Inefficient Resource Allocation Research Articles

Estimación paramétrica y no paramétrica de la disponibilidad a pagar por los beneficios recreativos de un proyecto de recuperación y conservación en el complejo club de pueblo Salcedo, Puno, Perú -2012

The recreational club village complex, Salcedo, Puno, Perú has characteristics that are characteristic of a public good, since sports and recreational activities are carried out in the open air, without any payment, which leads to an inefficient allocation of resources. The economic benefit derived from the use of the recreational benefits of the complex can represent a significant source of income to carry out recovery and conservation work. The objective of the study is to estimate the average disposition to pay for the recreational benefits that a complex recovery and conservation project would provide, using parametric and non-parametric techniques. A survey was applied to the contingent valuation in a referendum binary format to 361 people who visit the complex regularly for recreational purposes. Specifically, measures of change in welfare were estimated, using the contingent valuation method and parametric and nonparametric estimation techniques. Subsequently, these measures were statistically compared by means of the construction of confidence intervals. The results confirm that there is no significant statistical difference (5%) between the parametric (s / 4.13) and nonparametric Kriström estimates (s / 3.79). This does not happen when compared to Haab & McConnell's nonparametric estimate (s. 2.93). The estimate made with the Haab & McConnell technique undervalues the recreational benefits provided by the village's recreational club complex.

Efficient indirect regulation under Protection for Sale

Regulatory intervention is necessary to overcome market failures. However, this kind of intervention may also create Protection for Sale conditions in the market—which might, in turn, lead to an inefficient resource allocation. This paper examines the effect of an indirect intervention on regulated market welfare under Optimal Regulation and Protection for Sale conditions. Although under Optimal Regulation conditions there is zero welfare-loss as it derives from Differential Price Policy (DPP), it seems that under substantial Protection for Sale conditions this price policy increases the welfare-loss, and therefore a Uniform Price Policy (UPP) might achieve a smaller welfare-loss—due to the “free-riding” effect. Furthermore, this paper suggests that in between these two price policies lays a third option, a Combined Price Policy, that can balance between the accurate resource allocation (DPP) and the political pressure reduction (UPP) in order to reduce the welfare-loss and to increase the market efficiency.

Resource allocation in SDN based 5G cellular networks

The deployment and operation of Fifth Generation (5G) network is expected in 2020. The 5G aim to provide high throughput, reduced latency, increased capacity and a shift from service-orientation to user-orientation in requirements and innovations. The users require an efficient resource allocation and management. The closed infrastructure and ossified services of existing networks lead to complex, inefficient resource allocation and underutilized network resources especially in wireless networks. Different allocation techniques are proposed based on the utility gain of a service provider and user satisfaction. Software Defined Network (SDN) and Network Function Virtualization (NFV) are a hot topic in the wired and wireless network for the network management. SDN based 5G network is another stepping research domain for resource allocation and connectivity in 5G network. In this paper, a survey on state of the art on the 5G integration with the SDN is presented. A comprehensive survey is presented for different integrated architectures of 5G cellular network based on SDN and NFV form part of the paper. Different architectural integration of other wireless technologies such as 3G/4G, LTE, WiMAX etc. are highlighted in term of SDN and network virtualization. Furthermore, the paper focuses on the methods and techniques adopted for resource allocation for SDN based cellular network and elaborate requirements for futuristic 5G networks. It also highlights the role of virtualization and provides an analysis of abstraction for resource allocation in SDN based cellular network. In the end, the potential problems and issues are also comprehended in this article.

IMPACTOS DA POLÍTICA NA ACUMUNIVERULAÇÃO DA RIQUEZA DOS ESTADOS BRASILEIROS: A CONTRIBUIÇÃO DOS INVESTIMENTOS EM INFRAESTRUTURA E DOS ESFORÇOS EM INOVAÇÃO

O artigo busca analisar o impacto dos investimentos em infraestrutura e dos esforços em inovação na acumulação da riqueza dos estados. Foi adotado o método de regressão quantílica com o intuito de analisar o impacto dos investimentos em diferentes níveis de renda. Os resultados do modelo mostram que nas economias menos desenvolvidas e de baixa renda a ausência da infraestrutura torna o efeito do investimento superior em relação às economias mais desenvolvidas e com alta renda. Na medida em que a economia se aproxima da fronteira (a alta renda), o dinamismo dos negócios vai reduzindo os custos de oportunidade nos investimentos em Ciência & Tecnologia (C&T), alterando a demanda por mão de obra qualificada necessária para sustentar o deslocamento da fronteira. A ausência desta compreensão pode conduzir a uma alocação ineficiente dos recursos na geração de crescimento nos estados brasileiros.

