Welfare Reducing Research Articles

Streets of the ‘spice zombies’: Dependence and poverty stigma in times of austerity

Following the 2016 general ban on new psychoactive substances, synthetic cannabinoids (‘spice’-type drugs) have moved into unregulated street markets and have become popular among homeless populations in the United Kingdom. Images of so-called ‘spice zombies’, rough sleepers in public spaces experiencing severe substance-induced fits, have been used by local and national media to suggest the growing scale of the problem. This article proposes that such depictions should be read through a cultural analysis rooted in the political economy of austerity policies, where the twofold stigma of substance and welfare dependencies directs guilt at the poor, concealing the systemic cruelty of benefits reforms. Through the circulation of such tropes and the ridiculing of a superfluous abject underclass that embodies them, media and political discourses of the ‘broken society’ highlight an evident need for welfare reduction and more generally for the austerity project.

Reproductive health care in Catholic-owned hospitals

Mergers that affiliate a hospital with a Catholic owner, network, or system reduce the set of possible reproductive medical procedures since Catholic hospitals have strict prohibitions on contraception. Using changes in ownership of hospitals, we find that Catholic hospitals reduce the per bed rates of tubal ligations by 31%, whereas there is no significant change in related permitted procedures such as Caesarian sections. However, across a variety of measures, we find minimal overall welfare reductions. Still, fewer tubal ligations increase the risk of unintended pregnancies across the United States, imposing a potentially substantial cost for less reliable contraception on women and their partners.

Extended opportunity cost model to find near equilibrium electricity prices under non-convexities

This paper finds near equilibrium prices for electricity markets with non-convexities due to binary variables, in order to reduce the market participants’ opportunity costs, such as generators’ unrecovered costs. The opportunity cost is defined as the difference between the profit when the instructions of the market operator are followed and when the market participants can freely make their own decisions based on the market prices. We use the minimum complementarity approximation to the minimum total opportunity cost model, from previous research, with tests on a much more realistic unit commitment model than in previous research, including features such as reserve requirements, ramping constraints, and minimum-up and -down times. The developed model incorporates flexible price-responsive demand, as in previous research, but since not all demand is price responsive, we consider the more realistic case that total demand is a mixture of fixed and flexible. Another improvement over previous minimum total opportunity cost research is computational: whereas the previous research had nonconvex terms among the objective function’s continuous variables, we convert the objective to an equivalent form that contains only linear and convex quadratic terms in the continuous variables, thus allowing for efficient optimization by CPLEX.We compare the unit commitment model with the standard social welfare optimization version of unit commitment, in a series of sensitivity analyses, varying flexible demand to represent varying degrees of future penetration of electric vehicles and smart appliances, different ratios of generation availability, and different values of transmission line capacities to consider possible congestions. The minimum total opportunity cost and social welfare solutions are mostly very close in different scenarios, except in some extreme cases; the obtained solution has smaller opportunity costs than social welfare, at very little cost in reduction of social welfare; and solution times of the minimum total opportunity cost model are longer, due to a larger model size, but the times are still very quick for practical use.

Prevalence of an inflammation and necrosis syndrome in suckling piglets

The current study describes the results obtained from clinical examination of over 4700 suckling piglets from 19 individual herds in Germany. In this cohort the prevalence of inflammation and necrosis in the tails, ears, claw coronary bands, heels and teats was determined using a pre-defined scoring system. Results show that already in the 1st days of life, piglets were affected by inflammation and necrosis of the heels (80%), claw coronary bands (50%) and tail base (20%). The praevalences of these alterations in piglets were influenced by genetics (P <0.001) and age, decreasing gradually in the 2nd week of life (P <0.001). Moreover, a correlation between tail length after tail docking and the prevalence of tail necrosis (P⩽0.04) was found. Tail and ear biting as a behavioural trait was not detected during this study. The early onset, appearance and multiple locations of clinical signs of inflammation and the positive correlation with the genetic background of the piglets may suggest an impairment of the innate immune system by infectious and non-infectious agents. This is in contrast to previously described behavioural abnormalities seen in fattening pigs. Considering the obvious reduction of animal welfare due to the described lesions, there is a need to create awareness among pig farmers and to understand the multifactorial causality involved in this inflammation and necrosis syndrome in piglets.

