Flat Rate Research Articles

Switching from an Inclining to a Zero-Level Unemployment Benefit Profile: Good for Work Incentives?

This paper evaluates the impact on the transition to work of a policy reform in Belgium that restricted the access to a specific unemployment insurance scheme for young labor market entrants. This scheme entitles youths with no or little labor market experience to unemployment benefits after a waiting period of one year. As of 2015, the Belgian government unexpectedly scrapped benefit eligibility for youths who start the waiting period at the age of 24 or older. The reform implied a change from an inclining to a flat rate (zero-level) benefit profile. We use a difference-in-differences approach to identify the causal impact of this reform on fresh university graduates. Our main finding is that this reform only increases the transition to very short-lived jobs.

How do patent incentives affect university researchers?

Universities and other beneficiaries of public funding for scientific research are encouraged to patent resulting inventions under the Bayh–Dole Act. This controversial framework gives academic grant recipients a direct financial stake in the success of their inventions by requiring universities to share the resulting patent royalties with inventors. This incentive for grant recipients might help justify Bayh–Dole patents when the conventional justification for exclusivity—that it is necessary for commercialization—fails to hold. But there is little evidence as to whether it works.This article examines how one aspect of the patent incentive—the prospect of royalties—affects the behavior of university researchers. Fortuitously, different schools offer inventors different shares of patent revenue. We have created a dataset of royalty-sharing policies from 152 universities, which shows substantial variation across universities and time. (For example, Caltech switched from sharing 15 %–25 % of net income in 1994, the University of Washington switched from sharing 100 % of initial revenues to a flat rate of 33 % in 2004, and the University of Iowa switched from 25 % to 100 % of initial patent revenues in 2005.) Although prior work has reported that higher inventor royalties lead to more university licensing income, we show that this result was driven by coding errors. We also extend prior work by examining more years, doing a more convincing panel data analysis, using additional outcome variables, and looking at lateral moves by the most active patenters. In all of these analyses we find no compelling empirical evidence that increasing university inventors’ royalty share has a significant effect on any of the outcomes one would expect to be most affected.These results do not imply that patents provide no incentives to university researchers. They may provide reputational benefits or encourage faculty-run spin-offs, or even provide financial incentives that are not captured by our statistics. But the lack of a measurable impact of higher royalty shares on patenting activity suggests that, from a social welfare perspective, it may be preferable for a larger share of royalties to be retained by universities, which are then required by Bayh–Dole to reinvest this money in science research and education. In any event, our analysis raises promising questions for future research and calls into question the existing view that increasing the inventor’s share in university patent policies encourages researchers to develop and commercialize more remunerative patents.

Decentralized rainwater harvesting program for rural cities considering tax incentive schemes under stakeholder interests and purchasing power restrictions

Abstract This paper focuses on implementing a decentralized rainwater harvesting (DRH) program for rural cities under stakeholder interests and purchasing power restrictions. The study is conducted by considering: (1) a no tax incentive scheme (NTIS); (2) a flat rate tax incentive scheme (FTIS); and (3) a progressive tax incentive scheme (PTIS). A three-stage decision framework is proposed. In the first stage, a water balance simulation model is developed to estimate the amount of rainwater that can be collected at individual households using different capacity rain barrels and to determine the threshold rain barrel capacity. In the second stage, the water balance simulation model is run multiple times with varying input parameters to obtain the probability distributions for rainwater used and water demand for different households using different capacity rain barrels, which are then used to generate scenarios for the third stage optimization model. In the third stage, a multi-objective stochastic mixed integer linear programming (Mo-SMILP) model is proposed that aims to determine the household participation rate and cumulative city-wide DRH capacity considering tax incentive schemes, stakeholder interests, and purchasing power restrictions. The proposed Mo-SMILP model is solved by using an improved augmented epsilon constraint method (AUGMECON 2) in order to understand the trade-off between city-wide household reliability, city-wide household savings, and city government savings. A case study of a small rural city in the State of Texas in the US is used to illustrate the effectiveness of the proposed decision framework. The results shows a significant decrease in city-wide household reliability when stakeholder interests and purchasing power are considered. In addition, the PTIS is best at improving city-wide household reliability and savings. NTIS and FTIS are best at improving city government savings depending on the household preference for reliability and savings.