Do Auditors Accurately Predict Litigation and Reputation Consequences of Inaccurate Accounting Estimates?

To effectively manage audit risk, auditors must correctly predict the potential litigation and reputation consequences associated with inaccurate accounting estimates. Accurate predictions are critical because underestimation of negative consequences leads to excess legal exposure and overestimation leads to over-auditing. Our paper examines whether auditors correctly anticipate these litigation and reputation outcomes. We provide manager- and partner-level auditors with case facts from an auditor negligence lawsuit and ask them to predict the proportion of juries that will return verdicts against their firm. We then compare auditors’ predictions to the actual verdicts we observe when we provide the same set of case facts to mock jurors who deliberate as part of juries. We find that auditors overestimate the likelihood of negligence verdicts, especially when audit quality is relatively high. Our supplemental measures help explain the reasons for this overestimation: auditors tend to underestimate jurors’ perceptions of audit quality and willingness to attribute inaccurate estimates to situational factors. Finally, we examine auditors’ predictions about how a news article about the litigation will affect their reputation with the general public. Similar to our litigation results, we find that auditors tend to overestimate the article’s negative impact on auditor reputation. Collectively, our findings suggest that auditors overestimate litigation and reputation consequences resulting from inaccurate accounting estimates. This overestimation is consequential as it leads to inefficient allocation of audit resources.

Challenges of Designing and Implementing High Consequence Infectious Disease Response.

Ebola is a high consequence infectious disease-a disease with the potential to cause outbreaks, epidemics, or pandemics with deadly possibilities, highly infectious, pathogenic, and virulent. Ebola's first reported cases in the United States in September 2014 led to the development of preparedness capabilities for the mitigation of possible rapid outbreaks, with the Centers for Disease Control and Prevention (CDC) providing guidelines to assist public health officials in infectious disease response planning. These guidelines include broad goals for state and local agencies and detailed information concerning the types of resources needed at health care facilities. However, the spatial configuration of populations and existing health care facilities is neglected. An incomplete understanding of the demand landscape may result in an inefficient and inequitable allocation of resources to populations. Hence, this paper examines challenges in implementing CDC's guidance for Ebola preparedness and mitigation in the context of geospatial allocation of health resources and discusses possible strategies for addressing such challenges. (Disaster Med Public Health Preparedness. 2018;12:563-566).

The Shadow Prices of Carbon Emissions in China’s Planting Industry

The shadow prices of carbon emissions are essential for assessing emission abatement costs and formulating environmental public policies. By adopting the directional distance function method, this paper studies the shadow prices of carbon emissions caused by three main emission sources from China’s planting industry for a panel of 30 provinces spanning the period 1997–2014. We find that there is considerable regional heterogeneity in the shadow prices, and, of the 30 provinces, 23 are characterized by decreasing trends while only seven are on the rise over time. This implies that there is inefficiency of resource allocation among provinces, and the capacity for abatement increases during the observed period. The results support the following recommendation: It might be worth attempting to bring agriculture in China into line with its emission rights trading scheme, not only to help motivate the reduction of emissions but also to improve resource allocation. Also, policymakers are required to enhance regional cooperation and facilitate carbon-reduction technology transfer, to improve the immaterial production factors’ contribution to planting industry growth.

