Net Social Benefits Research Articles

Cost-benefit analysis for sheltered employment service programs for people with disabilities in Taiwan − a preliminary study

Purpose: The aim of this study is to do a cost-benefit analysis with monetary and non-monetary benefits for sheltered employment service programs and try to provide more evidence-based information for policy makers and practitioners to understand the outcomes of sheltered employment services. Method: This study analyzed 3 sheltered employment service programs for people with disabilities (2006–2007) implemented by Sunshine Social Welfare Foundation in Taiwan using cost-benefit analysis (including non-monetary benefits). Three groups were analyzed, including participants in the programs, taxpayers, and society (participants and taxpayers). Results: This study found that the net social monetary benefit was $NT29,432.07 per participant per year and the benefit cost ratio was 1.43. (In 2006–2007, $US1 = $NT32.5 averagely around.) The net monetary benefit for the participants was between $NT7,890.86 and $NT91,890.86 per participant per year. On the non-monetary benefit side, the physical health (raised 7.49%), social relationship (raised 3.36%) domains, and general quality of life (raised 2.53%) improved. However, the psychological (decreased 1.51%) and working/environment (decreased 3.85%) domains backslided. In addition, the differences between pre-test and post-test average scores of all domains were not statistically significant. Conclusions: This study is the first to use monetary and non-monetary cost-benefit analysis methods to analyze sheltered employment service programs for people with disabilities in Taiwan. The findings indicated that sheltered employment service programs for people with disabilities could be efficient and beneficial for the whole society and sheltered employees/clients, and also helpful for raising their quality of lives.Implications for RehabilitationThe sheltered employment service programs for people with disabilities can be efficient and beneficial for society as well as for sheltered employees/clients, and can be also helpful in raising their life quality.People with different categories of disabilities joining in sheltered employment service programs may have different outcomes. Thus, job coaches in the sheltered employment service programs might enhance the quality of counseling services for sheltered employees/clients with different categories of disabilities, sheltered employees’ working environment improvements by job redesigning and accommodation, and regularly receiving on-the-job training in these fields.This is the first study to do a cost-benefit analysis with monetary and non-monetary benefits for sheltered employment service programs in Taiwan. It provides firmer evidence-based information and suggestions for policy makers and practitioners as a means to better understand and improve the outcomes of sheltered employment services.

Corporate Reputational Dynamics, Private Regulation, and Activist Pressure

We model the interaction between a profi t-maximizing firm and an activist using an in nite-horizon dynamic stochastic game. The fi rm enhances its reputation through “self-regulation”: voluntary provision of an activity that reduces a negative externality. We show that in equilibrium the externality-reducing activity is subject to decreasing marginal returns, which can cause the fi rm to “coast on its reputation,” i.e., decrease the level externality-reducing activity as its reputation grows. The activist, which bene fits from increases in the externality-reducing activity, can take two types of action that can harm the firm’'s reputation: criticism, which can impair the firm’'s reputation on the margin, and confrontation, which can trigger a crisis that may severely damage the fi rm'’s reputation. An increase in the probability of a crisis in a given reputational state has the direct effect of decreasing the firm’'s externality-reducing activity in that state. But the activist changes the reputational dynamics of the game by tending to keep the firm in reputational states in which it is highly motivated to invest in externality-reducing activity. The paper provides both a positive and normative theory of anti-corporate activism. Using computational analysis, criticism and confrontational activity are shown to be imperfect substitutes. The more patient the activist and/or the more passionate it is about externality reduction, the more likely it is to rely on confrontation. The more patient the fi rm and the more important corporate citizenship is to the fi rm'’s brand equity, the more likely that it will be targeted by an activist that relies on confrontation. Both the long-run and the discounted net social benefit from externality reduction tend to increase due to the presence of the activist, but generally not to levels that exceed the first-best level. In this sense, the activist’s impact on private regulation can make it a positive force for social welfare when public regulation is ineffective or impossible.

