Lower Average Prices Research Articles

Deciphering Factors Contributing to Cost-Effective Medicine Using Machine Learning.

This study uses machine learning to identify critical factors influencing the cost-effectiveness of over-the-counter (OTC) medications. By developing a novel cost-effectiveness rating (CER) based on user ratings and prices, we analyzed data from Amazon. The findings indicate that Flexible Spending Account (FSA)/Health Savings Account (HSA) eligibility, symptom treatment range, safety warnings, special effects, active ingredients, and packaging size significantly impact cost-effectiveness across cold, allergy, digestion, and pain relief medications. Medications eligible for FSA or HSA funds, treating a broader range of symptoms, and having smaller packaging are perceived as more cost-effective. Cold medicines with safety warnings were cost-effective due to their lower average price and effective ingredients like phenylephrine and acetaminophen. Allergy medications with kid-friendly features showed higher cost-effectiveness, and ingredients like calcium, famotidine, and magnesium boosted the cost-effectiveness of digestion medicines. These insights help consumers make informed purchasing decisions and assist manufacturers and retailers in enhancing product competitiveness. Overall, this research supports better decision-making in the pharmaceutical industry by highlighting factors that drive cost-effective medication purchases.

Annuity puzzle: Evidence from a Swiss pension fund

AbstractWe analyze individual annuitization decisions at retirement in an environment with mandatory participation in a funded pension pillar and low average annuity price. Using administrative data from a large Swiss insurance company over the period 2011–2015, we document that, even in this favorable environment, only 42.7% of the retirees fully annuitize, against 45% taking full lump sum. We show that individual annuitization decisions strongly respond to financial incentives, measured by the Money Worth Ratio, and to the tax rates on annuity and lump‐sum payments. Lump‐sum payments are more common among French‐ and Italian‐speaking individuals. Using Survey of Health, Ageing and Retirement in Europe data, we show that French‐ and Italian‐speaking Swiss are more likely to leave inheritance—thus suggesting that preferences for bequests may affect annuitization decisions. Finally, we provide evidence of asymmetric information, using the unused observable test, to show that individuals living in high mortality municipalities are less likely to annuitize and more likely to cash out their pension wealth.

How Can Price Promotions Make Consumers More Interested? An Empirical Study from a Chinese Supermarket

Price promotions are commonly employed to enhance supermarket performance and the sustainable development of the retail industry, yet their effectiveness may vary among similar supermarket chains. In contrast to Western countries, Chinese supermarkets are typically community-centered, allowing consumers to make frequent visits due to lower transaction costs. This multiple-visit pattern discourages substantial one-time purchases based on promotions. This study aims to investigate how pricing promotions can attract consumers more effectively and which product categories are most suitable for this purpose. Utilizing scanner data from Chinese chain supermarkets, we empirically assess the impact of promotion depth, breadth, and duration on consumer purchasing behavior using fixed effects models, IV, and GMM methods. Furthermore, we identify product category characteristics that are more appealing to consumers based on the relationships between different product category promotions and consumer behavior. Results demonstrate that each of the three price-promotion features has a positive effect on Chinese supermarket performance, with varying degrees of significance. Different promotion methods not only benefit promoted products but also stimulate sales of non-promotional items. At the product level, the impact of supermarket promotions on performance differs across categories. The most attractive category in terms of consumer purchases influenced by discounts is special paper, while small kitchen appliances have the least impact. Promoting categories with lower average prices, higher average sales volumes, fewer products, and better storage durability is conducive to attracting consumer shopping. These empirical findings have implications for academic research on price promotion theory and supermarket managers’ pricing strategy decisions, as well as the sustainable development of the offline retail industry.

Dynamic price competition market for retailers in the context of consumer learning behavior and supplier competition: Machine learning-enhanced agent-based modeling and simulation

This study analyzes the impact of consumer learning behavior and supplier price competition on retailer price competition in a complex adaptive system. Using machine Learning-enhanced agent-based modeling and simulation, the study applies fuzzy logic and genetic algorithms to model price decisions, and reinforcement learning and swarm intelligence to model consumer behavior. Simulations reveal that different learning behaviors result in different retailer competition patterns, and that supplier price competition affects the strength of retailer price competition. Simulation results demonstrate that consumer learning behavior influences retailer competition, with self-learning consumers leading to higher-priced partnerships, and collective-learning consumers leading to a shift in price competition among retailers. In contrast, perfect rationality consumers result in low-price competition and the lowest average margin and profit. Additionally, the competitive price behavior of suppliers impacts retailers' price competition patterns, with supplier price competition reducing retailer price competition in the perfect rationality consumer market and enhancing it in the self-learning and collective-learning consumer markets, leading to lower average prices and profits for retailers. This study presents a simulated market for price competition among suppliers, retailers, and consumers that can be expanded by subsequent scholars to test related hypotheses.

