Proxy For Costs Research Articles

Phillips meets Beveridge

The Phillips curve plays a central role in the macroeconomics literature. However, there is little consensus on the forcing variable that drives inflation in the model, i.e., on the appropriate measure of “slack” in the economy. In this work, we systematically assess the ability of variables commonly used in the literature to (i) predict and (ii) explain inflation fluctuations over time and across U.S. metropolitan areas. In particular, we exploit a newly constructed panel dataset with job openings and vacancy filling cost proxies covering 1982–2022. We find that the vacancy-unemployment (V/U) ratio and vacancy filling cost proxies outperform other slack measures, in particular the unemployment rate. Beveridge curve shifts—notably, movements in matching efficiency—are responsible for the superior performance of the V/U ratio over unemployment.

Capital structure determinants of small and medium enterprises in Mogadishu, Somalia

The aim of this study is to examine the factors influencing the capital structure of small and medium enterprises (SMEs) in Mogadishu, Somalia. The study applies the trade-off theory, which posits that several characteristics affect how firms finance themselves. According to this theory, firm size, which serves as a proxy for bankruptcy costs, positively influences capital structure—larger firms face lower bankruptcy risks. The research employed a descriptive correlation research design and utilized a stratified random sampling technique to gather data through questionnaires. Data analysis was conducted using the Statistical Package for Social Sciences (SPSS version 20). The study identifies three independent variables—profitability, cultural factors, and firm size—as crucial indicators of capital structure for SMEs in Mogadishu. These factors are pivotal as SMEs expand and initiate new operations. Interestingly, the perceptions or beliefs of owner-managers have little impact on capital structure decisions, while network linkages do not significantly influence SMEs' capital structure. It underscores the responsibility of SME owners and management to ensure their financial structures are optimally managed. The study highlights profitability as a significant factor affecting capital structure. In the absence of profits or insufficient profitability, businesses may struggle to survive as investors seek returns that ensure capital growth over time. Profitability thus plays a critical role in the long-term sustainability of a company.

Tests for market failures and overcoming transaction costs barriers to market participation in Afghanistan

AbstractSimilar to other fragile poor countries, the majority of the rural population in Afghanistan depend directly or indirectly on small-scale farming for their livelihoods, and poor infrastructure and other barriers restrict access to markets and services, making improving access to local input markets a significant challenge for policymakers aiming to increase productivity. This paper offers empirical evidence addressing two important issues for smallholder participation in input markets: are rural markets incomplete or failing and how do transaction costs affect participation in factor markets? Pooled cross-sectional data from three waves of nationally representative surveys between 2011 and 2016 with a sample of nearly 21,000 households are used. The analysis first tests and rejects the separability hypothesis that household production and consumption decisions are independent which can be interpreted as evidence of market failures. A control function approach with instrumental variables to address endogeneity is employed to estimate household input market participation decisions. Ownership of or access to information and communication technology and transport equipment are used as proxies for transaction costs. Results confirm that lower transaction costs increase input market participation and expenditure on inputs by farm households. Additionally, households with better access to roads and district or provincial market centres have higher market participation and expenditure on input. Reducing transaction costs plays an important role in input use, potentially increasing productivity and incomes.

Why do farmers stop using collective drip irrigation technology? Evidence from rural Xinjiang, China

Collective drip irrigation (CDI) technology is becoming increasingly important for saving water and fertilizer and for improving land productivity. However, many farmers stop using this technology after investing in it and using it for several years in China. Sizable transaction costs occurring in CDI management may play a major role in CDI usage, but little research has been conducted to date. This paper measured transaction costs in traditional and new methods. Empirical estimates of the effects were obtained by applying Heckprobit and probit models to data collected in Awat County, Xinjiang, China, in 2017. We find that (1) new transaction cost proxies related to employing/demising irrigators and checking outcomes of irrigation and fertigation have significantly positive effects on the use decision of CDI and that (2) the traditional transaction cost proxy related to group size has a U-shaped relationship with the probability of using CDI, while the proxy related to social heterogeneity has significantly negative effects on this probability. These findings suggest that transaction costs originating from uncertainty are an important factor in limiting the use of this technology. Additionally, this paper contributes to the literature by examining the relationship between transaction costs and collective action.

