Model-based appraisal of minimum unit pricing for alcohol in Northern Ireland

In 2009, the Sheffield Alcohol Research Group (SARG) at Sheffield University developed the Sheffield Alcohol Policy Model version 2.0 (SAPM) to appraise the potential impact of alcohol policies, including different levels of MUP, for the population of England. In 2013, SARG were commissioned by the DHSSPS and the Department for Social Development to adapt the Sheffield Model to NI in order to appraise the potential impact of a range of alcohol pricing policies. The present report represents the results of this work. Estimates from the Northern Ireland (NI) adaptation of the Sheffield Alcohol Policy Model - version 3 - (SAPM3) suggest: 1. Minimum Unit Pricing (MUP) policies would be effective in reducing alcohol consumption, alcohol related harms (including alcohol-related deaths, hospitalisations, crimes and workplace absences) and the costs associated with those harms. 2. A ban on below-cost selling (implemented as a ban on selling alcohol for below the cost of duty plus the VAT payable on that duty) would have a negligible impact on alcohol consumption or related harms. 3. A ban on price-based promotions in the off-trade, either alone or in tandem with an MUP policy would be effective in reducing alcohol consumption, related harms and associated costs. 4. MUP and promotion ban policies would only have a small impact on moderate drinkers at all levels of income. Somewhat larger impacts would be experienced by increasing risk drinkers, with the most substantial effects being experienced by high risk drinkers. 5. MUP and promotion ban policies would have larger impacts on those in poverty, particularly high risk drinkers, than those not in poverty. However, those in poverty also experience larger relative gains in health and are estimated to marginally reduce their spending due to their reduced drinking under the majority of policies åÊ

The Efficacy of Minimum Unit Pricing, Fiscal and other Pricing Public Policies for Alcohol

This report was commissioned from CJP Consultants Limited by the Department of Health. It sets out the issues relating to hazardous and harmful consumption of alcohol in Ireland. It looks at the international experience and policy response;and makes recommendations about how the problems caused by hazardous alcohol consumption can and should be tackled in Ireland. Click here to download Report on The Efficacy of Minimum Unit Pricing, Fiscal and other Pricing Public Policies for Alcohol PDF 1MB

Usage-Based versus Measure-Based Unit Pricing: Is There a Better Index of Value?

In many product categories, unit prices facilitate price comparisons across brands and package sizes; this enables consumers to identify those products that provide the greatest value. However in other product categories, unit prices may be confusing. This is because there are two types of unit pricing, measure-based and usage-based. Measure-based unit prices are what the name implies; price is expressed in cents or dollars per unit of measure (e.g. ounce). Usage-based unit prices, on the other hand, are expressed in terms of cents or dollars per use (e.g., wash load or serving). The results of this study show that in two different product categories (i.e., laundry detergent and dry breakfast cereal), measure-based unit prices reduced consumers’ ability to identify higher value products, but when a usage-based unit price was provided, their ability to identify product value was increased. When provided with both a measure-based and a usage-based unit price, respondents did not perform as well as when they were provided only a usage-based unit price, additional evidence that the measure-based unit price hindered consumers’ comparisons. Finally, the presence of two potential moderators, education about the meaning of the two measures and having to rank order the options in the choice set in terms of value before choosing, did not eliminate these effects.

IPH response to DSD consultation on proposed changes to the law regulating sale and supply of alcohol

