Positive Welfare Effects Research Articles

Universal credit: Welfare reform and mental health

The UK Universal Credit (UC) welfare reform simplified the benefits system whilst strongly incentivising a return to sustainable employment. Exploiting a staggered roll-out, we estimate the differential effect of unemployment under UC versus the former system on mental health. Groups with fewer insurance possibilities - single adults and lone parents – experience a mental health deterioration of 8.4-13.9% standard deviations which persists into the subsequent year. For couples, UC partially or fully mitigates mental health consequences of unemployment. Exploring mechanisms, for single adults and lone parents, reduced benefit income and strict job search requirements dominate any positive welfare effects of the reduced administrative burden of claiming benefits.

Improving wild animal welfare through contraception.

To date, research on the welfare impacts of wildlife contraceptives has mostly been focused on the potential harms of contraceptives. However, there are compelling theoretical reasons to expect direct and indirect welfare benefits of wildlife contraceptives. These positive welfare effects would be experienced by more than just the treated individuals, because per capita resource availability will increase with decreasing numbers of individuals sharing a resource. In the present article, we discuss the potential for wildlife contraceptives to alleviate resource competition and their associated negative welfare effects at different scales. These effects are expected to vary across contexts and would presumably be stronger when wildlife contraceptives are used with the explicit purpose of improving wild animal welfare. The potential for considerable welfare gains for wildlife through the targeted use of contraceptives highlights the importance of both species-specific studies on the welfare benefits of wildlife contraceptives and further research on the links between population dynamics and wild animal welfare.

The welfare effects of partial tariff reduction in Japan

When some sectors are more heavily protected than others, will removing lightly protected sectors’ tariffs improve welfare? We argue that this second-best question is highly relevant in Japan, wherein its government made some exceptions to the across-the-board tariff elimination during the Trans-Pacific Partnership negotiations. We have calibrated a specific factor model with multiple import-competing sectors to the 2015 Japanese economy and conducted some counterfactual exercises. Although the partial tariff removal policy in question barely affects Japanese welfare, when it is combined with the agricultural sector tariff removal (across-the-board tariff elimination) the effect on Japanese welfare is made positive. Furthermore, the positive welfare effect more than doubles if it is combined with the removal of the subsidy in the agricultural sector. Both findings indicate the severity of the existing distortion stemming from the Japanese agricultural sector protection as well as the importance of lowering the protection to render the nonagricultural sector tariff removal meritorious.

The gains from changes in internal trade costs: A quantitative analysis of China

AbstractWe study how internal trade costs affect the Chinese economy. Combining regional and industry data with a multiregional multisector general equilibrium model, we quantify the magnitude of total trade costs and institutional trade costs, and the impact of their changes on aggregate, regional, and sectoral total factor productivity, gross domestic product, and welfare. Using unique data, we estimate the sectoral trade elasticity of internal trade in 16 tradable sectors. We use our calibrated model to perform a variety of counterfactual exercises. We find that the welfare gains are negative for a 5% reduction in total trade costs and for the elimination of institutional trade costs, which can be attributed to inherent inefficiencies in the economy. However, as total trade costs decrease further, the positive welfare effect significantly exceeds the impact of inefficiency. The regional and sectoral effects of changes in trade costs show that the spatial structure of the economy, input‐output linkages, and local factors together determine the heterogeneity of sectoral and regional consequences. Finally, we infer the relative changes in China's internal trade costs from 2012 to 2017, and calculate their economic effects.

