How returns from tertiary education differ by field of study. Implications for policy-makers and students. CEPS Working Document No. 411/July 2015

With the huge growth in enrolment in higher education, the key question facing young people today is not so much “what to study” as “whether to study”. Taking a methodologically innovative approach, this paper measures the net present value of university education and compares returns from studying a range of different subjects. We use data from 5 European countries (France, Italy, Hungary, Poland and Slovenia) and include (opportunity) costs in the computation. Results suggest that enrolling in science, technology, engineering and mathematics (STEM) courses is often not the best investment for students, especially female students. In choosing what to study, therefore, students are taking decisions that are consistent with their own private returns. This suggests that policymakers should consider changing the incentives offered if they wish to change students’ behaviour.

System Costs of Variable Renewable Energy in the European Union. Bruges European Economic Policy (BEEP) Briefings 37/2015

To shift to a low-carbon economy, the EU has been encouraging the deployment of variable renewable energy sources (VRE). However, VRE lack of competitiveness and their technical specificities have substantially raised the cost of the transition. Economic evaluations show that VRE life-cycle costs of electricity generation are still today higher than those of conventional thermal power plants. Member States have consequently adopted dedicated policies to support them. In addition, Ueckerdt et al. (2013) show that when integrated to the power system, VRE induce supplementary not-accounted-for costs. This paper first exposes the rationale of EU renewables goals, the EU targets and current deployment. It then explains why the LCOE metric is not appropriate to compute VRE costs by describing integration costs, their magnitude and their implications. Finally, it analyses the consequences for the power system and policy options. The paper shows that the EU has greatly underestimated VRE direct and indirect costs and that policymakers have failed to take into account the burden caused by renewable energy and the return of State support policies. Indeed, induced market distortions have been shattering the whole power system and have undermined competition in the Internal Energy Market. EU policymakers can nonetheless take full account of this negative trend and reverse it by relying on competition rules, setting-up a framework to collect robust EU-wide data, redesigning the architecture of the electricity system and relying on EU regulators.

Cost-benefit, cost-effectiveness research of drug abuse prevention : implications for programming and policy /

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A proposed new classification system for whiplash associated disorders - implications for assessment and management

The development of chronic symptoms following whiplash injury is common and contributes substantially to costs associated with this condition. The currently used Quebec Task Force classification system of whiplash associated disorders is primarily based on the severity of signs and symptoms following injury and its usefulness has been questioned. Recent evidence is emerging that demonstrates differences in physical and psychological impairments between individuals who recover from the injury and those who develop persistent pain and disability. Motor dysfunction, local cervical mechanical hyperalgesia and psychological distress are present soon after injury in all whiplash injured persons irrespective of recovery. In contrast those individuals who develop persistent moderate/severe pain and disability show a more complex picture, characterized by additional impairments of widespread sensory hypersensitivity indicative of underlying disturbances in central pain processing as well as acute posttraumatic stress reaction, with these changes present from soon after injury. Based on this heterogeneity a new classification system is proposed that takes into account measurable disturbances in motor, sensory and psychological dysfunction. The implications for the management of this condition are discussed. (C) 2004 Elsevier Ltd. All rights reserved.

Attaching unit costs to Australia's National Survey of Mental Health and Wellbeing

