Fixed Cost Component Research Articles

Evolutionary game analysis and efficiency test of water pollution control driven by emission trading: Evidence from Zhejiang Province, China

Presently, China is actively endorsing the pilot initiative for the remunerative use and trading of emission. By examining the operation and efficacy of emission trading in the context of water pollution control, one can contribute to the advancement and refinement of this system, thereby facilitating the attainment of regional pollution reduction, carbon reduction, and high-quality development objectives. In pursuit of this objective, we develop a theoretical framework for the local government and sewage enterprises evolutionary game of water pollution control, which includes two scenarios without considering and considering emission trading for studying the influencing factors and evolution trajectory of the game subject's. Through the stability analysis, the game interactive mechanism, the difference in evolutionary trajectory, and the response logic of the decision-making body in different situations become clearly visible. Further, the system sensitivity factors are analyzed by solving the partial derivation of the area formula of the phase diagram. And the efficacy of the sewage trading system in water pollution control in Zhejiang Province is empirically examined at the micro level by adopting the trading data of the first pilot area of sewage trading in the country and the case of pollution control in Jinhua City. The research reveals the following conclusions: Under specific circumstances, emission trading can incentivize businesses and even industries to enhance pollution control measures as a whole. The performance and degree of sensitivity factors vary across gaming systems, with public reputation evaluation and central government inspection serving as positive constraints. The initial cost of paid use of emission permits, as a fixed cost component for firms to address pollution, has no effect on the enterprises' behavioral actions to satisfy emission regulations. The findings can furnish local governments with a theoretical foundation and decision support in order to optimize regulatory strategies and enhance pollution control policies.

Cucumber under Controlled Environment Polyhouse: A Step Forward to Enhance Farmers Income

Present study was conducted to see profitability of cucumber crop when grown under polyhouse. Controlled environment crops have greater consistency and production is more reliable than uncontrolled open field crops. Technology is used to manage and manipulate the growing conditions to reduce uncertainty and optimise crop growth. Particularly, cucumber crop was uneconomical when grown under open field conditions due to its climate sensitiveness. Present study was conducted in cucumber which was being cultivated in environment-controlled poly house. The cost return analysis showed that the total cost of cultivation per 1000 m2 area was Rs. 307746 with an output value of Rs.888960 resulted in Benefit Cost Ratio of 2.89. As the poly house involves initial establishment costs besides maintenance costs every year. This component was amortized to be included in Total Fixed Cost component (TFC) of cost analysis. Similarly, the bed prepared for cucumber sowing also amortized as it lasts for five years once prepared. As most of the farmers were facing initial capital issues for establishing polyhouse, majority of farming fraternity till unable tap the full benefits of cucumber crop. By utilizing the policies of government, cucumber cultivation under poly house is economically beneficial.

The firm-level costs of utilizing free trade agreements

The number of free trade agreements (FTAs) has surged in recent years. In order to benefit from lower import duties, firms must apply for preferential customs treatment and comply with rules of origin requirements. This is costly and explains why preference utilization rates are typically far below 100 percent. Analyzing Switzerland’s wide FTA network based on a novel data set on all import transactions, our findings shed light on how sourcing requirements affect FTA utilization. Using a revealed preference criterion, we identify a fixed cost component of the utilization which firms avoid especially for urgent shipments. We also find limited evidence of learning effects and provide well-identified estimates of the restrictive effects of rules of origin.

ANALYSIS OF HYDROPONIC VEGETABLE BUSINESS IN SONOKWIJENAN SUKOMANUNGGA SUB-DISRICT SURABAYA

This study aims to determine the cost structure of hydroponic vegetable business in Sonokwijenan village, to determine business revenue and also to determine the advantages and efficiency of hydroponic vegetable business in Sonokwijenan village. The study was conducted from June to July 2020. The results showed that (1) The percentage of total fixed costs to the total cost of each vegetable commodity ranged from 60-71 percent, while the percentage of total variable costs to total costs ranged from 29-38 percent . Fixed costs consist of land rent, nursery greenhouse depreciation, enlargement greenhouse depreciation, irrigation facilities depreciation, equipment depreciation, permanent labor, electricity, distribution. The variable costs incurred consist of daily labor costs, costs for using seeds, rockwool, nutrition, and packaging. The highest fixed cost components are fixed labor costs and distribution costs, while the highest variable cost components are daily labor costs. (2) The calculation of the revenue received by a business is influenced by the selling price of the commodity and the amount that can be sold or the value obtained from the commodity. The largest total revenue obtained by the Sonokwijenan sub-district, Surabaya is kale with a total revenue of 126,350,000. (3) hydroponic water spinach commodity is the most efficient and profitable commodity compared to other hydroponic vegetables with an R/C ratio value of 2.42, this is because kale uses the gravel substrate method which can save more costs.