Food for thought: Assessing the consumer welfare impacts of deploying irreversible, landscape-scale biotechnologies

Genetically engineered insects have gained attention as regionally deployed pest control technologies, with substantial applications in agriculture for combatting intractable crop pests and diseases. One potential tool is a ‘gene drive’, using CRISPR-based gene editing. In gene drive, preferentially inherited, engineered traits are spread throughout a geographic area to reduce pest populations or inhibit disease transmission, while also potentially reducing pesticide use and crop prices. But the self-perpetuating nature of gene drives presents a consequence, in that consumers could eventually be limited to only host crops grown in the presence of these genetically engineered insects. In this study, we analyze potential consumer welfare impacts of these technologies using discrete choice experiment data from a representative sample of U.S. adults, examining preferences regarding gene drive use to control spotted wing drosophila in blueberries and Asian citrus psyllid in orange juice (OJ) production. We find smaller average discounts for gene drives versus increased conventional pesticide use or genetically modified crops. Only 27% and 25% of blueberry and OJ consumers, respectively, are estimated to derive disutility from gene drives. However, gene drive disutility for these consumers is so large that elimination of non-drive options from their choice sets results in negative (blueberries) or neutral (OJ) effects to aggregate consumer welfare when weighed against gains to other consumers from reduced prices. Positive welfare effects are recovered by retaining availability of non-gene-drive products. We argue that this type of analysis will be increasingly important as landscape-level biotechnologies are deployed to address challenges to agricultural sustainability.

Government Loan Guarantees, Market Liquidity, and Lending Standards

We study third-party loan guarantees in a model in which lenders can screen and sell loans before maturity when in need of liquidity. Loan guarantees improve market liquidity, reduce lending standards, and can have a positive overall welfare effect. Guarantees improve the average quality of nonguaranteed loans traded and thus, the market liquidity of these loans because of selection. This positive pecuniary externality provides a rationale for guarantee subsidies. Our results contribute to a debate about reforming government-sponsored mortgage guarantees by Fannie Mae and Freddie Mac, suggesting that the excessively high subsidies to these guarantees should be reduced but not completely eliminated. This paper was accepted by Kay Giesecke, finance.

Market power, output, and productivity

I document a positive correlation between increases in markups and growth of output, value added, and labor productivity at the 3-digit sector level using national accounts data from Mexico. Additionally, I show that those results can be partly accounted for by the positive correlation between increases in markups and total factor productivity growth. Taken together, the findings provide new evidence that a rise of market power can be associated with positive welfare effects and not only with negative outcomes of reduced competition.

Incidental Adaptation: The Role of Non-climate Regulations

When a non-climate institution, policy, or regulation corrects a pre-existing market failure that would be exacerbated by climate change, it may also incidentally induce climate adaptation. This regulation-induced adaptation can have large positive welfare effects. We develop a tractable analytical framework of a corrective regulation where the market failure interacts with climate, highlighting the mechanism of regulation-induced adaptation: reductions in the climate-exacerbated effects of pre-existing market failures. We demonstrate this empirically for the US from 1980 to 2013, showing that ambient ozone concentrations increase with rising temperatures, but that such increase is attenuated in counties that are out of attainment with the Clean Air Act’s ozone standards. Adaptation in nonattainment counties reduced the impact of a 1 °C increase in climate normal temperature on ozone concentration by 0.64 parts per billion, or about one-third of the total impact. Over half of that effect was induced by the standard, implying a regulation-induced welfare benefit of $412–471 million per year by mid-century under current warming projections.

Ethical Justifications for the Use of Animals in Competitive Sport

ABSTRACT Recently, shifting societal attitudes towards animals have resulted in an increasing challenge to the ‘social license’ to use animals in competitive sport. Against that background, this paper explores whether the use of animals in competitive sport is ever justifiable from the perspective of three commonly used ethical theories: deontology, utilitarianism and virtue ethics. In so doing, it recognises the importance of human understanding of animals as sentient beings. The author argues that when deontology, utilitarianism and virtue ethics are each used to consider the question ‘Is the use of animals in sport ethically justifiable?’, only absolutist rights theory leads to a negative conclusion. Specified rights theory, utilitarianism and virtue ethics all allow for the human use of animals in sport. However, the author then goes onto argue that even if one does not accept an absolutist rights point of view and does believe that the use of animals in sport is generally ethically justifiable, that use should be limited by fulfilment of certain ‘qualifying constraints’: (a) minimisation of negative welfare effects and maximisation of positive welfare effects, to enable ‘good lives’ for animals (b) identification of and mitigation against avoidable, unnecessary risk and (c) compliance with governing body regulations and the law.

