Editor's Introduction to the Special Edition: The Economics of Climate Change in Coastal Areas

Editor's introduction to the Special Edition on the Economics of Climate Change Adaptation in Coastal Areas

Equilibrium existence in the circle model with linear quadratic transport cost

We treat the problem of existence of a location-then-price equilibrium in the circle model with a linear quadratic type of transportation cost function which can be either convex or concave. We show the existence of a unique perfect equilibrium for the concave case when the linear and quadratic terms are equal and of a unique perfect equilibrium for the convex case when the linear term is equal to zero. Aside from these two cases, there are feasible locations by the firms for which no equilibrium in the price subgame exists. Finally, we provide a full taxonomy of the price equilibrium regions in terms of weights of the linear and quadratic terms in the cost function.

Essays in Applied Insurance Economics

The papers included in this thesis deal with a few aspects of insurance economics that have seldom been dealt with in the applied literature. In the first paper I apply for the first time the tools of the economics of crime to study the determinants of frauds, using data on Italian provinces. The contributions to the literature are manifold: -The price of insuring has a positive correlation with the propensity to defraud -Social norms constraint fraudulent behavior, but their strength is curtailed in economic downturns -I apply a simple extension of the Random Coefficient model, which allows for the presence of time invariant covariates and asymmetries in the impact of the regressors. The second paper assesses how the evolution of macro prudential regulation of insurance companies has been reflected in their equity price. I employ a standard event study methodology, deriving the definition of the “control” and “treatment” groups from what is implied by the regulatory framework. The main results are: -Markets care about the evolution of the legislation. Their perception has shifted from a first positive assessment of a possible implicit “too big to fail” subsidy to a more negative one related to its cost in terms of stricter capital requirement -The size of this phenomenon is positively related to leverage, size and on the geographical location of the insurance companies The third paper introduces a novel methodology to forecast non-life insurance premiums and profitability as function of macroeconomic variables, using the simultaneous equation framework traditionally employed macroeconometric models and a simple theoretical model of insurance pricing to derive a long term relationship between premiums, claims expenses and short term rates. The model is shown to provide a better forecast of premiums and profitability compared with the single equation specifications commonly used in applied analysis.

At the intersection of Behavioural Economics, Nudging and Regulation: Rethinking the process of nudge design for regulation

Alongside the developments in behavioural economics, the concept of nudge was introduced as an intervention able to guide individual behaviour towards better choices without using coercion or incentives. While behavioural teams were created inside governmental units and regulatory authorities, nudging emerged in regulatory discourse, being increasingly regarded as a regulatory instrument that could overcome the disadvantages of other tools. This thesis analyses the viability of incorporating nudges into regulation. In particular, it investigates the implications for regulators of bringing iterative experimental testing – a widespread nudge design methodology outside regulation – into their own design practices. Nudges outside regulation are routinely designed using experiments of all kinds. This thesis intends to answer whether design premises rooted in iterative experimentation are still valid in the regulatory space, an arena that nudging entered into and that is distinct from the one where it originally emerged. The design and provision of nudges using the premises of iterative experimental testing is possible, but at a cost and burden for regulatory nudge designers. Therefore, the thesis evaluates how this burden can be reduced, in particular how nudges can be feasibly designed and provided through regulation or, put differently, how to more efficiently design and provide nudging as a regulatory tool.

Transitional Justice as a Post-Revolution Constitutional Arrangement: A Law and Economics Approach

This dissertation addresses the timely questions of transitional justice (TJ) in the aftermath of revolutions against autocratic regimes, dealing with TJ as a constitutional arrangement through the lenses of constitutional economics. After an introductory chapter, chapter 2 deals with why nations rarely adopt meaningful TJ processes in the first place, it then explains the limitations of civil society as the arbiter, facilitator, and enforcer of TJ policies. Chapter 3 tackles the question of which mechanisms to choose? It uses the UN Guidelines on TJ that sets five principal TJ mechanisms. It provides a cost-benefit analysis (CBA) of each mechanism and suggests policy implications accordingly. The CBA inspires chapter 4 analysis, suggesting a tradeoff between restrictive fair trial standards under constitutional laws and justice considerations. The tradeoff explains the suggested efficiency of the balanced TJ approaches that combine trials and amnesties. This approach is used for the case study analysis of TJ in Tunisia after the 2011 revolution in chapter 5. The chapter presents the first index of TJ mechanisms in Tunisia through novel data collected by the author. It shows an ultimate TJ design that ended with a modest harvest in the application. The lack of cooperation between the Tunisian parties, added to the absence of transparency in many TJ measures, threatens any possible positive outcomes of the partial TJ process. It is also alarming regarding constitutional compliance in a system that – until recently - was considered the only democracy in the Arab region. Chapter 6 is a summary