Background: In mental health, policy-makers and planners are increasingly being asked to set priorities. This means that health economists, health services researchers and clinical investigators are being called upon to work together to define and measure costs. Typically, these researchers take available service utilisation data and convert them to costs, using a range of assumptions. There are inefficiencies, as individual groups of researchers frequently repeat essentially similar exercises in achieving this end. There are clearly areas where shared or common investment in the development of statistical software syntax, analytical frameworks and other resources could maximise the use of data. Aims of the Study: This paper reports on an Australian project in which we calculated unit costs for mental health admissions and community encounters. In reporting on these calculations, our purpose is to make the data and the resources associated with them publicly available to researchers interested in conducting economic analyses, and allow them to copy, distribute and modify them, providing that all copies and modifications are available under the same terms and conditions (i.e., in accordance with the 'Copyleft' principle), Within this context, the objectives of the paper are to: (i) introduce the 'Copyleft' principle; (ii) provide an overview of the methodology we employed to derive the unit costs; (iii) present the unit costs themselves; and (iv) examine the total and mean costs for a range of single and comorbid conditions, as an example of the kind of question that the unit cost data can be used to address. Method: We took relevant data from the Australian National Survey of Mental Health and Wellbeing (NSMHWB), and developed a set of unit costs for inpatient and community encounters. We then examined total and mean costs for a range of single and comorbid conditions. Results: We present the unit costs for mental health admissions and mental health community contacts. Our example, which explored the association between comorbidity and total and mean costs, suggested that comorbidly occurring conditions cost more than conditions which occur on their own. Discussion: Our unit costs, and the materials associated with them, have been published in a freely available form governed by a provision termed 'Copyleft'. They provide a valuable resource for researchers wanting to explore economic questions in mental health. Implications for Health Policies: Our unit costs provide an important resource to inform economic debate in mental health in Australia, particularly in the area of priority-setting. In the past, such debate has largely, been based on opinion. Our unit costs provide the underpinning to strengthen the evidence-base of this debate. Implications for Further Research: We would encourage other Australian researchers to make use of our unit costs in order to foster comparability across studies. We would also encourage Australian and international researchers to adopt the 'Copyleft' principle in equivalent circumstances. Furthermore, we suggest that the provision of 'Copyleft'-contingent funding to support the development of enabling resources for researchers should be considered in the planning of future large-scale collaborative survey work, both in Australia and overseas.

Design determines 70% of cost? A review of implications for design evaluation

This paper disputes the fact that product design determines 70% of costs and the implications that follow for design evaluation tools. Using the idea of decision chains, it is argued that such tools need to consider more of the downstream business activities and should take into account the current and future state of the business rather than some idealized view of it. To illustrate the argument, a series of experiments using an enterprise simulator are described that show the benefit from the application of a more holistic 'design for' technique. Design For the Existing Environment.

An analysis of costs in institutions of higher education in England

Cost functions are estimated, using random effects and stochastic frontier methods, for English higher education institutions. The article advances on existing literature by employing finer disaggregation by subject, institution type and location, and by introducing consideration of quality effects. Estimates are provided of average incremental costs attached to each output type, and of returns to scale and scope. Implications for the policy of expansion of higher education are discussed.

Raising rivals' fixed costs

This paper analyses the strategic use of fixed costs to deter entry or monopolize a market in a standard Cournot framework. First of all a general case shows how the presence of fixed costs can affect the possible equilibria to the Cournot game. It is shown that the presence of a firm with a first-mover advantage can have important implications if fixed costs are raised. In addition the forward induction process becomes important in determining plausible equilibria. The use of firstly regulation and secondly ‘nuisance’ law-suits are considered as strategies to increase fixed costs.

The implications of cost behaviour for profit planning and control

The work described in the following pages was carried out at various sites in the Rod Division of the Delta Metal Company. Extensive variation in the level of activity in the industry during the years 1974 to I975 had led to certain inadequacies being observed 1n the traditional cost control procedure. In an attempt to remedy this situation it was suggested that a method be found of constructing a system to improve the flexibility of cost control procedures. The work involved an assimilation of the industrial and financial environment via pilot studies which would later prove invaluable to home in on the really interesting and important areas. Weaknesses in the current systems which came to light made the methodology of data collection and the improvement of cost control and profit planning procedures easier to adopt. Because of the requirements of the project to investigate the implications of Cost behaviour for profit planning and control, the next stage of the research work was to utilise the on-site experience to examine at a detailed level the nature of cost behaviour. The analysis of factory costs then showed that certain costs, which were the most significant exhibited a stable relationship with respect to some known variable, usually a specific measure of Output. These costs were then formulated in a cost model, to establish accurate standards in a complex industrial setting in order to provide a meaningful comparison against which to judge actual performance. The necessity of a cost model was •reinforced by the fact that the cost behaviour found to exist was, in the main, a step function, and this complex cost behaviour, the traditional cost and profit planning procedures could not possibly incorporate. Already implemented from this work is the establishment of the post of information officer to co-ordinate data collection and information provision.