Disagreement about Innovations and Endogenous Growth

We study an equilibrium model with disagreement about the likelihood of successful innovations. We show that disagreement stimulates aggregate economic growth and overcomes market failures that would otherwise occur in an equilibrium without disagreement. The higher growth with disagreement comes at the cost of a higher wealth and consumption inequality, as a few entrepreneurs will ex post be successful while most entrepreneurs will fail. Hence, our disagreement model provides a potential explanation for the “entrepreneurial puzzle” in which entrepreneurs choose to innovate despite taking on substantial idiosyncratic risk accompanied by low expected returns. We show that taxes on profits reduce growth because it deters entrepreneurs from innovating, leading to a “Laffer curve” as total tax revenue declines with high tax rates. A flat tax rate does not affect innovation and thus economic growth. A high enough flat tax rate leads to the first best for economic growth, assuming that the government would let all entrepreneurs pursue their way of innovating even though from its point of view many of these ways would seem irrational.

ASSESSING THE IMPACTS OF CLIMATE CHANGE ON THE HYDROLOGY OF THE INDRAWATI RIVER BASIN, NEPAL

Abstract. This study details climate change assessment of the hydrological regime of Indrawati basin of Nepal. The study uses Soil and Water Assessment Tool (SWAT) model to delineate, discretize and parameterize the Indrawati basin to compute model’s input parameters. The model was then run for 1990–2014 to simulate the discharge at the outlet (Dholalghat). The coefficient of determination R2 and Nash-Sutcliffe (ENS) were used to evaluate model calibration and validation. The results found were satisfactory for the gauging station R2 = 0.951 and ENS = 0.901 for calibration and R2 = 0.937 and. ENS = 0.906 for validation. The calibrated hydrological model was run for the future climate change scenario using the RegCM4-LMDZ4 data and the relative changes with the baseline scenarios were analyzed. The comparison suggests that the historical trend of flow is decreasing at the rate of 0.55 m3/s per year. According to RegCM4-LMDZ4 simulations, the trend is going to continue but at a flatter rate. The decreasing trend is observed to be very less. The characteristic peak flow month in the historical scenario is August but the RegCM4-LMDZ4 led simulated flows suggest a shift in monthly peak to October suggesting decrease in monsoon flows and a subsequent significant increase in flows from October to January.

Valuation risk adjusted deposit insurance on heston model

Deposit insurance is a tool to stabilize the banking system. In managing deposit insurance in Indonesia, deposit insurance agency applies the flat rate premiun system which is the same premium imposition system for each bank without taking into account the different risk levels of each bank. The implementation of the flat rate, it can still cause moral hazard which can trigger the monetary crisis. To anticipate this problem, it is necessary to design a risk adjusted premium. One of method that can be used in determining deposit insurance premium is Fourier transform. In this study, we analyzed analytical solutions to determine risk adjusted deposit insurance premiums on Heston Model by using Fourier transforms. Based on the simulation results, it was found that the amount of volatility caused the value of deposit insurance premiums getting bigger, the smaller value of interest rates so the greater value of deposit insurance premiums. The high value of deposit insurance premiums is also influenced by the value of debt obligations and dividends value.

Effects of the Income Stabilization Tool on farm income level, variability and concentration in Italian agriculture

This paper provides an ex ante assessment of the effects of the Income Stabilization Tool (IST), a new risk management tool proposed in the Common Agricultural Policy of the European Union. We investigate the effects of IST on income variability and levels as well as on income inequality in the farming population. We take Italian agriculture as an example as the introduction of IST is currently under discussion there. A rich panel of 2777 farms was studied over a period of 7 years. We use stochastic simulation to derive different income inequality estimates and apply Gini decomposition approaches to assess the distributional implications of IST. We compare the current income situation with that resulting from a hypothetical implementation of IST under different policy scenarios, also accounting for reduced levels of CAP direct payments. We find that IST not only stabilizes farm income but also enhances its level and reduces income inequality in Italian agriculture. IST is more effective in reducing income inequality when farmers pay contributions to mutual funds that are proportional to their income compared to the case of flat rate contributions. Finally, results do not support the hypothesis that the impact of IST will differ if the level of direct payments were to be reduced. Thus, results seem robust enough to accommodate future policy conditions.