ANALISIS STRUKTUR BIAYA, TITIK IMPAS, DAN PENDAPATAN USAHATANI PADI PADA KELOMPOK TANI TUNAS KARYA MANDIRI KELURAHAN BANJARSARI KECAMATAN METRO UTARA KOTA METRO

This study aims were to analyze the cost structure; revenue, production, and price break even point; and the level of income of rice farming. This research was conducted in Banjarsari Village, North Metro Sub District, Metro District. This research used survey method. The data were taken in April-May 2021. The sample were all members of the Tunas Karya Mandiri Farmer Group amounting to thirty-two farmers. Methods of data analysis are descriptive quantitative. The results showed that the cost structure of the largest variable cost component lies in the cost of labor outside the family by 44.21% and the largest fixed cost component in the cost of land rent by 30.25% of the total cost. The value of the BEP of rice farming revenue was IDR6,071,490.06/ha, the BEP of rice production was 1,607.03kg/ha and the BEP of GKP (Dry Harvested Grain) was IDR 2,061.73/kg. The BEP value is smaller than the actual value received, namely the revenue of IDR18,951,023.90/ha; rice production was 5,018.52 kg/ha, and the selling price of GKP was set at IDR3,778.85/kg. The total income obtained was IDR7,707,474.91/ha with an R/C of 1.69 so that rice farming was profitable and feasible to continue.Key words: Rice, cost structure, break even point, income

Corn farming analysis in Babar Island, District of Babar Islands, Southwest Maluku Regency

Babar Island is corn production center in District of Babar Islands. Maize is the dominant food commodities and a major food source for the community. Corn is the dominant crop commodity in Barbar Island and become staple food for the community. The farming are traditional and subsystems to meet farmers household needs and the excess (if any) will be sold but in very limited quantities. However the sales purpose is not commercial but just to meet the households needs that can not be substituted by other goods and only by few farmers if necessary. The farming is carried out on slash and burn dry land by polyculture cropping pattern that is combination of annual and perrenial crops. This study aimed to examine the feasibility and profitability of corn farming in Barbar island, using survey methods with stratified random sampling technique. The results showed that the cost of corn production in Barbar Island, district of Barbar Islands, South West Maluku Regency is consisted of fixed cost and variable cost. The fixed cost components is including : equipment depreciation costs and land rent costs. The variable costs includes : inputs costs (seeds, fertilizers, chemical) and labor costs. Variable costs is the largest cost component for corn farming. Corn farming is profitable and viable, as indicated by the average income Rp.2.647.396 compared to the average cost incurred by farmers Rp.2.520.934 and BC ratio of 1.05. This means that the production costs of Rp.2.520.934 will generate benefit 1.05 times of the cost.

Some Analytical Results for Models of the Bid-Ask Spread

The focus of this paper is on order processing models of the bid-ask spread, also termed as fixed-cost models. While other theories have been advanced to explain spreads, such as inventory holding costs and adverse selection, research indicates that the fixed cost component constitutes the bulk of the observed spread. This paper starts with the Roll model and the subsequent extension of Choi, Salandro and Shastri. It takes cognizance of the implications of such models for the observed stock prices and the mid-points of bid-ask quotes, to set up tests using the Generalized Method of Moments (GMM) technique. The paper develops an analytical variance-covariance matrix for the fixed cost model with instantaneous adjustment of prices to new information.