Geographical variation in carbon dioxide fluxes from soils in agro-ecosystems and its implications for life-cycle assessment

1. Exchange of carbon dioxide (CO2) from soils can contribute significantly to the global warming potential (GWP) of agro-ecosystems. Due to variations in soil type, climatic onditions and land management practices, exchange of CO2 can differ markedly in different geographical locations. The food industry is developing carbon footprints for their products necessitating integration of CO2 exchange from soils with other CO2 emissions along the food chain. It may be advantageous to grow certain crops in different geographical locations to minimize CO2 emissions from the soil, and this may provide potential to offset other emissions in the food chain, such as transport. 2. Values are derived for the C balance of soils growing horticultural crops in the UK, Spain and Uganda. Net ecosystem production (NEP) is firstly calculated from the difference in net primary production (NPP) and heterotrophic soil respiration (Rh). Both NPP and Rh were estimated from intensive direct field measurements. Secondly, net biome production (NBP) is calculated by subtracting the crop biomass from NEP to give an indication of C balance. The importance of soil exchange is discussed in the light of recent discussions on carbon footprints and within the context of food life-cycle assessment (LCA). 3. The amount of crop relative to the biomass and the Rh prevailing in the different countries were the dominant factors influencing the magnitude of NEP and NBP. The majority of the biomass for lettuce Lactuca sativa and vining peas Pisum sativum, was removed from the field as crop; therefore, NEP and NBP were mainly negative. This was amplified for lettuces grown in Uganda (-16·5 and -17 t C ha-1 year-1 compared to UK and Spain -4·8 to 7·4 and -5·1 to 6·3 t C ha-1 year-1 for NEP and NBP, respectively) where the climate elevated Rh. 4. Synthesis and applications. This study demonstrates the importance of soil emissions in the overall life cycle of vegetables. Variability in such emissions suggests that assigning a single value to food carbon footprints may not be adequate, even within a country. Locations with high heterotrophic soil respiration, such as Spain and Uganda (21·9 and 21·6 t C ha-1 year-1, respectively), could mitigate the negative effects of climate on the C costs of crop production by growth of crops with greater returns of residue to the soil. This would minimize net CO2 emissions from these agricultural ecosystems.

"Trade creep" and implications of the Transatlantic Trade and Investment Partnership Agreement for the United Kingdom National Health Service

The ambitious and comprehensive Transatlantic Trade and Investment Partnership Agreement (TTIP/TAFTA) agreement between the European Union and United States is now being negotiated and may have far-reaching consequences for health services. The agreement extends to government procurement, investment, and further regulatory cooperation. In this article, we focus on the United Kingdom National Health Service and how these negotiations can limit policy space to change policies and to regulate in relation to health services, pharmaceuticals, medical devices, and health industries. The negotiation of TTIP/TAFTA has the potential to "harmonize" more corporate-friendly regulation, resulting in higher costs and loss of policy space, an example of "trade creep" that potentially compromises health equity, public health, and safety concerns across the Atlantic.

Accounting and the 'insoluble' problem of health care costs

Health service accounting reforms are frequently promoted, explained or justified with reference to ageing populations, expensive medical technologies and their purported implications for the cost of health care. Drawing on Foucault’s genealogical method, we examine the emergence of concerns regarding health expenditure in the wake of the creation of the British National Health Service in 1948, and their relationship with health service accounting practices. We argue that concerns regarding the cost of health care are historically contingent rather than inescapable consequences of demographic and technological change, and that health service accounting practices are both constitutive and reflective of such concerns. We conclude by relating our analysis to current attempts to control costs and increase efficiency in the health services.

