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

Consumer response to unit pricing for mobile telephony

This project is a co-operative study between ACCAN and Deakin University. It focuses on Unit Pricing, the practice of displaying the price of goods or services based on a standard quantity, to allow a direct comparison between competitive offers. This study aimed at gauging whether the new unit pricing information for mobile phone contracts assists consumers in assessing and comparing the value provided across alternative contracts within and between suppliers. Some 24 in-depth interviews were conducted with consumers who had recently bought or renewed a mobile phone contract.
The research showed that most consumers could use unit pricing information and some found it useful. Where consumers’ plans had unlimited or infinite capacity, unit pricing information was not relevant. Many consumers preferred voice allowances to be expressed in minutes, rather than in dollar allowances. Data was the most problematic category, as consumers typically had only limited understanding of the amount of data that various applications used. Most did have a broad understanding of what total capacity in data they would need, typically expressed in gigabytes.
Consumers commonly sought simplicity in deciding on which plan they would purchase or renew. A key issue for consumers was not “going over”, that is not exceeding their call, text or data allowances. For that reason, they were prepared to choose a plan that commonly resulted in them not using their full allowances each month. Some consumers used Apps on their smartphones to monitor their usage. Not all consumers had experienced advisory messages about nearing the limits of their plan’s allowances.
The Report recommended that:

R1. Unit pricing should be maintained
R2. Where unit pricing is provided for call costs, these should be expressed in terms of a one-minute call.
R3 Unit pricing for data should be expressed in terms of gigabytes or part thereof.
R4 In advertising mobile phone plans and at point of sales, customers should be provided with three levels of information – 1) overall plan features, 2) unit pricing information and 3) a data calculator.
R5 Level 2 and 3 information should be provided in a standard format across the industry, enabling consumers to make ready comparisons between plans and between competitive offers from different providers.
R6. Continuing public education is needed.
R7. Warnings about going over should always include the date when the allowance period ends and tell consumers what the rate will be if they “go over” based on the Level 2 information.
R8. The Consumer Protection Code should be reviewed in the light of these findings and recommendations.

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.

Perceptions of mobile plan unit pricing and terms and conditions

Purpose: The purpose of this paper is to test the efficacy of disclosing unit pricing and increasing the type size of complex terms and conditions in advertising. This is in line with recommendations made by global telecommunications regulators, including in Australia, to protect consumers in selecting mobile plans.

Design/methodology/approach: The authors employed a 2 (unit price disclosed: no, yes)×3 (type size: nine-, 12- and 15-point terms and conditions) full factorial, between-subjects experimental design using a scenario and fictional advertisements for 24-month mobile phone plans. This was complemented by 24 in-depth interviews with consumers who had recently purchased “real” plans and their assessment of these.

Findings: Extra information in the form of unit pricing has a positive influence on consumers’ value perceptions, but not on perceived confusion or risk. Presenting complex terms and conditions in larger type increases consumers’ perceived confusion and risk, but not perceived value, as consumers have difficulty understanding the complicated information presented.

Research limitations/implications: This study focused on a single country market for one product type of mobile phones, using a limited range of mobile plans. Practical implications: Public policymakers and providers are advised to pre-test planned changes to advertising’s informational content prior to implementation to identify the efficacy of proposed changes to protect consumers. Consumers may also need to be educated to accurately interpret complex plans.

Originality/value: The study contributes to the domain of informational content in advertising as a form of consumer protection. The effect of unit pricing and larger type for terms and conditions on consumer perceptions has not been examined previously in complex product settings.

The effect of consumer education on unit price usage : an early exploratory study