Getting more than \u201cclaps\u201d: incentive preferences of voluntary community-based mobilizers in Tanzania

BackgroundMarie Stopes Tanzania works with a voluntary cadre of 66 community-based mobilizers (CBMs), who are tasked with raising awareness, generating demand and providing referral to potential clients for family planning, comprehensive post-abortion care and cervical cancer screening. CBMs extend the reach of urban clinics to peri-urban communities, enhancing access to sexual and reproductive health services. In an effort to optimize performance of CBMs, a study was conducted to explore the drivers of CBM motivation and inform the design of an incentive scheme.MethodsThree focus group discussions with 17 CBMs and 11 interviews with CBM supervisors and managers were conducted in three clinics and the head office. After thematic analysis of transcripts, findings on motivational factors were discussed in a reflection workshop and informed the development of a discrete choice experiment (DCE) involving 61 CBMs as respondents. The DCE included eight choice questions on two incentive schemes, each consisting of five attributes related to remuneration, training, supervision, benefits and identification. For each attribute, different incentive options were presented, based on the outcomes of the qualitative assessment. The DCE results were analysed using conditional logistic regression.ResultsA variety of factors motivated CBMs. Most CBMs were motivated to conduct their work because of an intrinsic desire to serve their community. The most mentioned extrinsic motivational factors were recognition from the community and supervisors, monthly allowance, availability of supporting materials and identification, trainings, supervision and feedback on performance. Recommendations for improvement were translated into the DCE. Incentive attributes that were found to be significant in DCE analysis (p < 0.05), in preference order, were carrying an ID card, bi-monthly training, supervision conducted via both monthly meetings at clinics and visits from the head office, and a monthly flat rate remuneration (over pay for performance).ConclusionDespite the recognition that being a CBM is voluntary, incentives, especially those of non-financial nature, are important motivators. Incentive schemes should include basic compensation with a mix of other incentives to facilitate CBMs’ work and enhance their motivation. Programme designs need to take into account the voices of community-based workers, to optimize their performance and service delivery to communities they serve.

Economic Analysis and Optimization of Micro Grid considering Incentive Oriented Demand Response Programme

In this paper, Economic Analysis and Optimization of Micro Grid (MG) considering Incentive oriented Demand Response Programme (DRP) is proposed. To minimize levelized cost of energy, net present value and to maximize return on investment, incentive oriented Demand Response Programme is implemented using Hybrid optimization model of electric renewables (HOMER). Assessment of this work targets end users having installed net energy meters/smart meters with flat rate. This DRP also encourage end users to reduce their peak load. Simulations are carried by Hybrid optimization model of electric renewables. Results show that MG with incentive oriented DRP can be utilized for optimizing the bidding, utility savings to minimize levelized cost of energy, net present value and maximize Return on Investment(ROI).

How Much Does Basic Income Cost? Modelling Basic Income as Universal Life Annuity

Abstract The cost of basic income is typically estimated for a particular year. However, to assess the financial feasibility of basic income, it is also important to consider how much basic income will cost in the future. This is especially important in countries experiencing an ageing population, where the proportion of workers is expected to shrink. This article considers basic income as a universal life annuity and develops two models based on actuarial concepts to estimate the flat tax rate required to finance basic income. The first model considers the cost of basic income over the lifetime of the current population and the second model additionally considers changing population dynamics. The proposed models are conceptually simple, providing a straightforward way to assess the financial feasibility of basic income. Using Singapore data, the models show that the monthly cut-off income separating net contributors and net recipients is around $2710 and benefits around 39 % of adult residents. A tax rate of around 22 % is required to support a basic income of $600.

