Price Level Research Articles

Research on the improvement mechanism of value-based healthcare objectives in pharmaceutical group procurement

Focusing on the research scenario that integrates value-based healthcare objectives with the pharmaceutical group purchasing model, this study delineates value-based healthcare objectives in pharmaceutical group purchasing from three perspectives: drug sales price, drug quality, and service level. We construct a three-level pharmaceutical group purchasing supply chain consisting of drug manufacturers, medical institutions, and non-profit drug group purchasing organisations. Under centralised and decentralised decision-making, we introduce cost-sharing contracts and “cost-sharing-quantity-discount” contracts to analyse the impact of factors such as drug sales price, quality, and sensitivity of the service level. The study found that: (1) Compared with centralised decision-making, the optimal drug quality and service level in decentralised decision-making and the optimal profits of drug manufacturers and medical institutions will decrease. However, the optimal drug sales price in decentralised decision-making always deviates from that in centralised decision-making, leading to higher or lower drug sales prices. (2) The incorporation of value-based healthcare objectives in the pharmaceutical group purchasing through cost-sharing contracts depends on changes in the proportion of drug quality costs borne by medical institutions. If the proportion is too high, medical institutions will suffer greater losses because they bear too much of the cost. (3) Under certain conditions, cost-sharing contracts can improve supply chain efficiency but cannot achieve supply chain coordination, while the combination of “cost-sharing-quantity-discount” contracts can achieve supply chain coordination in pharmaceutical group purchasing.

The discount consolidation effect: How brands can present quantity discounts more effectively

AbstractHow should brands present quantity discounts to increase consumer appeal? We propose that, compared to distributed presentations that spread a discount across units (e.g., buy two, get 30% off on each unit), consolidated presentations that place the discount on a single unit (e.g., buy two, get 60% off on the second unit) can lead to a higher purchase likelihood. Four studies demonstrate this “discount consolidation effect” across a variety of consumption contexts, product categories and price levels. The studies show that this effect occurs because compared to consolidated presentations of a quantity discount, distributed presentations can lead to less favorable perceptions about the quality of the discounted product and about the savings offered. We also identify an important boundary condition, illustrating that when the discount offered is substantively small in size, the effect is attenuated. These findings add to the theoretical literature and offer actionable managerial insights.

Gold Smuggling in India and Its Effect on the Bullion Industry

This study strives to examine when and where most of the gold smuggling takes place in India. It further analyses the causal relationship between smuggled gold and other macroeconomic variables. Finally, it analyses how the smuggled gold affects the Indian bullion industry. The data related to gold smuggling has been sourced from the website of the Directorate Revenue Intelligence and analysed using graphs and the Granger causality test. The variables used in the study are the quantity of smuggled gold, exchange rates, the major stock indices in the world, the number of auspicious days in a month, domestic and international gold prices, India’s jewellery export, the GDP, customs duty, and the domestic gold supply. The results revealed that most of the gold smuggling takes place on Fridays and mostly occurs in the months of October, November, and December. The states of West Bengal, Delhi, Maharashtra, and Tamil Nadu account for most of the gold smuggling in India. A positive correlation is observed between the smuggled gold, India’s gold demand, the number of auspicious days in the month, India’s jewellery export, India’s GDP, India’s domestic gold supply, and stock indices such as SENSEX, FTSE100, DFMGI. Gold smuggling in India is caused by India’s gold demand, the level of jewellery export, the GDP, domestic and international gold prices, and India’s customs duty.

Impact of uncertain demand and channel power on dual channel supply chain decisions.

The paper aims to conduct an analysis of pricing strategies in a dual channel supply chain under external uncertainty, utilizing Interval numbers theory and Game theory as the theoretical basis. The focus is on maximizing the expected profits of manufacturers and retailers. Four models are considered: centralized decision-making, manufacturer's Stackelberg, retailer's Stackelberg strategy, and vertical Nash model, with the decision variable being the product price. By solving the game model, the paper compares the optimal decisions under the four models and conducts sensitivity analysis to reflect the influence of key parameters and analyze their relationships. The ultimate goal is to optimize profits under various circumstances by adjusting market potential and price parameters to determine the best price level. The findings suggest that decision-maker's risk indicators have a greater impact on decision results when market demand is less sensitive to price, and that the size of the market has a negative correlation with the impact of decision-maker's risk indicators on decision results.