Analisa Biaya Operasional Kendaraan Bus Angkutan Kota Jurusan Palangka Raya-Pangkalan Bun

Transportation is an important role in aspects of social economic and cultural activities. Based on the distribution of passenger traffic in and out of the land transportation, the Bus fleet majoring in Palangkaraya-Pangkalan Bun is the most desirable transportation service because travel times are faster and more efficient. The research objective is to determine the magnitude of operational costs for public transportation vehicles Palangka Raya-Pangkalan Bun. The method of collecting passenger data and bus fleet data is a non-random sampling method. Primary data in the form of vehicle operating costs are analyzed by the method of cost per kilometer approach for each vehicle, revenue is analyzed by the method of approaching the average amount of revenue of the company per year and subtracted by total vehicle operating costs per kilometer, rates are analyzed by the method of adding the fixed cost components, costs variable and overhead costs in units per passenger and Fare Box Ratio (FBR) are analyzed using the method of comparing the value of Vehicle Operating Costs per year with annual income. From the results of the study, the amount of Operational Cost needs is spent at 81% of annual income. With a Factor Load calculation of 12 passengers per Trip over the past three years. The fare incurred for ticket purchase per one time departure is Rp 130,000.00 with a Fare Box Ratio (FBR) of 123% so that it can be categorized as a profit

Economics of fish production at Chitwan district, Nepal

A study was conducted in 2016 to analyze the economics of fish production at Chitwan District of Nepal. Three study sites: East, West and South part of Chitwan were selected purposively. A total of 90 households, 30 from each study site were selected randomly and were interviewed by using pre-tested semi structured questionnaire. Secondary data needed for the study were obtained from DADO, MOAD, NARC and other related organizations working on fisheries and aquaculture sector. Descriptive statistics and extended Cobb Douglas production function was used to accomplish the study objectives for which MS-Excel and SPSS 16 were used. The B/C ratio is obtained dividing the gross return by total variable cost incurred. The total cost of production per ha of the pond area was Rs. 743798 per year with 79 and 21 percent variable and fixed cost components, respectively. Feed cost (28 %) was largest cost item followed by cost for labour (25 %), fingerlings (10 %), maintenance (6 %), manure cum fertilizers (5 %), fuel cum energy (3 %) and limestone and others (2%). The average gross return and net profit realized per ha were Rs. 1223934 and Rs. 480135 respectively. The cost, return and profit were calculated to be highest for east Chitwan with highest B/C ratio followed by west Chitwan and south Chitwan. The B/C ratio for the district was found to be 1.63. The return to scale was found to be decreasing with value of 0.654 indicating that 1 percent increment in all the inputs included in the function will increase income by 0.654 percent. Production function analysis, including five variables, showed significant effect of human labour, fingerlings and fuel cum energy cost but feed and manure cum fertilizers cost were insignificant.

Explaining the Fixed Cost Component of Discounting: The Importance of Students' Liquidity Constraints

Utilizing experimental data on choices over real monetary rewards made by university students, we provide evidence that two measures of liquidity, income and employment status, significantly explain differences in patterns of discounting. We find an average fixed cost component of discounting in the range of $5 for unemployed students and near $0 for employed students. An increase in annual disposable income of $1000 decreases the fixed cost component of discounting by approximately $0.20 to $0.25. These findings can help resolve the puzzle that some studies in the literature find evidence of present-bias and magnitude effects and some do not.

Overcoming Low Preference Utilization in PTAs: Presumption of Origin for Small Shipments

While rules of origin (ROOs) constitute an essential element of preferential trade agreements (PTAs), recent analysis of the utilization of preferences shows that even with liberal ROOs, utilization of preferences is often low, especially by smaller exporters. This reflects the high fixed cost component of demonstrating compliance with ROOs. In order to develop options for increasing the rate of preference utilization – especially by smaller exporters that might benefit most in terms of knowledge spillovers from entering into trade – we first examine different ROOs-related explanations of low preference utilization, in particular those based on exporters’ cost-benefit calculations in relation to compliance with ROOs. Second, we analyze the implications of low preference utilization rates for competition and welfare, which we argue are negative. To overcome the negative implications of ROOs, we propose a way to increase the welfare benefits from PTAs while also providing a stronger impetus to the integration of SMEs into regional trade than would be possible under even the most favourable ROOs regime currently in use. We label this approach the presumption of origin. It involves a presumption of compliance with ROOs for smaller commercial-scale shipments accompanied by a simple good faith attestation of origin, with use of anti-circumvention measures modelled on similar provisions in anti-dumping and countervailing duty law to address complaints and/or to investigate suspicious import surges. While some PTAs already have special regimes for small traders in place, these are so restrictive that their practical relevance is extremely limited.

