Total Economic Benefits Research Articles

Economic Impact of the Catfish Yield Verification Trials

From 1993 to 1995 catfish verification trials were conducted to provide production support to the catfish industry in Arkansas. The results from these trials encouraged catfish farmers to reduce stocking rates to 15,000/ha and increase aeration rates to 2.5 hp/ha. The adoption of these farming techniques resulted in a reduction in the cost of production by 22%. From 1993 to 2002, the total economic benefit from the trials was $67 million. The average annual internal rate of return was 3.4%. Given these results, the trial was economically profitable.

The economic value of an improved malaria treatment programme in Zambia: results from a contingent valuation survey

BackgroundZambia is facing a double crisis of increasing malaria burden and dwindling capacity to deal with the endemic malaria burden. The pursuit of sustainable but equity mechanisms for financing malaria programmes is a subject of crucial policy discussion. This requires that comprehensive accounting of the economic impact of the various malaria programmes. Information on the economic value of programmes is essential in soliciting appropriate funding allocations for malaria control.Aims and objectivesThis paper specifically seeks to elicit a measure of the economic benefits of an improved malaria treatment programme in Zambia. The paper also studies the equity implications in malaria treatment given that demand or malaria treatment is determined by household socio-economic status.MethodsA contingent valuation survey of about 300 Zambian households was conducted in four districts. Willingness-to-pay (WTP) was elicited for an improved treatment programme for malaria in order to generate a measure of the economic benefits of the programme. The payment card method was used in eliciting WTP bids.FindingsThe study reports that malaria treatment has significant economic benefits to society. The total economic benefits of an improved treatment programme were estimated at an equivalent of US$ 77 million per annum, representing about 1.8% of Zambia's GDP. The study also reports the theoretically anticipated association between WTP and several socio-economic factors. Our income elasticity of demand is positive and similar in magnitude to estimates reported in similar studies. Finally, from an equity standpoint, the constraints imposed by income and socio-economic status are discussed.

Water resources management in the Nile basin: the economic value of cooperation

Since 1999 a multilateral effort termed the Nile Basin Initiative has been underway among the Nile riparians to explore opportunities for maximizing the benefits of the river's waters through cooperative development and management of the basin. However, to date there has been virtually no explicit discussion of the economic value of cooperative water resources development. We believe that a serious discourse among Nile riparians about the economics of Nile cooperation is both inevitable and desirable, and that this discourse will not diminish the importance of environmental, social, or cultural issues that new infrastructure on the Nile will entail. To initiate such a discussion, in this paper we present the results of the first economic model designed to optimize the water resources of the entire Nile basin. Total (potential) annual direct gross economic benefits of Nile water utilization in irrigation and hydroelectric power generation are estimated to be on the order of US$7–11 billion. This does not account for the costs of building or operating the infrastructure.

Measuring the economic benefits of recycling: the case of the waste agricultural film in Korea

Recently increase of the waste agricultural film (WAF) raises the loss of the resources and produces the environmental damage in Korea. The Korean government has established the basic plan for increasing the recycling rate and abating the environmental damage. The objective of this paper is to estimate the economic benefits attached to the policy of recycling the WAF using contingent valuation method, aiming to provide policy-makers with useful information to make an informed public decision in recycling the WAF. The overall results show that the respondents well accepted the contingent market and would be willing to pay a significant amount for the proposed policy of recycling the WAF. The mean willingness to pay and the truncated mean willingness to pay per household were 4641 Korean won (US$ 3.6) and 5730 Korean won (US$ 4.4), respectively. Total economic benefits for the population amounted to approximately 14.33 billion Korean won (US$ 11.02 million) per year. This quantitative information can be used in cost-benefit analysis of the policy of recycling the WAF.

The relative contribution of outcome domains in the total economic benefit of addiction interventions: a review of first findings.

This paper provides a focused summary of the relative contribution of addiction intervention outcomes to total economic benefit, based upon a compilation of published economic studies from the United States. The relevant literature was searched extensively, and 11 economic studies were selected for review. The selected addiction interventions address both alcohol use/abuse and illicit drug use/abuse and represent various treatment modalities, including a brief physician intervention and long-term residential programs. Study participants included community-based drug users, pregnant and/or parenting women, problem drinkers, and criminal offenders. These studies estimated the economic benefits of an addiction intervention(s) in terms of one or more of the following outcome domains: criminal activity, health services utilization, employment earnings, and expenditures on illicit drugs and alcohol. The primary finding of this review was that avoided criminal activity was the greatest economic benefit of addiction interventions and contributed more, as a separate outcome domain, to the total economic benefit of addiction interventions than any other outcome domain. Reduced utilization of health care services was also a noteworthy economic benefit of addiction interventions. This study provides a detailed exposition of economic benefits estimation and highlights the potential impact of individual outcomes, thus providing a useful resource for substance abuse researchers and administrators as they design and evaluate future interventions.

