Economic Evaluation Criteria Research Articles

Technological Adoption in Health Care – The Role of Payment Systems

Abstract This paper examines the incentive to adopt a new technology resulting from common payment systems, namely mixed cost reimbursement and DRG reimbursement. Adoption is based on a cost–benefit criterion. We find that retrospective payment systems require a large enough patient benefit to yield adoption, while under DRG-linked payment, adoption may arise in the absence of patients benefits when the differential reimbursement for the old vs new technology is large enough. Also, mixed cost reimbursement leads to higher adoption under conditions on the differential reimbursement levels and patient benefits. In policy terms, mixed cost reimbursement system may be more effective than a DRG payment system to induce technology adoption. Our analysis also shows that current economic evaluation criteria for new technologies do not capture the different ways payment systems influence technology adoption. This gives a new dimension to the discussion of prospective vs retrospective payment systems of the last decades centered on the debate of quality vs cost containment.

Examining the feasibility of an economic analysis of dyadic developmental psychotherapy for children with maltreatment associated psychiatric problems in the United Kingdom.

BackgroundChildren with maltreatment associated psychiatric problems are at increased risk of developing behavioural or mental health disorders. Dyadic Developmental Psychotherapy (DDP) was proposed as treatment for children with maltreatment histories in the USA, however, being new to the UK little is known of its effectiveness or cost-effectiveness. As part of an exploratory study, this paper explores the feasibility of undertaking economic analysis of DDP in the UK.MethodsFeasibility for economic analysis was determined by ensuring such analysis could meet key criteria for economic evaluation. Phone interviews were conducted with professionals (therapists trained and accredited or in the process of becoming accredited DDP practitioners).Three models were developed to represent alternative methods of DDP service delivery. Once appropriate comparators were determined, economic scenarios were constructed. Cost analyses were undertaken from a societal perspective. Finally, appropriate outcome measurement was explored through clinical opinion, literature and further discussions with clinical experts.ResultsThree DDP models were constructed: DDP Full-Basic, DDP Home-Based and DDP Long-Term. Two potential comparator interventions were identified and defined as Consultation with Carers and Individual Psychotherapy. Costs of intervention completion per case were estimated to be: £6,700 (DDP Full-Basic), £7,100 (Consultations with Carers), £7,200 (DDP Home-Based), £11,400 (Individual Psychotherapy) and £14,500 (DDP Long-Term). None of the models of service delivery were found to currently measure effectiveness consistently. The Strengths and Difficulties Questionnaire (SDQ) was deemed an appropriate primary outcome measure, however, it does not cover all disorders DDP intends to treat and the SDQ is not a direct measure of health gain. Inclusion of quality of life measurement is required for comprehensive economic analysis.ConclusionsEconomic analysis of DDP in the UK is feasible if vital next steps are taken to measure intervention outcomes consistently, ideally with a quality of life measurement. An economic analysis using the models constructed could determine the potential cost-effectiveness of DDP in the UK and identify the most efficient mode of service delivery.Electronic supplementary materialThe online version of this article (doi:10.1186/s12888-014-0346-0) contains supplementary material, which is available to authorized users.

Economic evaluation of honeybee breeding projects in Anbar province productive season (2011-20012)

Occupies honey production projects economic importance to being an important agricultural commodity produced in terms of food, medical and aimed atanalyzing the costs of study economic development. so this production of honeybees projects, data were obtained through the form of statistical data collection of apiaries owner > the number of cells in varied projects bees bred in anbar province, so it was tab beekeeping projects into three categories according of the number of cells in the project ,and containing category Alaoli (1-15) cell, the second category (15-30) and third cell (30-45) cell was calculated costs of cost and revenue and economic evaluation criteria of cost. Show that a valuable contribution to bee communities in the composition of capital cost of the promiscuous, occupies first place for the first category, second and third, as a percentage of 85%, 81%, and 79% respectively of the capital costs for the first category, second and third respectively. has indicated all the evaluation criteria to the profitability of beekeeping project and its ability to recover capital in a short period of time, as it was the time required to recover capital (1.09) and (1.5) and (2.1) for the three groups, respectively, and this mean that the first category able to recover the capital during a productive season and one second category and the third it may ability to recover capital after two seasons and that large size costs used. Either the simple rate of return was 48%, 38.7%, and 37.8% respectively, for the three categories. and show us the results of the evaluation criteria that the first category superior to other groups in a standard rate of return Albusat and capital recovery period , but large groups excel in the value-added criteria of gross and net addition to the standard net profit.

