Social Opportunity Cost Research Articles

Social environment-based opportunity costs dictate when people leave social interactions

There is an ever-increasing understanding of the cognitive mechanisms underlying how we process others’ behaviours during social interactions. However, little is known about how people decide when to leave an interaction. Are these decisions shaped by alternatives in the environment – the opportunity-costs of connecting to other people? Here, participants chose when to leave partners who treated them with varying degrees of fairness, and connect to others, in social environments with different opportunity-costs. Across four studies we find people leave partners more quickly when opportunity-costs are high, both the average fairness of people in the environment and the effort required to connect to another partner. People’s leaving times were accounted for by a fairness-adapted evidence accumulation model, and modulated by depression and loneliness scores. These findings demonstrate the computational processes underlying decisions to leave, and highlight atypical social time allocations as a marker of poor mental health.

Estimating social discount rate for government investment projects in Russia

The article explores methods of estimating discount rate for investment projects financed with budgetary funds and aimed at creating social benefits. Social benefits often do not have a direct monetary value, so the methods for determining the discount rate for such projects differ from market ones. Spending budget funds on investment projects means that society gives up consumption at the current moment in time for the sake of future return on investment. The discount rate should reflect public preferences regarding the distribution of consumption between the current and future periods. The method for estimating these preferences is called the social rate of time preferences. Another approach to determine the discount rate allows one to consider the alternative possibility of implementing a project in the private sector (social opportunity cost of capital). The article describes the development of methods for evaluating the social discount rate and discusses the possibilities of their application for Russia. The value of the social rate of time preferences, equal to 2.5%, and the value of the social opportunity cost of capital, equal to 4.4—5%, are substantiated for short-and medium-term public investment projects in Russia. Rates are given in real terms.

The effects of social context and opportunity cost on the behavioral economic value of cannabis.

Behavioral economics suggest that cannabis reinforcing value (cannabis demand) may be influenced by external, contextual factors such as the social reward that might accompany cannabis use and the presence of opportunity costs (e.g., a next-day responsibility that cannabis use might adversely impact). The present study examined the effect of social context and opportunity cost on cannabis demand and explored whether relations were moderated by cannabis use severity. Adults with past-week cannabis use recruited from Amazon's Mechanical Turk (N = 310; 53.5% female, 79.4% White) completed four purchase tasks, in which participants reported how much cannabis they would purchase across escalating prices, to index cannabis demand under varying contexts: (a) solitary, typical responsibilities; (b) social, typical responsibilities; (c) solitary, substantial responsibilities; and (d) social, substantial responsibilities. The presence of peers significantly increased demand intensity (consumption at zero price) and Omax (maximum expenditure) relative to the solitary conditions. Substantial responsibilities significantly decreased intensity, breakpoint (price at which consumption is fully suppressed), and Pmax (price at which maximum expenditure occurs) and increased elasticity (greater price sensitivity). Demand was most inelastic in the social, typical responsibilities condition relative to other conditions. Cannabis use severity was associated with less elastic demand in the solitary, typical responsibilities condition. Those with higher cannabis use severity reported larger differences in demand intensity and Omax between solitary and social conditions, and in demand elasticity between typical and substantial responsibility conditions. Results are consistent with previous research illustrating social and opportunity costs as determinants of cannabis use behavior. (PsycInfo Database Record (c) 2023 APA, all rights reserved).

Supplemental Material for The Effects of Social Context and Opportunity Cost on the Behavioral Economic Value of Cannabis

Supplemental Material for The Effects of Social Context and Opportunity Cost on the Behavioral Economic Value of Cannabis

U. S. Political Economy on Migrants-Citizens Relations: State-Raids Vs. Church-Sanctuaries (Charity Re-Privatization)

Abstract This is a Political Economy study on migrants-citizens relations management in the United States of America, with special attention to the religious factor and the pendulum effect. There is a model switch, from integration policies (open doors and melting pot agenda, with expropriation of charity by Public Sector) to official persecution (state-raids and deportations, with re-privatization of charity), under a high social opportunity cost. Also, there is a split between the State and civil society (including the church), causing civil disobedience and sanctuary network across the country. The paper focuses on the development of the Sanctuary Movement, as a case of popular action against to the power elite policies and their sanctions. There was a revival of this movement during the values crisis or 2008 recession, but at the same time there was a critical division into the movement, with higher tension for the migrants.

