The impact of contract duration on the cost of cash retention

Cash retention is a common means of protecting an employer from a contractor's insolvency as well as ensuring that contractors finish the work that they start. Similarly, contractors withhold part of payments due to their sub-contractors. Larger contracts tend to be subjected to smaller rates of retention. By calculating the cost of retention as an amount per year of a contract, it is shown that retention is far more expensive for firms whose work consists of short contracts. The extra cost is multiplied when the final payment is delayed, as it often is for those whose work takes place at the beginning of a project. This may explain why it is that main contractors are a lot less interested than sub-contractors in alternatives to cash retention, such as retention bonds

Rebalancing frequency and the welfare cost of inflation

Cash-in-advance models usually require agents to reallocate money and bonds in fixed periods, every month or quarter, for example. I show that fixed periods underestimate the welfare cost of inflation. I use a model in which agents choose how often they exchange bonds for money. In the benchmark specification, the welfare cost of ten percent instead of zero inflation increases from 0.1 percent of income with fixed periods to one percent with optimal periods. The results are robust to different preferences, to different compositions of income in bonds or money, and to the introduction of capital and labor.

Rebalancing frequency and the welfare cost of inflation

Cash-in-advance models usually require agents to reallocate money and bonds in fixed periods. Every month or quarter, for example. I show that fixed periods underestimate the welfare cost of inflation. I use a model in which agents choose how often they exchange bonds for money. In the benchmark specification, the welfare cost of 10 percent instead of 0 inflation increases from 0.1 percent of income with fixed periods to 1 percent with optimal periods. The results are robust to different references, to different compositions of income in bonds or money, and to the introduction of capital and labor.

From Cash to Electronic Payments: Microeconomic, Macroeconomic, and Policy Aspects of Retail Payment Systems

This dissertation explores three aspects of the economics and policy issues surrounding retail payments (low-value frequent payments): the microeconomic aspect, by measuring costs associated with retail payment instruments; the macroeconomic aspect, by quantifying the impact of the use of electronic rather than paper-based payment instruments on consumption and GDP; and the policy aspect, by identifying barriers that keep countries stuck with outdated payment systems, and recommending policy interventions to move forward with payments modernization. Payment system modernization has become a prominent part of the financial sector reform agenda in many advanced and developing countries. Greater use of electronic payments rather than cash and other paper-based instruments would have important economic and social benefits, including lower costs and thereby increased economic efficiency and higher incomes, while broadening access to the financial system, notably for people with moderate and low incomes. The dissertation starts with a general introduction on retail payments. Chapter 1 develops a theoretical model for measuring payments costs, and applies the model to Guyana—an emerging market in the midst of the transition from paper to electronic payments. Using primary survey data from Guyanese consumers, the results of the analysis indicate that annual costs related to the use of cash by consumers reach 2.5 percent of the country’s GDP. Switching to electronic payment instruments would provide savings amounting to 1 percent of GDP per year. Chapter 2 broadens the analysis to calculate the macroeconomic impacts of a move to electronic payments. Using a unique panel dataset of 76 countries across the 17-year span from 1998 to 2014 and a pooled OLS country fixed effects model, Chapter 2 finds that on average, use of debit and credit cards contribute USD 16.2 billion to annual global consumption, and USD 160 billion to overall annual global GDP. Chapter 3 provides an in-depth assessment of the Albanian payment cards and remittances market and recommends a set of incentives and regulations (both carrots and sticks) that would allow the country to modernize its payment system. Finally, the conclusion summarizes the lessons of the dissertation’s research and brings forward issues to be explored by future research in the retail payments area.

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.