SEQUENTIAL PRICE SETTING: THEORY AND EVIDENCE FROM A LAB EXPERIMENT

AbstractIn the Varian (1980; American Economic Review 70(4) (1980), 651–59) model of price competition, a change from simultaneous to sequential price setting dramatically changes equilibrium strategies, and in the unique symmetric, equilibrium prices are pushed up to the monopoly price. There also exists an asymmetric equilibrium with lower average prices. Our main contribution is to test these predictions in the laboratory. Our data strongly support the qualitative model predictions. However, a fraction of players set low prices in accordance with the asymmetric equilibrium, which is puzzling. We show that the puzzle to a large extent can be resolved by introducing competitive preferences in the model.

A Cost Analysis of Phosphodiesterase Type 5 Inhibitors in the United States

ObjectiveTo perform a cost analysis of generic and brand-name PDE5 inhibitors at different dosages and pharmacies across the US. MethodsUsing an all-payer retail pharmacy-claims database, we analyzed prescription drug data for three generic and six brand-name oral PDE5 inhibitors at different dosages across US chain and independent pharmacies in 2019. ResultsWe obtained cash price data from 60,186 pharmacies (35,976 chain and 24,210 independent). The nationwide mean cash price per unit (PPU) ranged from $8.6±5.2 (sildenafil 20mg at chain pharmacies) to $107.1±71 (Adcirca 20mg at independent pharmacies) equal to 1,145.3% difference. Chain pharmacies provided significantly lower average prices for one brand-name and six generic PDE5 inhibitors. Tadalafil PPU was cheaper at higher quantities, however PPU increased with quantity prescribed for sildenafil. Looking at the top 10 metropolitan statistical areas, the highest PPUs were observed for tadalafil (Cialis) 10mg and sildenafil (Viagra) 50mg in Atlanta ($67.4±8.7) and Los Angeles ($50.3±24.0), while New York ($9.7±2.6) and Miami ($27.9±16.4) had the lowest PPUs for tadalafil (Cialis) 5mg and sildenafil (Viagra) 100mg, respectively. ConclusionA substantial variability in PDE5 inhibitor cash prices exists across manufacturer, dosage, quantity, pharmacy type, and location. In addition, the pricing does not necessarily correlate with the regional socioeconomic factors. This highlights the importance of provider awareness and patient counseling on drug price including potentially assisting patients in identifying opportunities for cost savings.

The effect of crude oil price changes on civil conflict intensity in rentier states

While existing literature has considered the relationship between oil and conflict, most of the studies have failed to consider mechanisms that might mediate the effect of the fluctuating market price of oil on conflict. We theorize that the military capacity of the state is a key mediating mechanism for understanding the relationship between shifting oil market prices and conflict intensity. We argue that states which rely upon oil sales to fund a large portion of government spending will have a more difficult time maintaining conflict-reducing state capacity during times in which oil prices are below previously prevailing averages for extended lengths of time. Using country-year data in 67 conflict states from 1989–2019, we find that low average oil prices are associated with lower military spending which in turn is associated with higher rates of battle fatalities in existing civil conflicts.

The impact of large-scale thermal energy storage in the energy system

In the last decade, pit thermal energy storage (PTES) systems have been used as a large-scale heat storage solution in district heating systems due to their low specific investment cost and high storage efficiency. Despite the existing knowledge on thermal energy storage (TES) technologies, their economic and environmental impacts have not been quantified in the literature, and very few studies have studied PTES as part of the energy system. For this reason, the energy system model Balmorel was used to quantify the impact of TES on the energy system, particularly PTES, and compare it to the tank thermal energy storage (TTES) alternative. The investigation was focused on Denmark and its neighboring countries. It was found that it was only the energy systems using TES that could achieve carbon neutrality by 2050. The main reason was the added flexibility due to the energy storage that allowed the system to have a 35% higher PV capacity, 10% higher wind capacity, and lower levels of curtailment. Additionally, systems with TES had 2.4 €/MWh lower average heat price (with 24% lower peak price). When comparing PTES with TTES, it was found that PTES systems were more advantageous, achieving a 1.5 €/MWh lower average price of heat.