Carsharing

With the increase in carsharing (sharing of motor vehicles through memberships in non- and for-profit enterprises) has come extensive analysis of the environmental, economic, and social benefits that result from vehicle-sharing programs. Although the research suggests that the public benefits are significant, public policy has not always supported the sector's growth, particularly in taxation. In this study a cross-section analysis of taxation rates in 82 U.S. cities was performed to foster understanding of the implications of taxation on the sector's expansion. Findings showed that taxes on carsharing services generally exceeded local taxes on sales, as well as taxes on other forms of passenger transportation. Nationally, the average tax was 17.93% for 1-h reservations and 14.08% for 24-h reservations. By comparison, sales taxes in cities with carsharing services averaged just 8.06%. In seven of the 25 largest cities in the study's sample, taxes on 1-h reservations exceeded 30%. Such taxation resulted in an estimated 11.7% reduction in carsharing use and a proportional drop in net social benefits. Such social losses can be avoided with policies that provide targeted tax waivers for neighborhood carsharing organizations that compile information (assembled and certified by a third party), which shows that the organizations provide services that meet clearly articulated criteria, and that the organizations generate significant benefits to the community at large. Several major cities, including Boston, Massachusetts; Chicago, Illinois; and Portland, Oregon, have created definitions for such organizations, which are used to exempt them from certain taxes.

Impact of Regulation and Network Topology on Effectiveness of Roadway Privatization

An agent-based model of roadway privatization is developed to evaluate pricing and capacity decisions for private toll roads when they compete with existing public roads. The model is demonstrated on a hypothetical grid and beltway structure network. Several simulation scenarios are presented to illustrate the effects of regulation policy packages of privatized roads and the influence of public and private network hierarchy on network growth patterns. From the simulation results of the developed agent-based model, several insights are provided on the impacts of ownership and network structures on the socioeconomic performance of transportation systems. Both the analytical findings and the application results on test networks are in favor of introducing private toll roads to current public road systems characterized by growing congestion, insufficient public funding, and inefficient pricing practices. When properly regulated, a privatized transportation network can achieve net social benefits close to the theoretical optimum and distribute a high percentage of welfare gains to travelers. Although the public sector is still able to expand roadway capacity gradually over time, additional revenue sources from privatization help to increase network capacity and to bring it closer to the optimal levels on public roads.

Choosing How to Pay: The Influence of Home Country Habits

Is having a foreign background a relevant factor in choosing between payment instruments in consumer point-of-sale transactions? We analyze this question using a unique diary survey in which both participants with a Dutch and a foreign background documented their daily purchases. Payment habits acquired in home countries continue to affect the mode of payment after migration. First generation migrants born in cash-oriented economies are more likely to use cash in point-of-sale transactions. However, the second-generation has similar payment habits as individuals with a Dutch background. This finding suggests that payment behavior is not passed on from generation to generation, but molded by host country payment habits. Finally, we suggest that special information campaigns to increase debit card usage will not have clear net social benefits.

Tax policy can change the production path: A model of optimal oil extraction in Alaska

We model the economically optimal dynamic oil production decisions for seven production units (fields) on Alaska's North Slope. We use adjustment cost and discount rate to calibrate the model against historical production data, and use the calibrated model to simulate the impact of tax policy on production rate. We construct field-specific cost functions from average cost data and an estimated inverse production function, which incorporates engineering aspects of oil production into our economic modeling. Producers appear to have approximated dynamic optimality. Consistent with prior research, we find that changing the tax rate alone does not change the economically optimal oil production path, except for marginal fields that may cease production. Contrary to prior research, we find that the structure of tax policy can be designed to affect the economically optimal production path, but at a cost in net social benefit.

The Impact of Sub-Metering on Condominium Electricity Demand

With a substantial fraction of the population insulated from energy price signals in bulk-metered apartment and condominium buildings, some jurisdictions are exploring mandatory metering of individual suites to encourage electricity conservation. This study finds that sub-metering in a Toronto condominium building reduces electricity usage by 20 percent. However, the costs of metering and customer service largely offset the electricity cost savings, and so the private net benefits are small or negative. The social net benefits depend strongly on the value assigned to externalities from generation. Social net benefits in our baseline results are closer to 5 percent than to 20 percent, and could be negative in many buildings.