Does Higher Price Transparency Imply Lower Prices and Less Price Dispersion in Healthcare Markets? An Empirical Analysis of the Effects of Compliance with the Hospital Price Transparency Final Rule in the Greater Los Angeles Area

<p class="MsoNormal" style="margin-top: 12pt; text-align: justify;"><span lang="EN-US" style="font-family: 'times new roman', times, serif; font-size: 14pt;">The Hospital Price Transparency Final Rule aims at reducing the cost of healthcare in the United States by making information about the prices of medical services more readily available to market participants. The economic rationale is that higher price transparency should reduce the level and the dispersion of prices by disincentivizing hospitals from charging higher prices than possible. Using data on 3789 prices for three diagnostic imaging procedures and on the compliance with the rule for 86 acute care hospitals in the Greater Los Angeles area, we test the hypothesis that price levels and price dispersion are lower among hospitals that are more compliant. We do not reject this hypothesis, although we do not observe strictly decreasing relationships in all analyses. Prices are lower at hospitals with high or medium compliance than at hospitals with low compliance, but there is not a clear difference between hospitals with high and hospitals with medium compliance. Prices are less dispersed among hospitals with high compliance than among hospitals with low compliance, but the evidence for hospitals with medium compliance is less clear. We conclude that high compliance with the Hospital Price Transparency Final Rule implies lower prices and less price dispersion among hospitals.</span></p>

A profit-cost ratio maximization approach for a manufacturing inventory model having stock-dependent production rate and stock and price-dependent demand rate

This paper discusses an optimal managerial approach regarding stock control in a manufacturing-inventory scenario. The selling price and inventory level in showrooms may impact customers’ demand. The fall in selling price creates additional demand, while shown inventory also positively enhances demand. In this paper, demand is influenced by the selling price during the productive phase and the displayed stock in idle time. The significance of selling price and stock on profit goal may not be inherited from that of the demand function. The production rate varies negatively against the inventory on hand. Instead of taking cost minimization or the profit maximization objective, this paper executes an optimization approach on the profit-cost ratio function, sharpening the manufacturer’s goal. The numerical solution and sensitivity analysis on optimal outcomes succeed the analytical solution in Mathematica software. Numerical results indicate that the profit-cost ratio rises with selling price, suppressing the negative impact of the selling price on demand. Also, the profit-cost ratio shows a concave curve for the production cycle, ensuring a global maximum for the objective function.

SOLVING THE PUZZLE OF CHINA’S LOW INFLATION: A NEW PERSPECTIVE FROM SECTORAL CORE INFLATION FLUCTUATIONS

China’s constantly rapid economic growth accompanying by a low overall inflation has long been mysterious in macroeconomics. The core purpose of this paper is to solve this puzzle. Therefore, we integrate overdetermined set of equations into a MUCSVO model to explore the volatility mechanism of the overall inflation from a sectoral perspective. Our key findings include: 1) the hedging effect of sectoral inflation fluctuations principally accounts for China’s long-run stable overall inflation; 2) the main contradiction of China’s inflation has been shifting from high price levels in the traditional food and residence categories to rising prices in the health care category; 3) as the proportions of inflation in the food and residence categories fall steadily, sectoral inflation weights become more evenly distributed. In conclusion, China’s overall inflation and deflation will be much less likely to occur, while inflation is still of sectoral imbalance. Unusual price fluctuations in the food and health care categories, which are highly relevant to basic living standards of the low-income group, deserve close attention in particular. Overall, besides solving the puzzle of China’s low inflation, our model is applicable to economies that do not publish inflation weights, which is a useful extension of core inflation measurement.

Islamic, ethical and conventional mutual funds: a comparative study (1990–2022)