공공 건축물 지열에너지설비 적용에 따른 경제성 분석

The aim of this study to propose an efficient method in selecting the type of new and renewable energy applied in at the planning phase of buildings. This study applied geothermal energy facilities with high adaptability to buildings. This study considered the energy reduction and reduced cost by comparing the values with the energy consumption before applying of geothermal energy facilities. In order to propose more reliable criteria of economic evaluation, maintenance costs reflecting the replacement cycles and initial construction costs by drawings and specifications for installation facilities for practical geothermal energy based on construction statement for life-cycle cost analysis. The results will help to effectively select economic types of facilities for new and renewable energy of the planning phase of buildings.

Combined Multi-criteria Evaluation Stage Technique as an Agro Waste Evaluation Indicator for Polymeric Composites: Date Palm Fibers as a Case Study

The final features of natural fiber composites (NFCs) depend on the integrated characteristics of their constituents. In the industry today, natural agro waste fibers are evaluated using a limited number of criteria. In this work, a combined multi-criteria evaluation stage technique (CMCEST) is introduced as a simple efficient systematic indicator to enhance evaluation of the available natural agro wastes for polymeric composites. In this proposed technique, criteria affecting the proper selection of natural agro waste fibers were combined and divided into sequence stages as follows: single-evaluation-criterion (SEC), combined-double-evaluation-criterion (CDEC), combined-triple-evaluation-criterion (CTEC), etc. These stages are based on combined physical, mechanical, and economic evaluation criteria and can be extended to several further stages to include other beneficial characteristics. The effectiveness of this technique was demonstrated by evaluating coir, date palm, jute, hemp, kenaf, and oil palm fibers simultaneously. This combined evaluation criteria can lead to more informative decisions regarding selection of the most suitable fiber type for polymeric composites. The CMCEST enhancements can reveal new potential fiber types through better evaluation schemes, help achieve clearer indications of the capabilities of available agro wastes to enhance composites, and determine proper ecological waste management practices. Utilizing the proposed technique, the date palm fiber type was found to be quite promising due to beneficial characteristics revealed in CTEC, which provides a reasonable, cheap, and eco-friendly alternative material suitable for different applications.

Regime-switching models for exchange rates

This study provides evidence of periodically collapsing bubbles in the British pound to US dollar exchange rate in the post-1973 period. We develop two- and three-state regime-switching (RS) models that relate the expected exchange rate return to the bubble size and to an additional explanatory variable. Specifically, we consider six alternative explanatory variables that have been proposed in the literature as early warning indicators of a currency crisis. Our findings suggest that the RS models are, in general, more accurate than the Random Walk model in terms of both statistical and especially economic evaluation criteria for exchange rate forecasts. Our three-state RS model outperforms the two-state models and among the variables considered in our analysis, the short-term interest rate is the optimal variable, closely followed by imports. Results are more promising for one-month predictions and are qualitatively robust over sample spans. However, various robustness checks based on other exchange rates show that the optimal bubble measures and optimal predictors critically depend on the exchange rate.

Green building design solution for a kindergarten in Amman

Abstract Buildings in Jordan consume a significant amount of energy for heating, cooling and lighting purposes. Therefore, improving energy performance of the existing building in Jordan will significantly reduce national electrical consumption. In this work, an existed kindergarten in Amman was redesigned moving toward low energy performance, in doing so, the proposed design studied the use of applying lighting saving lamps, adding thermal insulation for walls, solar water heater for domestic hot water, on grid photovoltaic system as a source of electrical power to generate free solar electricity to cover the electrical load demand of the kindergarten, and finally a heat recovery system for the exhaust air in air conditioning and ventilation. Also, a suitable economic evaluation criterion was used to estimate the payback period of all systems applied. The results showed energy saving fluorescent lamps can reduce the energy use by about 15%, and reduce the heating load up to 10%, achieved by using thermal insulation and 61.3% by using exhaust air heat recovery system. Furthermore, suitable energy conversion using solar systems were sufficient to cover the domestic hot water heating demand to reach zero of domestic hot water heating energy during sunshine days. The annual reduction achieved in carbon dioxide (CO2) emission was 11.7 ton.

