Changes In Social Welfare Research Articles

Monopoly Pricing Under a Medicaid-Style Most-Favored-Customer Clause and its Welfare Implication

To control Medicaid’s increasing expenditure on reimbursement of outpatient prescription drugs, the Omnibus Budget Reconciliation Act of 1990 included a rebate program that featured a most favored customer (MFC) clause. This clause guarantees that Medicaid gets a fixed rebate on each unit of purchase by Medicaid consumers. The rebate is calculated as the difference between the minimum price and the average manufacturer price (minimum price provisioning or MPP) or a proportion of the average manufacturer price (average price provisioning or APP). We characterize the optimal pricing strategy of a third-degree price discriminating monopolist in response to the imposition of MPP or APP rules. Under MPP, the minimum price gross of rebate always increases whereas prices gross of rebate in at least some of the markets always decrease. In contrast, under APP, these prices may move in the same direction in all markets, with all increasing in some circumstances and all decreasing in others. We also examine the effects of such provisions on social welfare and provide some useful sufficient conditions for directional changes in social welfare. For example, imposing MPP increases social welfare if it results in higher aggregate demand. Beyond the Medicaid setting, minimum price policies are relevant in a number of applications, including external referencing in drug pricing, price protection in long- term trading contracts and shifts of consumers between markets. We analyze a modified version of our Medicaid MPP model suitable for such settings.

Impact of Two-Part Pricing Scheme on Social Welfare for Congested Metropolitan Expressway Networks

Road pricing has proved to be an effective means of managing traffic demand, reducing the environmental impact of road traffic, and obtaining revenues. The model employed in this paper is based on the social marginal cost economic theory for assessing the total change in social welfare by means of different indicators. This model has the advantage of comparing different road-pricing systems apart from the traditional ones (simple schemes), such as cordon and kilometric toll. In this case a two-part tariffs scheme has been analyzed. The results show that to optimize the current road capacity, the two-part optimal prices must be determined (optimal combination of access toll and kilometric charge). This will allow a higher increase in social welfare. This increase is obtained by internalizing the congestion social cost (reducing deadweight loss) when diminishing demand to an optimum amount. This model has been applied on the expressway networks of the metropolitan area of Barcelona, Spain. Conclusions show that if demand is reduced by 10%, a favorable change in social welfare takes place, which is 96% higher than if demand is reduced by only 5%. However, if demand is reduced by 15%, such change in social welfare increases by only 20% compared with a 10% demand reduction scenario.

Wealth Accounting, Exhaustible Resources and Social Welfare

The empirical literature on natural resource accounting uses methods which implicitly or explicitly entail measuring changes in total resource asset value when an exhaustible resource is depleted. In contrast, the growth theoretic literature on saving, social welfare and sustainable development is built upon a central finding, that the change in real wealth (as measured by net or ‘genuine’ saving) is proportional to the change in social welfare. We show that the change in total wealth exceeds the change in real wealth in optimal and non-optimal models of resource-extracting economies. This suggests that the change in social welfare is over-estimated when the change in total resource asset value is used as the measure of depletion. A simple empirical exercise, using World Bank data on ‘adjusted net saving’, reinforces the results from theory.

Gasoline subsidy and consumer surplus in the Islamic Republic of Iran

AbstractGasoline subsidy in Islamic Republic of Iran is a controversial issue. While a group of politicians believe that its merits outweigh its costs, some economists believe that its harms exceed the benefits. A new approach is taken to study the changes in social welfare because of gasoline subsidies for the period 1987–2005. The findings indicate that the consumers’ surplus has declined over time for a representative consumer. A large population growth, inflation and non‐substitutability of gasoline with other goods might have caused this phenomenon.