The Alchian-Allen Theorem and the Economics of Internet Animals

The Alchian-Allen Theorem and the Economics of Internet Animals

Antitrust and Nonexcluding Ties

Notwithstanding hundreds of court decisions, tying arrangements remain enigmatic. Conclusions that go to either extreme, per se legality or per se illegality, invariably make simplifying assumptions that frequently do not obtain. For example, by ignoring double marginalization or tying product price cuts it becomes very easy to prove that a wide range of ties are anticompetitive. At the other extreme, by ignoring foreclosure possibilities one can readily conclude that ties are invariably benign. Ties have historically been thought to produce two kinds of competitive harm: “leverage,” or extraction; and foreclosure, or exclusion. The two theories are not mutually exclusive. Indeed, the premise of the foreclosure theory is that exclusion of rivals is harmful because it enables a firm to keep prices up or to prevent them from falling in response to the entry of new competitors. Ultimately, anticompetitive foreclosing ties must harm consumers. Is there any reason for thinking that ties that do not exclude anyone should be condemned under the antitrust laws? The issue can arise in several different contexts. The most common is the “unwanted” tied product. The purchaser does not want the tied product at all and is objecting about being forced to take and pay for it. This is basically the facts of the Ninth Circuit’s Brantley case, in which cable television consumers complain that the defendant cable television provider offers programming only in large packages of channels. The complaint was dismissed because the plaintiffs could not identify any independent program providers who were excluded by the arrangement. Another subset of cases involves customers complaining about the way the seller allocates the price between the tying and tied goods, typically in order to facilitate price discrimination. To be sure, customers may be injured when they want to purchase a smaller package than a seller wishes to sell. The customer might wish to buy a single residential lot rather than a rancher’s 1000 acre spread. Neither exclusion of a rival nor a restraint of trade producing lower market output is in prospect. Indeed, in a case such as Brantley the per channel cost of delivering a large number of channels is almost certainly lower than the per channel cost of delivering a few. The fixed cost component of a cable television system is a significant portion of its costs and the incremental costs of adding channels are very low. The Brantley plaintiffs simply want the seller to offer a smaller product. That is fundamentally not an antitrust problem.

The costs of hiring skilled workers

This paper analyzes the structure of hiring costs for skilled workers. We use novel Swiss administrative firm-level survey data that provide direct and detailed measures of hiring costs, including recruitment and adaptation. Results show that average hiring costs range, depending on firm size, from 10 to 17 weeks of wage payments. The structure of hiring costs is convex. Marginal hiring costs increase with the number of hires and reach up to 24 weeks of wage payments. We find no evidence for a fixed cost component. Hiring costs also increase with the hiring rate (the ratio of hires and skilled workers), confirming convexity. Hiring costs generally increase with skill requirements for job applicants, and depend on macroeconomic conditions: a 1% point increase in the unemployment rate reduces average hiring costs by more than 5%.

What are the best sample sizes for the Xbar and CUSUM charts?

The X ¯ and CUSUM control charts are used most widely for monitoring the mean of a quality characteristic x. This article studies the sample sizes n X ¯ and n CUSUM of these two charts in the domain of statistical design. However, the study takes the important sampling inspection cost (including the variable and fixed cost components) into consideration. The chart performance will be measured by a weighted average ATS (Average Time to Signal). There are two interesting findings based on the results of this study: (1) The X ¯ chart becomes more statistically effective for detecting mean shifts when the fixed sampling cost cannot be neglected and/or when the mean shift range is small. If n X ¯ and n CUSUM are set as 4 and 1, respectively, based on some conventional wisdom, the simple X ¯ chart often outperforms the more complicated CUSUM chart from an overall viewpoint. (2) Under all circumstances, the overall statistical performance of both charts can be improved, or significantly improved, by the optimization design. The optimal values of n X ¯ and n CUSUM depend on the ratio between the fixed and variable sampling costs, the range of the mean shift, and the in-control Average Time to Signal. For the general cases, the best sample sizes are n X ¯ = 3 or 4, and n CUSUM =2 or 3.

Truthful Mechanisms for Selfish Routing and Two-Parameter Agents

We prove a general monotonicity result about Nash flows in directed networks, which generalizes earlier results and can be used for the design of truthful mechanisms in the setting where each edge of the network is controlled by a different selfish agent, who incurs costs when her edge is used.Moreover, we consider a general mechanism design setting with two-parameter agents, which generalizes the well-known setting of one-parameter agents in two directions by allowing nonlinear cost functions and a fixed cost component as part of each agent’s private data. We give complete characterizations of the sets of output functions that can be turned into truthful mechanisms for two-parameter agents in the case that an agent always incurs her fixed costs and in the case that she only incurs her fixed costs when she is assigned a positive amount of work. Moreover, we give explicit formulas for the payment functions in both cases and show that the truthful payments are uniquely determined by the output function up to a constant as in the one-parameter setting.