Economic Security as a Scientific Category: Theoretical and Methodological Aspect of Research

SUMMARYThis article is devoted to the problems of providing economic security in the Russian Federation. Methodological approaches to research of economic security characteristics as an economic category are considered in this article as independent scientific fields. The special attention is paid to the analysis of scientific definitions of economic security within each of methodological approaches. The definition “economic security” is concretized on the basis of differentiation this definition from a methodological position of the research. The analysis of economic security evaluation criteria is carried out, and also measures to its providing for Russia are systematized at the federal, the regional and the local levels.

Role of pharmacoeconomics in developing countries

Farmeconomia. Health economics and therapeutic pathways 2013; 14(1): 3-5ROLE OF PHARMACOECONOMICS IN DEVELOPING COUNTRIESMost developing countries lack policies that encourage the use of economic evaluations in medicine selection, be it for public funding, prioritization of aid or health insurance. In addition, relevant guidelines for reporting pharmacoeconomic analyses are not availa-ble in the majority of countries. Most deve-loping countries do have National Essential Medicine Lists to guide procurement and do -nation of medicines in the public sector [5]. However, the extent to which they employ the WHO’s evidence-based approach or other guidelines advocating the use of economic evaluation criteria in drug selection has not been established. Studies conducted by Mori et al. [6] and Gavaza et al. [7-9] in a number of countries in East, South and West Africa have documented a very low availability of pharmacoeconomic studies. Some of these studies were too poor in quality and narrow in scope to be appropriate as evidence to in-form decision-making. A similar trend has also been reported for developing countries in Asia [10-12].Another important observation is that, even when pharmacoeconomic studies are availa-ble, they are not systematically or consistently applied in decision-making [6,13]. Experien-ce shows that many pharmacoeconomic stu-dies were conducted long after the decisions had been made, sometimes simply to justify or disqualify those decisions, but more often for academic purposes. Cost-effectiveness studies of artemisinin-based combination therapies for malaria control, for example, were conducted in a number of countries af-ter the decisions to recommend the treatment in the respective malaria treatment guide-lines had already been made [14-16]. Low availability and inconsistent application of pharmacoeconomic data implies that phar-macoeconomics so far has had a limited role INTRODUCTIONThe high price of medicines and increasing expenditure on pharmaceuticals is a serious concern for governments in low-income countries where already over half of the population lacks regular access to essential medicines [1]. Currently, pharmaceuticals in low-income countries consume 30-60 percent of the recurrent healthcare budgets, yet the unmet need for medicines has been strongly associated with insufficient public spending on pharmaceuticals [2]. Poor fa-milies mostly rely upon public healthcare systems, where shortages of drugs are ram-pant [3]. In this situation the use of pharma -coeconomic principles is inevitable when an objective is to ensure that the limited re-sources are efficiently spent on drug thera-pies with large potentials to improve health. While developing countries commonly use National Essential Medicine Lists to prio-ritize the allocation of scarce public fun-ds between drug therapies, little is known about the role of pharmacoeconomics in such decisions. In this editorial we there-fore examine how pharmacoeconomics has influenced prioritization decisions between drugs in developing countries.WHAT IS PHARMACOECONOMICS?Pharmacoeconomic analysis involves the identification, measurement, valuation and comparison of costs and outcomes of alter-native drug therapies. The underlying aim is to maximize treatment outcomes within limited budgets [4]. Due to the high alterna-tive costs of scarce funds, it may be argued that pharmacoeconomics is relatively more important in developing countries than in developed countries. By alternative costs in this context we mean the health losses from making sub-optimal decisions.

The Forecasting Performance of Regime-Switching Models of Speculative Behavior for Exchange Rates

This study provides evidence of periodically collapsing bubbles in the British pound to US dollar exchange rate in the post-1973 period. We develop two- and three-state regime-switching models that relate the expected exchange rate return to the bubble size and to an additional explanatory variable. Specifically, we consider six alternative explanatory variables that have been proposed in the literature as early warning indicators of a currency crisis. Our findings suggest that the regime-switching models are, in general, more accurate than the Random Walk model in terms of both statistical and especially economic evaluation criteria for exchange rate forecasts. Our three-state regime-switching model outperforms the two-state models and among the variables considered in our analysis, the short-term interest rate is the optimal variable, closely followed by imports, in both statistical and economic evaluation terms. Results are more promising for one-month predictions and are qualitatively robust to the calculated bubble measure.