Smart residential electricity distribution system (SREDS) for demand response under smart grid environment

The present research work attempts to develop a Smart Residential Electricity Distribution System (SREDS) for enabling Smart Residences (SR) to participate in Demand Response (DR) schemes of Power Distribution Company (PDC) with either Flat Rate tariff, Time of Use tariff or Real Time Pricing. SREDS includes a Smart Energy Meter (SEM) enabled with Internet of Things, an Intelligent Residential Load Management System (IRLMS) with Wi-Fi connectivity, distributed Wi-Fi enabled Smart Load Nodes (SLN) and Smart Battery Charing/Discharging Controller (SBCDC). The SEM receives the key parameters such as electricity pricing, maximum demand limit, etc. as per the DR schemes from the PDC through Meter Data Management System (MDMS) using Internet. IRLMS receives the required operational timings of the loads as per the desire and comfort of the user either through the user interface or from the SLN connected to the appliances participating in DR. If the SR is equipped with battery storage system, then the battery units are interfaced with the IRLMS through SBCDC. The present status of the battery is communicated to IRLMS by SBCDC. The communication between SEM, IRLMS, SLNs and SBCDC is established through Home Area Network using Wi-Fi. The IRLMS processes the PDC parameters and load requirements, and executes an optimization algorithm to find the best possible scheduling of appliances in order to get minimized electricity bill. The SEM communicates back the energy consumption data to the PDC through MDMS.

The Valuation of Deposit Insurance with Risk Using Fourier Transform

Deposit insurance is a tool to stabilize a banking system. In deposit insurance, the insured risk is the risk of the bank’s failure to fulfill its obligations to the customer because of its revoked license. The application of a flat rate deposit insurance system will lead to moral hazard problems, and cause a banking crisis as the banks get involved to risky activities. To anticipate this, it is necessary to design a deposit insurance premium which calculating the different risk levels of each bank. One method that can be used is Fourier transforms. The purpose of this study is to obtain a deposit insurance with risk premium model from the Black-Scholes Model by using Fourier transform. Based on the simulation results, the research found the value of volatility and interest rate is directly proportional to the value of deposit insurance premiums, as well as the value of debt obligations. The high value of deposit insurance premiums is also influenced by the value of dividends, however the value of insurance premiums has changed insignificantly prior to n period, therefore the value of deposit insurance premiums from zero to n period has changed insignificantly.

An emerging trend to tax sugar sweetened beverages and other junk foods: overregulation or an effective way to modify dietary behaviours?

Abstract Dietary behaviours have an important impact on rising prevalence of noncommunicable diseases responsible for 71% of deaths globally/year. Dietary behaviours also have a growing impact on quality of life, disabilities, as well as economic stability of health systems. In order to overcome the growing impact, many countries are looking for instruments to modify dietary habits of individuals. In the study presented here, we looked at solutions implemented in different countries in terms of junk food taxation, with regard to the political processes related to their implementation, adopted models of taxation, as well as their impact on social and economic reality. Throughout the world, several countries have adopted dietary taxes, such as sugar, fat, salt and soda taxes, while the other are planning or considering doing so. So far there is only one example of withdrawal from the tax that has been implemented. There are different models of taxation, including flat rates, percentages of the basic price and progressive rates on the amount of the component being subject to taxation. These solutions continue to be controversial and subject to intensive discussions in many countries. Nonetheless, the existing evidence shows that the impact on dietary habits seems to be positive.

A Retrospective on the Woodhouse Report: The Vision, the Performance and the Future

The following is a revised version of the second Woodhouse Memorial Lecture given at both the Victoria University of Wellington and the University of Auckland in September 2018. It traces the history and policy iterations of New Zealand's accident compensation scheme that flowed from the 1967 Woodhouse Report (the Report), a Royal Commission report chaired by Sir Owen Woodhouse. It discusses the features of the Report and the determination it showed to get rid of the common law action for damages for personal injury. It analyses the degree to which the Report was not followed in the journey it took through the political decision-making system. There is a critical analysis of the delivery of benefits, the administration of the scheme and its financing. The performance in accident prevention and rehabilitation is briefly covered. The method of settling disputes in the scheme has seen an unwelcome return to legalism. The lecture concludes with a strong plea to remove the anomalies created by the accident compensation scheme between the victims of accident who receive earnings related-benefit and those who are dealt with under the Social Security Act 2018 under which they receive flat rate benefits. The lecture concludes with some lessons for policymakers.