Flexible or mandatory retirement? Welfare implications of retirement policies for a population with heterogeneous health conditions

A flexible retirement policy has often been proposed as a solution to address the social dilemma of individuals in the population having different desired retirement ages. We analyze such a policy in an overlapping generations general equilibrium framework, where individuals differ in terms of their health condition at the standard retirement age, and therefore in their suitability for remaining in the labor force beyond the standard age. In our model, workers know about their future health condition when they are young, and adjust their savings and labor supply accordingly in order to maximize their lifetime utility. The applies to situations in which workers can fairly accurately predict their health status based upon personal, family, community and professional health status tendencies. We compare the flexible retirement policy to the mandatory retirement policy in the labor and capital markets, and the effects on savings and wages in the aggregate for both healthy and unhealthy, young and elderly cohorts. For economies with sufficiently high capital intensity of production and high levels health among the elderly, a flexible retirement policy can result in a welfare reduction compared to a mandatory retirement policy. Our study links the social desirability of the two retirement policies to the technological and population structure of the economy.

Consumer preferences for and beliefs about slow growth chicken

Improvements in genetics, feed, and housing have dramatically reduced the time required for broilers to reach market weight. However, some advocacy organizations have argued that the improvements in productivity have been accompanied by reductions in animal welfare and meat quality, prompting retailers to consider policies that either set a minimum number of days of production or require slower-growing heritage breeds. The overriding purpose of this project is to determine the market potential and consumer willingness-to-pay for chicken breast with different labels, with primary focus on slow growth labels. A national survey of over 2,000 US chicken consumers was conducted. A choice experiment, which simulates retail purchases, was included to compare slow growth chicken breast demand for consumers exposed to different types of information and who made choices in the presence or absence of brands. Willingness-to-pay for slow growth chicken, and importance of the attribute in consumer choice, is sensitive to the information provided and is generally lower in importance than other labels, except when consumers are provided pro slow growth information. There are multiple market segments consisting of consumers with distinct preferences for chicken breast attributes. Depending on the treatment in question, 30 to 40% of consumers are insensitive to price changes. If presented with a pairwise choice between slow growth chicken priced at a $0.72/lb premium, an estimated extra cost of slow growth, and an unlabeled chicken breast, slow growth is projected to be chosen by 37, 48, and 35% of respondents in the no added information, pro slow growth, and anti slow growth information conditions, respectively.

Social entrepreneurs in challenging places: A Delphi study of experiences and perspectives

Social Enterprises have grown in number and scope in response to reductions in state-provided welfare and increasing ambition to improve social conditions. While a range of issues have been identified in the literature as affecting the ability of Social Enterprises to successfully conduct their activities, there is currently a dearth of research into the relative influence of these factors. This study explores and ranks the challenges faced by social entrepreneurs in South Wales. Based on a Delphi study with 21 social entrepreneurs, government policy-developers and scholars, it presents a hierarchy of 14 factors, useful instruments for informing social entrepreneurs and policy-makers about the way social enterprises are managed, and how national and local policy should be developed. As part of this, the study also identifies four novel factors that affect the sustainability of social enterprises: ‘Professionalisation of Marketing’, ‘Perception of Validity’, ‘Leadership’ and ‘Situatedness’.

How do transport policies contribute to a low carbon city? An integrated assessment using an urban computable general equilibrium model

As the transport sector plays an increasingly important role in structuring future energy use and carbon dioxide emissions, decarbonization of the transport sector is necessary to achieve low carbon city development. In this paper, representative scenarios of low carbon transport policies are designed to create a better understanding of how the transport sector contributes to emissions reduction and increase of social welfare, using an integrated urban model which follows the tradition of the spatial computable equilibrium model. This integrated model is able to overcome the shortcomings of individual transport and economic models and capture the interplay between the transport sector and the urban economic system. The results show that the decarbonization goal can be achieved effectively by implementing transport policies such as the deployment of electric vehicles, speed regulation, pedestrian-friendly design, and bicycle-oriented development. Electric vehicles provide the most significant emissions reduction potential, whereas the lowest reduction is attributed to pedestrian-friendly design. However, the interesting finding is that the welfare increase generated by the decrease in the same quantity of emissions is most significant in the pedestrian-friendly design scenario. The trade-off between welfare and emissions reduction deserves attention when designing transport policy.