A Generation of Software Patents

This report examines changes in the patenting behavior of the software industry since the 1990s. It finds that most software firms still do not patent, most software patents are obtained by a few large firms in the software industry or in other industries, and the risk of litigation from software patents continues to increase dramatically. Given these findings, it is hard to conclude that software patents have provided a net social benefit in the software industry.

Life cycle costing and externalities of palm oil biodiesel in Thailand

One of the issues related to the increased use of biofuel (ethanol and biodiesel) in the transport sector concerns their higher production costs, either in pure or blended form, as compared to conventional fuels (gasoline and diesel). Based on the average cost of biodiesel, the former is not able to compete with diesel if no subsidies are provided by the government to boost its cost competitiveness. However, such a cost comparison is not a true reflection of the various potential benefits of biofuels. This study aims to evaluate the influence of externalities on the cost performance of various palm oil biodiesel blends (B5, B10 and B100) when internalized into their respective production cost for the case of Thailand. A case study of palm oil biodiesel has been assessed and compared to conventional diesel. An income elasticity of willingness to pay (WTP) was used as multiplier factor to transfer the values of selected environmental damage costs obtained from the Environmental Priority Strategies (EPS) methodology into Thai context. The three key environmental burdens considered in this work include land use, fossil energy resources depletion and air pollutants emissions i.e. CO2, CH4, N2O, CO, NOx, SO2, VOC and PM10. The results obtained indicate that environmental costs contribute to 34% of the total costs of conventional diesel. In comparison to diesel and for the same performance, the total environmental cost of biodiesel based palm methyl ester (PME) is about 3–76% lower depending on the blending levels. This is mainly due to two major advantages that biofuels present which are a reduction in the depletion of fossil energy resources and mitigation of carbon dioxide emissions. In terms of net social benefits, the promotion of biodiesel to replace diesel is economically feasible contributing a gain in welfare of about 0.01 and 0.76THBL−1 diesel equivalent for B5 and B10 respectively.

The Case for Less, Not More, US FDA Regulation

The article byNeumann et al. in this issue is an important contribution to the literature; one that shedsmuch light on a heretofore largely overlooked aspect of Section 114 of the 1997 Food and Drug Modernization Act (FDMA). The article describes how Section 114 has been interpreted and used by major US pharmaceutical firms with respect to the dissemination and communication of a pharmaceutical product’s economic value to health plans, formulary decision makers and similar organizations. The authors’ argument for greater clarity on the topic by the US FDA deserves to be echoed loudly, as does their appeal for flexibility with respect to its interpretation. The article, which fills a long-standing lacuna in the literature, is particularly timely, as the authors of the article emphasize, because new and evolving comparative effectiveness research (CER) legislation will potentially affect many Section 114 claims. The purpose of this commentary is to offer a larger context within which the findings and arguments of Neumann et al. might be considered: a free-market context. When new pharmaceutical regulations and policies are proposed, it is always in society’s best interest to consider the cost-benefit calculus of the proposed government intervention, and to ask the question ‘Will the new regulation lead to net social benefits relative to the benefits in the absence of the regulation?’ Alternatively, and more generally, the following question might be considered: ‘Will the regulation facilitate or impede free market forces and outcomes?’ To be certain, there are numerous circumstances, or market failures, that do indeed justify government intervention to improve upon unregulated market outcomes. Intellectual property rights established via government-enforced limited-term patents is one example; one that is a defining feature of pharmaceutical markets, and that significantly affects the industry’s structure, conduct and performance. Information, for example, themolecular structure of a new pharmaceutical or biologic, is a public good once the product is brought to market (and often much sooner). As such, in the absence of patents, this new information is non-rival and non-excludable; consumption/acquisition of this information, by any individual or organization, does not reduce its availability for consumption by anyone else. And once the information is public (published), without patents, no-one can be excluded from consuming the information. Without limited-term patents, there would be virtually no economic incentive to invest in R&D, and there would be no pharmaceutical innovation, ceteris paribus. Of course,

Analysis of road safety incentives applied in PPP road

Road safety is one of the most important issues in PPP roads. At this respect, to achieve a property regulation it is necessary to introduce objective and explicit incentives in the contracts. Besides, these incentives must be focused at the net social benefit. This paper explains how road safety has been introduced traditionally in PPP road contracts and how it is been doing it nowadays, comparing for three recent concessions of Europe, the bonuses and the social benefit associated to each reduction of accidents in the roads. As a result, it can be affirmed that the incentives applied, both traditional and the most ones, are unremarkable for two reasons: because they are much lower than the social benefit derived from them and because they apparently are well below the cost of measures to improve road safety.

