Fee Revenue Research Articles

Cost–benefit analysis of GHG emission reduction in waste to energy projects of China under clean development mechanism

Energy recovery is widely considered an important part of hierarchy of waste management. Previously, researchers have primarily focused on cost-effectiveness analysis of solid waste management, ignoring the global warming potential (GWP) impacts. By integrating greenhouse gas (GHG) emissions and the cost–benefit analysis, we analyzed the cost–benefit of GHG emissions for two waste to energy (WtE) methods: incineration with combined heat and power (ICHP) which produces electricity and heat, and landfill disposal with landfill gas utilization (LGU). We calculated both costs and benefits per ton certified GHG emission reductions (CER) for 20 clean development mechanism (CDM) projects with WtE technology in typical northern and southern cities in China. Furthermore, benefits were analyzed under two different scenarios: benefit only from recovery energy revenues; benefit from recovery energy revenues plus gate fee revenues. The results show that: (1) ICHP projects are beneficial from the GHG reduction standpoint; (2) The ratio of CER revenues to benefit is very high during 2008–2011. However, the decrease of CER price in CDM projects causes the disposal gate fee from local government to become more and more important for these two WtE technologies, especially for LGU. However, with or without the CDM, there is still a huge GHG reduction potential in solid waste management in China. Policies should be developed to facilitate and encourage WtE, and the selection of WtE method depends on geographical region and economics.

Why Do Fund Families Release Underperforming Incubated Mutual Funds?

Although the average incubated mutual fund outperforms nonincubated funds by up to 3.41% annually, a large number of released funds underperform during incubation. We find that launching underperforming incubated mutual funds is associated with objectives that attract large inflows and lower relative risk. These findings are consistent with the use of incubation to maximize fee revenue through means other than the flow‐to‐performance relationship. We also find that underperforming incubated funds are incubated longer suggesting that families release funds opportunistically to take advantage of outperformance when it is observed.

Does the entrance fee for a monopoly platform with monopolistic competition eliminate socially desirable products?

AbstractThis paper is concerned with a monopoly platform in which firms compete by setting quantities, each producing a variety of differentiated goods. Should a firm desire to enter the platform, it must pay an entrance fee to the platform owner, as well as incur a fixed setup cost. Since the platform can be maintained at zero cost, the platform owner aims to maximize the total entrance fee revenue. When a product is introduced, it reduces the prices of the other goods, thereby adversely affecting the revenue of other firms. Under condition of free entry, the entering firm does not take this effect into account. In contrast, the platform owner does take it into account. As a result, the entrance fee may act to raise welfare by eliminating socially undesirable goods.

Impact Fees and Employment Growth

Local jurisdictions across the country continue to adopt alternative financing options, although the effects of these remain uncertain. There are two views of impact fees: (a) an old view, that fees are a tax on development increasing prices and reducing quantity and (b) a new view, that fees provide services and reduce future taxes, thus increasing demand and prices. The research presented in this study, based on data from Florida counties, finds that the relationship between fees on commercial development and fees on employment differs across different categories of economic activity. The use of fees is positively related to service-sector employment growth and negatively related to manufacturing employment growth. This result suggests that different sectors realize different levels of benefits from infrastructure provided through fee revenue and that policy decisions based on total employment may suffer from overaggregations and lead to unintended consequences.

Downside Risk Timing by Mutual Funds

We study whether mutual funds systematically manage downside risk of their portfolios in ways that improve their performance. We find that actively managed mutual funds on average possess positive downside risk timing ability. Funds investing in large-cap and value stocks have stronger downside risk timing skills. Managers adjust funds’ downside risk exposure in response to macroeconomic information. Funds more skilled in timing downside risk outperform those which are not by 13.8bp per month (or 1.67% annualized) unconditionally and by 48.7 bp per month (or 6.00% annualized) during recessions, and attract larger flows. For the fund with average AUM and fees, extra flows from high downside risk timing skills result in 160 thousand dollars of additional fee revenue per year.

A Simple Framework for Estimating Consumer Benefits from Regulating Hidden Fees

Policymakers are increasingly turning to regulation to reduce hidden or non-salient fees. Yet the overall consumer benefits from these polices are uncertain because firms may increase other prices to offset lost fee revenue. We show that the extent to which firms offset reduced hidden fee revenue is determined by a simple equation that combines two “sufficient statistics,” which can be estimated or calibrated in a wide range of settings: (i) a parameter that captures the degree of market competitiveness and (ii) a parameter that captures the salience of the hidden fee. We provide corroborating evidence for this approach by drawing upon evidence on the effect of fee regulation under the 2009 CARD Act. We also illustrate the applicability of our approach by using the framework to assess a hypothetical regulation of airline baggage fees.