The Penalty Effect of Educational Mismatch on Wages: An Empirical Study Based on Micro Panel Data of China

With the expansion of higher education for many years, the difficulty in graduates’ employment and the continuous decrease in the starting salaries have become the typical features of China’s labor market in recent years. Under pressure from all facets, many university graduates have to engage in jobs that do not match their education. The mismatch between education and jobs not only implies the inefficient allocation of resources invested in education, but also imposes penalty effect on labor wages. How is the effect of educational mismatch on wages? How to avoid measurement error and the heterogeneity from unobservable variable ability”? What is the theoretical mechanism of the effect of educational mismatch on wages? Thus, this paper analyzes the effect of educational mismatch on wages on the basis of the models proposed by Duncan & Hoffman（1981）, and Verdugo, R.R & Verdugo, NT（1989）, by using the panel data of China Family Panel Studies（CFPS）from 2010 to 2014. We use a fixed effects model and instrumental variable estimates to address the two econometric problems faced by the empirical literature: omitted variable bias and measurement error. The fixed-effect instrumental variable estimates in this paper confirm that overeducated workers suffer from a wage penalty of 1.4%. Conversely, under-educated employees receive a bonus of 2.4%. Both omitted variable bias and measurement error are inevitable and important factors. The upward bias which is caused by the omission of unobservable variable ability” is offset by the downward bias caused by measurement error to a large extent. In addition, this paper further tests the theoretical mechanism of the effect of education mismatch on employment. we find educational requirement for jobs is the vital determinant of wages for employees aged 40 or above, while it has no significant effect on wages for those under the age of 40. In other words, as employees’ working years are getting longer and longer, their wages gradually depend on their current productivity and skills, rather than the education they have received when they left the education system. Workers who take voluntary job changes are less prone to over-education. Therefore, as their career progresses, the employees constantly seek jobs that match their educational skills, so that the mismatch has been improved. It means that the occupation liquidity hypothesis holds in China. There is a compensation mechanism between education mismatch and human capital. The over-education can compensate for the lack of expression ability, understanding capability, and health at work. The enlightenment contained in the conclusion of this paper is as follows: firstly, the education authorities should reform the education system, so as to provide the skilled graduates needed by the market; secondly, colleges and universities should adjust the subject structure and personnel training structure actively and effectively to meet the needs of the market; what’s more, companies should establish the talent identification and multi-level reward and punishment mechanism so as to identify the over-educated workers and release their labor productivity; finally, the governments should strengthen career guidance and help university graduates to find more matched jobs so as to reduce the time of job seeking and weaken the wage premium problem.

The Economic Benefits of Irrigation Districts under Prior Appropriation Doctrine: An Econometric Analysis of Agricultural Land‐Allocation Decisions

AbstractThe economic literature has established that prior appropriation doctrine induces heterogeneity in risk among water users, which leads to an inefficient allocation of resources. In this study, we show that irrigation districts alleviate that risk by deviating from the strict application of prior appropriation doctrine. As a result, farmers inside irrigation districts are able to plant more water‐intensive crops than farmers outside irrigation districts, which increases average profitability. We empirically examine this hypothesis by leveraging a georeferenced panel data set at the spatial scale of the individual water right and spanning 2007–14 in Idaho's Eastern Snake River Plain. Our results indicate that on average, irrigation districts allocate larger portions of their land to drought‐sensitive, high‐value crops such as sugar beets and potatoes. As a result of differences in planting decisions, members of irrigation districts earn on average $16.20 per acre, or 6.0% more per year than those outside of irrigation districts.

Econometric analysis of technical efficiency of pearl millet farmers in Kano State, Nigeria

In Nigeria, particularly the northern parts, pearl millet is a traditional crop that is very important to nation’s food security. Empirical evidence indicates that the main problem in pearl millet production in Nigeria is associated with low productivity and inefficiency in allocation of resources. This study therefore sought to analyse the Technical Efficiency (TE) of pearl millet farmers in Kano State of Nigeria, being the state with highest concentration of pearl millet farmers. SFA approach is used on a data collected from 256 randomly sampled pearl millet farmers during 2013/2014 cropping season. The study discovers that all the production inputs/variables included in the Cobb-Douglas Stochastic Frontier function with exception of agrochemicals were positively and significantly associated with TE. The TE range of 21% to 94% and mean TE of 73% were obtained from the analysis. The study also reveals that access to credit, education, extension and household size were the major contributors to TE. This therefore calls for formulation of appropriate policy that would extend these key determinants of TE which would go a long way in improving farmers’ efficiency level and economic benefits. This study contributes the first SFA approach in estimating TE of pearl millet farmers in Kano State, Nigeria, which can effectively help in addressing food insecurity problem in the country.