Biased Auctioneers

ABSTRACTWe construct a neural network algorithm that generates price predictions for art at auction, relying on both visual and nonvisual object characteristics. We find that higher automated valuations relative to auction house presale estimates are associated with substantially higher price‐to‐estimate ratios and lower buy‐in rates, pointing to estimates' informational inefficiency. The relative contribution of machine learning is higher for artists with less dispersed and lower average prices. Furthermore, we show that auctioneers' prediction errors are persistent both at the artist and at the auction house level, and hence directly predictable themselves using information on past errors.

Do mariculture products offer better environment and nutritional choices compared to land-based protein products in China?

Mariculture products are generally deemed to have less negative environmental externalities and more nutrient content, and are therefore a promising food substitute for land-based protein products (LPPs). China is the world's largest mariculture producer, with 66% of global production share in 2018. However, different categories of mariculture products have varied nutrient composition and environmental impacts, and ignoring such heterogeneity potentially misleads policy decision making in mariculture development in China. Here, we compare the environmental and nutritional performance of 28 mariculture products with 7 LPPs produced in China. Our results show that although mariculture products are more environmentally friendly than LPPs on the whole, not all mariculture products have better nutrition-environmental performance than LPPs. Only 17 out of 28 mariculture products, mainly shellfish and fish, are found to be both nutritionally and environmentally more friendly than LPPs. Shellfish are promising substitutes for LPPs due to their minor environmental impact, higher nutrient density, greater production volume and lower average price compared with other mariculture products. However, upper dietary limits on daily intake of shellfish due to potential overconsumption of certain micronutrients must also be considered. We also found mariculture derived fish have no distinct environmental, nutritional or cost benefits over some LPPs, such as egg and chicken. The current structure of the mariculture industry in China may be optimized by expanding the production of nutrient-rich mariculture products with low environmental impact and affordable price.

Differentiation strategies in coffee farms: opportunities for Costa Rican growers

AbstractThis study investigates the determinants of coffee prices received by growers in Costa Rica, paying attention to the impact of environmental, regional, quality, and international aspects in a panel data set for the period 2008–2016. We identify three groups of variables that affect domestic coffee prices. Some of them are external to the control of the coffee growers, such as the international price of green coffee or the power of multinationals; others, such as the altitude where the coffee is harvested or the berries' yield, are related to coffee quality but difficult to modify by coffee growers. The focus of our study is on the third group, which refers to differentiation strategies related to environmental certifications. More specifically, we consider two particularly relevant certifications, which are Fairtrade mills and organic coffee. We find that organic coffee berries received higher prices, but Fairtrade mills report lower average prices than other, non-certified, buyers.

Characteristics and sources of Pb exposure via household dust from the urban area of Shanghai, China

Household dust has been considered as an important pathway for children's environmental Pb exposure. Shanghai was one of the first cities in China that removed Pb from petrol and has been shown in our previous study to have the lowest childhood blood Pb levels in China. This study therefore examines household dust Pb (PbHD) in Shanghai in order to determine the extent and exposure risks of PbHD. Household vacuum cleaner dust samples (n = 40) were collected and analyzed for total Pb concentration, bio-accessible Pb concentration and Pb isotopic compositions (PbIC). The mean concentration of PbHD was 195 mg/kg, which is between 7 and 10 times the Pb concentration of background soil samples from Shanghai. Among the investigated homes, those living in neighborhoods with lower average estate prices have higher dust Pb exposure risks for children. Bio-accessibility of Pb in household dust ranged between 53 and 91%, with a mean value of 71%. Analysis of PbIC of household dust samples (208Pb/206Pb: 2.1096 ± 0.0054; 207Pb/206Pb: 0.8648 ± 0.0025) are a close match to PbIC of coal combustion and solid waste incineration and fit well with those of outdoor air PbIC and urban surface soil PbIC of Shanghai. The study shows that children living in Shanghai are subject to PbHD exposure, with children living in the homes with lower average price having increased susceptibility to PbHD exposure. The data indicate that PbHD is derived primarily from contemporary coal combustion and solid waste incineration rather than common legacy Pb sources (e.g., Pb petrol and paint). Practices including closing doors and windows on days with poor air quality or high wind and preventing shoe wearing inside homes will aid in minimizing outdoor surface soil and ambient particulate intrusion indoors.