The Foodservice Industry's Social Responsibility Regarding the Obesity Epidemic, Part I: Parallels to Other Public Health Issues and Potential Legal Implications

The incidence of obesity among both children and adults in the United States (U.S.) has reached epidemic level. If not quickly curtailed, it represents significant long-term costs to all facets of the U.S. economy. The foodservice industry has contributed to this major public health issue. Parallels between the obesity epidemic and the public health issues of smoking and foodborne illnesses could influence the foodservice industry's response to obesity concerns. Of particular note are the parallels between the liability litigation and legislative actions related to smoking and the tobacco industry. This industry has a history of taking socially responsible actions regarding public health issues. There is potential for costs to the foodservice industry from similar anti-obesity litigation and legislation if the industry does not once again assume social responsibility relative to the current obesity crisis and is not proactive in efforts to combat obesity

The market value implications of pension asset allocation

Pension funds have been part of the private sector since the 1850's. Defined Benefit pension plans [DB], where a company promises to make regular contributions to investment accounts held for participating employees in order to pay a promised lifelong annuity, are significant capital markets participants, amounting to 2.3 trillion dollars in 2010 (Federal Reserve Board, 2013). In 2006, Statement of Financial Accounting Standards No.158 (SFAS 158), Employers' Accounting for Defined Benefit Pension and Other Postemployment Plans, shifted information concerning funding status and pension asset/liability composition from disclosure in the footnotes to recognition in the financial statements. I add to the literature by being the first to examine the effect of recent pension reform during the financial crisis of 2008-09. This dissertation is comprised of three related essays. In my first essay, I investigate whether investors assign different pricing multiples to the various classes of pension assets when valuing firms. The pricing multiples on all classes of assets are significantly different from each other, but only investments in bonds and equities were value-relevant during the recent financial crisis. Consistent with investors viewing pension liabilities as liabilities of the firm, the pricing multiples on pension liabilities are significantly larger than those on non-pension liabilities. The only pension costs significantly associated with firm value are actual rate of return and interest expense. In my second essay, I investigate the role of accruals in predicting future cash flows, extending the Barth et al. (2001a) model of the accrual process. Using market value of equity as a proxy for cash flows, the results of this study suggest that aggregate accounting amounts mask how the components of earnings affect investors' ability to predict future cash flows. Disaggregating pension earnings components and accruals results in an increase in predictive power. During the 2008-2009 financial crisis, however, investors placed a greater (and negative) weight on the incremental information contained in the individual components of accruals. The inferences are robust to alternative specifications of accruals. Finally, in my third essay I investigate how investors view under-funded plans. On average, investors: view deficits arising from under-funded plans as belonging to the firm; reward firms with fully or over-funded pension plans; and encourage those funds with unfunded pension plans to become funded. Investors also encourage conservative pension asset allocations to mitigate firm risk, and smaller firms are perceived as being better able to handle the risk associated with underfunded plans. During the financial crisis of 2008-2009 underfunded status had a lower negative association with market value. In all three models, there are significant differences in pre- and post- SFAS 158 periods. These results are robust to various scenarios of the timing of the financial crisis and an alternative measure of funding.

Hotel Profit Implications from Rising Wages and Inflation in the U.S.

Macroeconomic models based on the Phillips Curve predict that as the unemployment rate declines toward the long-run, natural rate, the pace of wage and price growth accelerates and inflation rises.1 In this paper I analyze the profitability prospects for the U.S. hotel industry in today’s relatively volatile economic environment, keeping in mind the Phillips Curve’s general principle that inflation and employment have an inverse, but relatively stable short-term relationship. Although employment and economic growth in the U.S. have been uneven in recent months, the unemployment rate has declined to less than 5 percent, which many economists believe is close to the natural rate. Growth in wages and salaries, as measured by the Employment Cost Index, has concurrently been moving upward between 2.5 and 3.0 percent during the past 12 months. At the same time, general inflation remains below levels that might typically be expected this late in the cycle, although core inflation is bumping up against the Federal Reserve’s 2-percent target. If the inflation rate continues to move upward as predicted by Phillips Curve models (and encouraged by the Federal Reserve), rising labor costs and other expenses will exert downward pressure on U.S. business profits. Backward movement up the Phillips Curve (with greater inflation) coincides with an expanding economy. In that scenario, prices of goods and services also will rise in real terms if their supply cannot keep up with demand, and producers have the ability to raise prices (absent fixed-price contracts such as leases).