The shared mobility services ban in South Korea: Consumer preferences and social opportunity cost

With the advancement of information and communication technologies and the emergence of sharing economy, various shared mobility services have been introduced in many countries and some are achieving rapid growth. However, in South Korea, shared mobility services that were once introduced are now banned by laws and regulations following extreme opposition from taxi drivers and heated social conflict. This study analyzed consumer preferences for key technological and non-technological attributes that consists vehicle-based mobility services to investigate the social cost related to the ban. To be specific, this study evaluated the social opportunity cost of the ban on shared mobility services in South Korea and investigated the impact of potential options that may improve existing mobility services and minimize costs for various demographic groups. The results show that carpooling and professional ride-hailing services could assume significant amount of taxis’ current market share if they were fully available. This implies that significant social opportunity cost may be incurred from the ban as consumers are unable to use the services they want. In particular, females tended to have a higher cost than males, and the cost appeared to increase by age. The choice probability for banned mobility services (social opportunity cost) of the female older adult is the highest (73.8%) among consumer groups. Moreover, this study suggests that providing incentives to induce taxis’ electrification and strictly regulating and managing taxi drivers’ service quality could be a useful strategy for policymakers to minimize the social costs of the ban on shared mobility services.

DETERMINATION OF THE COST COMPONENT IN THE SOCIAL COST-BENEFIT ANALYSIS OF ROAD PROJECTS IN SOUTH AFRICA

The article deals with the preferred approach to determine the cost component in the social cost-benefit analysis (SCBA) of road projects in South Africa. The article is in four parts. The first part, the introduction, provides the reasons why investment cost should be identified as a single cost entity in the SCBA of a road project, regardless of the criteria according to which a project is adjudicated. The second part discusses the principles that guide the determination of the social opportunity costs (SOC) of road projects. The third part identifies the two items that form the cost component of the SCBA of road projects; the SOC of (i) the land required to accommodate the road reserve, and (ii) the construction of the road. The cost component of the latter is sub-divided into labour, plant, equipment, fuel, materials, and normal profit. The section also details a recommended procedure to convert the financial budget of a road construction project to an estimate of its SOC. The fourth section draws some conclusions from the study.

Gene therapy may not be as expensive as people think: challenges in assessing the value of single and short-term therapies.

At an upfront price of $2.125 million, the one-time gene therapy onasemnogene abeparvovec for spinal muscular atrophy, a rare neuromuscular disorder that is usually fatal by 2 years of age if untreated, has been called the "most expensive drug ever." This flawed characterization raises important methodological and policy issues regarding valuation of high-cost treatments. We reviewed several other high-cost therapies-with a particular focus on hemophilia A treatment-studied by the nonprofit Institute for Clinical and Economic Review (ICER). In ICER's summary report of 2 treatments for managing hemophilia A, published in this month's JMCP issue, the estimated $15-$18 million lifetime cost of factor VIII is characterized as "far too high," representing "a failure of competition [that] … builds a platform for pricing of treatments … that will only exacerbate these problems." Current literature indicates several factors underlying high factor VIII treatment cost (eg, historical pattern of innovation and lack of market competition) that may also drive the pricing dynamics of advanced therapies for other rare diseases. When a treatment's price is driven high (or "distorted"), an economic principle known as "theory of the second best" suggests that market price becomes a poor estimate of social opportunity cost, and adjustments should be made for such distortions. In any case, a high-cost standard of care creates an opportunity for new technology to generate cost savings, providing an inducement for market entry. Recognizing that this potentially creates a tendency to produce price distortions for new treatments, ICER has attempted to apply some ad hoc adjustments. However, challenges remain in creating a "level playing field" across different disease-modifying or potentially curative innovations (eg, one-time therapy vs ongoing or lifelong treatment with repeated doses). While additional policy work is needed to address this dilemma, it would clearly be misleading to assume that gene therapies are inherently expensive. Rigorous economic evaluation of novel therapies requires careful comparison of lifetime cost and benefits vs standard of care, including adjustments for pricing distortions. Fortunately, economic theory suggests that we could adjust to this circumstance by using the social opportunity costs of interventions based on an appropriate variable cost-effectiveness threshold that would be higher for rare severe diseases. DISCLOSURES: The research reported in this Viewpoints article was funded by Novartis Gene Therapies, Inc. Garrison and Jiao were paid by Novartis Gene Therapies, Inc., to conduct this research. Garrison has also received consulting fees from BioMarin, Inc, and UniQure. Dabbous is a full-time employee of Novartis Gene Therapies, Inc., and holds Novartis stock and stock options.