Economic, energy, and environmental impact of the Louisiana Energy Fund

The Louisiana Energy Fund is a public–private cooperative endeavor created by the Louisiana Department of Natural Resources in partnership with the Louisiana Public Facilities Authority, Hibernia National Bank and Lehman Brothers to provide publicly funded institutions in the state with low cost, tax exempt financing to implement energy and water conservation projects. In September 2002, the Louisiana Bond Commission authorized the issuance of $15.3 million dollars in tax-exempt bonds to fund seven energy and water retrofit performance contracts. The purpose of this paper is to evaluate the expected economic, energy, and environmental impact of the performance contracts. An input–output model is developed to quantify the expected total economic benefit, and based on the terms of the performance contracts, the expected energy and environmental impacts of the program are estimated.

A generalized modeling framework for public benefit fund program valuation

A generalized modeling framework to value Public Benefit Fund (PBF) programs is developed. The potential economic and environmental impact associated with PBF programs at the state-level is described through a simulation model that values energy savings and emissions reduction and an input–output model that estimates the total economic benefit of the program. The valuation strategy is based on publicly-available data and infer results under a reasonable assumption set. The methodology is illustrated through a case study for a proposed PBF program targeted for Louisiana across the residential and commercial sector.

Benefit-cost analysis of addiction treatment: methodological guidelines and empirical application using the DATCAP and ASI.

To provide detailed methodological guidelines for using the Drug Abuse Treatment Cost Analysis Program (DATCAP) and Addiction Severity Index (ASI) in a benefit-cost analysis of addiction treatment. A representative benefit-cost analysis of three outpatient programs was conducted to demonstrate the feasibility and value of the methodological guidelines. Procedures are outlined for using resource use and cost data collected with the DATCAP. Techniques are described for converting outcome measures from the ASI to economic (dollar) benefits of treatment. Finally, principles are advanced for conducting a benefit-cost analysis and a sensitivity analysis of the estimates. The DATCAP was administered at three outpatient drug-free programs in Philadelphia, PA, for 2 consecutive fiscal years (1996 and 1997). The ASI was administered to a sample of 178 treatment clients at treatment entry and at 7-months postadmission. The DATCAP and ASI appear to have significant potential for contributing to an economic evaluation of addiction treatment. The benefit-cost analysis and subsequent sensitivity analysis all showed that total economic benefit was greater than total economic cost at the three outpatient programs, but this representative application is meant to stimulate future economic research rather than justifying treatment per se. This study used previously validated, research-proven instruments and methods to perform a practical benefit-cost analysis of real-world treatment programs. The study demonstrates one way to combine economic and clinical data and offers a methodological foundation for future economic evaluations of addiction treatment.

A COST‐BENEFIT ANALYSIS OF WATER QUALITY PROTECTION IN THE CATAWBA BASIN1

ABSTRACT: The primary objective of this study was to perform a cost‐benefit analysis of maintaining the current level of water quality in the Catawba River basin. Economic benefits were estimated using a stated preference survey method designed to value respondents' willingness to pay for a management plan to protect water quality in the Catawba basin over time. From the surveys conducted with 1,085 area residents, we calculated an annual mean willingness to pay of $139 for the management plan, or more than $75.4 million for all taxpayers in the area. Over the five‐year time horizon in which respondents were asked to pay for the management plan, this resulted in a total economic benefit of $340.1 million. The Watershed Analysis Risk Management Framework model was used to estimate the amount of management activities needed to protect the current level of water quality in the basin over time. Based on the model results, the total cost of the management plan was calculated to be $244.8 million over a ten‐year period. The resulting cost‐benefit analysis indicated that the potential benefits of this management plan would outweigh the costs by more than $95 million.