Assessing the variation and drivers of cost in 1-level lumbar fusion: a time-driven activity-based costing analysis

Background ContextAs value-based health care arrangements gain traction in spine care, understanding the true cost of care becomes critical. Historically, inaccurate cost proxies have been used, including negotiated reimbursement rates or list prices. However, time-driven activity-based costing (TDABC) allows for a more accurate cost assessment, including a better understanding of the primary drivers of cost in 1-level lumbar fusion. PurposeTo determine the variation of total hospital cost, differences in characteristics between high-cost and nonhigh-cost patients, and to identify the primary drivers of total hospital cost in a sample of patients undergoing 1-level lumbar fusion. Study Design/SettingRetrospective, multicenter (one academic medical center, one community-based hospital), observational study. Patient SampleA total of 383 patients undergoing elective 1-level lumbar fusion for degenerative spine conditions between November 2, 2021 and December 2, 2022. Outcome MeasuresTotal hospital cost of care (normalized); preoperative, intraoperative, and postoperative cost of care (normalized); ratio of most to least expensive 1-level lumbar fusion. MethodsPatients undergoing a 1-level lumbar fusion between November 2, 2021 and December 2, 2022 were identified at two hospitals (one quaternary referral academic medical center and one community-based hospital) within our health system. TDABC was used to calculate total hospital cost, which was also broken up into: pre-, intra-, and postoperative timeframes. Operating surgeon and patient characteristics were also collected and compared between high- and nonhigh-cost patients. The correlation of surgical time and cost was determined. Multivariable linear regression was used to determine factors associated with total hospital cost. ResultsThe most expensive 1-level lumbar fusion was 6.8x more expensive than the least expensive 1-level lumbar fusion, with the intraoperative period accounting for 88% of total cost. On average. the implant cost accounted for 30% of the total, but across the patient sample, the implant cost accounted for a range of 6% to 44% of the total cost. High-cost patients were younger (55 years [SD: 13 years] vs 63 years [SD: 13 years], p=.0002), more likely to have commercial health insurance (24 out of 38 (63%) vs 181 out of 345 (52%), p=.003). There was a poor correlation between time of surgery (ie, incision to close) and total overall cost (ρ: .26, p<.0001). Increase age (RC: -0.003 [95% CI: -0.006 to -0.000007], p=.049) was associated with decreased cost. Surgery by certain surgeons was associated with decreased total cost when accounting for other factors (p<.05). ConclusionsA large variation exists in the total hospital cost for patients undergoing 1-level lumbar fusion, which is primarily driven by surgeon-level decisions and preferences (eg, implant and technology use). Also, being a “fast” surgeon intraoperatively does not mean your total cost is meaningfully lower. As efforts continue to optimize patient value through ensuring appropriate clinical outcomes while also reducing cost, spine surgeons must use this knowledge to lead, or at least be active participants in, any discussions that could impact patient care.

The Effect of Corporate Governance on the Degree of Agency Cost in the Korean Market

This study examines the relationship between corporate governance (CG) and agency costs using Korean market data, particularly for chaebol firms. The final sample includes 660 firm-year observations between 2016 and 2020 for Korean non-financial firms listed on the Korean Composite Stock Price Index (KOSPI). This study employs an ordinary least-squares panel data regression model using two proxies for agency costs, namely, asset utilization ratio and operating expense ratio, and six CG individual metrics as independent variables (CG score, protection of shareholder rights, board structure, disclosure, audit organization, and managerial discretion and error management). We find that firms with high CG experience lower agency costs than those with low CG. Moreover, our evidence suggests that firms can decrease agency costs by improving the quality of CG. The results of our regression model also support the idea that CG is effective in reducing agency costs for chaebol firms but not for non-chaebol firms. Finally, our findings suggest that the implementation of effective CG mechanisms in firms might improve managerial behavior through better decision-making to maximize the value of firms.