The shape of hiring and separation costs in France

In this article, we estimate the structure of costs of hiring, terminating, and retiring employees in France. We use a representative panel data set of French establishments that contains direct measures of these various costs as well as measures of entries and exits for the years 1992 and 1996. First, we show that our panel data source is able to reproduce results obtained by Abowd and Kramarz (2003) when we use the cross-section dimension. Our estimates show that collective terminations are much more expensive than individual terminations: legislation, namely the requirement to set up a “social plan” in case of collective terminations, magnifies firing costs. Collective terminations entail very large fixed costs. Termination costs are essentially linear in the number of terminated workers, with collective terminations being much more expensive. The costs of retirement are concave in the number of retired workers with a fixed cost component which is smaller than the one estimated for terminations, and quite smaller than that obtained by Abowd and Kramarz (2003). Finally, we find that hiring costs are small and seem only present when hiring on CDI; costs of hiring on short-term contracts are almost zero. Finally, the fixed (firm-specific) component of hiring costs is very small.

The Cost of Raising Capital - New Evidence from Seasoned Equity Offerings in Switzerland

This paper is focused on the cost of raising equity capital in Switzerland. In the spirit of the papers of Altinkilic and Hansen (2000) and Buehner and Kaserer (2002) we analyze the structure of the flotation cost function for listed firms in Switzerland. For a sample of 45 SEOs on the Swiss capital market over the years 1996-2000 it is found that the direct flotation cost spreads averages 4.26 percent of gross proceeds. Compared with results related to the German or French capital market this figure is surprisingly high. Moreover, we develop empirically a flotation cost function. On the basis of this analysis it turns out that flotation costs are lower if the issuer opts for self-registration, the issue is less complex, the offer price discount is higher and the stock's market risk is lower. As far as the economies of scale view is concerned, we find clear evidence in favor of diseconomies of scale. In fact, marginal flotation costs are weakly increasing in gross proceeds and, moreover, no supporting evidence for the existence of a fixed cost component in flotation costs can be found. To our understanding this is an important additional piece of evidence against the conventional wisdom that underwriting technology is governed by economies of scale.

The cost of raising capital — New evidence from seasoned equity offerings in Switzerland

This paper is focused on the cost of raising equity capital in Switzerland. In the spirit of the papers of Altinkilic and Hansen (2000) and Buehner and Kaserer (2002) we analyze the structure of the flotation cost function for listed firms in Switzerland. For a sample of 45 SEOs on the Swiss capital market over the years 1996-2000 it is found that the direct flotation cost spreads averages 4.26 percent of gross proceeds. Compared with results related to the German or French capital market this figure is surprisingly high. Moreover, we develop empirically a flotation cost function. On the basis of this analysis it turns out that flotation costs are lower if the issuer opts for self-registration, the issue is less complex, the offer price discount is higher and the stock's market risk is lower. As far as the economies of scale view is concerned, we find clear evidence in favor of diseconomies of scale. In fact, marginal flotation costs are weakly increasing in gross proceeds and, moreover, no supporting evidence for the existence of a fixed cost component in flotation costs can be found. To our understanding this is an important additional piece of evidence against the conventional wisdom that underwriting technology is governed by economies of scale.

Comparison of Lot-Sizing Methods in Aircraft Repairable Component Inventory Systems

The performance of single-level lot-size methods in the inventory environment of aircraft maintenance is studied. Many airlines have considerable difficulty in realistically tying together repair costs and inventory savings. This is because heavy and line maintenance inventories are not easily predicted nor is the consumption of parts, with daily airline operational business characterized by high fixed cost components. Results are presented of a comparison of alternative methods for determining appropriate purchase quantities within material requirements planning systems. Actual historical demands from airline component overhaul workshops were used to determine how lot-sizing methods respond to different combinations of operating parameters in aviation maintenance. A total of 17 lot-sizing methods have been considered. Visual examination of the results were the main focus of this analysis. Finally, a set of guidelines is included to enable airline inventory management practitioners to choose a lot-size method for particular operating parameters.