Purpose This study aims to test mutual fund superiority, comparing the performance of 646 Islamic mutual funds with 475 ethical funds and conventional proxies. Design/methodology/approach This study uses statistical methods including paired t-statistics of independent samples, one-way Bonferroni test–analysis of variance–F-statistic for testing means equality, the chi-squared test for median equality and regression models corrected for heteroscedasticity. These methods are used to identify superiority of mutual funds and to validate the significance of the results. Findings The findings confirm the superiority of conventional funds over ethical funds and ethical funds over Islamic funds. Both ethical and Islamic funds, however, outperform conventional proxies during some recessionary periods. Moreover, stronger performance is recorded for Islamic funds in Europe and North America regions and across age and asset allocation categories, but limited support for reversal fund size, composition focus and reversed price effect. Research limitations/implications These findings should assist investors when deciding to invest and motivate Islamic and ethical funds to improve their portfolio formation and asset allocation strategies set by their professional managers. Originality/value The originality of this study is in its comprehensive approach in that it compares the performance of funds after accounting for such characteristics as fund objectives, size, age, asset allocation, geographical investment focus, fund composition focus, share price levels and the effect of global crises. This study approach is not only original and productive in documenting Islamic funds’ performance for the past three decades (1990–2022) but can also update the literature on these characteristics collectively and individually.

Modelling the determinants of birth tourism demand: a time series analysis

ABSTRACT Birth tourism has been steadily rising in recent years as potential mothers travel across borders with the main purpose of giving birth. However, the economic reasons behind this form of tourism have not been adequately examined in the existing literature. This study explores the determinants of birth tourism by incorporating factors such as the average income of visitors, price level, exchange rate, and infant mortality while accounting for the potential impact of the Citizenship Amendment Act 2005 in New Zealand. The variables have been introduced into the model using a standard tourism demand framework and a new dynamic autoregressive distributed lag method has been used in the study. Ultimately, rising income of visitors and exchange rate are reported to boost birth tourism while rising price reduces birth tourism. The result also shows that the implementation of the Citizenship Amendment Act 2005 has no significant effect on birth tourism, which implies that monetary and financial considerations such as the income of tourists, price level, and exchange are the most important drivers of birth tourism in New Zealand.

Factors affecting the costs of broiler chicken production in light of urgent international variables

The study aims to analyze the costs of broiler chicken production in the Fayoum governorate, and in particular the effects that the Russia–Ukraine war has had on production costs. The results indicate increased production costs due to the war and a decreased net return for the three production capacities and the sample average: the return index on invested dollars before the war was 0.71, 0.89, 1.0, and 0.87, respectively; however, this decreased after the war to 0.35, 0.53, 0.66, and 0.51, respectively. The war has led to an increase of 43.93% in the minimum price as the production costs have risen. The value of the price elasticity of supply was about 0.233 at the minimum price and 0.041 at the current price level. If the prevailing price increases by 10% to become $2.13 thousand per ton, the price elasticity of supply becomes about 0.037. The study recommends producing cheap, high-quality, non-traditional feed and focusing on small production capacities. It also suggests integrating and developing them to increase profits. KEYWORDS capacity savings, cost functions, economic efficiency, equivalence price, quantitative equivalence, supply function

Cross-country comparisons in health price growth over time.

To examine how the United States compares in terms of health price growth relative to four other countries - Australia, Canada, France, and the Netherlands. Secondary data on health expenditure were extracted from international and national agencies spanning the years 2000-2020. International price indices specific to health were constructed using available international expenditure data and compared to existing health-specific national and general international price indices. Health expenditure data were extracted from the Organization for Economic Cooperation and Development (OECD) database. We obtained a time series of health price indices from the national agencies in each of the study countries. We find meaningful variation across countries in the rate at which health prices grow relative to general prices. The United States had the highest cumulative health price growth compared to general price growth over the years 2000-2020 at 14%, followed by Canada and the Netherlands. Unlike the other study countries, health prices in France grew consistently in line with general prices. Price growth for health care paid for by public funds and households grew at different rates across countries, where price growth was higher for public payers. US households faced the greatest mean annual price growth. The choice of price index has major implications for comparative analysis. Despite their widespread use internationally, general price indices likely underestimate the contribution of price growth to overall health expenditure growth. We find that in addition to its reputation for having high health price levels compared to other high-income countries, the United States also faces health price growth for goods and services paid for by government and households in excess of general price growth. Furthermore, US households are exposed to greater health price growth than households in comparator countries.

Contractor states and globalization of the market for naval artillery technology (1500–1750)

AbstractThis article reflects on the dynamics that underlay the circulation of military technology during the early modern phase of globalization. The debate on the development and transfer of gunpowder weaponry has been dominated by a grid of analysis which implicitly puts value on sovereign production and direct state control over the resources used for war. Focusing on the transfer of naval artillery between Europe and Asia, the article argues for the need to expand the scope of analysis of the contractor state, so far centred on Europe, and study the potential world-scale of the market for naval resources and services in the period between 1500 and 1750. It also highlights the need to replace the reading of technological transfers centred on nation-states by a more fluid and transnational vision which articulates the demand stemming from both states and non-state actors and the rise of regional clusters specialized in providing naval technology with competitive levels of prices, in an age of increasingly interconnected maritime economies. Therefore, the article aims to show why naval artillery, despite being a protagonist of old imperialistic narratives, is still a relevant object of study for the agenda of global history.