Short-term triple therapy with azithromycin for Helicobacter pylori eradication: Low cost, high compliance, but low efficacy

Background: The Brazilian consensus recommends a short-term treatment course with clarithromycin, amoxicillin and proton-pump inhibitor for the eradication of Helicobacter pylori ( H. pylori). This treatment course has good efficacy, but cannot be afforded by a large part of the population. Azithromycin, amoxicillin and omeprazole are subsidized, for several aims, by the Brazilian federal government. Therefore, a short-term treatment course that uses these drugs is a low-cost one, but its efficacy regarding the bacterium eradication is yet to be demonstrated. The study's purpose was to verify the efficacy of H. pylori eradication in infected patients who presented peptic ulcer disease, using the association of azithromycin, amoxicillin and omeprazole. Methods: Sixty patients with peptic ulcer diagnosed by upper digestive endoscopy and H. pylori infection documented by rapid urease test, histological analysis and urea breath test were treated for six days with a combination of azithromycin 500 mg and omeprazole 20 mg, in a single daily dose, associated with amoxicillin 500 mg 3 times a day. The eradication control was carried out 12 weeks after the treatment by means of the same diagnostic tests. The eradication rates were calculated with 95% confidence interval. Results: The eradication rate was 38% per intention to treat and 41% per protocol. Few adverse effects were observed and treatment compliance was high. Conclusion: Despite its low cost and high compliance, the low eradication rate does not allow the recommendation of the triple therapy with azithromycin as an adequate treatment for H. pylori infection.

Cost risk benefit analysis to support chemoprophylaxis policy for travellers to malaria endemic countries

Background: In a number of malaria endemic regions, tourists and travellers face a declining risk of travel associated malaria, in part due to successful malaria control. Many millions of visitors to these regions are recommended, via national and international policy, to use chemoprophylaxis which has a well recognized morbidity profile. To evaluate whether current malaria chemo-prophylactic policy for travellers is cost effective when adjusted for endemic transmission risk and duration of exposure. a framework, based on partial cost-benefit analysis was used Methods: Using a three component model combining a probability component, a cost component and a malaria risk component, the study estimated health costs avoided through use of chemoprophylaxis and costs of disease prevention (including adverse events and pre-travel advice for visits to five popular high and low malaria endemic regions) and malaria transmission risk using imported malaria cases and numbers of travellers to malarious countries. By calculating the minimal threshold malaria risk below which the economic costs of chemoprophylaxis are greater than the avoided health costs we were able to identify the point at which chemoprophylaxis would be economically rational. Results: The threshold incidence at which malaria chemoprophylaxis policy becomes cost effective for UK travellers is an accumulated risk of 1.13% assuming a given set of cost parameters. The period a travellers need to remain exposed to achieve this accumulated risk varied from 30 to more than 365 days, depending on the regions intensity of malaria transmission. Conclusions: The cost-benefit analysis identified that chemoprophylaxis use was not a cost-effective policy for travellers to Thailand or the Amazon region of Brazil, but was cost-effective for travel to West Africa and for those staying longer than 45 days in India and Indonesia.

Cost-effectiveness analysis of PCR for the rapid diagnosis of pulmonary tuberculosis

