Higher Marginal Value Research Articles

A Systems Analysis of Sustainability Impacts of Agricultural Policies in India

AbstractWe apply a systems framework for analyzing the overall sustainability impacts of interventions to a case of the rice‐wheat cropping system of Punjab (India), where agricultural practices lead to air pollution‐related health impacts, over‐exploitation of groundwater, over‐use of fertilizers and reduced local crop diversity. We use this case to quantify how varying degrees of change in interventions result in sustainability impacts using an inclusive wealth‐based approach. We show that either improving the existing cropping system or inducing fundamental changes in the cropping system, can lead to substantial and wide‐ranging sustainability benefits. We also show that interventions that improve human health show the largest quantitative benefit due to the assumed high marginal value of human life. Accurate localized estimates of marginal values of stocks are needed for estimating overall sustainability impacts.

Is Ecological Birdwatching Tourism a More Effective Way to Transform the Value of Ecosystem Services?-A Case Study of Birdwatching Destinations in Mingxi County, China.

Ecological birdwatching tourism is an ecological product and an essential part of ecotourism, and the realization of its recreation value is crucial for improving human well-being, and realization of the local benefits of ecosystem services for areas focused on biodiversity conservation, especially in bird species. In this study, we use travel cost interval analysis, one of the travel cost derived models featuring more easily satisfied assumptions and less limited data, to evaluate the recreation value of the ecological bird-watching tourism destination, and compare it with the general ecotourism, of Mingxi County destination in China. The results show that, firstly, the per capita recreation value of eco-birdwatching is 3.9 times that of general eco-tourism, its per capita social benefit is three times that of general eco-tourism, and its per capita economic benefit is 4.5 times that of general eco-tourism. Secondly, compared with general ecotourists, the per capita travel costs of eco-birdwatchers are higher, and there were significant statistical differences in the expenses for catering, tickets, shopping, opportunity cost, and total travel expenses between these two groups. Thirdly, in comparison with general ecotourists, the marginal cost of an individual eco-birdwatcher is higher, and the travel intention of an eco-birdwatcher is more robust at the same cost level. The price of a single eco-birdwatcher is higher under the same travel intention demand level. In short, the ecological bird-watching industry has a higher marginal value than general eco-tourism and has higher social, economic, and ecological benefits, bringing a higher level of development for the local tourism industry.

Adverse Effects of Monitoring: Evidence from a Field Experiment

We conduct a field experiment with remote workers to assess potential adverse effects of monitoring. We find that monitoring reduces the average performance of workers, in particular among the intrinsically motivated workforce. Moreover, monitoring cultivates the average worker: There are fewer high performers and the variance in performance is significantly reduced. Importantly, we show that performance reductions primarily occur among challenging tasks. These performance reductions significantly increase unit costs in our setting. This effect is particularly severe when challenging tasks have high marginal value, as in high-performance work systems or when tasks are complementary inputs into the production function.

Anticorruption, Political Connections, and Corporate Cash Policy: Evidence from Politician Downfalls in China

We examine how firms change their cash policies in response to the downfall of corrupt politicians in China. We find that firms connected to their local government increase cash holdings when high-profile politician downfalls occur in the government. Consistent with the precautionary saving argument, the effect is stronger for firms that have greater investment opportunities or face greater financial constraints. Compared to unaffected firms, affected firms save more cash out of cash flows and have a higher marginal value of cash holdings. Overall, we show that the collapse of firms' political connections has significant impacts on those firms' financial policies.

Effects of rapid urban land expansion on the spatial direction of residential land prices: Evidence from Wuhan, China

During rapid urbanization, trends for urban land prices show continuous growth. Identifying directional land prices gradients is important to guide land management effectively. This study seeks to grasp the spatial direction of residential land price variations influenced by rapid urban land expansion. After analyzing the conceptual framework for urban land expansion and spatial direction of residential land price variations, the spatial interaction effect was explained. Then, geographically weighted regression (GWR) analysis was conducted for a study site in Wuhan, central China, using datasets for residential land prices in 2001, 2007, and 2014. Based on the relationships between residential land expansion and in land price variations, their intermediate variables were selected to establish an evaluation system. GWR analysis provided the spatial distributions of estimated coefficients for three representative location determinants (the distance to the nearest center business district, lake, and arterial road). The results suggest that residential land prices are characterized by obvious spatial direction in residential land expansion. The spatial distribution of residential land prices is reshaped with the formation of an urban (sub-)center, showing a centrifugal development model as a whole. The premium for lakeside property gradually increased as well, which resulted in higher marginal values in prosperous districts, while large lake accessibility had a heterogeneous impact on residential land prices. Proximity to arterial roads had a more obvious impact on land premium in the suburbs than in the central district. This study finally discussed the trends of local variation for spatial direction of residential land prices and analyzed the risks of residential land expansion in the study area.