An introduction to the law and economics of class action litigation

The consolidation of similar claims for compensation into a single large class of plaintiffs is referred to as “class action litigation.” This practice can have both social costs and social benefits. For an example of the social benefits of consolidating separate claims, if the facts giving rise to the claims are substantially similar, then there may be significant savings in litigation and court administrative costs from presenting those facts once rather a multitude of times. There may, however, be significant social costs to creating a class of litigants and consolidating their claims. For example, this practice may empower those with frivolous negative expected-value claims to wring an unwarranted settlement from the defendant or defendants. The article surveys other sources of social cost and benefit from class-action litigation, reviews the empirical literature on these actions, and examines recent U.S. policy debates about reforming class-action litigation. The article concludes that class-action litigation can have substantial net social benefits but only if courts assiduously oversee the class certification process so as to identify and forestall the social-cost-generating aspects of class-action litigation.

Lactic acid and xanthan fermentations on an alternative potato residues media – Carbon source costs

This study estimates the carbon source costs for producing xanthan and lactic acid on alternative potato residues media and assesses the potential for profitability and social net benefits of xanthan and lactic acid fermentations. Xanthan fermentations were conducted in solid and semi-solid mode where there was 60–240 kg dry matter t −1 of potato residues. Average xanthan yield was 249 g kg −1 dry matter, with standard deviation of 149 g kg −1 . Lactic acid fermentations were conducted in submerged mode with starch concentrations of 30–60 kg m −3 . Nine to 54 kg of the starch was fermented to lactic acid with average conversion efficiency of about 60 percent. Fermentation of the residues into xanthan or lactic acid could generate profit and net social benefits; the potential for positive externalities emanates from: i) reducing environmental costs of the residues disposal, and ii) alleviating the pressure on materials that are both conventional media for xanthan and lactic acid fermentations and inputs in subsidized markets for food and fuel. ► This study estimates the carbon source costs for producing xanthan and lactic acid on alternative potato residues media. ► The study assesses the potential for profitability and social net benefits of xanthan and lactic acid fermentations. ► Fermentation of the residues into xanthan or lactic acid could generate profit and net social benefits.

Urban wildscapes and green spaces in Mombasa and their potential contribution to climate change adaptation and mitigation

Well-planned urban green landscapes, including wildscapes and green spaces, have the potential to contribute to climate change adaptation and mitigation. Yet for cities in low-income countries, the value of these urban landscapes in climate change response strategies is often disregarded and remains largely unexploited and unaccounted for. This paper discusses the potential role of urban green landscapes as a “soft engineering” climate change response strategy, and calls for the pursuance of management practices that preserve and promote the use of these urban spaces. It does so by combining theoretical arguments with an empirical example based on an innovative and novel approach to landscape rehabilitation, the Lafarge Ecosystems Programme, in the coastal city of Mombasa, Kenya. The paper finds that a well-managed system of green landscapes in resource-poor urban areas can generate net social benefits under a range of future scenarios. It further finds that climate change adaptation and mitigation responses can be initiated by a range of stakeholders operating at all scales.

The benefits and costs of the Section 8 housing subsidy program: A framework and estimates of first‐year effects

AbstractThis paper provides estimates for a comprehensive set of social benefits and costs associated with the federal Housing Choice Voucher ( Section 8) program. The impact categories for which we provide empirical estimates include the value of the voucher to recipients; additional services and public benefits induced by voucher receipt; improvements in children's health, education, and criminal behaviors; the costs of voucher provision; the labor supply impacts on voucher recipients; and community effects. These estimates rest largely on empirical analyses of the effect of voucher receipt on several recipient and taxpayer behaviors and outcomes that occur in the first year of voucher receipt. The analysis distinguishes benefits and costs accruing to program participants, nonparticipants—including taxpayers and property owners—and society as a whole. Our analysis suggests that the program is likely to meet the efficiency standard of positive net social benefits. © 2011 by the Association for Public Policy Analysis and Management.