The Appropriate Roles for Equity and Efficiency in a Progressive Income Tax

Increased focus on economic efficiency in formulating tax policy, at the expense of achieving equity, has resulted in decreased rate progressivity in our individual income tax. This decrease has exacerbated inequality. There are several explanations for the intense focus on efficiency and reduced emphasis on equity. Predictions of efficiency gains from low individual income tax rates appear more certain than equity gains from progressive tax rates. Efficiency gains seem measurable, while equity gains appear intangible and unquantifiable. In addition, distributive justice, which underlies and shapes tax equity, exists in many abstract forms, some of which may not require progressive tax rates. This Article argues, however, that the emphasis on efficiency is misplaced. Inequality imposes measurable costs on the health, social well-being, and intergenerational mobility of our citizens, as well as on our democratic process. This is corroborated by significant empirical analysis. In contrast, empirical analysis shows that anticipated efficiency gains from low individual tax rates are speculative. A consensus exists among economists that taxes within the historical range of rates in the United States have little or no impact on labor supply. Moreover, economists cannot agree whether the myriad empirical studies on savings indicate that progressive tax rates decrease, increase, or have no impact on savings in the United States. The clear harms arising from inequality and the uncertain harms arising from progressive tax rates, strongly support always giving equity at least equal weight with efficiency in formulating tax policy. But given the high level of inequality in the United States and the currently low and flat tax rate structure, equity should be given more weight than efficiency at this time. Emphasizing equity in a progressive individual income tax will contribute to the health and economic mobility of our citizens, as well as the stability of our democracy

On the design of equity-oriented pharmaceutical copayments

In this paper, we propose a new approach to address the problem of designing pharmaceutical copayments. The rationale for positive copayments in our setting lies in the presence of budgetary constraints and, hence, in the need to raise funds in order to finance the costs of the treatments. We use results from the literature on axiomatic bargaining with claims to incorporate criteria of distributive justice into the design of copayments. We find that if the government constrains patient rights to what is medically feasible, equity-based copayments vary from a percentage of the cost of the treatment, to a flat rate per prescription. If the government also takes into account the burden of disease experienced by patients, then copayments based on equity lead to a relation between copayments and clinical status that diverges from those proposals based on efficiency arguments. In particular, we show that equity-based copayments might be increasing in the health gains that the treatments provide to the patients. The reason is that these copayments try to avoid a “double jeopardy” problem, by ensuring that those patients with a large burden of disease do not face also an important monetary cost.

Concentration-Dependency and Time Profile of Insulin Secretion: Dynamic Perifusion Studies With Human and Murine Islets.

The detailed characterization and quantification of the kinetics of glucose-stimulated insulin secretion (GSIS) by normal pancreatic islets is of considerable interest for characterizing β-cell dysfunction, assessing the quality of isolated islets, and improving the design of artificial pancreas devices. Here, we performed dynamic evaluation of GSIS by human and mouse islets at high temporal resolution (every minute) in response to different glucose steps using an automated multichannel perifusion instrument. In both species, insulin responses were biphasic (a transient first-phase peak followed by a sustained second-phase), and the amount of insulin released showed a sigmoid-type dependence on glucose concentration. However, compared to murine islets, human islets have (1) a less pronounced first-phase response, (2) a flat secretion rate during second-phase response, (3) a left-shifted concentration response (reaching half-maximal response at 7.9 ± 0.4 vs. 13.7 ± 0.6 mM), and (4) an ~3-fold lower maximal secretion rate (8.3 ± 2.3 vs. 23.9 ± 5.1 pg/min/islet at 30 mM glucose). These results can be used to establish a more informative protocol for the calculation of the stimulation index, which is widely used for islet assessment in both research and clinical applications, but without an accepted standard or clear evidence as to what low- to high-glucose steps can provide better characterization of islet function. Data obtained here suggest that human islet functionality might be best characterized with a dynamic stimulation index obtained with a glucose step from a low of 4–5 to a high of 14–17 mM (e.g., G4 → G16).