Consumer awareness and usage of Unit Price (UP) information continues to hold academic interest. Originally designed as a device to enable shoppers to make comparisons between grocery products, it is argued consumers still lack a sufficient understanding of the device. Previous research has tended to focus on product choice, effect of time, and structural changes to price presentation. No studies have tested the effect of UP consumer education on grocery shopping expenditure. Supported by distributed learning theories, this is the first study to condition participants over a twenty week period, to comprehend and employ UP information while shopping. A 3x5 mixed factorial design was employed to collect data from 357 shoppers. A 3 (Control, Massed, Spaced) x 5 (Time Point: Week 0, 5, 10, 15 and 20) mixed factorial analysis of variance (ANOVA) was performed to analyse the data. Preliminary results revealed that the three groups differed in their average expenditure over the twenty weeks. The Control group remained stable across the five time points. Results indicated that both intensive (Massed) and less intensive (Spaced) exposure to UP information achieved similar results, with both group reducing average expenditure similarly by Week 5. These patterns held for twenty weeks, with conditioned groups reducing their grocery expenditure by over 10%. This research has academic value as a test of applied learning theories. We argue, retailers can attain considerable market advantages as efforts to enhance customers’ knowledge, through consumer education campaigns, can have a positive and strong impact on customer trust and goodwill toward the organisation. Hence, major practical implications for both regulators and retailers exist.

Consumer decision making in telecommunications

The data analyses consumers' decision making processes in the telecommunications market. The dataset includes both autoethnographic videographies and experimental quantitative data.

The data comprises an extended autoethnographic methodology with 22 participants. Participants recorded video diaries, written diaries and extended interviews about their experiences looking for a mobile phone service. It also includes a quantitative experiment with 517 participants to examine, under close to real conditions, how consumers make decisions. This involved advertising and sales scenarios looking at the effect of bundling and limited time offers in advertising on consumer perceptions and purchase intentions; the effect of unit pricing and the presentation of terms and conditions information in advertising on consumer perceptions and purchase intentions; and the effect of information and the mode of its presentation in personal selling on consumers’ perceptions.

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?

Conditional coskewness and asset pricing

We explore the empirical usefulness of conditional coskewness to explain the cross-section of equity returns. We find that coskewness is an important determinant of the returns to equity, and that the pricing relationship varies through time. In particular we find that when the conditional market skewness is positive investors are willing to sacrifice 7.87% annually per unit of gamma (a standardized measure of coskewness risk) while they only demand a premium of 1.80% when the market is negatively skewed. A similar picture emerges from the coskewness factor of Harvey and Siddique (Harvey, C., Siddique, A., 2000a. Conditional skewness in asset pricing models tests. Journal of Finance 65, 1263–1295.) (a portfolio that is long stocks with small coskewness with the market and short high coskewness stocks) which earns 5.00% annually when the market is positively skewed but only 2.81% when the market is negatively skewed. The conditional two-moment CAPM and a conditional Fama and French (Fama, E., French, K., 1992. The cross-section of expected returns. Journal of Finance 47,427465.) three-factor model are rejected, but a model which includes coskewness is not rejected by the data. The model also passes a structural break test which many existing asset pricing models fail.

The legal framework for Australia's carbon pricing mechanism : a critique

As part of the Australian Government’s Clean Energy Plan, the Government has attempted to harness the legal innovation of the tradeable emissions unit, within a capped carbon trading system, to reduce greenhouse gas emissions. Such an approach promises to send a price signal to the market which will influence emitting behaviours and reduce our emissions in a cost-effective manner. However, if the carbon trading scheme is to successfully achieve cost-effective emissions reductions then the carbon market must be supported by an appropriate legal framework. This paper will consider the key features of the Australian Carbon Pricing Mechanism, including the Carbon Farming Initiative, and critique whether it has all the hallmarks of an effective legal framework to reduce Australia’s net greenhouse gas emissions. The likely future of the trading scheme, following the 2013 elections, will also be addressed.

The Day of the Week Effect and Option Pricing - A Study of the German Option Market

The use of different time units in option pricing may lead to inconsistent estimates of time decay and spurious jumps in implied volatilities. Different time units in the pricing model leads to different implied volatilities although the option price itself is the same.The chosen time unit should make it necessary to adjust the volatility parameter only when there are some fundamental reasons for it and not due to wrong specifications of the model. This paper examined the effects of option pricing using different time hypotheses and empirically investigated which time frame the option markets in Germany employ over weekdays. The paper specifically tries to get a picture of how the market prices options. The results seem to verify that the German market behaves in a fashion that deviates from the most traditional time units in option pricing, calendar and trading days. The study also showed that the implied volatility of Thursdays was somewhat higher and thus differed from the pattern of other days of the week. Using a GARCH model to further investigate the effect showed that although a traditional tests, like the analysis of variance, indicated a negative return for Thursday during the same period as the implied volatilities used, this was not supported using a GARCH model.

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.