To T or Not to T: A Ballpark Assessment of the Costs and Benefits of Urban Rail Transportation

The debate over the costs and benefits of rail passenger transit is lively, deep, and often ideological. As with most polemical debates, the truth probably lies somewhere in the middle of extreme views. Some rail systems have benefits that outweigh their costs, while others do not. Applying a commonly used transit-fare price elasticity to 24 of the largest light and heavy rail systems in the United States and Puerto Rico, assuming a linear demand curve, and accounting for a counterfactual scenario, we find that just over half of the systems have net social benefits. Although Los Angeles’ rail system does not “pass” our back-of-the-envelope cost—benefit analysis, as the network expands, it will begin to mimic the regional spatial coverage and connectivity of its chief competitor—the auto-freeway system—and approach the fare recovery rates of other large, dense American cities.

A Benefit-Cost Analysis of Private and Semi-Private Hospital Rooms

The design of new hospital inpatient rooms is moving towards private (single occupancy) rooms. These rooms are generally preferred by patients and they may improve patient care, but they are more expensive to build and to staff than semi-private rooms. The question of their societal worth is important because hospitals are expensive, long-term investments and, once built, are prohibitively expensive to change. This paper presents a benefit-cost analysis of private rooms versus semi-private rooms in a proposed new hospital. We estimate that the net social benefit of a bed in a private room is about $70,000 more than a bed in a semi-private room.

Benefit-Cost Analysis for Drinking Water Standards: Efficiency, Equity, and Affordability Considerations in Small Communities

The federal Safe Drinking Water Act (SDWA), as amended in 1996, enables benefit-cost analysis (BCA) to be used in setting federal drinking water standards, known as MCLs. While BCAs are typically conceived of as a tool to inform efficiency considerations by helping to identify MCL options that maximize net social benefits, in this paper we also illustrate how important equity and affordability considerations can be brought to light by suitably applying BCAs to drinking water regulations, especially in the context of communities served by relatively small water systems. We examine the applicability and relevance of health-health analysis (HHA), and provide an empirical evaluation of the risk tradeoffs that may be associated with the MCL established for arsenic. We find that the cost-associated risks may offset a nontrivial portion of the cancer risk reduction benefits attributed to the MCL (e.g., the additional adverse health impacts from the costs may be roughly half as large as the number of cancer cases avoided). This reveals the relevance of using the HHA approach for examining net benefits of MCLs in small drinking water utilities, and raises issues related to whether and how these cost-associated health risks should be considered in BCAs for drinking water standards.

Seasonal Unemployment and Voluntary Out-Migration from Northern Bangladesh

This paper explores the major push-pull and self-selective factors of seasonal rural-urban migration during the lean period using survey data from northern Bangladesh. Among all other factors, probit estimates reveal that the choice of destination, per capita monthly food expenditure, availability of social safety net benefits are affecting individuals’ decision of being seasonal migrant to a significant extent.

The environmental and socio-economic impacts of bio-ethanol production in Thailand

Abstract The study assesses the impacts of the bio-ethanol production to the environment and socio-economic development in Thailand. The key assessment elements include greenhouse gas (GHG) emissions performance, employment generation, and economic effects on gross domestic product (GDP) and trade balance of Thai economy. The results reveal that there are wide ranges of GHG emissions depending upon the production environment and especially when direct land-use change is included in the system boundary. GHG emissions for cassava and molasses ethanol range between 27 – 91 and 28 – 100 g CO2-eq per MJ ethanol, respectively. For socio-economic impacts, producing bio-ethanol requires about 17-20 times more workers than gasoline for the same amount of final energy. Direct employment in agriculture contributes to more than 90% of the total employment. In addition, production of 1 TJ bio-ethanol could result in an additional GDP around 0.7-0.9 M.THB and the increase of imported goods worth 0.7-1.8 M.THB. However, around 0.4-1.1 M.THB of imports would be saved per TJ from the promoting use of bio-ethanol to substitute gasoline. These obtained externalities raise the attractiveness of bio-ethanol in terms of net social benefit; however, it specifies to only in case that bio-ethanol production systems are sustainably managed.