster (1973). Amb l’objectiu d’obtenir una solució interior, es van imposar restriccions importants sobre el valors dels paràmetres del model. En aquest treball estenem aquest resultat, en el límit en que la taxa de descompte és igual a zero, eliminant les restriccions i considerant totes les solucions possibles.

Cost-effectiveness analysis of a European primary-care physician training in smoking cessation counseling.

BACKGROUND: Physician training in smoking cessation counseling has been shown to be effective as a means to increase quit success. We assessed the cost-effectiveness ratio of a smoking cessation counseling training programme. Its effectiveness was previously demonstrated in a cluster randomized, control trial performed in two Swiss university outpatients clinics, in which residents were randomized to receive training in smoking interventions or a control educational intervention. DESIGN AND METHODS: We used a Markov simulation model for effectiveness analysis. This model incorporates the intervention efficacy, the natural quit rate, and the lifetime probability of relapse after 1-year abstinence. We used previously published results in addition to hospital service and outpatient clinic cost data. The time horizon was 1 year, and we opted for a third-party payer perspective. RESULTS: The incremental cost of the intervention amounted to US$2.58 per consultation by a smoker, translating into a cost per life-year saved of US$25.4 for men and 35.2 for women. One-way sensitivity analyses yielded a range of US$4.0-107.1 in men and US$9.7-148.6 in women. Variations in the quit rate of the control intervention, the length of training effectiveness, and the discount rate yielded moderately large effects on the outcome. Variations in the natural cessation rate, the lifetime probability of relapse, the cost of physician training, the counseling time, the cost per hour of physician time, and the cost of the booklets had little effect on the cost-effectiveness ratio. CONCLUSIONS: Training residents in smoking cessation counseling is a very cost-effective intervention and may be more efficient than currently accepted tobacco control interventions.

Liikearvon arvonalentumistestaus IAS 36:n mukaan

The main object of this Master´s Thesis was to study the goodwill impairment testing under IAS 36. The aim was also to study the process of impairment testing in companies. The definition, treatment and impairment testing of goodwill were based on the interpretative literature of the standard, articles in trade papers and in international journals. Research methodology was descriptive, qualitative and normative. The empirical data was gathered from focused interviews of companies, consultant and auditor. In the impairment testing of goodwill under IAS 36 carrying amount of cash-generating unit is compared with unit´s recoverable amount, which is defined by either fair value less costs to sell or value in use. Value in use, which is based on unit´s net present value of the future cash flows, is clearly more generally used. The greatest black spots of testing are determination of cash-generating units and allocation of goodwill to them and determination of the discount rate. These black spots enable covering-up goodwill impairment. Companies testing processes differed, which makes comparison more difficult. The documentation of testing should also be invested more in companies.

Keskuspankkien ohjauskorkojen muutosten vaikutus markkinakorkoihin Euroopassa 1990-2007

Keskuspankit vastaavat maidensa rahapolitiikasta ja niiden tärkein väline tehtyjen rahapoliittisten päätösten toteuttamisessa on ohjauskorko, jonka muutoksilla vaikutetaan pankkeihin ja markkinakorkoihin ja sitä kautta koko talouteen yleisesti. Tässä tutkielmassa tarkastellaan keskuspankkien ohjauskorkojen muutosten vaikutuksia markkinakorkoihin Euroopassa aikaperiodeilla 1990– 1998 ja 1999–2007. Ensimmäisellä periodilla 1990–1998 tutkitaan viiden nykyään euroalueeseen kuuluvan maan markkinakorkojen ja toisella periodilla euroalueen yhteisien Eonia- ja Euriborkorkojen reaktioita ohjauskoron muutoksiin. Lisäksi kummallakin periodilla tarkastellaan myös neljän euroalueen ulkopuolisen Euroopan maan sekä vertailumaiden Yhdysvaltojen ja Japanin markkinakorkojen muutoksia. Markkinakorkojen reaktioita tutkitaan viidellä eri maturiteetilla kuutena eri aikaintervallilla ohjauskoron muutosten julkistamishetkinä.

Consumer valuation of energy-saving features of residential air conditioners with hedonic and choice models

The promotion of energy-efficient appliances is necessary to reduce the energetic and environmental burden of the household sector. However, many studies have reported that a typical consumer underestimates the benefits of energy-saving investment on the purchase of household electric appliances. To analyze this energy-efficiency gap problem, many scholars have estimated implicit discount rates that consumers use for energy-consuming durables. Although both hedonic and choice models have been used in previous studies, a comparison between two models has not yet been done. This study uses point of sale data about Japanese residential air conditioners and estimates implicit discounts rates with both hedonic and choice models. Both models demonstrate that a typical consumer underinvests in energy efficiency. Although choice models estimate a lower implicit discount rate than hedonic models, the latter models estimate the values of other product characteristics more consistently than choice models.

The Impact of the 2007-2009 Financial Crisis on the Relationship between Central Bank Rates and the Corresponding Interbank Interest Rates in 2002-2014

The role of central banks throughout the global financial system has become even more important during and after the events of the financial crisis. In order to stabilize the market conditions and provide solid ground for future development, the central banks use discount rate as their primary monetary policy tool in many developed and emerging economies. The purpose of this thesis is to examine how the relationship between central bank rates and corresponding interbank rates has developed before, during and after the crisis period of 2007-2009 in five developed countries and five emerging market countries. The results indicate that during the before-crisis period the interest rate markets reacted diversely but the joint recovery attempts of global economies seem to have stabilized the reactions during and especially after the crisis. The crisis also seems to have highlighted the characteristics of each country’s survival strategy as the role of other policy instruments arose.