Social Capital and Managers’ Use of Corporate Resources

This study investigates how social capital affects managers’ use of corporate resources. We find that for firms located in U.S. counties with a high level of social capital, (i) corporate cash holdings have higher marginal value, (ii) the contribution of capital expenditures to shareholder value is higher, and (iii) acquirers experience higher announcement-period abnormal stock returns. We further find that social capital decreases both over- and under-investment, and thus improves ex post corporate investment efficiency. Our evidence suggests that in communities with a high level of social capital, strong social norms and dense social networks constrain unethical corporate behavior, which induces more efficient use of corporate resources.

Data-Driven Consumer Debt Collection via Machine Learning and Approximate Dynamic Programming

This paper develops and tests a framework for the data-driven scheduling of outbound calls made by debt collectors. These phone calls are used to persuade debtors to settle their debt, or to negotiate payment arrangements in case debtors are willing, but unable to repay. We determine on a daily basis which debtors should be called to maximize the amount of delinquent debt recovered in the long term, under the constraint that only a limited number of phone calls can be made each day. Our approach is to formulate a Markov decision process and, given its intractability, approximate the value function based on historical data through the use of state-of-the-art machine learning techniques. Specifically, we predict the likelihood with which a debtor in a particular state is going to settle its debt and use this as a proxy for the value function. Based on this value function approximation, we compute for each debtor the marginal value of making a call. This leads to a particularly straightforward optimization procedure, namely, we prioritize the debtors that have the highest marginal value per phone call. We validate our proposed methodology in a controlled field experiment conducted with real debtors. The results show that our optimized policy substantially outperforms the current scheduling policy that has been used in business practice for many years. Most importantly, our policy collects more debt in less time, whilst using substantially fewer resources — leading to a large increase in the amount of debt collected per phone call.

Naïve, bold, or just hungry? An invasive exotic prey species recognises but does not respond to its predators

Alien species experience both costs and benefits in invaded environments, through naivete of potential prey species, but also predation pressure from native predators. The question of whether alien prey recognise and respond to native predators has been relatively understudied, despite the hypothesised potential for native predators to provide biotic resistance to invasion. There are two main hypotheses about whether exotic prey should recognise native and exotic predators in their new ranges: (1) naivete—predicting recognition of evolutionarily familiar predators only, and (2) pre-adaptation—predicting recognition of all predators through a generalist recognition template. With regards to antipredator responses, (3) naivete theory presumes that exotic prey will respond to the predators they recognise, but we suggest that (4) a bold behavioural syndrome, and/or a high marginal value of food in invaded environments might result in weak or absent responses, even to recognised predators. Here we combine the giving-up density framework with behavioural analysis of remote camera footage to experimentally test these ideas in a disturbed, peri-urban, Australian ecosystem, where alien black rats are predated on by alien dogs, foxes, cats, and native quolls. Black rats recognised dogs and foxes, but appear naive towards quolls. However, they showed no antipredator responses at all, consistent with a bold behavioural syndrome, elevated predation risk, and/or a high marginal value of food in invaded environments.

Efficient groundwater allocation and binding hydrologic externalities

Reallocating water according to its highest marginal value can generate economic gains. However, reallocation of water use often generates third-party effects, or externalities, which prohibit transfers. We develop a spatial-dynamic hydro-economic model to assess the gains from redistributing water across irrigators, taking into account externalities that water use transfers may produce. Water use is optimized across space and time such that return flows in various segments of the watershed do not decrease relative to the flows obtained under current water use. Across a suite of water shortage scenarios in Idaho’s Eastern Snake River Plain, the reallocation of water subject to third party externalities generates an 8–16% increase in aggregate annual profit earned by irrigators, relative to the Prior Appropriation-based allocation. The failure to account for the constraints on reallocation that arise due to externalities overstates the benefits from reallocation by 7%.

Adaptive parametric prediction of event times in clinical trials.