Tax Cost of Investment Projects: the case of ICMS credits

This article discusses the impact on the profitability of firms under Complementary Law 102/2000 (which abrogated the Law 89/96 - Kandir Law) allowing the appropriation of ICMS credits, due to investment in fixed assets goods, at a ratio of 1/48 per month. The paper seeks to demonstrate how this new system - which resulted in the transformation of the ICMS as a value added tax (VAT) consumption-type to an income-type - leads to a loss of approximately 30% of the value of credits to be recovered and the effect it generates on the cost of investment and the profits for small, medium and large firms. From the methodological point of view, it is a descriptive and quantitative research, which proceeded in three stages. Initially, we have obtained estimated value of net sales and volume of investments, based on report Painel de Competitividade prepared by the Federacao das Indtustrias do Estado de Sao Paulo (Fiesp/Serasa). Based on this information, it was possible to obtain estimates of the factors of generation of debits and credits for ICMS, using the model Credit Control of Fixed Assets (CIAP). Finally, we have calculated three indicators: (i) present value of debt recovery/value of credits, (ii) present value of debt recovery / investment value, (iii) present value of debt recovery / sales profitability. We have conclude that the system introduced by Complementary Law 102/2000 implicates great opportunity cost for firms and that legislation should be reviewed from this perspective, aiming to ensure lower costs associated with investment projects.

Sweet Basil (Ocimum basilicum) Extracts Obtained by Supercritical Fluid Extraction (SFE): Global Yields, Chemical Composition, Antioxidant Activity, and Estimation of the Cost of Manufacturing

In this work, supercritical technology was used to obtain extracts from Ocimum basilicum (sweet basil) with CO(2) and the cosolvent H(2)O at 1, 10, and 20% (w/w). The raw material was obtained from hydroponic cultivation. The extract`s global yield isotherms, chemical compositions, antioxidant activity, and cost of manufacturing were determined. The extraction assays were done for pressures of 10 to 30 MPa at 303 to 323 K. The identification of the compounds present in the extracts was made by GC-MS and ESI-MS. The antioxidant activity of extracts was determined using the coupled reaction of beta-carotene and linolenic acid. At 1% of cosolvent, the largest global yield was obtained at 10 MPa and 303 K (2%, dry basis-d.b.); at 10% of cosolvent the largest global yield was obtained at 10 and 15 MPa (11%, d.b.), and at 20% of cosolvent the largest global yield was detected at 30 MPa and 303 K (24%, d.b.). The main components identified in the extracts were eugenol, germacrene-D, epi-alpha-cadinol, malic acid, tartaric acid, ramnose, caffeic acid, quinic acid, kaempferol, caffeoylquinic acid, and kaempferol 3-O-glucoside. Sweet basil extracts exhibited high antioxidant activity compared to beta-carotene. Three types of SFE extracts from sweet basil were produced, for which the estimated cost of manufacturing (class 5 type) varied from US$ 47.96 to US$ 1,049.58 per kilogram of dry extract.

The cost of life expectancy and the implicit social valuation of life

A new method of estimating the economic value of life is proposed. Using cross-country data, an equation is estimated to explain life expectancy as a function of real consumption of goods and services. The associated cost function for life expectancy in terms of the prices of specific goods and services is used to estimate the cost of a reduction in age-specific mortality rates sufficient to save the life of one person. The cost of saving a life in OECD countries is as much as 1000 times that in the poorest countries. Ethical implications are discussed.

Estimating the cost of contact for non-resident parents: A budget standards approach

Most Western countries have, for some time, provided income support and/or taxation relief to parents with children in their care. The significant amount of research into the costs of children to couple and sole parent households has been important in assessing and developing family support policies. Changing societal expectations about the level of involvement of fathers in child rearing activities has highlighted the need to understand the costs facing usually male non-resident parents in having contact with their children. The budget standards methodology is used in this paper to estimate the costs for non-resident parents exercising regular contact with their children. Costs of contact are found to be high. For contact with one child for 20 per cent of the year, costs of contact represent about 40 per cent of the costs of that same child in an intact couple household with a medium income and more than half of the costs of that child in a household with low income. Household infrastructure and transportation is the reason for high costs. One implication of this finding is that the total cost of children substantially increases when parents separate. The article discusses some policy implications of these findings. This research is of relevance to social security, taxation, family law and child support policies and administration.

Right adolescent idiopathic thoracic curve (Lenke 1 A and B): does cost of instrumentation and implant density improve radiographic and cosmetic parameters?