Biased Benevolence: The Perceived Morality of Effective Altruism Across Social Distance.

Is altruism always morally good, or is the morality of altruism fundamentally shaped by the social opportunity costs that often accompany helping decisions? Across four studies, we reveal that in cases of realistic tradeoffs in social distance for gains in welfare where helping socially distant others necessitates not helping socially closer others with the same resources, helping is deemed as less morally acceptable. Making helping decisions at a cost to socially closer others also negatively affects judgments of relationship quality (Study 2) and in turn, decreases cooperative behavior with the helper (Study 3). Ruling out an alternative explanation of physical distance accounting for the effects in Studies 1 to 3, social distance continued to impact moral acceptability when physical distance across social targets was matched (Study 4). These findings reveal that attempts to decrease biases in helping may have previously unconsidered consequences for moral judgments, relationships, and cooperation.

Discounting for Energy Transition Policies—Estimation of the Social Discount Rate for Poland

The transition of the energy system in Poland has a long time horizon and demands a substantial investment effort supported by proper economic evaluation. It requires a precise Social Discount Rate (SDR) estimation as discounting makes the present value of long-term effects extremely sensitive to the discount rate level. However, Polish policymakers have little information on SDR: the predominant practice applies a priori fixed 5% discount rate, while studies devoted only to Poland are quite rare. To eliminate this research gap, our paper aims at estimating SDR for Poland, applicable in energy transition policies. We derive SDR for three datasets varying in length, twofold: using market rates via Consumption Rate of Interest (CRI) and Social Opportunity Cost (SOC) of capital, and prescriptive Ramsey and Gollier approaches based on Social Welfare Function (SWF). The results indicate that the rates based on CRI and SOC deviate substantially with changing data timeframes and market conditions, while prescriptive methods show much higher time stability. Due to long-term planning horizons for energy policies, we argue for adopting, as SDR in Poland, the longest dataset’s Ramsey-based rate of 4.72% which can be reduced to 4.39% by Gollier’s precautionary term (reflecting the uncertainty over future consumption growth), which are our main findings.

The standing of foreign lenders in cost-benefit analysis: some implications for environmental appraisals

ABSTRACT International loans often finance projects with environmental benefits and costs. Cost–benefit analysis (CBA) is the default tool to determine the societal economic value of investment projects or policies producing environmental externalities. Standing in CBA concerns whose benefits and costs count in the calculation of societal value. Common practice is to grant standing only to nationals of the country hosting the policy or investment project under appraisal. Foreign lenders therefore do not stand. The social opportunity cost (SOC) approach to the social discount rate (SDR) addresses foreign loans. In the SOC approach, the SDR incorporates the opportunity cost of foreign loans associated to a marginal change in government borrowing, while foreign lenders implicitly do not stand. However, the literature has not addressed the treatment of foreign loans in appraisals following the social time preference (STP) method of discounting. This paper argues that CBA appraisals following the STP approach to the SDR would need to model loan cash flows explicitly as the loan itself may be a source of societal gain or loss. It then discusses implications for projects with long-term benefits or costs and with cross-border externalities, epitomising environmental appraisals. A case study of a forest harvesting project is also included.

The Causal The effect of individual entrepreneurship on job satisfaction and turnover intention – the moderation effect of organizational entrepreneurship

국내외 기업가정신에 대한 관심과 연구는 폭발적으로 증가하고 있으나, 실증연구는 개인수준의 기업가정신에 집중하고 있다. 본 연구는 개인수준의 기업가정신과 조직수준의 기업가정신의 관계를 밝히는 동시에 기업가정신과 직무만족, 이직의도와 같은 조직적응 요인들의 관계를 연구하였다. 2016년 GETR자료 중 한국의 50인 이상 피고용자 580명을 실증분석한 결과는 다음과 같다. 첫째, 개인의 기업가정신은 직무만족에 정(+), 이직의사에 부(-)적 영향을 주었다. 둘째, 이 관계에서 조직의 기업가정신은 유의한 조절효과가 있는 것이 발견되었다. 이러한 결과는 높은 기업가정신을 보유한 구직자가 조직적응력이 떨어지고 이직가능성이 높다는 기존의 부정적 인식의 반대되는 결과를 제시하면서, 오히려 조직의 기업가정신과 상호작용하여 조직성과에 긍정적인 영향을 미치는 개인의 성과가 될 수 있음을 보여준다. 이러한 결과는 창업 실패로 발생할 수 있는 사회·경제적인 비용과 리스크, 창업에 대한 부정적 인식의 확산과 같은 문제를 완화할 수 있는 단서를 제공할 수 있을 것이다.Interest and research on entrepreneurship at home and abroad are increasing explosively, but empirical research focuses on entrepreneurship at the individual level. This study investigated the relationship between entrepreneurship at the individual level and entrepreneurship at the organizational level, while also studying the relationship between entrepreneurship and organizational adaptation factors such as job satisfaction and turnover intention. The result of analysis of 580 workers who work in korean company from 2016 GETR. First, personal entrepreneurship had a positive(+) effect on job satisfaction and a negative(-) effect on turnover intention. Second, in this relationship, it was found that organizational entrepreneurship has a significant moderating effect. These results suggest the opposite result of the existing negative perception that job seekers with high entrepreneurship have low organizational adaptability and high turnover intention, but rather, the individual entrepreneurship can be the performance of individuals that positively affect organizational performance, and will provide clues to alleviate problems such as economic and social opportunity costs that may arise from startup failure, and the spread of negative social perceptions about startup failure.