Grid-connected hydrogen production via large-scale water electrolysis

A techno-economic analysis was performed for large-scale hydrogen production plants (4000–40,000 kgH2/day or approximately 10–100 MW). Two electricity pricing schemes in 8 different geographical locations were considered. The analysis included five Canadian provinces with flat rates and real-time pricing for the wholesale markets in Germany, California, and Ontario. Under flat-rate pricing, the levelized cost of hydrogen produced via water electrolysis ranged from, for example, $4.21 to $4.71/kgH2 in Québec. For wholesale electricity markets, an operational strategy was developed that aims to identify if a posted price is high or low based on historical electricity spot prices. The electricity cost can be reduced by 4%–9% in Germany and by 15%–31% in Ontario and California at a capacity factor of 0.9 by implementing such operational strategy. Electrolytic hydrogen production in Ontario combined with underground storage was found to be the cheapest in the three wholesale electricity markets, resulting in a levelized cost of hydrogen of $2.93–$3.22/kgH2 for alkaline electrolysis and $2.66–$3.54/kgH2 for proton exchange membrane electrolysis. Compared to steam methane reforming at $2.5–$2.8/kgH2 (without carbon capture), the electrolytic hydrogen cost is 6%–27% higher. However, this cost becomes comparable to that from steam methane reforming once carbon capture and storage are included in the analysis. Our results suggest that maximizing the use of the electrolytic systems via high capacity factors can be favorable, especially under integration with wholesale electricity markets.

Enabling secure wireless multimedia resource pricing using consortium blockchains

Wireless Service Providers (WSPs) and Content Providers (CPs) charge common data price according to the flat rate, the transmission time, or the data usage, irrespective of the content characteristics. The multimedia compression parameters that determine the multimedia importance diversities among frames have largely been ignored in media pricing research. We establish a new economics-driven resource allocation framework for multimedia transmissions among WSPs, CPs, and End Users (EUs) based on Smart Media Pricing (SMP). The WSPs transmit media streams provided by CPs to the EUs to earn money. However, facing with the transaction security and privacy protection issues, we undertake promising consortium blockchain to improve resource pricing transaction security without reliance on a trusted third party. A novel Stackelberg game with consortium blockchain is firstly established to allocate transmission resources such as Transmission Times’ Limitations (TTLs) from an economic point of view. Then we investigate the utility maximization problems of the leader (WSP and CP) and the follower (EU) in terms of TTLs respectively. Finally, the optimal TTL and the optimal price are non-uniformly determined for each frame according to the game equilibria, by analyzing the payment from EUs, the channel conditions, and the media characteristics in terms of frame importance. Security analysis shows that our proposed scheme achieves better transaction security and privacy protection. Experimental comparison with uniform pricing based on equal TTL or equal frame importance validates the effectiveness of the proposed economic model.

Optimal package pricing in healthcare services

Fixed pricing for healthcare services is emerging as an attractive business model for private healthcare service providers. Under fixed pricing (or flat rate) contract, the patient is charged a fixed price for the healthcare services irrespective of the actual cost incurred by the hospital. Such contracts increase the risks for the healthcare service provider, thus making pricing decision crucial. In this paper, we study uncertainty and analyse the flat rate pricing contract for a profit maximising hospital to find the optimal price of treatment and examined value-at-risk (VaR) associated with such contracts for a risk minimising hospital. Bounds on price were derived to support healthcare providers with price negotiations. We extended the basic models by adding constraints to obtain risk-adjusted optimal price. We proved analytically that the optimal price lies between profit maximisation value and risk minimisation value of price, which we refer to as the efficient pricing interval. Our models and insights provide practical support to private healthcare service providers for optimal pricing and keep them informed about their risk position.