Evaluating Household Welfare in Participation of China’s Natural Forest Protection Program: A Dual Perspective of Income Welfare and Material Welfare

This paper presents novel empirical evidence on the welfare impacts of forest protection programs, focusing on both income and material welfare at the household level. Specifically, we conduct a household survey of 1271 households in forestry communities that participate in the Natural Forest Protection Program (NFPP) in China. The survey data are collected from 56 state forest enterprises (SFEs) across three provinces in China. We employ the Alkire–Foster method to calculate and decompose the material deprivation index based on household income levels. Our analysis reveals that forestry communities exhibit a significant proportion of households in low-income welfare states, comprising nearly one-fourth (25.41%) of the sample. Furthermore, we observe that the percentage of households in a low-material welfare state is nearly one-fifth (21.70%), with 7.79% of households experiencing both low-income and low-material welfare. Importantly, we find that welfare disparities persist across population subgroups based on occupation and geography. In addition, we assess the impact of the NFPP on household welfare outcomes and identify an elite group of technicians residing in urban communities down the hill who experience positive welfare effects from the program. These findings provide critical insights beyond a single welfare dimension and contribute to the growing literature on evaluating forest protection policies. Furthermore, the results offer valuable lessons for designing and implementing forest protection programs in other developing countries.

Regional Infrastructure Effects on the Life Satisfaction of Rural and Urban Residents. A Case Study for Ecuador

In developing countries, many households lack basic household services and the provision of utility infrastructure is uneven across regions, leaving lagged regions behind. This lack of infrastructure in specific places can affect the welfare of its inhabitants. This paper aims to measure the influence of household basic services and sub-national infrastructure activities on individual subjective well-being in Ecuador. To determine how important the geographical context is for individual welfare, a hierarchical ordered logistic multilevel model is conducted. The results show that the individual heterogeneity is explained in 7% by the variation across cantons. There are 52 cantons that are above the average life satisfaction and 43 cantons below it. Findings regarding infrastructure evidence that sub-national utility projects and road infrastructure have a positive significant effect on the life satisfaction of rural residents whereas it is not significant for urban residents, indicating the diminishing marginal utility of urban people. Once a satiation point is achieved, marginal utility increases are lower. As for household services, access to the internet has a higher positive welfare effect than access to sewerage and access to water via pipelines.

Selection effects, inequality, and aggregate gains from trade

This paper argues that the cost of trade-induced inequality in terms of aggregate gains from trade is decreasing with globalization. I use a general equilibrium model of trade and show that at low levels of trade openness, a 1% point increase in real per capita income due to higher trade is associated with percentage point increases of 0.5, 0.85, and 0.92 in the Gini, Atkinson and Theil indices, respectively. These trade-offs, however, quickly decline upon opening up to trade and converge toward zero as trade barriers disappear. I find that at high levels of openness, more firms are exporters such that the elasticity of income inequality to reductions in trade costs converges to a constant, whereas the elasticity of average real income keeps increasing. Trade liberalization has positive marginal welfare effects for a wide range of social welfare function parameters. Existing taxation and redistributive policies can reinforce this relationship.

Vertical integration under optimal taxation: A consumer surplus detrimental result

Vertical integration in environments without foreclosure, or more generally without any obstacles that restrict competition in the market, and subsidization of firms are two separate mechanisms that have pro-competitive effects. In this paper we show that subsidization can corrode the positive welfare effects of vertical integration, as the latter induces the government to subsidize firms’ output to a lesser extent. This causes an output reduction that lowers consumer surplus.