Flexible Power & Biomass-to-Methanol plants: Design optimization and economic viability of the electrolysis integration

This paper assesses the optimal design criteria of a flexible power and biomass to methanol (PBtM) plant, conceived to operate both without green hydrogen addition (baseline mode) and with hydrogen addition (enhanced mode), following an intermittent use of the electrolysis system, which is turned on when the electricity price allows an economically viable hydrogen production. The assessed plant includes a gasification section, syngas cleaning and compression, methanol synthesis and purification and heat recovery steam cycle, to be flexibly operated. A sorption-enhanced gasification technology allows to produce a tailored syngas for the downstream synthesis in both the baseline and enhanced operating conditions, by controlling the in-situ CO2 separation rate. Two designs are assessed for the methanol synthesis unit, with two different reactor sizes: (i)a larger reactor, designed on the enhanced operation mode (enhanced reactor design – ERD) and (ii)a smaller reactor, designed on the baseline operation mode (baseline reactor design – BRD). The ERD design resulted to be preferable from the techno economic perspectives, resulting in 20% lower cost of the e-MeOH (30.80 vs. 37.76€/GJLHV) with the baseline assumptions (i.e. 80% of electrolyzer capacity factor and 2019 Denmark day-ahead market electricity price). Other important outcomes are: (i)high electrolysis capacity factor is needed to obtain competitive cost of e-MeOH and (ii)advantages of flexibly operated PBtM plants with respect to inflexible PBtM plants are significant in scenarios with high penetration of intermittent renewables, leading to low average prices of electricity but also longer periods of high peak prices.

Potential synergy between natural gas production and offshore wind power generation: a case study in northeast Brazil

Offshore wind energy production is non-existent in Brazil, although is currently considered in the country's expansion plans. New and promising oil and gas fields have recently been discovered in the Sergipe and Alagoas basin, corresponding to one third of current Brazilian production. This work analyzes the technical and economic viability of an Offshore Wind Farm to supply the energy demand of a Floating Liquified Natural Gas proposed to be used in those fields. The resulting estimated cost of capital and levelized cost of energy were in line with international values. However, the project proved to be unfeasible due to the high cost for its size and the low average price of energy generation. Nonetheless, the synergy between the oil and gas sector and offshore wind may include benefits such as the reduction of greenhouse gas emissions within the sector itself, making the non-renewable resource available for more noble use.

Prominent Retailer and Intrabrand Competition

Online retail search traffic is often concentrated at a “prominent” retailer for a product. The authors unpack the ramifications of this pattern on pricing, profit, and consumer welfare in an intrabrand setting. Prominence denotes a larger number of heterogenous-search-cost consumers starting their search at the prominent retailer than at any other retailer. These analyses show that search traffic concentration can intensify intrabrand competition, lower average prices of all retailers, and improve consumer welfare. Interestingly, the prominent retailer's incremental traffic advantage can increase or reduce its own profit; the authors denote these as the “blessing” and “curse” of prominence, respectively. The authors extend their analysis to a setting where consumers consider searching only among those retailers they are individually aware of; the prominent retailer is included in all these individual awareness sets. The effects on market average prices and welfare carry over, but only below a critical threshold level of the prominent retailer's first-search traffic advantage. Above this threshold, market average prices rise and welfare decreases, making this the region where search concentration warrants scrutiny from policy makers. The authors close with policy remedies and managerial implications of search concentration.

Opening the OTC drug market: The effect of deregulation on retail pharmacy’s performance

Governments in many countries have deregulated the retail pharmacy market to offer easier and broader access to pharmacy services. Such deregulation has spurred the competition by allowing the entry of new drug distribution channels. Current research leverages the Pharmaceutical Affairs Law revision introduced in South Korea in November 2012. The policy change allowed 24-hour convenience stores to sell 13 first-aid drugs directly to patients. This research investigates the causal effect of new retailers’ entry on incumbent pharmacies’ financial performance in terms of pricing, revenue, and market exit. The findings, based on the panel data of 2,795 pharmacies in a 36-month period from 2011 to 2013, suggest deregulation posed a significant competitive threat to incumbent pharmacies, resulting in lower average prices for the deregulated drugs, significant drops in revenue and accelerated financial failures. A significant heterogeneity in the treatment effect is found across pharmacies. Pharmacies with less loyal customers and poorer financial performance suffered more after deregulation. Our findings suggest that although such deregulation is intended to enhance consumers’ access to health care, opening the OTC drug market to new retailers may hamper consumers’ access to pharmacy services because of the exit from the market of underperforming incumbents.