OP177 Identification Of Technologies Of No Or Low Added Value

Introduction:Health technology has no or low added value when it is harmful and/or is deemed to deliver limited health gain relative to its cost, representing inefficient health resource allocation. A joint effort by the Health Technology Assessment International (HTAi) interest group (IG) on disinvestment and early awareness, the IG on ethics, the EuroScan network and the International Network of Agencies for Health Technology Assessment (INAHTA) is aiming to design a toolkit that could aid organizations and individuals considering disinvestment activities. We synthesized state of the art methods for identifying candidate technologies for disinvestment, and propose a framework for executing this task.Methods:We searched systematic reviews on disinvestment and compared the methods used for identifying potential candidates. A descriptive analysis was performed including sources of evidence used and methods for selection / filtration.Results:Ten systematic reviews were retrieved, and the methods of 29 disinvestment initiatives were compared. A new framework for identifying potential candidates was proposed which comprises seven basic approaches based on the wide definition of evidence provided by Lomas et al.; 11 triggers for disinvestment were adapted from Elshaug's proposal, and 13 methods for applying these triggers that were grouped in embedded and ad-hoc methods.Conclusions:Identification methods have been described in the literature, and have been tested in different contexts. Context is crucial in determining the ‘not to do’ practices as they are described in different sources.

Benefits of mobile end user network switching and multihoming

Mobile users have not been able to exploit spatio-temporal differences between individual mobile networks operators for a variety of reasons. End user network switching and multihoming are two promising mechanisms that could allow such exploitation. However these mechanisms have not been thoroughly explored at a general system level with QoE metrics. Therefore, in this work we analyze these mechanisms in a variety of diverse scenarios through a system level model based on an agent based modeling framework.In terms of results, we find that in all scenarios end user network switching provides significant benefits in terms of both throughput and mean opinion score as the number of available networks increases. However, contrastingly, end user multihoming in most scenarios does not provide significant benefits over network switching given the same number of available networks. The major reason is inefficient radio resource allocation resulting from individual networks not taking the multihoming nature of end users into account. Though, in low user density situations this inefficiency is not a problem and multihoming does provide increased throughput though not increased mean opinion scores. Finally, scenarios that vary the fraction of users adopting multihoming suggests that both early and late adopters will have similar gains over users not adopting multihoming. Thus the adoption dynamics of multihoming appear favorable. Overall, the results support the applicability of end user network switching for improving mobile user experience and the applicability of end user multihoming in more limited situations.

R&D in a post centrally-planned economy: The macroeconomic effects in Poland

Half a century of centrally planned policy in the Central and Eastern European countries resulted in outdated technologies, inefficient allocation of resources and low productivity. Following the end of communism there was a fifteen year process of transition which ended in 2004 with eight post-communist countries joining the European Union (EU) of which Poland was the largest. As part of the EU these countries now face the challenge of the common EU strategy Europe 2020, which has set the target of achieving R&D expenditure to GDP ratio (called the R&D intensity) of 3% by 2020 for the Union as a whole in an effort to increase the competitiveness of the region. Poland, like the other post-communist countries, faces a lower target of R&D intensity, set at 1.7%. Nevertheless, the challenge is immense, since the country is still at only half that level and has little experience in developing policies to help achieve it. In this paper we tested two possible policy options to achieve the target: (1) to increase government expenditures on R&D and; (2) to provide tax relief on R&D to businesses. The method applied to assess the options is a recursive dynamic computable general equilibrium (CGE) model for Poland with an explicit link between productivity and R&D stock. The results show that achieving the R&D intensity target via the use of tax relief is 2.5 times more costly to the government budget, but it has a greater impact on the economy in terms of a higher GDP growth. Tax relief proved efficient in the short run while in the long run the government expenditure policy provides better value for money.

Information asymmetry in small and medium enterprise credit guarantee schemes: evidence from Japan

ABSTRACTIn this article, we investigate whether there is adverse selection and/or moral hazard in credit guarantee schemes for small and medium enterprises (SMEs) in Japan. As credit guarantee corporations cannot distinguish low risk from risky borrowers, credit guarantee schemes typically attract a larger proportion of risky borrowers, which results in inefficient resource allocation. Using bank-level data, we analyse whether the default rate is positively associated with the ratio of guaranteed loans to total loans, and find that the data are consistent with an adverse selection and/or moral hazard hypothesis. Further analysis shows that the relationship is stronger for 100% coverage than for 80% coverage, indicating that the ‘20% self-payment’ requirement somewhat mitigates the problem, but not enough to eliminate it altogether.