In event-based clinical trials, it is common to conduct interim analyses at planned landmark event counts. Accurate prediction of the timing of these events can support logistical planning and the efficient allocation of resources. As the trial progresses, one may wish to use the accumulating data to refine predictions. Available methods to predict event times include parametric cure and non-cure models and a nonparametric approach involving Bayesian bootstrap simulation. The parametric methods work well when their underlying assumptions are met, and the nonparametric method gives calibrated but inefficient predictions across a range of true models. In the early stages of a trial, when predictions have high marginal value, it is difficult to infer the form of the underlying model. We seek to develop a method that will adaptively identify the best-fitting model and use it to create robust predictions. At each prediction time, we repeat the following steps: (1) resample the data; (2) identify, from among a set of candidate models, the one with the highest posterior probability; and (3) sample from the predictive posterior of the data under the selected model. A Monte Carlo study demonstrates that the adaptive method produces prediction intervals whose coverage is robust within the family of selected models. The intervals are generally wider than those produced assuming the correct model, but narrower than nonparametric prediction intervals. We demonstrate our method with applications to two completed trials: The International Chronic Granulomatous Disease study and Radiation Therapy Oncology Group trial 0129. Intervals produced under any method can be badly calibrated when the sample size is small and unhelpfully wide when predicting the remote future. Early predictions can be inaccurate if there are changes in enrollment practices or trends in survival. An adaptive event-time prediction method that selects the model given the available data can give improved robustness compared to methods based on less flexible parametric models.

SMEs access to finance and the value of supplier financing

ABSTRACTThis article examines the relationship between supplier financing and small- and medium-sized firms’ value as well as the variation in the marginal value of supplier financing that arises from differences in access to financial markets and internal financing. We employ a sample of Spanish small- and medium-sized enterprises from the period 1998–2014. The results show a positive relationship between supplier financing and firm value. Furthermore, the findings reveal that the marginal value of supplier financing declines with leverage, short-term financial debt and cash flow, whereas it increases with financial costs. Also, the results show a higher marginal value of accounts payable during the financial crisis period when bank credit is reduced, for all firms, regardless of their access to finance. These results are in agreement with the financing motive for trade credit use. Firms with better availability of financial resources (internal and external) and with a lower financial cost place less value on supplier financing.

Value of wind power – Implications from specific power

This paper investigates the marginal system value of increasing the penetration level of wind power, and how this value is dependent upon the specific power (the ratio of the rated power to the swept area). The marginal system value measures the economic value of increasing the wind power capacity. Green-field power system scenarios, with minimised dispatch and investment costs, are modelled for Year 2050 for four regions in Europe that have different conditions for renewable electricity generation. The results show a high marginal system value of wind turbines at low penetration levels in all four regions and for the three specific powers investigated. The cost-optimal wind power penetration levels are up to 40% in low-wind-speed regions, and up to 80% in high-wind–speed regions. The results also show that both favourable solar conditions and access to hydropower benefit the marginal system value of wind turbines. Furthermore, the profile value, which measures how valuable a wind turbine generation profile is to the electricity system, increases in line with a reduction in the specific power for wind power penetration levels of >10%. The profile value shows that the specific power becomes more important as the wind power penetration level increases.

Local Gambling Preference and Corporate Cash Policy

This paper studies the relation between local attitudes towards gambling and corporate liquidity. I find that firms exposed to stronger gambling preference hold significantly more cash, because cash enables them to take more risk while staying away from financial distress. Furthermore, I show that gambling-prone firms hold more cash only when they are financially constrained, and these firms also have higher marginal value of cash holding. Corporate headquarter relocation confirms the causal impact of gambling preference on cash holding. Taken together, these findings suggest that greater cash holding in gambling-prone firms is a value-increasing policy due to their strong risk-taking incentive.