Is interest rate hiking a recipe for missing several goals of monetary policy—beating inflation, preserving financial stability, and keeping up output growth?

After the corona crisis, and even more so when the war in Ukraine struck, the price levels of all goods in the US and Europe rose surprisingly quickly and persistently. The FED began in March 2022 and the ECB in July 2022 with historically unique interest rate increases to combat the wage-price spiral that had not yet begun. In this article we show that energy, commodities and food were the main drivers of inflation. For this reason, central banks' goal of weakening demand for labor through historically large interest rate hikes seems unwise. We argue that the current measures cannot achieve all of their objectives: slowing inflation, stabilizing financial markets and sustaining growth. If interest rates remain high, but external forces emerge with a lasting effect and keep inflation rates high, especially in smaller emerging countries, it will be difficult to counteract this on a country or regional basis through high interest rate policy and national control of the price- and wage-Phillips curve. Significant negative side effects of interest rate hikes increase the risk of not making the necessary investments and, in particular, weaken the bargaining power of particularly vulnerable employment groups. Other tools are needed to curb inflation and keep it under control, for example more investment in sectors with supply disruptions and a massive expansion of investment in renewable energy.

Freebie Seekers or Desperate Buyers? An Analysis of Willingness to Pay for COVID-19 Vaccine in Türkiye

ABSTRACT The aim of the study is to determine the level of price that individuals living in Türkiye are willing to pay (WTP) for a hypothetical COVID-19 vaccine. In addition, the study also aims to identify the socioeconomic factors affecting that level of WTP. The data is collected via a virtually applied questionnaire. Probit estimations are employed to determine the level of price that is willing to be paid. Further, the socioeconomic factors affecting the revealed WTP level are identified with an ordered-probit estimation strategy. The average price level that the participants are willing to pay for two doses of a hypothetical COVID-19 vaccine which immunes for 12 months is ₺316.93 ($42.66). Higher education groups, public employees, married people, and urban individuals are more likely to pay at higher price levels of hypothetical COVID-19 vaccine. Interestingly, the individuals living with a pregnant woman or a baby, the ones who experienced severe COVID-19 disease and the ones who already decided to be vaccinated are more likely to pay at relatively low-price levels. This study may contribute to broader literature as it will provide evidence from Türkiye for international comparisons.

The simple macroeconometrics of the quantity theory and the welfare cost of inflation

The quantity theory of money hypothesizes that the price level is determined through the equilibration of money supply and demand. Predicated on this causal structure, a single-equation error correction model decomposes from a larger vector autoregressive system so as to make available bounds tests for a levels relationship that are robust to the univariate integration properties of the variables. This model is estimated using three monetary aggregates and two money demand specifications, for U.S. and U.K. annual data over the past century and quarterly post-WWII data. The classic homogeneity propositions of the quantity theory are testable, and are found to be most compatible with U.S. annual M2 using log-log money demand with structural change permitted. Nevertheless, the resulting welfare costs are similar to those yielded by the U.K. annual data, being less than one percent of GDP at interest rates experienced during the past century.

Conventional Fiscal Policy System and Islamic Economics in The Indonesian Economy

The economic crisis and political turmoil in the 1990s did not guarantee the strength of Indonesia's economic situation, therefore political and fiscal decentralization was initiated and Law No. 25 was passed in 1999. This research aims to understand conventional fiscal policy and Islamic economics in the Indonesian economy. This research method uses literature study through secondary data collection. The results of this research show that conventional fiscal policy has a stability function that aims to, among other things, maintain high employment opportunities, relatively stable price levels, and economic growth rates. This function shows the similarity of the functions and benefits of zakat, jizyah, khums, and kharaj in Islamic economic fiscal policy. If zakat, jizyah, khums, and kharaj are instruments of fiscal policy, the redistribution of income and wealth will take place, then the problem of poverty and economic growth can be reduced and will have a good impact on economic and political stability. According to experts, the concept of contractionary fiscal policy is reducing government spending so that the money supply can be reduced through income redistribution. This is in line with the aim of fiscal policy instruments in Islamic economics to improve the living standards of the poor by redistributing the income of the rich to the poor.

