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.

Elastic modulus of posts and the risk of root fracture

The definition of an optimal elastic modulus for a post is controversial. This work hypothesized that the influence of the posts` elastic modulus on dentin stress concentration is dependent on the load direction. The objective was to evaluate, using finite element analysis, the maximum principal stress (sigma(max)) on the root, using posts with different elastic modulus submitted to different loading directions. Nine 3D models were built, representing the dentin root, gutta-percha, a conical post and the cortical bone. The softwares used were: MSC.PATRAN2005r2 (preprocessing) and MSC.Marc2005r2 (processing). Load of 100 N was applied, varying the directions (0 degrees, 45 degrees and 90 degrees) in relation to the post`s long axis. The magnitude and direction of the sigma(max) were recorded. At the 45 degrees and 90 degrees loading, the highest values of sigma(max) were recorded for the lowest modulus posts, on the cervical region, with a direction that suggests debonding of the post. For the 0 degrees loading, the highest values of sigma(max) were recorded for higher modulus posts, on the apical region, and the circumferential direction suggests vertical root fracture. The hypothesis was accepted: the effect of the elastic modulus on the magnitude and direction of the sigma(max) generated on the root was dependent on the loading direction.

The Environment and the Selection of Aquaculture Species and Systems: An Economic Analysis

Environmental conditions play a significant role in the economic success of aquaculture. This article classifies environmental factors in a way that facilitates economic analysis of their implications for the selection of aquaculture species and systems. The implication of on-farm as on-site environmental conditions for this selection are considered first using profit-possibility frontiers and taking into account the biological law of environmental tolerance. However, in selecting, recommending and developing aquaculture species and systems, it is often unrealistic to assume the degree of managerial efficiency implied by the profit-possibility function. It is appropriate to take account of the degree of managerial inefficiency that actually exists, not all of which may be capable of being eliminated. Furthermore, experimental R&D should be geared to on-farm conditions, and the variability of these conditions needs to be taken into account. Particularly in shared water bodies, environmental spillovers between aquaculturalists can be important and as shown theoretically, can influence the socially optimal selection of aquaculture species and systems. Similarly, aquaculture can have environmental consequences for the rest of the community. The social economic implications of this for the selection of aquaculture species and systems are analyzed. Some paradoxical results are obtained. For example, if the quality of social governance of aquaculture is poor, aquaculture species and systems that cause a slow rate of environmental deterioration may be socially less satisfactory than those that cause a rapid rate of such deterioration. Socially optimal choice of aquaculture species and systems depends not only on their biophysical characteristics and market conditions but also on the prevailing state of governance of aquaculture. Failure to consider the last aspect can result in the introduction of new aquaculture species (and systems) doing more social harm than good.

Influence of differently oriented dentin surfaces and the regional variation of specimens on adhesive layer thickness and bond strength

Statement of the Problem: Adhesive systems can spread differently onto a substrate and, consequently, influence bonding. Purpose: The purpose of this study was to evaluate the effect of differently oriented dentin surfaces and the regional variation of specimens on adhesive layer thickness and microtensile bond strength (MTBS). Materials and Methods: Twenty-four molars were sectioned mesiodistally to expose flat buccal and lingual halves. Standardized drop volumes of adhesive systems (Single Bond [SB] and Prime & Bond 2.1 [PB2.1]) were applied to dentin according to the manufacturer`s instructions. Teeth halves were randomly divided into groups: 1A-SB/parallel to gravity; 1B-SB/perpendicular to gravity; 2A-PB2.1/parallel to gravity; and 2B-PB2.1/perpendicular to gravity. The bonded assemblies were stored in 37 degrees C distilled water for 24 hours and then sectioned to obtain dentin sticks (0.8 mm(2)). The adhesive layer thickness was determined in a light microscope (x200), and after 48 hours the specimens were subjected to MTBS test. Data were analyzed by one-way and two-way analysis of variance and Student-Newman-Keuls tests. Results: Mean values (MPa +/- SD) of MTBS were: 39.1 +/- 12.9 (1A); 32.9 +/- 12.4 (1B); 52.9 +/- 15.2 (2A); and 52.3 +/- 16.5 (2B). The adhesive systems` thicknesses (mu m +/- SD) were: 11.2 +/- 2.9 (1A); 18.1 +/- 7.3 (1B); 4.2 +/- 1.8 (2A); and 3.9 +/- 1.3 (2B). No correlation between bond strength and adhesive layer thickness for both SB and PB2.1 (r = -0.224, p = 0.112 and r = 0.099, p = 0.491, respectively) was observed. Conclusions: The differently oriented dentin surfaces and the regional variation of specimens on the adhesive layer thickness are material-dependent. These variables do not influence the adhesive systems` bond strength to dentin. CLINICAL SIGNIFICANCE Adhesive systems have different viscosities and spread differently onto a substrate, influencing the bond strength and also the adhesive layer thickness. Adhesive thickness does not influence dentin bond strength, but it may impair adequate solvent evaporation, polymer conversion, and may also determine water sorption and adhesive degradation over time. In the literature, many studies have shown that the adhesive layer is a permeable membrane and can fail over timebecause ofits continuous plasticizing and degradation when in contact with water. Therefore, avoiding thick adhesive layers may minimize these problems and provide long-term success for adhesive restorations.

Estimating Income Inequality in China Using Grouped Data and the Generalized Beta Distribution

There are two main types of data sources of income distributions in China: household survey data and grouped data. Household survey data are typically available for isolated years and individual provinces. In comparison, aggregate or grouped data are typically available more frequently and usually have national coverage. In principle, grouped data allow investigation of the change of inequality over longer, continuous periods of time, and the identification of patterns of inequality across broader regions. Nevertheless, a major limitation of grouped data is that only mean (average) income and income shares of quintile or decile groups of the population are reported. Directly using grouped data reported in this format is equivalent to assuming that all individuals in a quintile or decile group have the same income. This potentially distorts the estimate of inequality within each region. The aim of this paper is to apply an improved econometric method designed to use grouped data to study income inequality in China. A generalized beta distribution is employed to model income inequality in China at various levels and periods of time. The generalized beta distribution is more general and flexible than the lognormal distribution that has been used in past research, and also relaxes the assumption of a uniform distribution of income within quintile and decile groups of populations. The paper studies the nature and extent of inequality in rural and urban China over the period 1978 to 2002. Income inequality in the whole of China is then modeled using a mixture of province-specific distributions. The estimated results are used to study the trends in national inequality, and to discuss the empirical findings in the light of economic reforms, regional policies, and globalization of the Chinese economy.