Relationships between tree size and occupancy by cavity-dependent arboreal marsupials

Hollow-bearing trees are keystone structures in many ecosystems worldwide and they play critical habitat roles for a vast array of fauna through providing denning and/or nesting sites. We quantified empirical relationships between the diameter of hollow-bearing trees and probability of occupancy of these trees by cavity-dependent arboreal marsupials in the Mountain Ash (Eucalyptus regnans) forests of the Central Highlands of Victoria, south-eastern Australia. We also quantified the effects of other variables such as stand age and elevation on tree occupancy. Finally, we compared the diameter of occupied and unoccupied hollow-bearing trees with non-hollow-bearing trees in 77-year old forest that regenerated after fires in 1939 and which form the dominant age cohort of trees in our study region.Hollow-bearing trees occupied by arboreal marsupials had a larger diameter than unoccupied hollow-bearing trees. The mean diameter of both occupied and unoccupied hollow-bearing trees was almost three times that of 1939-aged trees that did not contain hollows. Our analyses contained evidence of inter-specific differences in the diameter of hollow-bearing trees occupied by different species of arboreal marsupials. Beyond the influence on occupancy of tree-level factors such as diameter, we also found that the probability of occupancy of a hollow-bearing tree was affected by the age of the surrounding forest and landscape attributes such as elevation. The probability of occupancy of an individual hollow-bearing tree was highest when that tree was located in regrowth forest, most likely because of the scarcity of these critical nesting and denning resources in such stands.Populations of large hollow-bearing trees, including those typically selected for occupancy by arboreal marsupials, are in rapid decline in Mountain Ash forests. This decline, coupled with the prolonged period until current cohorts of existing younger trees eventually reach an age (and therefore diameter) that are suitable for occupancy by arboreal marsupials, underscores the critical need to protect all existing hollow-bearing trees from practices that can otherwise destroy them, including industrial clearfelling operations. Better protection is important not only in the small remaining areas of old growth Mountain Ash forest but also in regrowth forest where such trees are scarce and have high marginal value as nesting sites, as reflected by high rates of per tree occupancy rates in stands of this age.

Globalization of Technological Development and Opportunities for National Innovation Systems of Developing Countries

Prior literature expects a lower marginal cash value for weaker governance firms. We test this empirical hypothesis by using the sample of publicly traded Korean firms from 2005 to 2013. To measure the quality of governance structures, we employ the corporate governance scores provided by Korean Corporate Governance Services. The empirical model of Faulkender and Wang (2006) is adopted to estimate the marginal value of cash. Our empirical analysis shows a higher marginal value of cash for the good governance firms in the examination of the total governance score. This finding is consistent to the agency view of cash policy predicting a larger marginal value of cash for the firms with higher governance scores. However, this positive relationship is not robust for a subset of detailed governance scores; a lower marginal cash value is observed for the firms with better qualities of board structure, auditing, dividend policies. Moreover, our empirical analysis verifies a quite low level of marginal cash value for Korean firms, which supports the existence of severe agency conflicts in Korean corporations. Our results verify the significant role of agency conflicts between a manager and shareholders in the determination of marginal cash values in the Korean firms.

Universities as partners in research joint ventures

Sustainable economic growth depends on a continual flow of innovations that depends in turn on a continual flow of knowledge. While empirical evidence suggests that universities can play a significant role in the creation and dissemination of that knowledge, little is known of the characteristics of research joint ventures involving universities. One of the few studies to investigate this issue is Link and Scott (Research Policy 34:385–393, 2005), which found a positive relationship between university participation in RJVs and the size of RJVs which they attributed to universities providing higher marginal value and lower appropriability problems to larger RJVs. Boardman and Bozeman (Economics of Innovation and New Technology 15:51–69, 2006), however, suggests that the explanation might be more complex and not necessarily associated with profit maximization. The purpose of this paper is to present a theoretical model based on a profit-maximizing approach of the decision to invite a university to participate in an RJV that can serve as a foundation for future empirical work, an exploration of the relative explanatory power of a profit-maximizing approach, and a framework for evaluating empirically the policy implications of the Link and Scott’s (Research Policy 34:385–393, 2005) findings.

Who Coordinates Shareholder Votes? The Role of Proxy Advisors in Corporate Governance

We examine the effect of proxy advisors on the firm. Contrary to critics’ concerns that following proxy-advisor recommendations leads to suboptimal contracting, our findings show that firms with proxy-advisor aligned owners have a higher marginal value of cash, superior operating performance, increased forced CEO turnover sensitivity to performance, and are less likely to make value-destroying acquisitions. Consistent with the information aggregation function of the proxy advisory process, proxy advisor influence is strongest in diffusely held firms. We address potential selection bias and infer causality by showing that these results only hold after coverage initiation by a proxy advisor. Overall, our study identifies circumstances under which proxy advisors mitigate collective action problems, and act as an efficient coordinating mechanism for institutional voting.