Financial Inclusion, Economic Growth and Macroeconomic Stability in Nigeria

In the face of the present economic realities, the study investigated the impact of financial inclusion on economic growth and macroeconomic stability over the period of 40 years (1980 - 2020), with focus on basic macroeconomic indicators (poverty, output growth, price stability and unemployment). Using secondary data from Central Bank of Nigeria (CBN) Statistical Bulletin (various years) and World Development Indicators (WDI - 2020), the study employed suitable cointegration technique viz: Autoregressive Distributed Lag (ARDL) technique. It was found that first,financial inclusion can reduce poverty in the long-run, if the inclusiveness is robust, progressive and sustained, second, the interaction between financial inclusion and output growth was inverse, and that outcome was found to be associated with some encumbrances within the financial system and the economy, third, financial inclusion can stabilize price level in the longrun if the process of inclusiveness is deepened and sustained, and fourth, unemployment can be greatly reduced vis-à-vis financial inclusion, especially if the inclusiveness is deepened and sustained. It was recommended, amongst other things, that a robust financial system should be developed, so as to deepen financial inclusion (like expanding credit and money supply, amongst other things) in a way that can encourage economic growth and stabilize the economy, ceteris paribus.

How do price (risk) changes influence farmers’ preferences to reduce fertilizer application?

AbstractThe decision of farmers to reduce fertilizer applications and, thus, the achievement of agri‐environmental policy goals interacts with market price developments. In this study, we analyze how changes in price levels and volatility over time (i.e., 1991–2006 vs. 2007–2022) affected farmers’ preferences to reduce fertilizer application using statistical inferences of stochastic dominances. The analysis considers two cropping systems and fertilizer reduction measures: (i) grassland‐based milk production and the use of legumes and (ii) wheat production and the use of variable rate application. We show that the economic value of reducing fertilizer increased over time in both grassland‐based milk and wheat production. However, only in the case of wheat production was the reduction in fertilizer application observed as more risk‐reducing over time. In contrast, in grassland‐based milk production, the co‐movement of fertilizer and milk prices canceled out the increase in risk reduction. We conclude that changes in market price, along with agri‐environmental subsidies, can increasingly incentivize the reduction of fertilizer use.

Carbon-free Electricity Supply in a Cournot Wholesale Market: Israel

We develop a two-stage model to analyze a Cournot wholesale electricity market in which competing firms use photovoltaics augmented with batteries (PVB) or combined cycle gas turbines (CCGTs) to meet time-varying demands. Capturing the complex interactions of output and investment decisions made by multiple profit-maximizing PVB and CCGT firms, our model yields the market’s long-run equilibrium of capacity mix and short-run equilibrium of electricity generation and price levels. Accounting for the sun’s irradiation that determines solar generation level, our model computes the battery cost reduction necessary for batteries entering the optimal capacity mix. Using Israel as a case study, we show how declining battery cost may cause PVB firms to displace CCGT firms, resulting in carbon-free electricity supply as a market-based outcome. The battery cost threshold initiating this outcome is ~24% of CCGT’s capacity cost, implying that natural gas is a transitional fuel in Israel’s pathway to deep decarbonization.

The Effect of Revitalisation on the Value of Residential Premises in Historic Urban Layouts

Abstract The aim of this research was to analyze the effects of revitalization activities performed in a selected historical urban layout using the mixed method in which statistical analysis was supported by Geographic Information System (GIS) tools on the price level of residential premises on the secondary market. The subject of the analyses is “Old” Nowa Huta (Krakow, Poland), which was designed as an ideal independent city in the mid-20th century. The analysis covered the period from January 1, 2007 to December 31, 2020. The conducted analyses have demonstrated that the transaction prices (and hence the value) of residential premises located in “Old” Nowa Huta increased during the performed revitalization activities. However, based on the results obtained, it could not be confirmed that this was the direct result of the revitalization itself, because the price level within the research site increased in proportion to the rising prices in the entire city. It seems, however, that although the changes in the quality of space in the analyzed area are not spectacular, they serve to improve the quality of life of the local community and are one of the ways to protect this historic urban layout.