This consultation was intended to test public opinion on proposed changes to the law regulating the sale of alcohol in Northern Ireland. The proposed changes relate to-    regulating the sale of alcohol in supermarkets and off-sales premises-    regulating the sale of alcohol in pubs and other on-sales premises-    regulating private member clubs-    codes of practice Key points from IPH response -    IPH welcomes the opportunity to submit our views on this review of regulations related to the sale and supply of alcohol in Northern Ireland. IPH notes that the reduction of alcohol-related harm is a stated aim of the review. -    International evidence clearly supports the role of regulation of the sale and supply of alcohol in reducing alcohol consumption and in reducing alcohol-related harm. -    The consultation document does not present any meaningful estimation of the scale or nature of potential positive or negative effects on alcohol-related harm arising from the proposed changes. On this basis, IPH recommends that a Health Impact Assessment should be conducted on the proposed regulations. -    IPH shares the concerns raised in respect of increases in the number of people drinking at home and the availability of large volumes of low cost alcohol in supermarkets. In this regard, we welcome the proposals to enhance the regulation of sale of alcohol in mixed trading premises by more stringent structural separation measures and restricted advertising. -    IPH wishes to emphasise the importance of the work underway to explore the introduction of minimum unit pricing of alcohol on the island of Ireland as this measure will be significant in enhancing the proposals on regulating sale of alcohol in mixed trading premises -    In light of evidence of increased alcohol consumption and harm associated with increased hours and days of sale of alcohol, IPH does not support the proposal to introduce additional late opening hours or extended drinking up time.

IPH response to the DSD consultation on regulations to prohibit or restrict irresponsible promotions of alcohol in Northern Ireland

IPH responded to the Department for Social Development consultation on the banning of certain promotions that may encourage irresponsible and excessive drinking. The consultation relates to regulations Article 57A(2)(d) of the 1996 Licensing Order “involving the supply of unlimited amounts of intoxicating liquor for a fixed charge (including any charge for entry to the premises)” and Article 31A(2)(d) of the Registration of Clubs Order “restricting the price at which the holder of a licence or the licence holder’s servant or agent may sell on licensed premises a package containing two or more intoxicating liquor products”. IPH welcomes this consultation and supports the Department’s proposals to restrict promotions that involve the supply of unlimited amounts of intoxicating liquor for a fixed charge. IPH welcomes this tangible action linked to the renewed commitment to tackling alcohol-related harms on the island of Ireland set out in the Steering Group Report on a National Substance Strategy (Dept of Health, 2012) and in the New Strategic Direction on Alcohol and Drugs (DHSSPS, 2011). IPH considers that irresponsible alcohol promotions can contribute to this burden of physical and mental ill-health, accidental and non-accidental injury and other harms associated with excessive alcohol consumption in Northern Ireland. As previously stated in the IPH submissions on the introduction of powers to prohibit or restrict irresponsible alcohol promotions (Dec, 2010), IPH considers that the issues of promotion and price are inter-related. The effectiveness of the proposed restrictions could be reinforced by the expeditious introduction of minimum unit pricing of alcohol on an all-island basis.

The families and friends of heavy drinkers: Caught in the cross-fire of policy change?

INTRODUCTION AND AIMS: Research highlights the need to better understand the impact of alcohol-related harm on families and communities. Scottish policy initiatives to reduce alcohol consumption and alcohol-related harm include the planned introduction of a minimum unit price for alcohol. We aimed to explore existing and proposed changes in alcohol policy, from the standpoint of heavy drinkers, through accounts of their involvement and repercussions for family and friends. DESIGN AND METHODS: Interviews were conducted with 20 heavy drinkers, recruited from hospital alcohol treatment centres in Scotland's two largest cities. Participants were part of a larger longitudinal mixed methods study. Interviews explored experiences of alcohol-related harm and the impact, or potential impact, of alcohol policy changes on drinking patterns, risk-taking, consumption and wellbeing. Data coded for 'family and friends' were thematically analysed using a constant comparison method. RESULTS: Family and friends were portrayed as important for aiding moderation and abstinence, but more often for sustaining continued heavy drinking. Heavy drinkers with complex needs and those living in deprived communities suggested that increased alcohol prices could exacerbate the detrimental effect on their health and social circumstances, and that of their family, should their consumption remain excessive. DISCUSSION AND CONCLUSIONS: Population level policy initiatives to reduce alcohol consumption, such as minimum unit pricing, will impact on the families and social networks of heavy drinkers in addition to the drinker. The most vulnerable may be affected disproportionately. Alcohol policy changes and evaluations need to consider consequences for drinkers, families and communities. [O'May F, Whittaker A, Black H, Gill J. The families and friends of heavy drinkers: Caught in the cross-fire of policy change?