Impact of investment efficiency on cost of equity: evidence from China

PurposeThe purpose of this study is to investigate the effect of investment efficiency on cost of equity capital.Design/methodology/approachPrior research indicated that any governance mechanism which reduces the agency conflict reduces the cost of equity capital. This study provides empirical evidence that investment efficiency represents such governance mechanism which reduces agency conflict and hence cost of equity. The authors use price earning growth ratio (Easton, 2004) and Ohlson and Juettner-Nauroth (2005) model for the measurement of cost of equity while investment efficiency measure of Biddle et al. (2009) have been employed to examine the association. We also use Chen et al. (2013) measure of investment efficiency for robustness.FindingsThe results show that investment efficiency is negatively associated with cost of equity. It was also found that there is a strong relationship of investment efficiency with cost of equity for non-state-owned enterprises (NSOEs), while no significant relationship is found for state-owned enterprises. Furthermore, overinvestment is significantly associated with cost of equity capital. However, no significant relationship was found between underinvestment and cost of equity.Originality/valueThe results provide empirical support to the argument that investment efficiency acts as a mechanism which represents lower agency conflict. Moreover, the findings provide evidence that government act as “deep pocket” while NSOEs are punished by investors for inefficient resource allocation. This study also proposes that there is a positive relationship between overinvestment and cost of equity.

Revisiting Indirect Health Preference Elicitation As A Base Case

In the context of constrained health budgets, cost-effectiveness of health technologies has become an important concern. The strengths of this approach include its ability to explicitly model assumptions of what policy makers value when making a decision, to contextualize decisions in terms of absolute versus relative effects, and to use results to inform efficient use of research resources. A key aspect of many cost-effectiveness models is the quality adjusted life year (QALY), which allows analysts to capture the value of reduced mortality and improved quality of life simultaneously. Measurement of QALYs requires the determination of a quality weight which is bound at negative infinity (indicating death or health states worse than death) and one (indicating perfect health). While these weights can be elicited directly from patients through a standard gamble or time trade off, most national bodies recommend that preference for health states be determined by the general public. This recommendation comes despite the empirical evidence that these indirect health state valuations often differ in magnitude, and possibly in direction, to those directly elicited from patients. In this abstract, we assume that the purpose of cost-effectiveness analysis is to maximize population health and argue that recommendations to use indirect preference elicitation render this goal impossible to achieve. We use examples from the published literature to create two scenarios which illustrate how indirect preferences may be preferred for questions of prevention, but may lead to unjust and inefficient resource allocation that will meaningfully decrease population health when evaluating interventions to improve of cure disease. We argue that methods guidelines for cost-effectiveness analysis of health technologies ought to recommend that the source of health preferences match the population that will be most directly affected by the decision problem.

Economic and Technical Efficiency of the Biomass Industry in China: A Network Data Envelopment Analysis Model Involving Externalities

This paper proposes the network data envelopment analysis (DEA) model accounting for negative externalities and applies it for decomposition of profit inefficiency in the biomass-agriculture circular system (Bio-AG system). A circular structure of the Bio-AG system which is different from the previously applied network structures is assumed. Since the negative externalities (i.e., pollutant emissions from the biomass industry) occur in the Bio-AG system, the property rights are taken into consideration to model the externalities-adjusted profits. Therefore, the changes in profits due to changes in the property rights (assuming no property rights, allocating property rights to agricultural sector, and allocating property rights to biomass power generation sector) are quantified. Further, the decomposition shows that the biomass power generation sector is less affected by technical inefficiency if contrasted to allocative inefficiency in terms of the profit loss. The findings suggest that the biomass power generation technology influences the profits of the biomass industry. What is more, the inefficient allocation of resources is now the key factor undermining performance of the biomass industry. Therefore, the government should adopt measures to improve the allocation of resources and prevent excessive investments or development of less efficient technologies.