Reunification of Korea: a social development approach to resolving the Korean conflict1

This paper deals with Korea, a nation divided for more than half a century, and aims to shed some light on the type of social welfare regime that will need to come to the fore in the process of gradual reunification, whenever it inevitably occurs. Reunification will create changes in mobility, urbanization, employment, housing, healthcare, and social welfare in general. Many of the basic facets of society will be redrawn and rearranged. A comparative case study analysis between Germany and Korea reveals that an unbearable social cost could challenge the future of reunified Korea if it were to follow Germany's rapid market-based absorption model. The main argument is that these negative socio-economic consequences can be minimized if the process of change is gradual such that it maximizes freedom and minimizes dehumanization. This social development approach to reunification suggests building a common social welfare policy regime that ensures social rights as an empowerment strategy.

Changes in social welfare and sustainability: Theoretical issues and empirical evidence

We analyze the time derivative of a Ramsey–Koopmans social welfare function (R–K SWF), as an indicator of genuine investment and current change in social welfare (CSW) conditions, when feedback or arbitrary rules are used for selecting policy variables in non-optimizing economies. When policy variables are selected arbitrarily, their accounting prices should determine current CSW in addition to the accounting prices of the economy's assets and genuine investment should be adjusted accordingly. We use our theoretical framework to characterize CSW conditions for non-optimizing economies, based on direct estimation of accounting prices. We use our theoretical model to provide empirical evidence regarding the CSW conditions for the Greek economy.

Gasoline demand, pricing policy and social welfare in the Islamic Republic of Iran

AbstractThis study estimates the gasoline demand function for the Islamic Republic of Iran, using the structural time series model over the period 1968‐2002, and uses it to estimate the change in social welfare for 2003 and 2004, of a higher gasoline price policy. It is found that short‐ and long‐run demand price elasticities are inelastic, although the response is greater in the long run. Hence, social welfare is estimated to fall because of the higher gasoline price (ceteris paribus). However, allowing all variables in the model to change, social welfare is estimated to increase since the changes in the other variables more than compensate for the negative effects of the policy.

Hub-and-spoke network alliances and mergers: Price-location competition in the airline industry

This paper presents a framework to analyze global alliances and mergers in the airline industry under competition. The framework can help airlines identify partners and network structures, and help governments predict changes in social welfare before accepting or rejecting proposed mergers or alliances. The research combines profit-maximizing objectives to cost-based network design formulations within a game theoretic framework. The resulting analysis enables merging airlines to choose appropriate international hubs for their integrated network based on their own and their competitors’ costs and revenues in the form of best response functions. The results of an illustrative example suggest that some mergers may be more successful than others and optimal international gateway choices change according to the number of competitors remaining in the market. Furthermore, although the pressure on airlines would suggest a strong preference for mergers or alliances, perhaps surprisingly, the solution outcomes whereby all airlines merge or ally are not equilibria in the overall game.

Investiční rozhodování a veřejně prospěšné projekty

Hodnocení investic veřejné sféry je třeba zkoumat napříč spektrem ekonomických disciplin. V naší hospodářské praxi lze v této oblasti narazit na řadu přetrvávajících iracionálních názorů nekorespondujících se soudobou ekonomickou teorií. Pro zvýšení efektivity společenského investičního rozhodování je třeba kvalifikovat řadu tržních i veřejných subjektů a poskytnout jim kvalitní, teoreticky bezrozporný rámec pro hodnocení veřejných investičních projektů, jejichž smyslem není maximalizace shareholder value, ale růst blahobytu společnosti co nejvhodnější alokací vzácných zdrojů mezi konkurující si způsoby určení. Takovouto metodou je Cost-Benefit Analysis, která kvantifikuje v peněžních jednotkách hodnotu všech dopadů tohoto investičního projektu na členy společnosti. Základními koncepčními předpoklady jsou propojení mezi alokační efektivitou a hodnotu projektu, vymezení základního principu ohodnocení výstupů na bázi Willingness-to-Pay (WTP) a ohodnocení vstupů do projektu na úrovni oportunitních nákladů, závislost WTP na vymezení společnosti a antropocentrická povaha CBA. Mikroekonomickým odrazem čistých benefitů plynoucích z dopadů projektu je změna společenského přebytku. Ohodnocení dopadů projektu je reálně závislé na tom, zda pro ně existuje efektivní trh, neefektivní trh nebo neexistuje žádný trh. Výsledně získané socioekonomické toky jsou převedeny na jejich současnou hodnotu společenskou diskontní sazbou a následně je z nich vypočtena NPV.