In adolescent idiopathic scoliosis (AIS) there has been a shift towards increasing the number of implants and pedicle screws, which has not been proven to improve cosmetic correction. To evaluate if increasing cost of instrumentation correlates with cosmetic correction using clinical photographs. 58 Lenke 1A and B cases from a multicenter AIS database with at least 3 months follow-up of clinical photographs were used for analysis. Cosmetic parameters on PA and forward bending photographs included angular measurements of trunk shift, shoulder balance, rib hump, and ratio measurements of waist line asymmetry. Pre-op and follow-up X-rays were measured for coronal and sagittal deformity parameters. Cost density was calculated by dividing the total cost of instrumentation by the number of vertebrae being fused. Linear regression and spearman`s correlation were used to correlate cost density to X-ray and photo outcomes. Three independent observers verified radiographic and cosmetic parameters for inter/interobserver variability analysis. Average pre-op Cobb angle and instrumented correction were 54A degrees (SD 12.5) and 59% (SD 25) respectively. The average number of vertebrae fused was 10 (SD 1.9). The total cost of spinal instrumentation ranged from $6,769 to $21,274 (Mean $12,662, SD $3,858). There was a weak positive and statistically significant correlation between Cobb angle correction and cost density (r = 0.33, p = 0.01), and no correlation between Cobb angle correction of the uninstrumented lumbar spine and cost density (r = 0.15, p = 0.26). There was no significant correlation between all sagittal X-ray measurements or any of the photo parameters and cost density. There was good to excellent inter/intraobserver variability of all photographic parameters based on the intraclass correlation coefficient (ICC 0.74-0.98). Our method used to measure cosmesis had good to excellent inter/intraobserver variability, and may be an effective tool to objectively assess cosmesis from photographs. Since increasing cost density only improves mildly the Cobb angle correction of the main thoracic curve and not the correction of the uninstrumented spine or any of the cosmetic parameters, one should consider the cost of increasing implant density in Lenke 1A and B curves. In the area of rationalization of health care expenses, this study demonstrates that increasing the number of implants does not improve any relevant cosmetic or radiographic outcomes.

Gender, marital status, farm size and other factors influencing the extent of cash cropping in Kenya: A case study

This article examines the effects of commercialisation of agriculture on land use and work patterns by means of a case study in the Nyeri district in Kenya. The study uses cross sectional data collected from small-scale farmers in this district. We find that good quality land is allocated to non-food cash crops, which may lead to a reduction in non-cash food crops and expose some households to greater risks of possible famine. Also the proportion of land allocated to food crops declines as the farm size increases while the proportion of land allocated to non-food cash crops rises as the size of farm increases. Cash crops are also not bringing in as much revenue commensurate with the amount of land allocated to them. With growing commercialisation, women still work more hours than men. They not only work on non-cash food crops but also on cash crops including non-food cash crops. Evidence indicates that women living with husbands work longer hours than those married but living alone, and also longer than the unmarried women. Married women seem to lose their decision-making ability with growth of commercialisation, as husbands make most decisions to do with cash crops. Furthermore husbands appropriate family cash income. Husbands are less likely to use such income for the welfare of the family compared to wives due to different expenditure patterns. Married women in Kenya also have little or no power to change the way land is allocated between food and non-food cash crops. Due to deteriorating terms of trade for non-food cash crops, men have started cultivation of food cash crops with the potential of crowding out women. It is found that both the area of non-cash crops tends to rise with farm size but also the proportion of the farm area cash cropped rises in Central Kenya.

Marital status, farm size and other influences on the extent of cash cropping in Kenya: A household case study

This article examines the effects of marital status, farm size and other factors on the extent of cash cropping (and allocation of land use) by means of a case study in the Nyeri district in Kenya. It was found that married women are involved in the production of a relatively greater amount of output of cash crops than unmarried women since husbands prefer to have more land under cash crops than food crops. Farmers with better quality land allocate a high proportion of it to non-food cash crops, which may expose some households to greater risks of possible famine. The proportion of land allocated to food crops declines as the farm size increases while the proportion of land allocated to non-food cash crops rises as the size of farm increases. Age is also inversely associated with subsistence. Education, though inversely associated with subsistence farming does not appear to be statistically very significant as an influence on the composition of land use and composition of farm output. With growing commercialisation, married women work more hours than unmarried ones, working not only on non-cash food crops but also on non-food cash crops. Married women seem to lose their decision-making ability with growth of agricultural commercialisation, as husbands make most decisions to do with cash crops. Married women in Kenya also have little or no power to change the way land is allocated between food and non-food cash crops.