Environmental policy when consumers value conformity

We present a model of consumer behaviour when consumers value conformity and examine the implications for environmental policy. The model shares a feature set out in Dasgupta et al. (2016) of having a structure of preferences for conformity which induces a mass of consumers to adhere exactly to a norm level of consumption (clumping). However we extend our previous analysis by analysing the conditions for the existence and potential uniqueness of consumption norms. In doing so we introduce threshold effects whereby individuals adhere to a norm only if sufficiently many others do so. Taken together these have striking implications for environmental policy in the case where the norm good generates pollution emissions. Clumping means many individuals will not change behaviour unless the norm changes while threshold effects plus clumping means that it may be hard to change a norm. We show that the use of Pigovian taxes to control behaviour may be either ineffective or welfare reducing, and that the optimal Pigovian tax will work only if it is above some threshold level. There are parameter values for which quantity-based injunctive policies raise welfare relative to no intervention while optimal Pigovian taxes would lower welfare.

Effects of intermittent feeding on water quality, skin parasites, feed consumption, and growth performance of juvenile longfin yellowtailSeriola rivoliana(Valenciennes, 1833)

This study investigated the effect of intermittent feeding on the water quality, occurrence of skin parasites, feed consumption, and growth performance of juveniles (102.7 ± 5.1 g) longfin yellowtail, Seriola rivoliana. Fish were exposed for 89 days to six different feeding regimes: continuous daily feeding fed one or twice a day (treatment 24R1 and 24R2); 2‐day fasting and refed once or twice a day for 1 day (treatment 48R1 and 48R2); and 3‐day fasting and refed once or twice a day for 1 day (treatment 96R1 and 96R2). Water quality was not affected by feeding strategies. Likewise, condition factor was not affected by fasting up 48 hr. On the other hand, lowest survival in 96R1 was not related with abundance of skin parasites (Neobenedenia girellae). Specific growth rate, feed intake, feed efficiency, and morphological indices were not statistically different (p > 0.05) between 2 days fasted fish and continuously fed fish. Partial compensatory growth in 48R2 could be attributed to a hyperphagic consumption (8.2 ± 1.1 g day⁻¹ fish⁻¹) and feed conversion efficiency (0.61 ± 0.03). A feeding strategy based on cyclical 48 hr of starvation followed by 1 day of refeeding twice may be used for on‐growing juvenile longfin yellowtail without reduction in growth or welfare of fish.

Buyer-specific versus uniform pricing in a closed-loop supply chain with third-party remanufacturing

Managers broadly agree that the entry of third-party remanufacturers (TPRs) is detrimental to original equipment manufacturers (OEMs), and social planners broadly agree that a nondiscriminatory uniform pricing policy is more desirable than a buyer-specific pricing policy. In this study, we develop a game theoretical model to revisit the effects of these policies in a closed-loop supply chain in which one supplier sells a component that cannot be remanufactured to one OEM and one TPR. The supplier must charge the same wholesale price in the uniform pricing model. Our analysis shows that regardless of the pricing policy, third-party remanufacturing could lead to a triple win to the supplier, the OEM, and the TPR. When compared with a buyer-specific pricing policy, a uniform pricing policy may result in a fourfold loss to the supplier, the OEM, the TPR, and the consumers, and hence an absolute reduction in social welfare. The key intuition driving the findings is that under certain conditions, the buyer-specific pricing policy facilitates third-party remanufacturing, which may increase the total profit of the supply chain and improve social welfare. Therefore, the OEM should not always attempt to deter the entry of TPRs. In addition, the government should allow the supplier to charge buyer-specific wholesale prices to foster the remanufacturing sector, particularly in its infancy.