Timing matters: worker absenteeism in a weekly backward rotating shift model.

We analyze the impact of the positioning of shifts (morning, afternoon, night) on worker absenteeism in a large German automobile plant. Using a completely balanced panel of 153 organizational units over the 2-year-period 2009 to 2010 (i.e. 104 consecutive weeks with 15,912 unit-week-observations) we estimate a series of GLM and Fixed Effects models. Our main finding is that during afternoon shifts absence rates are significantly higher than during either morning or night shifts and that absence rates are particularly high during the afternoon shift immediately following the 3weeks of consecutive night shifts. We attribute our first finding to the "social opportunity costs" of working and the second one to a "tax evasion effect". When designing new shift models, firms should try to anticipate their workers' reaction to avoid unintended incentives.

Investment Sensitivity of Corn Silage Production Integrated into Feed Supply Service of Dairy Cooperative

The study aimed to identify the sensitivity of investment in commercial corn silage production based on 20 hectares of cropland. The start-up project was prepared through a profit-sharing partnership between the South Bandung Dairy Cooperative and the owner of the land rights. The harvested whole-plant crop (WPC) was processed to produce packaged silage, further distributed to meet the needs of the member of the cooperative. Data on agriculture input and output as well as their prices were gathered through a field survey. The result of data analysis was examined within a focus group discussion attended by the project authority. The project used hybrid corn that could be planted and harvested twice in a year and yields corn silage on average 78 ton/hectare/year. It required an investment fund of IDR1.5 billion for running the project for over ten years. By using social opportunity cost of the capital of 8% a year, financially it gave a positive Net Present Value. The B/C ratio was 1.34, and the IRR was 28.5%. Three variables have to be controlled by the project management because of the sensitive effect on the project feasibility, it consists of the cost of silage distribution, selling price and WPC/hectare yielded.

Personal spend on cigarettes and tobaccos in Cuba from 2013 to 2016.

Introduction: As risk factor smoking means a social opportunity cost because of the whole goods and services didn´t obtained to satisfice the tobacco and cigarettes demand. While the tobacco and cigarettes spend is increasing these opportunity cost will be increasing too. Objective: To describe the tobacco and cigarettes spends in Cuba since 2013 to 2016. Materials and methods: Was made a descriptive and longitudinal research about the tobacco and cigarettes spends in Cuba from 2013 to 2016. Were utilized two rates: monthly per capita sales on cigarettes and tobaccos measured in pesos and monthly per capita sales on cigarettes and tobaccos respect to middle salary measured in percent. Theoric methods: Historic – Logic, Inductive – Deductive, Comparative and Analysis and Synthesis. Empiric methods: documental and bibliographic research and arithmetic calculus. All the statistic processing was in Microsoft Excel 2007. Results: The personal spend on cigarettes and tobaccos from 2013 to 2016 shows a stable and defined structure. Conclusions: Havana, Santiago de Cuba provinces and the Special Municipality Isla de la Juventud were the Cuban regions showed consumption rate higher than the national middle.