Preference Heterogeneity and Willingness to Pay for Travel Time Savings

We examined different model specifications to detect the presence of preference heterogeneity in a mode choice context. The specification that worked best allows for both systematic and random variations in tastes, with parameters obtained at the individual level using Bayesian methods. Subjective values of travel time (SVT) and expected individual compensated variation were derived and aggregated to obtain measures of social welfare. Results suggest that the benefit measures, both at the individual and at the social level, are sensitive to preference heterogeneity assumptions. SVT and welfare changes derived from travel time reductions could be underestimated if the traditional assumption of taste homogeneity is made (we detected differences up to 30% in both types of measures). We also obtained an empirical value for the error made when evaluating changes in social welfare using an approximation of the expected individual compensated variation (expressed as a function of individual SVT) rather than its exact expression.

Third‐Degree Price Discrimination, Consumption Externalities and Social Welfare

This paper analyses monopolistic third‐degree price discrimination in the presence of consumption externalities within two separate markets. Assuming linear inverse demands, we investigate an associated change in social welfare (the sum of the consumers' surpluses and the producer's profit) with the regime change from uniform pricing to price discrimination when both markets are open under either regime. It is shown that social welfare can improve even if total output is unaffected by the regime change. Moreover, it is possible that the sum of the consumers' surpluses also increases.

Genetic influences on life span and survival among elderly African-Americans, Caribbean Hispanics, and Caucasians.

An investigation of the genetic influences on life span and survival was conducted among elderly African-Americans, Caribbean Hispanics, and Caucasians Medicare recipients (ages 65-104 years). Family history information on 13,161 parents and siblings was obtained. Heritability of life span varied by the age and by ethnic group being lowest for African-Americans. We recalculated the heritability coefficients for life span including only probands and their siblings, but the differences across ethnic groups persisted. In contrast the heritability of survival was more similar across ethnic groups but was similar to that for life span. Heritability coefficients for survival in probands and their siblings revealed little difference between ethnic groups and suggested that as much as 35% of the variation in survival may be genetically influenced. These results indicate that life span and survival are genetically influenced. Comparisons across generations and ethnic groups indicate that changes in environmental hygiene, social welfare, and health care systems are significant contributors to life span and survival, but genetic influences are also important. Identifying the genes associated with life span and survival will provide insight into how the genes interact with environment to influence aging in humans.

Can Developmental Social Welfare Change an Unfair World?

Developmental social welfare and developmental social work have been on the agenda in South Africa since liberation, but little has been reported. Founded in the historical context of radical community work in the freedom ght, developmental social work has found ways to empower groups and communities, in spite of an economic policy that does little to support it.

Between Sanctity and Depravity: Law and Human Nature in Martin Luther's Two Kingdoms

Martin Luther (1483-1546) was one of the great revolutionaries in the Western legal tradition. The Protestant Reformation that he inaugurated produced fundamental changes in legal theory, political organization, church-state relations, marriage, education, and social welfare. These changes were inscribed on the legal and confessional systems of that period. They have had an enduring effect on modern public, private, and criminal law, and on modern ideals of liberty, equality, and dignity. This essay surveys these sweeping changes that Luther's Reformation wrought, and then analyzes more closely the sources of inspiration and integration of these reforms in Luther's famous theory of the two kingdoms.