Increased human and economic losses from river flooding with anthropogenic warming

River floods are among some of the costliest natural disasters1, but their socio-economic impacts under contrasting warming levels remain little explored2. Here, using a multi-model framework, we estimate human losses, direct economic damage and subsequent indirect impacts (welfare losses) under a range of temperature (1.5 °C, 2 °C and 3 °C warming)3 and socio-economic scenarios, assuming current vulnerability levels and in the absence of future adaptation. With temperature increases of 1.5 °C, depending on the socio-economic scenario, it is found that human losses from flooding could rise by 70–83%, direct flood damage by 160–240%, with a relative welfare reduction between 0.23 and 0.29%. In a 2 °C world, by contrast, the death toll is 50% higher, direct economic damage doubles and welfare losses grow to 0.4%. Impacts are notably higher under 3 C warming, but at the same time, variability between ensemble members also increases, leading to greater uncertainty regarding flood impacts at higher warming levels. Flood impacts are further shown to have an uneven regional distribution, with the greatest losses observed in the Asian continent at all analysed warming levels. It is clear that increased adaptation and mitigation efforts—perhaps through infrastructural investment4—are needed to offset increasing risk of river floods in the future. River floods have severe socio-economic impacts. A multi-model framework reveals river-flood-related human losses may rise by up to 83%, 134% and 265% at 1.5 °C, 2 °C and 3 °C warming, respectively, with economic losses also projected to rise.

Capital controls and monetary policy in sudden-stop economies

The dangers of high capital flow volatility and sudden stops have led economists to promote the use of capital controls as an addition to monetary policy in emerging market economies. This paper studies the benefits of capital controls and monetary policy in a small open economy with financial frictions, nominal rigidities, and sudden stops. Without commitment, the optimal monetary policy should sharply diverge from price stability. The policymakers will also tax capital inflows in a crisis, but such taxes may be welfare reducing. With commitment, capital controls involve a mix of current capital inflow taxes and future capital flow subsidies. The optimal policy will never involve macro-prudential capital inflow taxes or a departure from price stability, whether or not commitment is available.

The Effects of Social Exclusion and Group Heterogeneity on the Provision of Public Goods

The multi-dimensional nature of social exclusion requires several perspectives in understanding its causes and consequences. Focus on the topic is largely centred around questions of material deprivation. However, as poverty and inequality are inextricably linked to questions of access and inclusion, a holistic approach is required. Consequently, we explore how imposed relational asymmetries which manifest as differences in the ability to exercise personal agency and in turn, engender wealth inequalities, affect social cooperation in future interactions. To do this, we generate wealth inequalities through two Prisoner’s Dilemma games, where one party is excluded from participating in the determination of the outcomes of the game. The effects of this asymmetry in social participation on ex post cooperation is examined using a Public Goods game. We find that the presence of prior asymmetric influence in social decision-making subsequently reduces contributions to the public good, independent of endowment level. This reduction in social welfare is driven by the under-contribution from players who were excluded in prior social interactions. Simply put, the data shows that a history of social exclusion reduces subsequent public goods provision, independent of material inequality.

Decomposing bivariate dominance for social welfare comparisons

The principal dominance concept for inequality-averse multidimensional social welfare comparisons, commonly known as lower orthant dominance, entails less or equal mass on all lower hyperrectangles of outcomes. Recently, it was shown that bivariate lower orthant dominance can be characterized in terms of two elementary mass transfer operations: diminishing mass transfer (reducing welfare) and correlation-increasing switches (increasing inequality). In this paper we provide a constructive algorithm, which decomposes the mass transfers into such welfare reductions and inequality increases.

ON THE WELFARE EFFECTS OF CREDIT ARRANGEMENTS

AbstractThis article studies the welfare effects of credit arrangements and how these effects depend on the trading mechanism and inflation. In a competitive market, credit arrangements can be welfare reducing, because high consumption by credit users drives up the price level, reducing consumption by money users who are subject to a binding liquidity constraint. By adopting an optimal trading mechanism, however, these welfare implications can be overturned. Both price discrimination and nonlinear pricing are essential features of an optimal mechanism.