Prospects and Obstacles for Green Hydrogen Production in Russia

Renewable energy is considered the one of the most promising solutions to meet sustainable development goals in terms of climate change mitigation. Today, we face the problem of further scaling up renewable energy infrastructure, which requires the creation of reliable energy storages, environmentally friendly carriers, like hydrogen, and competitive international markets. These issues provoke the involvement of resource-based countries in the energy transition, which is questionable in terms of economic efficiency, compared to conventional hydrocarbon resources. To shed a light on the possible efficiency of green hydrogen production in such countries, this study is aimed at: (1) comparing key Russian trends of green hydrogen development with global trends, (2) presenting strategic scenarios for the Russian energy sector development, (3) presenting a case study of Russian hydrogen energy project «Dyakov Ust-Srednekanskaya HPP» in Magadan region. We argue that without significant changes in strategic planning and without focus on sustainable solutions support, the further development of Russian power industry will be halted in a conservative scenario with the limited presence of innovative solutions in renewable energy industries. Our case study showed that despite the closeness to Japan hydrogen market, economic efficiency is on the edge of zero, with payback period around 17 years. The decrease in project capacity below 543.6 MW will immediately lead to a negative NPV. The key reason for that is the low average market price of hydrogen ($14/kg), which is only a bit higher than its production cost ($12.5/kg), while transportation requires about $0.96/kg more. Despite the discouraging results, it should be taken into account that such strategic projects are at the edge of energy development. We see them as an opportunity to lead transnational energy trade of green hydrogen, which could be competitive in the medium term, especially with state support.

Feasibility analysis of autonomous hybrid solar-wind system for household consumption: a case study

The constant increase of electricity prices from the power grid, rising fossil fuel prices and environmental motives make people look for opportunities to supply their homes with renewable energy independently from the grid. The easy technical feasibility of the projects and the climatic features of Bulgaria determine the solar and wind energy as the most suitable for the households. The variability of solar and wind energy predetermines their shared use in hybrid systems. Feasibility analysis of autonomous hybrid solar-wind system for household consumption was made in the article. The calculations were made for a residential building located in the village of Okop, Yambol District, Bulgaria. It has been verified if the levelized cost of energy (LCOE) of the domestic solar-wind hybrid system is in parity with the final cost of the grid electricity. Different variants of system configurations and different ways of financing were considered. The results show that for the considered place, the prices of electricity produced by autonomous hybrid systems are higher than the prices of electricity for household customers connected to the power grid. The use of standalone hybrid systems is only justified when there is no power supply from the grid. Lower average prices than those of the power grid are obtained only when building a photovoltaic plant connected to the grid.

SCALE EFFICIENCY IN TAMBAQUI FARMING IN EARTH PONDS IN THE METROPOLITAN REGION OF MANAUS-AM

This study aimed at determining the scale efficiency in tambaqui production in earth ponds developed in the metropolitan region of Manaus-AM. Eleven fish farms were analyzed and were sampled data regarding its characteristics, productive data, disbursement, infrastructure value and production value, in order to calculate the total operational cost and profitability indexes. For the DEA was applied the VRS/BCC (variable return of scale) model with input orientation, using three inputs (total operational cost, feed value, and depreciation, all in BRL($) per kilo) and one output (annual gross revenue, in BRL($) per hectare). The study showed that 80% of the fish farms (DMUs) had increasing returns to scale, with scale efficiencies lower than 65%, affected by lack of profitability, low technical and marketing knowledge, high production cost (R$ 4.50 kg-1 ) and low average sales price (lower than R$ 5.00 kg-1).

The “green lemon” problem - a study of the effect of partial disclosure of poorer assessment ratings on housing prices

The introduction of green building certifications, on the one hand, can provide useful information for different stakeholders, such as developers and buyers, to evaluate “green” buildings’ environmental performance. On the other hand, it gives rise to an issue resembling the “lemons” problem in New Institutional Economics, as sellers such as developers and owners of properties with poorer ratings do not disclose, or only partially disclose this information to the public. Given that a likely result of this “lemons” problem is lower average market prices that drive good products out of the market, this paper, thus, investigates this latent issue by assessing how the knowledge of these “lemons”, referring to BEAM Plus-assessed buildings with an “Unclassified” rating, influences the price effect of BEAM Plus certification for other certified properties. Utilizing Bayesian Modeling, the findings indicate that should the “green lemons”, or BEAM Plus-assessed properties with an Unclassified rating, be known, the price premium for other BEAM Plus-certified properties on Hong Kong Island and in the New Territories is higher than the scenario under which “green lemons” are not known as thus mistaken as non-assessed properties. This finding is akin to the traditional “lemons” issue which can result in the saturation of “lemons” in the market due to lower average prices that drive the good quality products out of it. This situation, we believe, is further exacerbated by the HKSAR government’s GFA Concession Policy that grants GFA concessions to projects assessed under BEAM Plus regardless of rating, which is reflected by the high percentage of assessed projects with an “unclassified” rating. A higher degree of disclosure for these “lemons” compared to what is required now, according to the findings, could benefit potential investors and the BEAM Society alike.