The Effect of Material Flow Cost Accounting on Company Sustainability: Moderating Role of Green Accounting in Consumer Goods Industry Companies

This study analyzes the influence of material flow cost accounting in improving company sustainability. Material flow cost accounting. This research uses proxies for production costs, factory area, and output or production value. The population used in this research is all goods and consumption companies listed on the IDX for the 2015-2021 period. Through Purposive sampling, the samples obtained were 6 companies in that period, so 42 data were obtained. Data processing in this research was carried out using multiple regressions and moderated regression methods with an absolute difference value approach. This research concludes that MFCA (production costs) negatively and significantly affects company sustainability. This means that reducing production costs to get higher profits will increase the company's sustainability. Meanwhile, MFCA (factory area and output or production value) positively and significantly influences company sustainability. This shows that the wider the company's area and every time there is an increase in production results, the company's sustainability can increase. Besides, green accounting cannot moderate material flow cost accounting on company sustainability.

Diurnal temperature variation impacts energetics but not reproductive effort across seasons in a temperate dung beetle.

Temperature varies on multiple timescales and ectotherms must adjust to these changes to survive. These adjustments may lead to energetic trade-offs between self-maintenance and reproductive investment. However, we know little about how diurnal and seasonal temperature changes impact energy allocation. Here we used a combination of empirical data and modeling of both thermoregulatory behaviors and body temperature to examine potential energetic trade-offs in the dung beetle Onthophagus taurus. Beginning in March 2020, universities and laboratories were officially closed due to the COVID-19 pandemic. We thus performed experiments at a private residence near Knoxville, Tennessee, USA, leveraging the heating, ventilation and air conditioning of the home to manipulate temperature and compare beetle responses to stable indoor temperatures versus variable outdoor temperatures. We collected O. taurus beetles in the early-, mid-, and late-breeding seasons to examine energetics and reproductive output in relation to diurnal and seasonal temperature fluctuations. We recorded the mass of field fresh beetles before and after a 24-h fast and used the resulting change in mass as a proxy for energetic costs of self-maintenance across seasons. To understand the impacts of diurnal fluctuations on energy allocation, we held beetles either indoors or outdoors for 14-day acclimation trials, fed them cow dung, and recorded mass change and reproductive output. Utilizing biophysical models, we integrated individual-level biophysical characteristics, microhabitat-specific performance, respirometry data, and thermoregulatory behaviors to predict temperature-induced changes to the allocation of energy toward survival and reproduction. During 24 h of outdoor fasting, we found that beetles experiencing reduced temperature variation lost more mass than those experiencing greater temperature variation, and this was not affected by season. By contrast, during the 14-day acclimation trials, we found that beetles experiencing reduced temperature variation (i.e., indoors) gained more mass than those experiencing greater temperature variation (i.e., outdoors). This effect may have been driven by shifts in the metabolism of the beetles during acclimation to increased temperature variation. Despite the negative relationship between temperature variation and energetic reserves, the only significant predictor of reproductive output was mean temperature. Taken together, we find that diurnal temperature fluctuations are important for driving energetics, but not reproductive output.

Predicting Operating Income via a Generalized Operating-Leverage Model

We propose a generalized, practitioner-oriented operating-leverage model for predicting operating income using net sales, cost of sales, depreciation, and SG&amp;A. Prior research links operating income directly to these items; hence, our model includes all aggregate revenues and expenses that comprise operating income. Prior research finds that the cost of sales is “much less” sticky than depreciation and SG&amp;A; hence, we use the cost of sales as a proxy for the total variable costs and depreciation and SG&amp;A as proxies for the sticky fixed costs. We introduce a new adjustment to the textbook operating-leverage model so that the ratio of sales to the cost of sales remains constant for the reference and forecast periods. Inspired by prior research, we adjust depreciation and SG&amp;A for cost stickiness. We find that using our generalized operating-leverage model improves the forecast accuracy of next-quarter and next-year operating income predictions compared to predictions made using textbook operating leverage, which is a special case of our model.