Enterprise Zones, Firm Attraction and Retention: A Study of the California Enterprise Zone Program

In the following paper the impact on the number of firms is estimated for the California Enterprise Zone Program from 1987 to 1991, the years of operation for the first series of enterprise zones in the state. Data for the estimates for the change in the number of firms derived from the County Business Pattern data of the U.S. Census Bureau. the relative change in the number of firms is estimated using a Two-Way Fixed Effects Model. the results indicate that some types of firms in terms of their size as measured by their number of employees and industry type may indeed have produced some positive employment effects for those enterprise zones considered in the study. Caution should be taken however in placing too much weight on the results of the study given the number of theoretical and empirical issues that can create doubt with respect to the efficacy of enterprise zone programs in their ability to provide net changes in social welfare for economic distressed areas.

Estimating the benefits of pollution reduction on agricultural yields: Taiwan's air pollution emission fees program

Taiwan's implementation of the 1997 Air Pollution Emissions Fees Program will conceivably lead to long-term reductions in pollution emissions. The purpose of this paper is to estimate the benefits to Taiwan from the expected reduction in crop losses as a direct result of such a decrease in air pollution. We employ a demand–supply framework for rice production to estimate the change in social welfare resulting from changes in the concentration of certain pollutants in the atmosphere. Our empirical results show that, in the year 1997, social welfare increments resulting from the decline in sulfur dioxide concentrations in the atmosphere ranged between US$ 946,200 and US$ 2,435,800. Meanwhile, during the same period, the increase in social welfare due to the decline in the ozone concentration in the atmosphere ranged between US$ 838,100 and US$ 1,927,000. The average benefit from the reduction in both sulfur dioxide and ozone concentrations is calculated to be between US$ 2.67 and US$ 6.86 per acre (for sulfur dioxide), and from US$ 2.36 to US$ 5.43 per acre (for ozone).

THE ORDINAL AND CARDINAL JUDGMENT OF SOCIAL WELFARE CHANGES IN SINGAPORE, 1982?99

This paper analyzes the changes in social welfare in Singapore using both cardinal and ordinal measures. Labour Force Survey data published by the Manpower Research and Statistics, Department of the Ministry of Manpower, Singapore are used. It is observed with the use of Lorenz dominance technique that social welfare in Singapore during 1999 is less than in 1991 while an unambiguous conclusion cannot be made on the welfare ranking of 1982 and 1991 or of 1982 and 1999. According to the generalized Lorenz dominance, 1999 ranks first; however, this criterion is also unable to make any unambiguous ranking between 1982 and 1991. The ranking based on Sen social welfare function shows a continuous increase in the social welfare in Singapore. But when a more general social welfare function is used a different ordering might occur.

Welfare State and Welfare Change

Welfare state The classic welfare state The restructured welfare state The modern welfare state Economic explanations Political explanations Organizational explanations Social explanations Welfare change Further Reading References Index.

Stakeholder Involvement in Coastal Decision-making Processes

This article discusses the current framework of coastal decision making which tends to exclude participation by individuals and those without a strong institutional representation. A distinction is drawn between institutional and local stakeholders to illustrate weaknesses in the existing decision framework. It is argued that particularly in the coastal environment, the relationship between changes in physical form and changes in social welfare is critical to understanding how decision making may engage more fully with local stakeholders and ultimately improve decision outcomes. A reordering of stakeholder engagement in decision systems at the coast is proposed and a framework is outlined which enhances the capacity of local stakeholders to influence decision making.

When the theory is not enough - valuation of forest resources with “efficiency” prices in practice

Summary In resource accounting, simple theoretical models built upon efficiency prices have been developed to capture changes in social welfare generated by natural resources. We examine whether changes in market stumpage prices, as proxies for efficiency prices, have actually reflected changes in the physical timber inventories in Finland and Sweden during the past seventy years. Cointegration and unit root tests show that no long-term equilibrium relationships exist between the timber prices and stocks. After identifying a potential reason for the result, the basic theoretical growth model is slightly elaborated to provide a more appropriate framework for measuring net domestic product for the forest sector.