Personal spend on cigarettes and tobaccos in Cuba from 2013 to 2016

Introduction: As risk factor smoking means a social opportunity cost because of the whole goods and services didn´t obtained to satisfice the tobacco and cigarettes demand. While the tobacco and cigarettes spend is increasing these opportunity cost will be increasing too. Objective: To describe the tobacco and cigarettes spends in Cuba since 2013 to 2016. Materials and methods: Was made a descriptive and longitudinal research about the tobacco and cigarettes spends in Cuba from 2013 to 2016. Were utilized two rates: monthly per capita sales on cigarettes and tobaccos measured in pesos and monthly per capita sales on cigarettes and tobaccos respect to middle salary measured in percent. Theoric methods: Historic – Logic, Inductive – Deductive, Comparative and Analysis and Synthesis. Empiric methods: documental and bibliographic research and arithmetic calculus. All the statistic processing was in Microsoft Excel 2007. Results: The personal spend on cigarettes and tobaccos from 2013 to 2016 shows a stable and defined structure. Conclusions: Havana, Santiago de Cuba provinces and the Special Municipality Isla de la Juventud were the Cuban regions showed consumption rate higher than the national middle.

On the social opportunity cost of unemployment

ABSTRACT The handling of unemployment is a central issue in cost–benefit analysis. Typically, the shadow price of employing an unemployed is derived by considering a marginal change in the employment constraint faced by an unemployed or rather an underemployed. In contrast, in this paper, we consider the discrete shift from unemployment to (full) employment. The result provides guidance how to estimate the social cost of recruiting otherwise unemployed to a project. It is shown that the social cost is overestimated by using the private reservation wage. The common practice of adding different cost items is shown to be flawed.

Social Discounting and the Cost of Public Funds: A Practitioner’s Perspective

AbstractSocial discounting conventions vary widely. Some differences reflect institutional constraints, but many reflect differing assumptions about how a social discount rate should be derived and applied. The divide between advocates of social opportunity cost and social time preference (STP) frameworks seems unbridgeable. There is no consensus among STP advocates on whether the social cost of funding $1 of public spending is barely more than $1 of consumption or perhaps more than $2; or on whether the covariance of public service benefits with income merits a discount rate premium that is trivial or a few percentage points. The practicalities of government fund raising are sometimes overlooked. The issues are here reviewed in the light of the literature and of experience with developing and applying social discounting regimes and extended debates within government.

Analysis of Financial Feasibility System Integration of Cow and Palm Oil with A Semi Intensive Maintenance System (Case Study on Sarwo Sari Farmer Group at Sari Makmur Village Pangkalan Lesung District Pelalawan Regency)

This research aims to analyze the financial feasibility and sensitivity to changes in input prices, production levels and prices of the output of a business System integration of Cow-Palm oil in Sari Makmur villagePangkalan Lesung District Pelalawan Regency Province of Riau. The research method used is the method of case studies. Data used are primary data and secondary data. The informant on this research consists of a group of farmers which is Sari Sarwo group members as many as 14 people and the number of cattle beginning as many as 51 cows , extension officers of Sari Makmur village, Village Unit Cooperative of Sari Makmur,and Village Unit Cooperative shop of Sari Makmur. Data analysis the criteria used was Net Present Value (NPV), Net Benefit Cost Ratio (Net B/C) and Internal Rate of Return (IRR). The results showed : integration efforts of cow-palm oil is worth because it has a value of NPV is positive, the value of Net B/C is greater than zero and the value of the IRR is greater than the Social Opportunity Cost of Capital (SOCC), the business is still eligible for develop in the event of a decrease in the price increase of chemical fertilizer 32.80%, decrease in price of palm oil of 15%, and decrease in urine and feses price 50%.The business is un eligible to developif in the production of palm oil greater than47,21%, and decrease in birth rate cow greater than53,68%.

Evaluating the Efficiency of Forestry Policy for Inclusive Growth in Ghana

The study evaluates the efficiency of forestry policy implemented in Ghana, where about 70% of the population depends on forest resources for livelihood and cultural purposes. It sought to assess how efficiently forestry policy had been implemented in Ghana, to inform policy on how benefits of forestry policy could promote inclusive growth. It employs an inclusive wealth framework to ascertain the social opportunity cost due to forestry policy implementation in Ghana, an indicator of the economic welfare effect of the policy. The results show negative net divergence in revenue due to forestry policy implementation, indicating a distorting influence of forestry policy on Ghana’s forestry sector, creating increasing inefficiency. Computed summary ratios – Nominal Protection Coefficient, Effective Protection Coefficient and Subsidy Ratio to Producers, confirmed that forestry policy implementation in Ghana had induced lower economic welfare in the country. Ghana will need to apply the holistic model, with special emphasis on the economic and social subsectors to ensure that implemented forestry policy leads to inclusive growth.Keywords: Efficiency, Forestry policy, Ghana, Inclusive growth, Policy analysis matrix