Factors Affecting Agricultural Employee’s Job Satisfaction

For this study, data were gathered from 80 randomly selected agricultural employees. Major planning for their job satisfaction were made for (1) Inducing conducive organizational climate for creative work (x ̅ =4.60), (2) Making necessary decisions during planning(x ̅=4.48), and reducing unnecessary pressure or intimidation (x ̅=4.40). Secondly, recruitment and selection procedure that affects employees job satisfaction includes: Positive step in staffing (x ̅=3.82) and advertisement of vacant positions (x ̅= 3.75). Major challenges affecting employees job satisfaction were inefficient allocation of resources (x ̅=2.04) and absence of special allowances (x ̅= 1.8). Significant relationship (p less than 0.05) existed between employees income (r=0.045), Challenges faced by the employees (r= 0.246,), Planning (r=0.393), Recruitment and Selection (r=0.608) and job satisfaction. For perfect requirement and selection of employees, allocation of appropriate resources and adequate planning must be adopted by the organization.

Corporate finance practices in Morocco

PurposeThe purpose of this paper is to examine corporate finance practices in the frontier market of Morocco and compare the practices used by Moroccan companies to those in other countries. It focuses primarily on capital budgeting and real options. The study also examines whether corporate finance practices used in Morocco are consistent with more theoretically superior techniques.Design/methodology/approachThe study uses a mail questionnaire to gather data from chief financial officers and other senior executives of Casablanca Stock Exchange (CSE) listed companies.FindingsMoroccan managers generally view the internal rate of return, accounting rate of return, and payback method as more important than the theoretically superior net present value. Few of the responding firms use real options when making capital budgeting decisions. They tend to use less sophisticated techniques to evaluate investment opportunities and calculate the cost of capital than their counterparts in developed countries. The most frequently used techniques by CSE-listed companies to estimate the cost of equity capital are the cost of debt plus an equity risk premium and the accounting return on equity. CSE-listed companies rely heavily on management’s subjective judgment to estimate cash flows.Research limitations/implicationsDespite a 40 percent response rate, the number of responses did not permit examining whether differences in firm size, industry, educational background, and other characteristics affect the results. Although non-response bias is a potential limitation, test results show no statistically significant differences between the responding and non-responding companies on any of the five characteristics analyzed. These findings lessen concern about potential non-response bias. Given that the findings relate to a frontier market, they are most likely generalizable to similar countries in the Middle East and North Africa region.Practical implicationsThe findings may be useful to various parties including corporate managers, boards of directors, and financial analysts. Given that investment decisions affect shareholder wealth, understanding the practices used by corporate managers is crucial in deciding what projects to undertake. This research raises awareness for management to review their corporate finance practices, compare them with their peers, and examine whether these techniques are aligned with proper allocation of resources and value maximization.Social implicationsOverall, the findings imply that Moroccan firms have room to improve their corporate finance practices. Failing to do so could have serious implications ranging from the inefficient allocation of resources in the economy to the destruction of shareholder value.Originality/valueTo the authors’ knowledge, this is the most comprehensive study using survey methodology to investigate corporate finance practices in Morocco. It provides new insights on such topics as capital budgeting, capital structure, cost of capital estimation, and real option techniques.

The Importance of Nepotym and Corruption Management in Institutions and the Economy of the Country

: Social, political and institutional factors play a major role in the country's economic development and economic growth in developing and developed countries. Corruption, which is a symptom of deep institutional weaknesses, is one of the factors responsible for reducing investment and spending (for education and health), increasing income inequality, decreasing foreign direct investment, and allocating resources. It tends to grow faster than the dynamics implemented to neutralize it. Systematically, it has caused many disturbing problems in all countries of the world. Based on a Transparency International report. Corruption is one of the greatest contemporary challenges of the world. It determines good governance, leads to inefficient resource allocation, disrupts the private and public sector, and often affects the poor. The people in the world carry the phenomena that society has so far encountered but has neglected. Nepotism usually means hiring close relatives, close friends, regardless of their merits and abilities. While corruption poses a permanent threat to both the economic system and the country's legal system. The purpose of this paper is; To assess the factors that have influenced the appearance and development of nepotism and corruption. Then, analyze the influence of nepotism and corruption in the country's economy. The impact of nepotism on employment and the advancement of relatives in the important sector of the country as well as the influence of corruption and nepotism in justice institutions. The research results will be useful for researchers who will be concerned with analyzing the influential factors of nepotism and corruption.