The reputation costs of tax avoidance of financial institutions

This paper investigates empirically if financial institutions have reutation cost by practicing tax avoidance. We found that the reputation costs restrain Banks from being more aggressive in practicing tax avoidance. Thus, in this paper we empirically examine whether there are reputation costs for financial institutions when engaging in tax avoidance, especially during the protest period. For this purpose, we use a sample of 20,129 firm-years of U.S. public financial firms from Compustat, Capital IQ, CRSP and I/B/E/S. We use two measures of tax avoidance: GAAP ETR and CASH ETR. As proxies for reputation costs we use cumulative abnormal stock return, analysts’ recommendations and credit rating. The results confirm both hypotheses stating that financial institutions have reputation costs when practicing tax avoidance and during the protest period these costs are higher. The results also show that financial institutions that practice tax avoidance have a negative impact of 11.18% in their cumulative abnormal stock return. We also find that tax avoidance negatively affects analysts’recommendations by in 2.5% and during the protest period this effect is 5.9%. Furthermore, the results of sensitivity testing with quantile regression indicate that a higher level of tax avoidance is associated with higher reputation costs. This paper of the study contributes both to the financial and tax avoidance literature, especially with respect to the reputation costs of tax avoidance for financial institutions. This is one of the first studies to empirically investigate the reputation costs of financial institutions when practicing tax avoidance.

Exploring the distance decay in port hinterlands under port regionalization using truck GPS data

Ports are pivotal in the socioeconomic development of regions, countries, and cities as they serve as gateways for the transportation of goods between sea and land. Analyses of port hinterlands can enable port authorities and shippers to develop competitive strategies while assisting local authorities in identifying areas where inland transportation systems require improvement. In general, physical distance is a robust proxy for transportation costs. However, the role of distance in the context of port regionalization remains under debate, despite the spatial interaction model, with distance decay being commonly used to analyze the port–hinterland relationship. Doubt concerning the explanatory power of distance may act as an obstacle for port managers and local authorities in assessing the market share of ports, as well as in constructing planning agendas related to facility locations. This study examines the distance decay of port hinterlands using more than 0.18 billion points of heavy-duty truck GPS trajectory data from the Guangdong–Hong Kong–Macau Greater Bay Area. We develop an algorithm to compute heavy-duty truck flows and actual travel distance between the port and identified facility areas, and we apply the weighted least squares method to evaluate the explanatory power of six distance-decay models. Our findings reveal that the actual travel distance is a significant reduction factor in the port–hinterland relationship, while it follows the exponential model instead of a power function. This paper presents new evidence to reshape the role of distance in delimiting port hinterlands, providing port managers and local authorities with novel insights into the structure of port hinterlands in the context of port regionalization.

Improving estimates of land protection costs in a tropical biodiversity hotspot

Accurate estimates of the costs of land protection are useful for understanding where biodiversity conservation goals can be achieved at the lowest cost to society. However, because of the scarcity of high‐quality cost maps for tropical countries, conservation planning studies often ignore cost or rely on untested proxies, such as agricultural rent or land‐use intensity. Here, we show how analysts can estimate land protection costs using original data of public land acquisitions, global predictor datasets, and simple machine‐learning models. For the Colombian Andes, a global biodiversity hotspot, we found that the principal driver of the cost of land protection is urban proximity, not agricultural rent. We derived cost estimates that predict public land protection costs more accurately than available cost proxies and identified new protection priorities for 143 threatened bird species. A more systematic collection of cost records of land protection will help inform public decisions on national and global biodiversity protection priorities.

Surgeon idiosyncrasy is a key driver of cost in arthroscopic rotator cuff repair: a time-driven activity-based costing analysis.