Financial Intermediaries and the Cross‐Section of Asset Returns

ABSTRACTFinancial intermediaries trade frequently in many markets using sophisticated models. Their marginal value of wealth should therefore provide a more informative stochastic discount factor (SDF) than that of a representative consumer. Guided by theory, we use shocks to the leverage of securities broker‐dealers to construct an intermediary SDF. Intuitively, deteriorating funding conditions are associated with deleveraging and high marginal value of wealth. Our single‐factor model prices size, book‐to‐market, momentum, and bond portfolios with an R2 of 77% and an average annual pricing error of 1%—performing as well as standard multifactor benchmarks designed to price these assets.

Effect of integrated approach of plant nutrients on yield and yield attributes of different crops in wheat-sesame-T. Aman cropping pattern

The experiment was carried out at FSRD site, Pushpopara, Pabna, during November, 2010 to December, 2011 to observe the comparative performance of integrated plant nutrients management (IPNS) system through the use of organic (cowdung, cowdung slurry) manure and inorganic fertilizer on wheat, sesame and T. Aman crops under wheat-sesame-T. Aman cropping pattern. The experiment was consisted with four treatments viz. T1: Soil test based inorganic fertilizer dose for high yield goal, T2: Cowdung @ 5 t ha-1 + IPNS basis inorganic fertilizer dose for high yield goal, T3: Cowdung slurry @ 5 t ha-1 + IPNS basis inorganic fertilizer dose for high yield goal and T4: Fertilizer dose usually practiced by the farmers. In case of wheat, the highest grain yield (3.80 t ha-1) was obtained from bio-slurry treated plot that means T3 treatment followed by T2 and the lowest (3.31 t ha-1) from T4. Higher seed yield (1.31 t ha-1) of sesame was obtained from T3 that was statistically identical to T2 and T1 and the lower (1.01 t ha-1) from T4. For T. Aman rice, the highest grain yield (4.89 t ha-1) was obtained from T3 which was statistically indistinguishable from T1 where as the lowest grain yield (4.1 t ha-1) was recorded from T4. Considering the whole pattern, it is observed that the highest gross return (271100 Tk ha-1) was obtained from T3 followed by T2 and the lowest (225650 Tk ha-1) from T1 treatment. Total variable cost was recorded as the highest (100368 Tk ha-1) in T2 followed by T3 and the lowest (86775 Tk ha-1) in T4 treatment. The highest marginal value of product (45450 Tk ha-1) was recorded in T3 followed by T2 where as the minimum (28710 Tk ha-1) was found in T1 over the T4 treatment. Marginal variable cost was observed as the highest (13593 Tk ha-1) in T2 treatment followed by T3 and the minimum (8899 Tk ha-1) was recorded in T1 treatment. The highest MBCR (4.15) was recorded from T3 followed by T2 and the minimum (2.31) from T2 treatment. DOI: http://dx.doi.org/10.3329/ijarit.v3i2.17847 Int. J. Agril. Res. Innov. & Tech. 3 (2): 66-71, December, 2013

Economic impacts of climate change on water resources in the coterminous United States

A national-scale simulation-optimization model was created to generate estimates of economic impacts associated with changes in water supply and demand as influenced by climate change. Water balances were modeled for the 99 assessment sub-regions, and are presented for 18 water resource regions in the United States. Benefit functions are developed for irrigated agriculture, municipal and domestic water use, commercial and industrial water use, and hydroelectric power generation. Environmental flows below minimal levels required for environmental needs are assessed a penalty. As a demonstration of concept for the model, future climate is projected using a climate model ensemble for two greenhouse gas (GHG) emissions scenarios: a business-as-usual (BAU) scenario in which no new GHG controls are implemented, and an exemplary mitigation policy (POL) scenario in which future GHG emissions are mitigated. Damages are projected to grow less during the 21st century under the POL scenario than the BAU scenario. The largest impacts from climate change are projected to be on non-consumptive uses (e.g., environmental flows and hydropower) and relatively lower-valued consumptive uses (e.g., agriculture), as water is reallocated during reduced water availability conditions to supply domestic, commercial, and industrial uses with higher marginal values. Lower GHG concentrations associated with a mitigation policy will result in a smaller rise in temperature and thus less extensive damage to some water resource uses. However, hydropower, environmental flow penalty, and agriculture were shown to be sensitive to the change in runoff as well.