So Slow to Change: The Limited Growth of Nontax Revenues in Public Education Finance, 1991–2010

We examine changes in the use of nontax revenues for education finance from 1991 to 2010. Beyond the summary of usage over time, we ask whether nontraditional revenues like fees accentuate or mitigate the impact of downturns. More generally, we examine the extent to which school districts have responded to fiscal pressures by turning to nontax revenues. We also document the extent to which the use of nontax revenues varies across districts according to student poverty status. We show that alternative revenues continue to be a small source of local revenues and have increased quite little since the early 1990s. There was at most a minimal shift to nontax revenues in downturns, though there is evidence of greater use of these revenues among school districts facing more permanent fiscal pressures like tax limits. Differential access to fee revenues and other alternative revenues during downturns may slightly accentuate inequities in K–12 education spending.

Customer loyalty among daily disposable contact lens wearers.

Optometric practices offer contact lenses as cash sale items or as part of monthly payment plans. With the contact lens market becoming increasingly competitive, patients are opting to purchase lenses from supermarkets and Internet suppliers. Monthly payment plans are often implemented to improve loyalty. This study aimed to compare behavioural loyalty between monthly payment plan members and non-members. BBR Optometry Ltd offers a monthly payment plan (Eyelife™) to their contact lens wearers. A retrospective audit of 38 Eyelife™ members (mean±SD: 42.7±15.0 years) and 30 non-members (mean±SD: 40.8±16.7 years) was conducted. Revenue and profits generated, service uptake and product sales between the two groups were compared over a fixed period of 18 months. Eyelife™ members generated significantly higher professional fee revenue (P<0.001), £153.96 compared to £83.50, and profits (P<0.001). Eyelife™ members had a higher uptake of eye examinations (P<0.001). The 2 groups demonstrated no significant difference in spectacle sales by volume (P=0.790) or value (P=0.369). There were also no significant differences in contact lens revenue (P=0.337), although Eyelife™ members did receive a discount. The Eyelife™ group incurred higher contact lens costs (P=0.037), due to a greater volume of contact lens purchases, 986 units compared to 582. Monthly payment plans improve loyalty among contact lens wearers, particularly service uptake and volume of lens purchases. Additionally the greater professional fees generated, render monthly payment plans an attractive business model and practice builder.

Comments: The Milestones Hypothesis.

In a recent issue, Norman et al1 and Carter2 use evocative metaphors to describe the status of the Milestone project. Norman et al1 summarize the promise of competency-based education/Milestones and categorically state, “Regrettably, these declarations appear to be more a matter of faith than of evidence.”1 Although, at this point, there is insufficient evidence that this major overhaul will be meaningful, its transformational potential remains promising. In support of the Milestones, Carter2 states that “the Next Accreditation System (NAS) and Milestones are akin to designing a plane in flight. . . . Starting in July 2014, we will all be aboard this plane that is now in midflight.” Carter's statement emphasizes an important point: Milestones may be a very good idea, but their greatest challenge lies in it being an incomplete and unproven hypothesis. The next step is to replace faith with evidence. The traditional scientific approach to developing an untested hypothesis (the Milestones) into a proven theory would require studies to answer the essential question as to whether their adoption will produce better doctors in unsupervised practice and to have as many of these (positive) answers before the Milestones are broadly prescribed. For instance, it can be hypothesized that the elaborate Milestones are better than the current system of 6 general competencies, which it seeks to replace. However, the previous hypothesis—that adoption of the 6 general competencies would lead to better physicians—was never tested, and it will be a while before there are data to support the hypothesis that Milestones will be an improvement over the general competencies. This is an opportunity to sift through a bank of competencies, generate data, and then pick only those competencies that are proven to produce good physicians. For instance, do we need more (eg, interprofessional collaboration, personal and professional development),3 fewer, or different competencies and Milestones? There are suggestions that Milestones will be more expensive, at least to the consumers, so we need evidence that this extra expense is worthwhile. It is important to define outcomes a priori: better at what? Milestones carry the promise to be useful in giving more detailed and accurate feedback to trainees but do not address the critical question: Will their use make better physicians? Will there be better clinical outcomes4 or fewer adverse events5 or more cost-effective care? A positive answer to these questions is needed to make these changes meaningful and longitudinally successful. It is heartening that there are ongoing studies of the Milestones in several disciplines. These are difficult to conduct and even more difficult to fund. Therefore, we applaud the Accreditation Council for Graduate Medical Education, which “although not a funding agency, has agreed to use interest from reserves (but no current accreditation fee revenue) to provide seed funding”6 for independent educational research on other important questions. This may infuse foundations and government agencies with more confidence to support studies of critical projects, such as the Milestones. We are clearly on the right track. Addressing this promising hypothesis with scientific rigor and prudence would lead us to delay full implementation of the unproven Milestones; to conduct studies to refine their specifics, prove clinical relevance, and minimize the burden; and then to confidently prescribe a proven remedy that reliably leads to graduating the finest physicians.