Delivering high-value orthopedic care requires optimizing value, defined as health outcomes achieved per dollar spent. Published literature is stippled with inaccurate proxies for cost, including negotiated reimbursement rates, fees paid, or listed prices. Time-driven activity-based costing (TDABC) offers a more robust and accurate approach to calculating cost, including shoulder care. In the present study, we sought to determine the drivers of total cost in arthroscopic rotator cuff repair (aRCR) using TDABC. Consecutive patients undergoing aRCR at multiple sites associated with a large urban health care system between January 2019 and September 2021 were identified. Total cost was determined using TDABC methodology. The episode of care was defined by 3 phases: preoperative, intraoperative, and postoperative care. Patient, procedure, rotator cuff tear morphology, and surgeon characteristics were collected. Bivariate analysis was performed across all characteristics between high-cost (top decile) and all other aRCRs. Multivariable linear regression was used to identify the key cost drivers. In total, 625 aRCRs performed by 24 orthopedic surgeons and 572 aRCRs performed by 13 orthopedic surgeons were included in the bivariate and multivariable linear regression analyses, respectively. By TDABC analysis, total aRCR cost varied 6-fold (5.9×) from least to most costly. Intraoperative costs accounted for 91% of average total cost, followed by preoperative costs and postoperative costs (6% and 3%, respectively). Biologic adjuncts (regression coefficient [RC] 0.54, 95% confidence interval [CI] 0.49-0.58, P<.001) and surgeon idiosyncrasy (RC of highest-cost surgeon 0.50, 95% CI 0.26-0.73, P<.001) were the major cost drivers in aRCR. Patient age, comorbidities, number of rotator cuff tendons torn, and revision surgery were not significantly associated with total cost. The amount of tendon retraction (RC 0.0012, 95% CI 0.000020-0.0024, P=.046), average Goutallier grade (RC 0.029, 95% CI 0.0086-0.049, P=.005), and the number of anchors used (RC 0.039, 95% CI 0.032-0.046, P < .001) were also significantly associated with cost, but with far smaller effect sizes. Episode of care costs vary nearly 6-fold in aRCR and are almost exclusively dictated by the intraoperative phase. Tear morphology and repair technique contribute to cost, although the largest cost drivers of aRCR are the use of biologic adjuncts and surgeon idiosyncrasy, defined as something a surgeon does or does not do that impacts total cost and is not controlled for in the current analysis. Future work should seek to better delineate what these surgeon idiosyncrasies may represent.

Computational Segmentation of Timber Slabs with Free Column Placement

Modular floor slabs must be subdivided into prefabricable, transportable segments. This slab segmentation process conventionally uses a rectangular pattern, particularly for timber buildings. Regular segmentation patterns and strict column grids are ideal for rectangular building shapes, but restrict timber buildings to only some architectural uses, and are unideal for urban infill. Unfortunately, planning and constructing multi-storey wood buildings without a strict grid is still challenging. There is therefore a conflict between the desired column placement and the constraints imposed by building systems. This article investigates novel methods for segmenting timber floors supported by irregular column layouts. It proposes six different segmentation methods that are informed through Co-Design by structural, material waste, and transportation requirements. Co-Design allows for the direct integration and automated feedback of such diverse criteria into the early building design phase. These methods are based on three well-known computational approaches: Single-Objective Optimisation, Parametric Modelling, and Agent-Based Modelling. They could also be applied to other non-timber prefabricated floor systems. The segmentation methods are demonstrated on two example floor slabs with irregular column layouts, one with a rectilinear and the other with an irregular outline. The methods are compared using quantitative proxies for cost, fabrication time, architectural adaptability, and assembly complexity. More benchmark testing is needed, but initial results showed that the most efficient segmentations cannot adapt to irregular layouts, emphasising the need for a more adaptable approach to modular timber construction.

Household food waste and the opportunity cost of time

This article provides empirical evidence showing that the opportunity cost of time explains the frequency of household food waste. We analyze three waves of a longitudinal panel survey representative of the French population. In the second wave, the respondents were asked whether they had wasted food during the previous week. The first and third waves (conducted before and after the survey asking about wasted food) asked about household characteristics and proxies for the opportunity cost of time including working time and income. We ran regressions controlling for confounding factors, and found that these proxies for the opportunity cost of time were correlated positively with the probability of reporting wasting food. The last set of estimations focuses on life transitions between the first and third survey last waves and provides evidence supporting a causal relationship between the opportunity cost of time and food waste.

The Simultaneous Effect Dividend Policy and Debt Policy

This study aims to examine dividend policies for companies listed on the Indonesia Stock Exchange during the 2018-2022 period. Agency theory argues that dividend policy can reduce agency costs and reduce agency conflicts. The percentage of institutional ownership is used as a proxy for agency costs and can be used as a mechanism for lowering agency conflict. The total sample is 44 companies listed on the IDX. The estimation uses the pooling data method and 3SLS. This research develops a simultaneous system econometric model. This study argues that high institutional ownership leads to higher agency conflict, as management and institutions collaborate to prioritize their interests over other shareholders. Conversely, low institutional ownership leads to disputes between management, low institutional, and public shareholders. The entrenchment argument predicts higher conflict in high institutional ownership, while the convergence argument predicts common agency conflict in common institutional ownership.