Aid and internal migration in Malawi

This paper uses geographically disaggregated data to investigate the role of foreign aid as a pull factor for internal migration in Malawi over the period 1998–2008. Employing a standard gravity model of migration, we show a positive relationship between the volume of foreign assistance a district receives and the number of immigrants. While aid makes districts more attractive as migrant destinations, there is no evidence of a counterbalancing push factor effect on internal mobility. We also dig deeper into the mechanisms through which foreign aid can shape internal migration decisions. According to our results, the positive welfare effects of foreign assistance manifest themselves not only through a rise in economic opportunities, but also in improved access to public services in recipient districts.

5 The Use of Alginate Hydrogel Beads During Pig Transportation

Abstract During marketing, pigs are exposed to multiple stressors, including feed/water withdrawal, physical assertion, and mixing with unfamiliar pigs. These stressors can disrupt the homeostasis of the market pig, that in-turn could result in non-ambulatory-non-injured, non-ambulatory injured pigs or death. The objective of this study was to provide pigs electrolytes and a glucose source in alginate hydrogel beads (AHB) to determine if they could mitigate transportation stressors. A maternal neonatal pheromone was added to the AHB to encourage consumption. Sixty (PIC USA Camborough-22 sow line) market pigs (BW 122.27± 32.72 kg), including barrows and gilts were allocated to two treatment groups, either AHB (n= 30) or control (CON) without AHB (n= 30). Pigs were acclimated to the AHB 72-h prior to transport and fasted 12-h before being loaded on a straight trailer and transported for a total of 4-h. Pig body weights were collected before and after transport and blood samples were collected via jugular venipuncture. Active and inactive postures and drinking behavior were recorded using GoPro Cameras during transport and 24-h post-transport using a DVR in one min scan sample. The study was a complete randomized design with pen as the experimental unit. The AHB did not affect the pigs body weight (P > 0.05). Blood chemistry and blood hematology measures showed treatment by time interactions for PH, PCO2, HCO3, BE, TCO2, TBIL and GLU (P ≤ 0.05). During transport AHB pigs displayed more lying than CON pigs (P < 0.05). After transport AHB pigs sat more (P < 0.05) and tended (P > 0.05) to move more than CON pigs. CON pigs engaged in more drinking than AHB pigs after transport (P < 0.05). In conclusion, AHBs had some positive welfare effects on pig physiology and behavior during and immediately after short transportation and show promise as a tool that could be practically implemented by the industry.

Cereal crops commercialization and welfare of households in Guji Zone, Ethiopia

Cereal crops account for 88.52% of grain production in Ethiopia and 87.6% in the Guji Zone. Despite its size, its contribution to household welfare has yet not been studied. Besides, there are limited studies with rigorous methodological approaches regarding the effects of commercializing cereal production on household welfare. This paper is set out to measure the commercialization of cereal crops and examines its welfare effects measured as food and nonfood consumption expenditure. The study was based on cross-sectional data collected in 2019 from 288 sample farm households selected through a multistage sampling technique. A Kruskal-Wallis test and post hoc Dunn's test were employed to examine the welfare effects of commercialization. The study shows that about 48.33% of cereal production was sold to the market, suggesting a moderate level of commercialization. Moreover, the finding indicates that the welfare effects differed across various levels of commercialization at p < 0.01, p < 0.05, and p < 0.1 significance levels. This implies that at least one of the commercialization categories had a different mean. The effects of cereal crop commercialization were statistically significant in terms of monetary expenditure on coffee and sugar, edible oil, clothes and shoes, education, medications, farm implements, durable goods, and aggregate expenditure. The study showed the positive welfare effects of cereal crop commercialization between comparisons considered (moderate vs. low, high vs. moderate, and high vs. low commercialization categories). It also pinpointed the possibility of further improving their consumption expenditure by enhancing their intensity of commercialization if appropriate strategies are designed and implemented. Thus, stakeholders involved in cereal subsector development should work collaboratively to enhance the farm-level intensity of commercialization by improving public service delivery in rural areas. Besides, farm households should work on value addition and market linkage to achieve a better commercial status, thus, improve their welfare.