Disappearance and Survivorship Bias of Corporate Bond Funds

This is the first paper analyzing the determinants of success and failure on the corporate bond fund market in terms of surviving vis-a-vis disappearance, generating superior performance and attracting investor flows in a consistent framework. Using a large and comprehensive sample of US corporate bond funds with daily returns over a 28-year period, we show that mutual funds optimize fee revenues rather than performance as corporate bond fund investors are relatively fee insensitive. Thus, size, flows and expenses are the most important determinants of survival. Performance only plays a role for the survival of small funds while large funds survive independently of performance. Regarding success in terms of performance, corporate bond funds exhibit short term performance persistence and suffer from diseconomies of scale, however not as severe as equity funds.

The business of pediatric hospital medicine.

Pediatric hospital medicine (PHM) programs are mission driven, not margin driven. Very rarely do professional fee revenues exceed physician billing collections. In general, inpatient hospital care codes reimburse less than procedures, payer mix is poor, and pediatric inpatient care is inherently time-consuming. Using traditional accounting principles, almost all PHM programs will have a negative bottom line in the narrow sense of program costs and revenues generated. However, well-run PHM programs contribute positively to the bottom line of the system as a whole through the value-added services hospitalists provide and hospitalists' ability to improve overall system efficiency and productivity. This article provides an overview of the business of hospital medicine with emphasis on the basics of designing and maintaining a program that attends carefully to physician staffing (the major cost component of a program) and physician charges (the major revenue component of the program). Outside of these traditional calculations, resource stewardship is discussed as a way to reduce hospital costs in a capitated or diagnosis-related group reimbursement model and further improve profit-or at least limit losses. Shortening length of stay creates bed capacity for a program already running at capacity. The article concludes with a discussion of how hospitalists add value to the system by making other providers and other parts of the hospital more efficient and productive.

A Simple Framework for Estimating Consumer Benefits from Regulating Hidden Fees

AbstractPolicy makers are increasingly turning to regulation to reduce hidden or nonsalient fees. Yet the overall consumer benefits from these policies are uncertain because firms may increase other prices to offset lost fee revenue. We show that the extent to which firms offset reduced hidden-fee revenue is determined by a simple equation that combines two sufficient statistics, which can be estimated or calibrated in a wide range of settings: a parameter that captures the degree of market competitiveness and a parameter that captures the salience of the hidden fee. We provide corroborating evidence for this approach by drawing upon evidence on the effect of fee regulation under the 2009 Credit Card Accountability Responsibility and Disclosure Act. We also illustrate the applicability of our approach by using the framework to assess a hypothetical regulation of airline baggage fees.

Implementation of patient charges at primary care facilities in Kenya: implications of low adherence to user fee policy for users and facility revenue.

With user fees now seen as a major hindrance to universal health coverage, many countries have introduced fee reduction or elimination policies, but there is growing evidence that adherence to reduced fees is often highly imperfect. In 2004, Kenya adopted a reduced and uniform user fee policy providing fee exemptions to many groups. We present data on user fee implementation, revenue and expenditure from a nationally representative survey of Kenyan primary health facilities. Data were collected from 248 randomly selected public health centres and dispensaries in 2010, comprising an interview with the health worker in charge, exit interviews with curative outpatients, and a financial record review. Adherence to user fee policy was assessed for eight tracer conditions based on health worker reports, and patients were asked about actual amounts paid. No facilities adhered fully to the user fee policy across all eight tracers, with adherence ranging from 62.2% for an adult with tuberculosis to 4.2% for an adult with malaria. Three quarters of exit interviewees had paid some fees, with a median payment of US dollars (USD) 0.39, and a quarter of interviewees were required to purchase additional medical supplies at a later stage from a private drug retailer. No consistent pattern of association was identified between facility characteristics and policy adherence. User fee revenues accounted for almost all facility cash income, with average revenue of USD 683 per facility per year. Fee revenue was mainly used to cover support staff, non-drug supplies and travel allowances. Adherence to user fee policy was very low, leading to concerns about the impact on access and the financial burden on households. However, the potential to ensure adherence was constrained by the facilities’ need for revenue to cover basic operating costs, highlighting the need for alternative funding strategies for peripheral health facilities.