Economic Analysis of Solar Energy/Air Compound Source Heat Pump System

The foundation, principle and prior condition and engineering economic Evaluation Criteria of engineering economic analysis are introduced. The economy for a solar energy/air source heat pump system is analyzed. Through a single air-cooled heat pump system, air conditioning in summer + winter heating systems, solar / air source compound heat pump system model analysis and comparison of three systems, integrated initial investment and running costs of both, come to solar / air source compound heat pump system has certain advantages in economical efficiency.

THE ECONOMIC USEFULNESS OF PRODUCING MEDICAL PLANTS PROJECT IN THE CITY OF MOSUL

The research aims at studying the economic usefulness of producing medical plants project un the city of Mosul bu using economic evaluation criteria. A sample of medical plants was chosen including Ghazing, Coriander, Chamomile and black Cumin. As for the reason behind choosing them, that is because they are local raw materials involved in manufacturing many pharmatical formulas and the wild abundant production in the city of Mosul in addition to consider them as an important economic resource. For the sake of refuting the hypothesis of the research, the criteria of commercial earning i.e. the portion of earnings to costs which reached 1.408 and the current next value of the additional cash flow which reached 576745 Iraqi Dinars and the rate of the internal earnings that reached 34.87%. the total costs of the proposed project reached 75927579 Iraqi Dinars, and the total additional value of the duration of the project 50699456 Iraqi Dinars equal to 42605 US Dollar by exchange rate 1119 Dinar / US Dollar.

Forecasting Multivariate Volatility using the VARFIMA Model on Realized Covariance Cholesky Factors

Summary This paper analyzes the forecast accuracy of the multivariate realized volatility model introduced by Chiriac and Voev (2010), subject to different degrees of model parametrization and economic evaluation criteria. Bymodelling the Cholesky factors of the covariance matrices, the model generates positive definite, but biased covariance forecasts. In this paper, we provide empirical evidence that parsimonious versions of the model generate the best covariance forecasts in the absence of bias correction. Moreover, we show by means of stochastic dominance tests that any risk averse investor, regardless of the type of utility function or return distribution, would be better-off from using this model than from using some standard approaches.

ANÁLISE COMPARATIVA DA VIABILIDADE ECONÔMICA DE PLANTIOS DE Pinus taeda E Eucalyptus dunnii NA REGIÃO CENTRO-SUL DO PARANÁ

O presente trabalho teve por objetivo fazer uma análise comparativa de viabilidade econômica de projetos florestais com Pinus taeda e Eucalyptus dunnii localizados no município de Prudentópolis, PR. Na análise econômica foram utilizados os critérios do Valor Presente Líquido (VPL), Razão Benefício Custo (B/C), Taxa Interna de Retorno (TIR) e Valor Periódico Equivalente (VPE). A taxa de juros usada foi de 6,75% ao ano. Para o projeto de Pinus taeda os dados de custos e receitas corrigidos totalizaram R$ 4.344,71/ha e R$36.143,99/ha, respectivamente. Os valores calculados dos critérios de avaliação econômica foram um VPL de R$31.799,28/ha; Razão Beneficio/Custo de 8,32, TIR de 27.23% e VPE de R$ 3.200,87/ha/ano. Para o povoamento de Eucalyptus dunnii, a correção dos valores para o momento zero totalizaram R$ 5.767,75/ha, de custos e R$43.842,46/ha de receitas. Os valores calculados dos critérios de avaliação econômica foram um VPL de R$ 38.074,71/ha; Razão Beneficio/Custo de 7,60; TIR de 35,83% e um VPE de R$ 3.832,55/ha/ano. Para os dois projetos foi realizada análise de sensibilidade do VPL. Os resultados mostraram que ambos os projetos são economicamente viáveis.Palavras-chave: Análise comparativa; viabilidade econômica; custos; receitas. AbstractComparative analysis of the economic viability of Pinus taeda and Eucalyptus dunnii plantations in the south-center region of Parana State, Brazil. The objective of this research was to carry out a comparative analysis of economic viability of afforestation projects with Pinus taeda and Eucalyptus dunnii located in Prudentópolis County, State of Paraná, Brazil. In the economic analysis the criteria of Net Present Value (NPV), Benefit Cost rate (B/C), Internal Return Rate (IRR) and Periodic Equivalent Value (PEV) were used. The interest rate used was of 6.75% per the year. For the Pinus taeda plantations the data of rectified costs and income totalized R$ 4.344,71/ha and R$ 36.143,99/ha, respectively. The calculated values of the of economic evaluation criteria presented a NPV of R$ 31,799.28/ha, a Benefit Cost rate of 8,32, an IRR of 27.23% and a PEV of R$ 3.200,87/ha. For the Eucalyptus dunnii plantations the rectified values totalized R$5.767,75 and R$43.842,46/ha for the costs and income, respectively. The calculated values of the economic evaluation criteria showed a NPV of R$38.074,71/ha, a Benefit Cost rate of 7.60, an IRR of 35,83%, and a PEV of R$3.832,55/ha. A sensitivity analysis of the NPV for the two plantations was carried out. The results showed that both afforestation projects are economically viable.Keywords: Comparative analysis; economic viability; costs; income.