Effects of unit - based pricing on the waste collection demand : a meta - regression analysis

We perform a meta - analysis of 21 studies that estimate the elasticity of the price of waste collection demand upon waste quantities, a prior literature review having revealed that the price elasticity differs markedly. Based on a meta - regression with a total of 65 observations, we find no indication that municipal data give higher estimates for price elasticities than those associated with household data. Furthermore, there is no evidence that treating prices as exogenous underestimates the price elasticity. We find that much of the variation can be explained by sample size, the use of a weight - based as opposed to a volume - based pricing system, and the pricing of compostable waste. We also show that price elasticities determined in the USA and point estimations of elasticities are more elastic, but these effects are not robust to the changing of model specifications. Finally, our tests show that there is no evidence of publication bias while there is some evidence of the existence of genuine empirical effect.

The system of Transfer Pricing in a multinational

Transfer prices are used by the majority of firms worldwide when intermediate products or services are transferred within the same organization. These prices are reported as revenue for the selling entity (division, unit, department etc.) and as cost for the buying entity. Nevertheless, transfer prices lead to many disputes among managers in the same organization as transfer prices influence the performance of their entities. In cross-border transactions, transfer prices can be used by firms to reduce corporate taxes and thus, increase total firm profits. In order to fight against this firms’ practice, tax authorities require firms to establish a transfer pricing system in accordance with OECD1 Transfer Pricing Guidelines.

Aumann-Shapley Pricing : A Reconsideration of the Discrete Case

We reconsider the following cost-sharing problem: agent i = 1,...,n demands a quantity xi of good i; the corresponding total cost C(x1,...,xn) must be shared among the n agents. The Aumann-Shapley prices (p1,...,pn) are given by the Shapley value of the game where each unit of each good is regarded as a distinct player. The Aumann-Shapley cost-sharing method assigns the cost share pixi to agent i. When goods come in indivisible units, we show that this method is characterized by the two standard axioms of Additivity and Dummy, and the property of No Merging or Splitting: agents never find it profitable to split or merge their demands.

A unit root test based on partially adaptive estimation

This paper constructs a unit root test baseei on partially adaptive estimation, which is shown to be robust against non-Gaussian innovations. We show that the limiting distribution of the t-statistic is a convex combination of standard normal and DF distribution. Convergence to the DF distribution is obtaineel when the innovations are Gaussian, implying that the traditional ADF test is a special case of the proposed testo Monte Carlo Experiments indicate that, if innovation has heavy tail distribution or are contaminated by outliers, then the proposed test is more powerful than the traditional ADF testo Nominal interest rates (different maturities) are shown to be stationary according to the robust test but not stationary according to the nonrobust ADF testo This result seems to suggest that the failure of rejecting the null of unit root in nominal interest rate may be due to the use of estimation and hypothesis testing procedures that do not consider the absence of Gaussianity in the data.Our results validate practical restrictions on the behavior of the nominal interest rate imposed by CCAPM, optimal monetary policy and option pricing models.

Optimal Contract Pricing of Distributed Generation in Distribution Networks

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

Optimal contract pricing of distributed generation under a competitive framework

A bilevel programming approach for the optimal contract pricing of distributed generation (DG) in distribution networks is presented. The outer optimization problem corresponds to the owner of the DG who must decide the contract price that would maximize his profits. The inner optimization problem corresponds to the distribution company (DisCo), which procures the minimization of the payments incurred in attending the expected demand while satisfying network constraints. The meet the expected demand the DisCo can purchase energy either form the transmission network through the substations or form the DG units within its network. The inner optimization problem is substituted by its Karush- Kuhn-Tucker optimality conditions, turning the bilevel programming problem into an equivalent single-level nonlinear programming problem which is solved using commercially available software. © 2010 IEEE.