Uninvited U.S. Investors? Economic Consequences of Involuntary Cross‐Listings

ABSTRACTWe study the economic consequences of a recent Securities and Exchange Commission securities regulation change that grants foreign firms trading on the U.S. over‐the‐counter (OTC) market an automatic exemption from the reporting requirements of the 1934 Securities Act. We document that the number of voluntary (sponsored) OTC cross‐listings did not increase following the regulation change, suggesting that it did not achieve its intended purpose of increasing voluntary OTC cross‐listings through a reduction in compliance costs. We do find that the design of the regulation allowed financial intermediaries to create an unprecedented number of involuntary (unsponsored) OTC ADRs: 1,700 unsponsored ADR programs for 920 firms were created for companies that had previously chosen not to cross‐list in the United States. Our difference‐in‐differences analysis based on a matched sample approach documents that foreign firms forced into the U.S. capital markets experience a significant decrease in firm value, and we further show that the decrease in firm value is related to an increase in U.S. litigation risk. We also find that depositary banks’ propensity to involuntarily cross‐list firms is positively related to banks’ expected fee revenue, and that banks chose firms that incur high costs when involuntarily cross‐listed. Our results provide evidence that securities regulation can be exploited for private gain and result in costly unintended consequences.

Optimal concession contracts for landlord port authorities to maximise fee revenues

This paper analyses optimal concession contracts offered by a landlord port authority to competing operators of container terminals. The port authority pursues fee-revenue maximisation. Three contract schemes considered are fixed-fee, unit-fee, and two-part tariff. A two-stage game is constructed to characterise interactions between the port authority and two terminal operators. In the first stage, the port authority announces a contract. Then terminal operators compete for cargo amounts in the second stage. We discover that when marginal service costs of the less-efficient operator are small, the port authority would choose between the two-part tariff and the unit-fee schemes. Oppositely, the two-part tariff and the unit-fee schemes are equally preferred. Finally, if both terminal operators’ efficiency is identical, the two-part tariff contract is the best.

Economic Feasibility of a Municipal Food Waste Collection and Energy Generation Model

This study analyzes the economic prospects for the utilization of food waste collected from a variety of sources as feedstock for a standalone waste-to-energy (WtE) business model in Toledo, Ohio. This analysis intends to add a practical perspective to the quickly growing body of literature focusing on technical aspects of the anaerobic digestion of food waste for hydrogen and methane creation. The study examines economic constraints and possible solutions to promote widespread adoption of food WtE in the United States. In addition, waste managers in other geographical entities may replicate the methods and analyses described in the article to provide valuable, relevant information to policymakers and other stakeholders. The study includes a description of the methodology used to estimate the initial costs, annual costs, and annual benefits of an anaerobic digestion (AD) system, including collection costs, facility and digestion costs, electricity sales, and tipping fee revenues.

Changes in Trauma Service Professional Fee Coding Following Electronic Health Record Implementation

Background: Implementing an electronic health record (EHR) system is an expensive and large-scale project. Few studies have examined the impact of inpatient EHRs on documentation, coding levels, and professional fee reimbursement. Trauma and Emergency Surgery services are ideal for studying this question given their high percentage of inpatient evaluation and management (E & M) work. This study elucidates effects of an EHR on coding practices for the inpatient Trauma and Emergency Surgery Service at an academic level I Trauma Center. We hypothesize that EHR implementation leads to higher coding levels and increased professional fee revenue. Methods: De-identified data was extracted from the University Health System Consortium and Association of American Medical Colleges Faculty Practice Solution Center database. Our medical center transitioned from written physician notes to the EHR in May 2009. The database was queried for notes written by the Trauma and Emergency Surgery service in calendar years 2008 and 2011 to compare years before and after EHR implementation. The CPT codes of interest were for E & M Initial Hospital Care (99221, -2, and -3) and Subsequent Hospital Care (99231, -2, and -3). Coding levels were linked to standard Medicare Relative Value Units. Professional coders were used throughout and coding guidelines were unchanged over the study period. Results: Coding levels for Initial Hospital Care notes increased immediately and markedly. Revenue from these codes increased by 28.1% while Subsequent Hospital Care codes increased less dramatically by 1.7%. Conclusions: The increase in higher E & M coding levels due to HER implementation was financially significant, immediate, and durable. The increase in total Initial Hospital Care notes resulted from improved coder note recognition and higher note quality. Revenue increased measurably.