The value of fiduciary duties: Evidence from en bloc sales in Singapore

This paper examines the impact of fiduciary duties on collective asset sales in the case of owners acting as delegates for other owners, thereby potentially inducing conflicts of interests. Our identification strategy exploits a unique legal shock in Singapore, which established fiduciary duties in those transactions in the real estate market known colloquially as en bloc sales. The imposition of fiduciary duties caused the price premium of units sold via en bloc sales to increase over units ineligible for en bloc sale, as well as over units that, although eligible for en bloc sale, are sold individually. In addition, this valuation effect is stronger for projects with especially severe agency problems as proxied by high ownership turnover. This legal reform also affects the general private housing market beyond the en bloc premium: findings show that residential owners are increasingly willing to participate and reduce condominium turnover. Finally, we find that the stock price of public real estate developers responded positively to the legal reform, which indicates a possible overall positive welfare effect. Our study highlights the importance of judicial oversight for addressing agency conflicts in non-consensual asset-sale mechanisms.

Do protected areas increase household income? Evidence from a Meta-Analysis

Do protected areas (PAs) increase or reduce the welfare of rural households? This study assesses this key question in environmental economics through a meta-analysis of studies that used income or poverty reduction as measures of welfare. A systematic search of peer-reviewed and “grey” literature identified 99 observations from 30 studies. The results showed that PAs have positive and significant impacts on economic outcomes at the local level, although the effect is small. The likelihood of observing positive economic impacts and the magnitude of the outcomes vary depending upon factors such as the choice of econometric method, location and context: studies from Africa are less likely to show positive welfare effects than studies from Asia and South America. Our findings contribute to research on the nexus between PAs and their economic impacts, and offer recommendations for researchers and practitioners working on this frontier.

Economic impacts of UK's free trade agreements with Korea, Japan, and EU as a breakthrough of Brexit

AbstractWith the UK‐Korea‐EU Free Trade Agreement (FTA) and the UK‐Japan‐EU FTA, the gross domestic products of the UK, Korea, Japan, and the EU will increase. The UK's exports to Korea and Japan, and Korea's exports to the UK, Japan, and the EU will increase in some manufacturing sectors, particularly the automotive sector. Likewise, Japan's manufacturing exports to the UK and the EU will grow. However, UK and Japanese exports to the EU and Korea, respectively, will decline in this sector. There will be positive welfare effects on the UK, Korea, and Japan, but negative welfare effects on the EU, China, and the rest of the world (ROW). While UK imports from Korea and Japan and Korean imports from the UK and the EU will both increase and have mixed trade creation and diversion effects, UK imports from the EU will decrease in the manufacturing sectors. Korea's imports from Japan will decline, but Japan's imports from the UK, Korea, and the EU will increase due to trade creation and diversion effects. China's imports from Korea and Japan will decline, whereas China's imports from the UK and the EU will increase. EU imports from Korea and Japan will increase due to trade creation and diversion effects, but EU imports from the UK, China, and the ROW will decline in most manufacturing sectors.

Non-Tariff Measures in the Food Processing Sector in Malaysia: An Assessment of Welfare Impacts

Given the ambiguity of the overall welfare effects of non-tariff measures (NTMs), this paper furthers our understanding of the well-being of consumers by focusing on a single sector analysis. It examines the welfare effects associated with the highly regulated food processing sector in Malaysia. A comparative static computable general equilibrium model is employed to quantify the welfare impacts of a partial removal of NTMs, or a reduction in trade restrictiveness of NTMs. The simulation results indicate welfare gains, albeit minimal (not more than 2%), from a partial reduction in NTMs, both in the short run and long run. A plausible reason for the somewhat small gains in welfare in the food sector is the dominance of standard-like measures relative to price or quantity-based regulations. The positive and small welfare effects from a partial removal of NTMs suggest that some regulations in the food processing sector may be pervasive in that they may embed some protectionist elements and/or they do not address genuine market failures. Therefore, this paper concludes that there is still scope for regulatory reform in the food processing sector in Malaysia.