Mandatory Price Research Articles

Living with cuts to public services: how can we get more for less?

social welfare spending was correlated closely with mortality from diseases associated with social circumstances (such as diet-, alcohol- and tobacco-related diseases) but that this effect was largely due to spending on areas other than health care. Indeed, we know from a multitude of other studies and reports, that there are a great many so-called ‘wider determinants’ of health and health inequalities, among the most influential of which is fiscal policy and its impact on fairness in society. 5 Unfortunately, in determining fiscal policy, public health is rarely uppermost in the minds of politicians and legislators—their main driver tends to be economic growth. And yet, as Marmot 6 and others have pointed out, a fair and healthy society is a productive society. Public health is all about the ‘bigger picture’, and as public health professionals we spend much time and effort analysing the complexities and interdependencies of the many factors that influence health and wellbeing. But we have been slow to get to grips with analysing the crosssector effects—the way factors such as education, housing, environment, transport, employment, social services and health care interact with each other to influence outcomes, not just health and wellbeing, but also such crucial outcomes as educational achievement, jobs, social cohesion, citienship, personal security, crime, regeneration, and political power. This whole-system or multisector evaluation has been recently dubbed ‘macro-evaluation’. 7 There have been calls for this broader approach to evaluation, particularly multisector cost –benefit analyses and predictive modelling, to be used by legislators in deciding on new laws with multisector impacts, such as whether or not to ban smoking in certain settings, introduce mandatory minimum pricing for alcohol or put extra taxes on foods

Modeling the Effects of Restricting Packer‐Owned Livestock in the U.S. Swine Industry

AbstractAn imperfectly competitive model of processor (packer) behavior is formulated to estimate welfare effects from restricting alternative marketing arrangements of livestock procured by packers. Pork was aggregated into a composite good and hog supply was partitioned into negotiated (spot), contract, and packer‐owned. The model was estimated with the dynamic SUR method using weekly Mandatory Price Reporting (MPR) hog and pork data from 2001 to 2005. The model incorporates production uncertainty by modeling expected pork output as expected output in the input demand functions. The welfare effects from banning packer‐owned hogs indicate that independent producers, consumers, and packers all would lose.

Multifaceted national and regional drug reforms and initiatives in ambulatory care in Sweden: global relevance

It is a continual challenge trying to improve the quality of prescribing while concurrently trying to address increasing pharmaceutical development, utilization and expenditure. National and regional reforms and initiatives in Sweden have moderated growth in ambulatory drug expenditure to 2.7% per annum in recent years despite increasing volumes. National reforms include mandatory generic substitution and value-based pricing alongside devolution of drug budgets to the regions. Regional initiatives include strengthening the role of the regional Drug and Therapeutic Committees, further budget devolution as well as strategies incorporating prescribing guidance and monitoring coupled with financial incentives. The extent and nature of the regional initiatives vary depending on their characteristics. In this article, we compare initiatives undertaken in two major counties, Stockholm and Östergötland, and their outcomes. Outcomes include annual drug budget savings while achieving agreed quality as well as increased adherence to prescribing targets and guidance; the latter associated with savings. Appraising these multifaceted reforms can provide guidance to other countries and regions in view of their diversity. Future steps must incorporate measures to improve the utilization of new expensive drugs, which should include horizon scanning and forecasting activities as well as post-launch activities involving monitoring of prescribing and registries. This may well require cooperation with other European countries.

Do Alternative Marketing Arrangements Increase Pork Packers' Market Power?

AbstractIn this article we use structural econometrics to formally test whether the use of the alternative marketing arrangements (AMAs) by pork packers is the source of their market power on the spot (cash) market for live hogs. We specify the pork packers' conjectures of the change in the industry total market procurement of live hogs through the spot market with respect to their AMAs stocks. The test is carried out using the mandatory price reporting data. Our results show that pork packers have statistically significant market power on the spot market for live hogs, but the source of that market power cannot be narrowed down to the existence of AMAs stocks.

The Need For Greater Price Transparency In The Medical Device Industry: An Economic Analysis

Proposed legislation seeks to impose price transparency in the heath care industry as a remedy for increasing medical device prices. This paper analyzes previous attempts to mandate similar price-disclosure rules in a variety of industries. We identify the economic conditions under which mandatory price disclosure is likely to generate substantial benefits and costs. Applying these conditions, we conclude that mandatory price disclosure for implantable devices is unlikely to pass a benefit-cost test.

Public Price Reporting in the Cash Market for Live Cattle: A Spatial Market Approach

Legislative authorization for the Livestock Mandatory Reporting Act of 1999 was renewed in October of 2006. One of the cited justifications for implementing mandatory reporting was that the voluntary reporting system for the slaughter cattle cash market was unable to provide accurate and timely market information. We extend the spatial market analysis literature by developing a methodology for detecting distortions in spatial relationships across related price series. Using spatially linked regional markets, we compare state-level mandatory price-reporting data to the U.S. Department of Agriculture voluntarily reported state data to determine if the spatial relationship between price-reporting mechanisms was disrupted by market distortions prior to implementation of federal mandatory price reporting. We found no empirical evidence of system failure; therefore, we conclude that market thinning or noncompetitive behavior had not reached the level necessary to disrupt the ability of the voluntary price-reporting system to provide timely and accurate price information.