Optimierung forstlicher Produktion unter Beachtung von finanziellen Restriktionen | Optimisation of forest production under financial restrictions

The question of efficiency of resources bound in the silvicultural (biological) production of forest enterprises strikes a central topic of forest management. Using simple spreadsheet calculation models, this paper tries to explicate the relations between silvicultural treatments and economic evaluation criteria under financial restrictions. By means of actual examples, concerning thinning intensity and final harvest age under the restriction of maintenance of capital, practical silvicultural behaviour can be seen as compatible with the optimal economic solutions, determined by the model calculations. This leads to the conclusion that commonly practiced concepts of thinning intensity and productivity dependent harvest age can be interpreted as rational economic behaviour. With reference to such an economic optimum the consequences of changes in forest management, as they are often claimed for instance by directives of nature conservation, water protection etc., can be evaluated based on opportunity costs.

Economic evaluation of breeding strategies for improvement of dairy cattle in Kenya

Cost-benefit analysis using net present value (NPV) as the economic evaluation criterion was used to investigate the economic merits of four breeding strategies used for genetic improvement of dairy cattle in Kenya. The breeding strategies were evaluated over a 25-year period. The costs involved in setting up and running each strategy were obtained from large-scale dairy cattle farms, and government and private institutions involved in genetic improvement of dairy cattle. Only benefits from genetic improvement were considered. The impact on NPV due to changes in genetic and economic parameters was investigated. The ranking of the breeding strategies greatly differed with genetic ranking. Among the local selection programs, a strategy utilizing young bulls, sons of local bulls, was more profitable than one utilizing old progeny tested bulls. Continuous semen importation was not an economically viable alternative. The strategy utilizing young bulls progeny of imported bulls (PIB) was only viable if imports were from countries which are >2.00 SD in genetic merit above the local dairy cattle population. The ranking of strategies was not sensitive to changes in genetic parameters but to economic parameters. The use of local semen from young bulls progeny of local proven bulls is recommended. Alternatively, PIB can be utilized but the semen will have to be imported from countries which are >2.00 SD above the local dairy cattle population or the cost of imported semen should be < or = US$40 per straw.

An economic analysis of oil sands mining options

Mining projects normally involve huge levels of capital outlay with their attendant high investment risks. Thus, all new mining projects and existing projects have to be economically evaluated to assess their viabilities and whether they add value to the company’s portfolio. Economic analysis is one of the best tools for evaluating and comparing different projects or investments options. Various economic evaluation criteria such as the Net Present Value, Profitability Index, Internal Rate of Return and Discounted Payback Period are commonly used, alone or in combination, to determine the acceptability or attractiveness of projects and to aid in the selection of the best investment ventures from a number of options. In this paper, economic, risk and sensitivity analyses were conducted on two oil sands mining options at Syncrude Mine in Canada. These are the Current Mining System (CMS) and the Cyclic Excavator Conveyor Belt Control System (CycEx CBCS). The results of detailed economic analysis show that the net present value (NPV) of the CMS option is $3.20 ´ 1010 while that for the CycEx CBCS option is $4.06 ´ 1010. The profitability indices for the CMS and CycEx CBCS options are 19.37 and 43.37 respectively. The internal rates of return of the CMS and CycEx CBCS options were calculated to be 29.02% and 33.37% respectively. Both the CMS and CycEx CBCS options have very short discounted payback periods (≤ 0.27 years). The results of risk characterisation of the two mining options show that there is 85% probability that the NPVs of the CMS and CycEx CBCS options will be greater than $2.69 ´ 1010 and $3.42 ´ 1010 respectively. The results of sensitivity analysis show that the input variables that significantly affect the NPV in both mining options are the discount rate, production rate, oil price, exchange rate, and the federal and provincial tax rates. In general, changes in input parameters such as discount rate, scheduled mine production capacity and time, price of oil per barrel and total operating costs had lower effects on the NPV of the CycEx CBCS option than the CMS option. The calculated economic parameters together with the results of the risk and sensitivity analyses show that the CycEx CBCS option is more economically viable than the CMS option.