Nature to the rescue: past drivers and future potential of the Australian land-based carbon offsets market

ABSTRACT Large quantities of ‘negative emissions’ will be required to meet the 1.5°C temperature target under the Paris agreement. As nations consider more ambitious emissions reductions goals, policy makers, carbon market participants and environmental advocates need to estimate the potential scale of nature-based climate solutions (NCS), against the opportunity cost of current land use. In this study we construct a simple linear regression model of the relationship between carbon abatement potential and agricultural profitability, the latter a proxy for opportunity cost, to describe the total set of options for NCS on the Australian continent. Sampling these same two variables at the sites of over 800 land-based offset projects accredited since 2015 shows how the market selected from these abatement options. The model demonstrates that offset projects, under a range of crediting methodologies, were typically selected where the ratio of abatement potential to opportunity cost is maximized. These results, produced from two readily available spatial variables, provide an empirically derived framework for those with an interest in the structure of the long-run supply curve for land-based carbon abatement. This modelling approach could be applied in any geographic region where similar spatial variables for agricultural profitability and abatement potential are available.

Does cost of debt reflect the value of quality greenhouse gas emissions reduction efforts and disclosure?

Using a sample of North American companies reporting to the CDP (formerly Carbon Disclosure Project), we investigate whether details of companies’ carbon management practices reduce the cost of debt associated with greenhouse gas (GHG) emissions, with credit risk ratings as a proxy for cost of debt. Specifically, employing structural equation modeling (SEM) for the main analysis and three-stage least squares (3SLS) regression for further in-depth analysis, we simultaneously, yet separately, study the effect of detailed GHG emissions performance and assured GHG emissions disclosure on the cost of debt. Based on the theory of voluntary disclosure, our findings suggest that providing details about the implementation of many diverse GHG emissions reduction projects and assuring GHG emissions disclosure provides integrity to carbon management practices and, therefore, decreases cost of debt. Furthermore, we find that a reduced cost of debt assists companies to invest more in GHG reduction related projects. We recommend that further research considers aspects of voluntary disclosure that add to its integrity.

The cost of buying land for protected areas in the United States

Buying land to establish protected areas is a common conservation strategy, particularly in countries with strong private property rights. Accurately accounting for spatial heterogeneity in land cost could lead to large efficiency savings when planning future acquisitions. However, lack of data regarding actual acquisition costs faced by conservation organizations has led planners to rely on more readily available proxies, such as agricultural land value. Using data on nearly 36,000 parcels acquired for conservation by public agencies and land trusts in the continental U.S., we built a model predicting protected area acquisition costs. While costs of land for agriculture or development are useful predictors of variation in protected area acquisition costs, they are not, by themselves, good approximations of those costs. For example, using a more comprehensive combination of variables, our model explained almost four times as much variation in actual acquisition costs as those. We found that agricultural land value loses most of its explanatory power once other predictors are used, confirming that it acts as a partial proxy for actual acquisition costs. We then used an optimization model to compare prioritization recommendations with our new cost estimates to those suggested when relying on agricultural land values alone. Locations of highest conservation return on investment shifted from coastal regions toward the country's center, when using actual cost data. Cost estimates used in conservation planning should be based on actual protected area acquisitions, because the type of properties and motivations of buyers and sellers differ from those of other land transactions.

Role of regional trade agreements in enhancing investments in mineral resources projects in ASEAN

In this research, the effects of the regional trade agreement on sustainable investment in mineral resources in 10 Association of Southeast Asian Nations (ASEAN) members are investigated using econometric analysis of annual data from 1990 to 2021. The empirical estimations confirmed that the gross domestic product has an adverse effect in the short term. In addition, a 1% increase in the development of capital markets will increase green investments in mineral resources by 0.23% and 0.34% in the long and short term, respectively. Geographical distance as a proxy for transportation and insurance costs has an adverse short-term and long-term effect on the amount of green investment in mineral resources. Furthermore, the ASEAN trade-in goods agreement (ATIGA) and ASEAN investment facilitation framework are essential and significant factors in improving sustainable investment in mineral resources in ASEAN member countries.