Removing financial barriers to access reproductive, maternal and newborn health services: the challenges and policy implications for human resources for health

BackgroundThe last decade has seen widespread retreat from user fees with the intention to reduce financial constraints to users in accessing health care and in particular improving access to reproductive, maternal and newborn health services. This has had important benefits in reducing financial barriers to access in a number of settings. If the policies work as intended, service utilization rates increase. However this increases workloads for health staff and at the same time, the loss of user fee revenues can imply that health workers lose bonuses or allowances, or that it becomes more difficult to ensure uninterrupted supplies of health care inputs.This research aimed to assess how policies reducing demand-side barriers to access to health care have affected service delivery with a particular focus on human resources for health.MethodsWe undertook case studies in five countries (Ghana, Nepal, Sierra Leone, Zambia and Zimbabwe). In each we reviewed financing and HRH policies, considered the impact financing policy change had made on health service utilization rates, analysed the distribution of health staff and their actual and potential workloads, and compared remuneration terms in the public sectors.ResultsWe question a number of common assumptions about the financing and human resource inter-relationships. The impact of fee removal on utilization levels is mostly not sustained or supported by all the evidence. Shortages of human resources for health at the national level are not universal; maldistribution within countries is the greater problem. Low salaries are not universal; most of the countries pay health workers well by national benchmarks.ConclusionsThe interconnectedness between user fee policy and HRH situations proves difficult to assess. Many policies have been changing over the relevant period, some clearly and others possibly in response to problems identified associated with financing policy change. Other relevant variables have also changed.However, as is now well-recognised in the user fee literature, co-ordination of health financing and human resource policies is essential. This appears less well recognised in the human resources literature. This coordination involves considering user charges, resource availability at health facility level, health worker pay, terms and conditions, and recruitment in tandem. All these policies need to be effectively monitored in their processes as well as outcomes, but sufficient data are not collected for this purpose.

Mutual Fund Dividend Policy

In contrast with the large literature on firms' dividend policy, mutual fund dividend policy has received little attention. Mutual fund dividend policy is not as flexible as firms', since mutual funds are required by law to pay out nearly all dividends each year. However, mutual funds can still decide the frequency of dividend distributions. I show that multi-dividend policy hurts mutual funds and their shareholders, and therefore, ask the question why some mutual funds distribute dividends more frequently than the mandated. I find that mutual funds trade off the interests of new and existing investors as well as the different interests of existing investors with different dividend preferences. The first tradeoff between new and existing investors is related to the agency problem. To increase fee revenues, funds seek to increase fund size and might favor new investors at the expense of existing ones. The second tradeoff within existing investors with different dividend preferences is, however, potentially associated with a successful delegation of investment decisions. Mutual funds might adopt the dividend policy following some existing investors' preference. The author finds empirical evidence that dividend policy is associated with fund characteristics that measure the severity of conflicts of interest.

Deal or No Deal?: Advertizing and Sampling Effects on Two-Sided Daily Deal Platforms

With the advent of Groupon.com in 2008, daily deal platforms have seen phenomenal growth. But surprisingly there is very sparse analytical research that has studied the economics of daily deal platforms which are two-sided in the sense that they connect merchants on the one side to consumers on the other side. We develop a stylized two-period game-theoretic model to analyze the strategic interaction between heterogeneous merchants and consumers. In our conceptualization, a monopolist daily deal platform is revenue maximizer who not only takes into consideration the cross-side network effect leading to chicken-and-egg problem, but also sampling and advertizing effect due to the presence of the platform. Keeping in view the realworld market conditions, we do not impose the restriction that the two-sides can interact only through the platform and allow the two-sides to transact outside the platform too. We model the strategic interaction between the daily deal website (platform) and merchants as a Stackelberg leader-follower game where merchants choose discount rate, keeping that in view the platform’s choice of the fixed fee rate or revenue sharing rate. Our result shows the merchants offer higher discount rate on the daily deal website than outside the website, and surprisingly, merchants’ optimal choice of discount rate is independent from the platform’s fixed fee rate. We also show that merchants that are new in the market place and therefore, less well-known gain more from offering a deal on the daily deal website. Some of merchants never offer a deal on the platform even if offering a deal on the platform is free.