Background: Tuberculosis is one of the most prominent health problems in the world, causing 1.75 million deaths each year. Rapid clinical diagnosis is important in patients who have comorbidities such as Human Immunodeficiency Virus (HIV) infection. Direct microscopy has low sensitivity and culture takes 3 to 6 weeks [1-3]. Therefore, new tools for TB diagnosis are necessary, especially in health settings with a high prevalence of HIV/TB co-infection. Methods: In a public reference TB/HIV hospital in Brazil, we compared the cost-effectiveness of diagnostic strategies for diagnosis of pulmonary TB: Acid fast bacilli smear microscopy by Ziehl-Neelsen staining (AFB smear) plus culture and AFB smear plus colorimetric test (PCR dot-blot). From May 2003 to May 2004, sputum was collected consecutively from PTB suspects attending the Parthenon Reference Hospital. Sputum samples were examined by AFB smear, culture, and PCR dot-blot. The gold standard was a positive culture combined with the definition of clinical PTB. Cost analysis included health services and patient costs. Results: The AFB smear plus PCR dot-blot require the lowest laboratory investment for equipment (US$ 20,000). The total screening costs are 3.8 times for AFB smear plus culture versus for AFB smear plus PCR dot blot costs (US$ 5,635,760 versus US$ 1,498, 660). Costs per correctly diagnosed case were US$ 50,773 and US$ 13,749 for AFB smear plus culture and AFB smear plus PCR dot-blot, respectively. AFB smear plus PCR dot-blot was more cost-effective than AFB smear plus culture, when the cost of treating all correctly diagnosed cases was considered. The cost of returning patients, which are not treated due to a negative result, to the health service, was higher in AFB smear plus culture than for AFB smear plus PCR dot-blot, US$ 374,778,045 and US$ 110,849,055, respectively. Conclusion: AFB smear associated with PCR dot-blot associated has the potential to be a cost-effective tool in the fight against PTB for patients attended in the TB/HIV reference hospital.

Cost effectiveness of OptiMal (R) rapid diagnostic test for malaria in remote areas of the Amazon Region, Brazil

Background: In areas with limited structure in place for microscopy diagnosis, rapid diagnostic tests (RDT) have been demonstrated to be effective. Method: The cost-effectiveness of the Optimal (R) and thick smear microscopy was estimated and compared. Data were collected on remote areas of 12 municipalities in the Brazilian Amazon. Data sources included the National Malaria Control Programme of the Ministry of Health, the National Healthcare System reimbursement table, hospitalization records, primary data collected from the municipalities, and scientific literature. The perspective was that of the Brazilian public health system, the analytical horizon was from the start of fever until the diagnostic results provided to patient and the temporal reference was that of year 2006. The results were expressed in costs per adequately diagnosed cases in 2006 U. S. dollars. Sensitivity analysis was performed considering key model parameters. Results: In the case base scenario, considering 92% and 95% sensitivity for thick smear microscopy to Plasmodium falciparum and Plasmodium vivax, respectively, and 100% specificity for both species, thick smear microscopy is more costly and more effective, with an incremental cost estimated at US$ 549.9 per adequately diagnosed case. In sensitivity analysis, when sensitivity and specificity of microscopy for P. vivax were 0.90 and 0.98, respectively, and when its sensitivity for P. falciparum was 0.83, the RDT was more cost-effective than microscopy. Conclusion: Microscopy is more cost-effective than OptiMal (R) in these remote areas if high accuracy of microscopy is maintained in the field. Decision regarding use of rapid tests for diagnosis of malaria in these areas depends on current microscopy accuracy in the field.

Cost-effectiveness of Sick Leave Policies for Health Care Workers with Influenza-like Illness, Brazil, 2009

We describe the effect of influenza-like illness (ILI) during the outbreak of pandemic (H1N1) 2009 on health care worker (HCW) absenteeism and compare the effectiveness and cost of 2 sick leave policies for HCWs with suspected influenza. We assessed initial 2-day sick leaves plus reassessment until the HOW was asymptomatic (2-day + reassessment policy), and initial 7-day sick leaves (7-day policy). Sick leaves peaked in August 2009: 3% of the workforce received leave for ILI. Costs during May October reached R$798,051.87 (approximate to US $443,362). The 7-day policy led to a higher monthly rate of sick leave days per 100 HCWs than did the 2-day + reassessment policy (8.72 vs. 3.47 days/100 HCWs; p<0.0001) and resulted in higher costs (US $609 vs. US $1,128 per HCW on leave). ILI affected HCW absenteeism. The 7-day policy was more costly and not more effective in preventing transmission to patients than the 2-day + reassessment policy.

A Cost-Benefit Analysis on Modulation Formats for 40-Gb/s Optical Communication Systems

This article discusses possible approaches for optical network capacity upgrade by considering the use of different modulation formats at 40 Gb/s. First, a performance evaluation is carried out regarding tolerance to three impairments: spectral narrowing due to filter cascading, chromatic dispersion, and self-phase modulation. Next, a cost-benefit analysis is conducted, considering the specific optoelectronic components required for the optical transmitter/receiver configuration of each format.