Earnings Forecast, Earnings Management, and Asymmetric Price Response

The empirical evidence on earnings management and the corresponding stock price response to earnings announcements has consistently uncovered two important regularities: Missing an earnings target triggers a large and disproportionate negative stock price response, while exceeding such a target meets with only a moderate increase in stock price; and firms seem to manipulate their announced earnings to meet/beat earnings targets. I seek a rational explanation that connects these regularities by formulating an analytical model of earnings forecasts, mandatory earnings announcements and stock price behavior. I show that there is a kink in the distribution of reported earnings located close to but to the left of the earnings forecast. I also show that the equilibrium stock price schedule is much steeper when reported earnings lie below the forecast than when reported earnings lie above the forecast. These results help shed light on many puzzling empirical findings.

Impact of Mandatory Price Reporting Requirements on Level, Variability, and Elasticity Parameter Estimations for Retail Beef Prices

Moving to scanner based and quantity-weighted monthly average retail beef price series has changed the price series significantly. Quantity-weighted price levels are lower and more volatile. Perhaps most important, calculated elasticities for the quantity-weighted averages are lower than for the historical simple average data. Elasticity estimates for simple average monthly price data are also larger than for weekly data, raising the possibility that historic demand analyses have significantly overstated own price demand elasticities.

The Evolution of Farm Programs and Their Contribution to Agricultural Land Values

The economic environment of agricultural producers has been influenced by formal U.S. agricultural policy for more than seventy years. Among the first pieces of New Deal legislation proposed by incoming President Franklin D. Roosevelt, was a farm program designed to address declines in crop prices and net farm income. Key features of the Agriculture Act of 1933 included mandatory price support for specified commodities, direct subsidy payments to farmers, and supply controls. Farm programs, once viewed as temporary and supplementary to agricultural earnings, are increasingly viewed as permanent and of major proportion. Gardner examined the relationships between U.S. farm commodity programs and U.S. farm structure, while others (see Sumner for concept, evidence, and implications) have examined farm programs and specific crops. Gardner (2002), and Weersink et al. analyzed the effects of farm program programs upon land values. These studies examined various aspects of agricultural policy including whether farm program payments have enhanced land prices and landowner wealth rather than the welfare of producers. While it would seem logical that revenueenhancing farm programs would increase land values, reliably estimating the magnitudes of farm program effects upon land values is an empirically challenging task. Both statistical and budgeting-based methodologies have been used to estimate the share of land prices generated by farm program payments. Statistically based studies are complicated by the fact that both real per acre crop receipts

Is Best Really Better? Internalization in Xetra BEST

Xetra BEST allows participating brokers to internalize retail customer orders. The system is operated by Deutsche Borse AG as part of the electronic open limit order book Xetra. Internalized or- ders receive a mandatory price improvement. We provide an empirical assessment of Xetra BEST. We develop a structural model of its specific dual market structure that builds on the trade indicator model of Glosten and Harris (1988). Internalizing orders in Xetra BEST is profitable, as is evidenced by high realized spreads. The adverse selection costs in Xetra BEST are significantly lower than those of regu- lar order book trades. We find that the mandatory price improvement does not fully compensate for the difference in adverse selection costs. Our results imply that measures aimed at increasing competition among internalizers may yield improved execution quality for internalized orders.

The Voluntary Reporting System's Ability to Provide Price Transparency in the Cash Market for Dressed Steers: Evidence from South Dakota

The informational value of USDA's former voluntary price reporting system is investigated for dressed-weight slaughter steers sold by South Dakota producers. The ability of the former system to promote price transparency in the cash market is evaluated using state-level mandatory price reportingdata collected from September 1999 to April 2001. The empirical framework examines the informational value of public price reports according to the criteria established in the market integration literature. The empirical results indicate that in the South Dakota cash market for dressed weight steers, the voluntary price reporting system fostered price transparency, and thus contributed to the price discovery process. Empirical evidence is also presented suggesting that strategic price reporting by market participants to influence the voluntary price reporting system was not detected during the period covered in this study.

Cattle Feeder Perceptions of Livestock Mandatory Price Reporting

Mandatory livestock price reporting was designed to increase available price information with the intent of facilitating price discovery. Has the program been effective? This study determines how cattle feeders, a primary target of the program, feel about mandatory price reporting (MPR) effectiveness. Results from a survey of cattle feeders reveal a diversity of opinion. Producers tend to be neutral to slightly negative regarding the value of MPR. Some of the dissatisfaction appears to have been associated with unrealistic expectations. Most feedlot characteristics have little systematic relationship to the manager's perceptions regarding usefulness of MPR.