Anti-Innovation Norms

Intellectual property (IP) scholars have recently turned their attention to social norms-informal rules that emerge from and are enforced by non-hierarchically organized social forces-as a promising way to spur innovation in communities as diverse as the fashion industry and the open source software movement. The narrative that has emerged celebrates social norms' ability to solve IP's free-rider problem without incurring IP's costs. But this account does not fully consider the dark side of social norms. In fact, certain social norms, when over-enforced, can create substantial barriers to the most socially beneficial creative pursuits. Because IP scholars have left unexplored how social can hinder innovation in this way, the harm they cause has gone unmitigated. This Article sheds light on the dark side of innovation norms. It coins the term norms to label these counterproductive social forces. Using the double lens of sociology and psychology, it gives a full theoretical account of three types of anti-innovation norms: research priority, methodology, and evaluation norms-all of which interfere with socially beneficial boundary-crossing innovation. Our elucidation of anti-innovation has both theoretical and policy implications. On the theory side, it suggests that IP scholars to date have been too focused on addressing the free-rider problem. This has caused them to overlook other barriers to innovation, like those posed by the set of anti-innovation we describe here. This focus on free-riding may also help explain why innovation and scholars have paid little attention to debates within the broader literature on law and social concerned with identifying situations in which social are welfare reducing. On the policy side, it points to innovation dilemmas that IP is not fully equipped to solve. While changes to the IP doctrines of attribution and fair use in copyright and nonobviousness in patent law can counteract anti-innovation at the margin, a comprehensive solution requires innovation scholars to broaden their vision beyond the IP toolkit. We take the first steps in this direction, proposing a number of interventions, including novel funding regimes and tax credits.

Going Along or Going Independent? A Dynamic Analysis of Nonprofit Alliances

Abstract This paper investigates strategic alliances in the nonprofit sector in the form of franchising. Using a dynamic model of local public goods with endogenous affiliation and splitting, we show that local organizations may choose to affiliate with the national organization for faster capital accumulation. Temporary alliance occurs when a local organization strategically affiliates with the national organization only to break away after accumulating enough capital. Alliance is more likely to arise and persist when the local chapter is smaller, when the local chapter’s mission is closer to the national organization’s, when the national organization is more efficient in production, and when the local chapter is more patient. Moreover, regulation that requires the local chapter to be affiliated with the national organization would be welfare reducing when the local chapter is large, when the local and national missions differ substantially, and when production at the national organization is inefficient.

Environmental Taxation, Employment and Public Spending in Developing Countries

This paper investigates the consequences of environmental tax reforms for unemployment and welfare, in the case of developing countries with a large informal sector, rural–urban migration, and three different assumptions about public spending: (1) as part of a revenue-neutral policy, (2) fixed, and (3) varying endogenously. Under the indexation of unemployment benefits and informal-sector income that give rise to a double dividend, a lower level of public spending is associated with a smaller negative impact on the after-tax income of households and a higher increase in employment. These policies, however, still lead to a reduction in social welfare; even more so in the case of endogenous public spending, although it is associated with a higher increase in employment and a smaller reduction in private-sector incomes. The model implies that complementary policy, in terms of lower public spending, is unlikely to be socially acceptable, and does not support the case for a green tax reforms in developing countries.

Offshoring Barriers, Regulatory Burden and National Welfare

We present a model which considers both regulatory burden of offshoring barriers and possible terms of trade gains from such barriers. Non-tariff barriers are shown to be unambiguously welfare-reducing, and tariff barriers raise welfare only when associated terms-of-trade gains exceed resulting regulatory burdens, in which case there is a positive optimal offshoring tax. Otherwise, free trade is optimal. Welfare reductions from an offshoring tax are more likely with several developed nations engaging in offshoring. We derive and characterize the Nash equilibrium in such a case.