Functionality of the approach of hierarchical analysis in the full cost accounting in the IRP of a metropolitan airport

This work shows the application of the analytic hierarchy process (AHP) in the full cost accounting (FCA) within the integrated resource planning (IRP) process. For this purpose, a pioneer case was developed and different energy solutions of supply and demand for a metropolitan airport (Congonhas) were considered [Moreira, E.M., 2005. Modelamento energetico para o desenvolvimento limpo de aeroporto metropolitano baseado na filosofia do PIR-O caso da metropole de Sao Paulo. Dissertacao de mestrado, GEPEA/USP]. These solutions were compared and analyzed utilizing the software solution ""Decision Lens"" that implements the AHP. The final part of this work has a classification of resources that can be considered to be the initial target as energy resources, thus facilitating the restraints of the IRP of the airport and setting parameters aiming at sustainable development. (C) 2007 Elsevier Ltd. All rights reserved.

Role of price and enforcement in water allocation: Insights from Game Theory

As many countries are moving toward water sector reforms, practical issues of how water management institutions can better effect allocation, regulation, and enforcement of water rights have emerged. The problem of nonavailability of water to tailenders on an irrigation system in developing countries, due to unlicensed upstream diversions is well documented. The reliability of access or equivalently the uncertainty associated with water availability at their diversion point becomes a parameter that is likely to influence the application by users for water licenses, as well as their willingness to pay for licensed use. The ability of a water agency to reduce this uncertainty through effective water rights enforcement is related to the fiscal ability of the agency to monitor and enforce licensed use. In this paper, this interplay across the users and the agency is explored, considering the hydraulic structure or sequence of water use and parameters that define the users and the agency`s economics. The potential for free rider behavior by the users, as well as their proposals for licensed use are derived conditional on this setting. The analyses presented are developed in the framework of the theory of ""Law and Economics,`` with user interactions modeled as a game theoretic enterprise. The state of Ceara, Brazil, is used loosely as an example setting, with parameter values for the experiments indexed to be approximately those relevant for current decisions. The potential for using the ideas in participatory decision making is discussed. This paper is an initial attempt to develop a conceptual framework for analyzing such situations but with a focus on the reservoir-canal system water rights enforcement.

Exergy-based method for analyzing the composition of the electricity cost generated in gas-fired combined cycle plants

The proposed method to analyze the composition of the cost of electricity is based on the energy conversion processes and the destruction of the exergy through the several thermodynamic processes that comprise a combined cycle power plant. The method uses thermoeconomics to evaluate and allocate the cost of exergy throughout the processes, considering costs related to inputs and investment in equipment. Although the concept may be applied to any combined cycle or cogeneration plant, this work develops only the mathematical modeling for three-pressure heat recovery steam generator (HRSG) configurations and total condensation of the produced steam. It is possible to study any n x 1 plant configuration (n sets of gas turbine and HRSGs associated to one steam turbine generator and condenser) with the developed model, assuming that every train operates identically and in steady state. The presented model was conceived from a complex configuration of a real power plant, over which variations may be applied in order to adapt it to a defined configuration under study [Borelli SJS. Method for the analysis of the composition of electricity costs in combined cycle thermoelectric power plants. Master in Energy Dissertation, Interdisciplinary Program of Energy, Institute of Eletro-technical and Energy, University of Sao Paulo, Sao Paulo, Brazil, 2005 (in Portuguese)]. The variations and adaptations include, for instance, use of reheat, supplementary firing and partial load operation. It is also possible to undertake sensitivity analysis on geometrical equipment parameters. (C) 2007 Elsevier Ltd. All rights reserved.

Life cycle assessment and life cycle cost of sugar plants evaporators

The evaporators of sugar plants in Brazil have used carbon steel intensively because of it is, a low priced material, which possesses inferior corrosion resistance. The materials more indicated for the substitution of carbon steel are stainless steels, however they are considered expensive. The environmental and financial performances of evaporator pipes constructed with carbon steel and with types AISI 304 444 and 439 stainless steel were evaluated. For the environmental evaluation, the Life Cycle Assessment (LCA) methodology Was used and it, revealed that stainless steel is more environmentally efficient than carbon steel. The life cycle costing (LCC) technique was the tool chosen for the financial evaluation and it showed that stainless steel is a better investment option compared to carbon steel. The results also indicate that LCA and LCC methodologies must be used together Therefore, it can he seen that safer environmental products can come to be the most profitable investment options.