Cattle Feeder Perceptions of Livestock Mandatory Price Reporting

Cattle Feeder Perceptions of Livestock Mandatory Price Reporting

Price Transparency

Although enhanced price transparency will generally increase competition to the benefit of consumers, this paper argues that it can have the opposite effect in some special situations. A negative impact is especially likely in markets already prone to anti-competitive coordination. In such markets, competition authorities should be suspicious of competitors exchanging price data, or engaging in any other practice that could help focus anti-competitive arrangements or help competitors more than customers to react to price changes. They should also be wary of exchanges of non-binding future prices. The paper identifies a number of key factors to consider in assessing whether increased price transparency might raise the probability of anticompetitive co-ordination. That includes having a look at meeting competition and most favored nation clauses, and the practice of base point pricing. The paper also examines price transparency as regards information exchanges within trade associations, price advertisements, and mandatory price transparency in public procurement markets. It closes with a short list of questions competition authorities might wish to keep in mind when investigating the effects of price transparency. This OECD Competition Roundtable was held in June 2001.

Cattle feeder perceptions of mandatory price reporting (2003)

Livestock price reporting mandated by the USDA was designed to increase available price data with the intent of providing producers with information to facilitate price discovery. Has the program been effective at accomplishing this goal? This study determined how cattle feeders, a primary target of the program, feel about mandatory price reporting effectiveness. This study reports results from a survey of cattle feeding companies located primarily in Kansas, Nebraska, Texas, and Iowa. Results indicate a diversity of opinions regarding the effectiveness of mandatory price reporting. On average, producers are neutral to slightly negative regarding the value of mandatory price reporting. Some of the dissatisfaction was associated with excessive or unrealistic expectations. Feedlot size, amount of custom feeding, and the percentage of cattle sold by the feedlot to its largest buyer had little systematic relationship to the manager's perceptions regarding the usefulness of mandatory price reporting. In contrast, feedlot location and feedlot manager opinions about market structure were related to their opinions regarding mandatory price reporting.

Deregulating Property‐Casualty Insurance Pricing: The Case of Workers’ Compensation

Property and casualty lines of insurance have traditionally been subject to more regulatory price control than most goods in the U.S. economy. However, beginning in the 1970s, some states began to deregulate these lines of insurance, either dropping mandatory pricing in concert by means of rating bureaus or, additionally, dropping regulatory prior approval of premiums. This paper assesses the impact of rate deregulation in workers’ compensation insurance. Besides examining the impact of deregulation on price, we examine effects on injury rates, as rate regulation may have reduced incentives for workplace safety by restricting price differences across risk classes. We find that eliminating both rating bureau pricing and prior approval reduced long‐run premiums by 13.7 percent and reduced injury rates at most by 8.2 percent. In contrast, eliminating only rating bureau pricing had small effects.

Mandatory Full-Cost Pricing in Public Services: The Case of the ‘Fantask’ Sentence

The sentence issued by the Court of Justice in the ‘Fantask’ Case defined what sort of policies can be adopted by the Member States in connection with the fees for company registration without contravening the stipulations of Community legislation on raising capital. This article analyses how to set prices that comply with the sentence and at the same time generate efficient incentives. It first reviews to what extent the sentence meets the aims on which it is based. Second, it provides a guide for subsequent development of related jurisprudence. Third, it throws some light on how public authorities can set pricing policies.

Deterring Corruption in Public Purchase: Need for Mandatory Price Negotiation Approach

Deterring Corruption in Public Purchase: Need for Mandatory Price Negotiation Approach

The Impact of Price Stabilizing Policies on the Risk Efficient Crop/Fallow Decisions of Wheat Farmers in the Brown Soil Zone of Saskatchewan

The micro‐linkages between the crop/fallow decision and price‐induced risk are examined for wheat producers located on the brown soils of Saskatchewan. Three generic price stabilization policies are defined. Based on a bio‐economic simulation model, the risk‐efficient FLEXCROP decision rules are selected, and their corresponding cropping patterns are assessed for each generic price stabilization policy. Assuming no subsidy component within the mandatory price stabilization program:• risk lovers reduce cropped acreages by 0% to 4%, depending upon both the risk‐aversion level and the stabilizing program and• risk‐averse producers increase cropped acreage from 10% to 35% over no price stabilization.

Anti-inflation taxation policy: An alternative to wage and price controls

One reason the postwar economy has become increasingly inflation prone is that oligopolistic firms tend to act as if demand is completely inelastic for price increases no greater than the expected rate of inflation. Hence, in the absence of mandatory price controls, there is no effective disincentive at the individual firm level to price increases of this magnitude. The policy proposed below provides such a disincentive by linking each firm's tax rate to the increase in its revenues attributable to price changes.