ECONOMIC ANALYSIS FOR PRODUCING MASS LEAVES AND VOLATION OIL OF LEMON GRASS PLANT AND ITS PHARMACEUTICAL PARTICIPATION

This study contained the range of suitability of environmental conditions of the city of Samarah in planting cymbopogoncitratus (DC) which is called Lemon Grass (West Indiana Type) in the General Firm for pharmaceutical industries inorder to produce this plant locally and providing volatile oil extracted from it as a natural raw material for pharmaceutical industries . The study included Also, the economic avail to establish the project in which it is characterized by high demand on its outputs from the company . There was a sort of dependence on the value of company’s import (SDI) of the raw material Nystation as a basis for knowing the size of local demand throughout studying the market . It was clear through that the study the basic aspect practiced upon the plant to prepare and analyze the project and its compatibility with the environmental conditions for the city of Samarah to produce the plant . We were able to get four monthly cultivars of the plant and oil quantity was 15 liters per hectare for the first year and the production increased later to reach 39 liters per hectare . The basic tests made upon the plant have shown a high competency to use it in pharmaceutical industries for it retard the growth of Somany fungis which cause human, plant and animal diseases and this is more than the foreign kind used for a limited number of fungis and this encourage to apply studies and researches in order to be used in new products . It was also clear from the study using the economic evaluation criteria compared with the evaluation results that the project is considered of high economic avail and this is considered to be a significant remark for the decision markers in economic and drug fields .

Methodologies of Real Estate Investment Projects’ Efficiency Evaluation

Construction and real estate investment sector was vitally important to Lithuanian economy in recent decade. Recent rapid real estate prices growth and current market fall directly influenced Lithuanian economy development. For this purpose it can be argued that correct investment and real estate projects’ development can support better conditions for Lithuanian economy rehabilitation. in this article the methods and models of real estate projects’ evaluation are analyzed, projects’ selection criteria researched, the investment decision-making discussed, real estate projects’ economic efficiency evaluation criteria systematized as well as conclusions considering essential further evaluation methodology improvement are given.

Economic evaluation of genomic breeding programs

The objective of this study was to compare a conventional dairy cattle breeding program characterized by a progeny testing scheme with different scenarios of genomic breeding programs. The ultimate economic evaluation criterion was discounted profit reflecting discounted returns minus discounted costs per cow in a balanced breeding goal of production and functionality. A deterministic approach mainly based on the gene flow method and selection index calculations was used to model a conventional progeny testing program and different scenarios of genomic breeding programs. As a novel idea, the modeling of the genomic breeding program accounted for the proportion of farmers waiting for daughter records of genotyped young bulls before using them for artificial insemination. Technical and biological coefficients for modeling were chosen to correspond to a German breeding organization. The conventional breeding program for 50 test bulls per year within a population of 100,000 cows served as a base scenario. Scenarios of genomic breeding programs considered the variation of costs for genotyping, selection intensity of cow sires, proportion of farmers waiting for daughter records of genotyped young bulls, and different accuracies of genomic indices for bulls and cows. Given that the accuracies of genomic indices are greater than 0.70, a distinct economic advantage was found for all scenarios of genomic breeding programs up to factor 2.59, mainly due to the reduction in generation intervals. Costs for genotyping were negligible when focusing on a population-wide perspective and considering additional costs for herdbook registration, milk recording, or keeping of bulls, especially if there is no need for yearly recalculation of effects of single nucleotide polymorphisms. Genomic breeding programs generated a higher discounted profit than a conventional progeny testing program for all scenarios where at least 20% of the inseminations were done by genotyped young bulls without daughter records. Evaluation of levels of annual genetic gain for individual traits revealed the same potential for low heritable traits (h2=0.05) compared with moderate heritable traits (h2=0.30), preconditioning highly accurate genomic indices of 0.90. The final economic success of genomic breeding programs strongly depends on the complete abdication of any forms of progeny testing to reduce costs and generation intervals, but such a strategy implies the willingness of the participating milk producers.