Non-Linear Pricing in Imperfectly Competitive Markets

This thesis is dedicated to the analysis of non-linear pricing in oligopoly. Non-linear pricing is a fairly predominant practice in most real markets, mostly characterized by some amount of competition. The sophistication of pricing practices has increased in the latest decades due to the technological advances that have allowed companies to gather more and more data on consumers preferences. The first essay of the thesis highlights the main characteristics of oligopolistic non-linear pricing. Non-linear pricing is a special case of price discrimination. The theory of price discrimination has to be modified in presence of oligopoly: in particular, a crucial role is played by the competitive externality that implies that product differentiation is closely related to the possibility of discriminating. The essay reviews the theory of competitive non-linear pricing by starting from its foundations, mechanism design under common agency. The different approaches to model non-linear pricing are then reviewed. In particular, the difference between price and quantity competition is highlighted. Finally, the close link between non-linear pricing and the recent developments in the theory of vertical differentiation is explored. The second essay shows how the effects of non-linear pricing are determined by the relationship between the demand and the technological structure of the market. The chapter focuses on a model in which firms supply a homogeneous product in two different sizes. Information about consumers' reservation prices is incomplete and the production technology is characterized by size economies. The model provides insights on the size of the products that one finds in the market. Four equilibrium regions are identified depending on the relative intensity of size economies with respect to consumers' evaluation of the good. Regions for which the product is supplied in a single unit or in several different sizes or in only a very large one. Both the private and social desirability of non-linear pricing varies across different equilibrium regions. The third essay considers the broadband internet market. Non discriminatory issues seem the core of the recent debate on the opportunity or not of regulating the internet. One of the main questions posed is whether the telecom companies, owning the networks constituting the internet, should be allowed to offer quality-contingent contracts to content providers. The aim of this essay is to analyze the issue through a stylized two-sided market model of the web that highlights the effects of such a discrimination over quality, prices and participation to the internet of providers and final users. An overall welfare comparison is proposed, concluding that the final effects of regulation crucially depend on both the technology and preferences of agents.

Revisiting the determinants of unit values

This paper studies the issue of how traded quantities affect trade prices, which has been relatively unexplored in the trade literature. By reproducing previous literatures' regressions which are based on the general equilibrium trade theories, incorporating the role of traded quantities, this paper shows a possibility of prevalence of the second degree price discrimination (quantity discount) in international trade, rather than the pricing behaviour of the general equilibrium theories.

Pricing-to-market for UK export sector

This thesis investigates the pricing-to-market (PTM) behaviour of the UK export sector. Unlike previous studies, this study econometrically tests for seasonal unit roots in the export prices prior to estimating PTM behaviour. Prior studies have seasonally adjusted the data automatically. This study’s results show that monthly export prices contain very little seasonal unit roots implying that there is a loss of information in the data generating process of the series when estimating PTM using seasonally-adjusted data. Prior studies have also ignored the econometric properties of the data despite the existence of ARCH effects in such data. The standard approach has been to estimate PTM models using Ordinary Least Square (OLS). For this reason, both EGARCH and GJR-EGARCH (hereafter GJR) estimation methods are used to estimate both a standard and an Error Correction model (ECM) of PTM. The results indicate that PTM behaviour varies across UK sectors. The variables used in the PTM models are co-integrated and an ECM is a valid representation of pricing behaviour. The study also finds that the price adjustment is slower when the analysis is performed on real prices, i.e., data that are adjusted for inflation. There is strong evidence of auto-regressive condition heteroscedasticity (ARCH) effects – meaning that the PTM parameter estimates of prior studies have been ineffectively estimated. Surprisingly, there is very little evidence of asymmetry. This suggests that exporters appear to PTM at a relatively constant rate. This finding might also explain the failure of prior studies to find evidence of asymmetric exposure in foreign exchange (FX) rates. This study also provides a cross sectional analysis to explain the implications of the observed PTM of producers’ marginal cost, market share and product differentiation. The cross-sectional regressions are estimated using OLS, Generalised Method of Moment (GMM) and Logit estimations. Overall, the results suggest that market share affects PTM positively.Exporters with smaller market share are more likely to operate PTM. Alternatively, product differentiation is negatively associated with PTM. So industries with highly differentiated products are less likely to adjust their prices. However, marginal costs seem not to be significantly associated with PTM. Exporters perform PTM to limit the FX rate effect pass-through to their foreign customers, but they also avoided exploiting PTM to the full, since to do so can substantially reduce their profits.