Measuring total economic benefits from water in plantation forestry: Application of quasi I-0 framework to the Crocodile catchment in South Africa

Synopsis A quasi input-output framework was applied to measuring direct and indirect economic benefits from water use in plantation forestry in the Crocodile river catchment of South Africa. The study accounted for indirect economic benefits generated in downstream timber processing activities and input supply sectors linked with timber plantations as part of the total economic benefits from water use in forestry. The derived measure oftotal economic benefits from water use was 9 to 16 fold higher than the estimate of direct benefits (in terms of value added and employment) generated at the primary gum and pine production activities (plantation gate), respectively. The study results showed the importance of considering indirect economic benefits realised in forward and backward sectors linked with the primary production activity in evaluating water allocation strategies and policy regimes.

Using the DATCAP and ASI to estimate the costs and benefits of residential addiction treatment in the State of Washington

Funding agencies and policy makers often criticize residential addiction treatment because the cost of residential services is typically higher than for outpatient services and it is unclear whether the outcomes are significantly better for most clients. To address these concerns, proponents of residential treatment require economic evidence to justify further investments in this modality over less intensive and less costly options. Recent studies have developed methods and empirical guidelines for using the drug abuse treatment cost analysis program (DATCAP) and the addiction severity index (ASI) in a comprehensive economic evaluation of addiction treatment. The present study applied these methods and guidelines to estimate the economic costs and benefits of residential addiction treatment at five programs in the State of Washington, USA that serve publicly funded clients. Program- and client-specific economic cost estimates were derived using data collected on-site with the DATCAP along with opportunity cost estimates associated with treatment attendance. Economic benefits were calculated from client self-reported information at treatment entry and at 6 months post discharge using the ASI. Outcome categories included inpatient services, employment, medical and psychiatric conditions, and criminal activity. Results indicate that average weekly economic cost of treatment services at the five programs ranged from $463 to $703. Average (per client) economic cost of treatment was $4912 (composed of $3650 in program cost and $1262 in client cost) for all subjects that completed both a baseline and follow-up questionnaire ( N=222; 82%). Average (per client) total economic benefit was $21,329, leading to estimates of $16,418 for average net benefit and 4.34 for the benefit–cost ratio. Total and net economic benefits were significantly related to gender, race, religious preference, and baseline ASI composite scores for drug use and legal status. A detailed sensitivity analysis did not alter the qualitative findings. This study provides conclusive evidence that, for this sample of programs in Washington State, the economic benefits of residential addiction treatment significantly exceeded the economic costs. Although the results are not necessarily generalizable to private-paying clients or clients from other States in the US, the methods are based on widely used data collection instruments and well-accepted economic principles. Thus, extensions of this research to other clients, States, and modalities should be feasible and straightforward.

Climate Policy Induced Investments in Developing Countries

International climate policy has assigned the leading role in emissions abatement to the industrialized countries while developing countries remain uncommitted to binding emission reduction targets. However, cooperation between the industrialized and the developing world through joint implementation of emission abatement promises substantial economic gains to both parties. In this context, the policy debate on joint implementation has addressed the question of how investment risks to project-based emission crediting between industrialized countries and developing countries affect the magnitude and distribution of such gains. In our quantitative analysis, we find that the incorporation of country-specific investment risks induces rather small changes vis-a-vis a situation where investment risks are neglected. Only if investors go for high safety of returns is there a distinct decline in the overall volume of emission crediting and the associated total economic benefits. While the welfare effects of risk incorporation for industrialized countries are unequivocally negative, the implications across developing countries are ambiguous. Whereas low-risk developing countries attract higher project volumes and benefit from higher effective prices per emission credit compared to a reference scenario without risk, the opposite applies to high-risk countries. Sensitivity analysis with respect to higher risk estimates show that shifts in the comparative advantage of emission abatement against high-risk countries may become dramatic as only very low-cost mitigation projects will be realized, driving down the country's benefits from emission crediting to the advantage of low-risk developing countries. This result is supported by empirical evidence on regional imbalances of activities implemented jointly under the pilot phase of the Kyoto Protocol.

Process system optimization for life cycle improvement

AbstractLife Cycle Assessment (LCA) is an analytic tool for quantifying the environmental impacts of all processes used in converting raw materials into a final product. The LCA consists of three parts. Life cycle inventory quantifies all material and energy use, and environmental emissions for the entire product life cycle, while impact assessment evaluates actual and potential environmental and human health consequences of the activities identified in the inventory phase. Most importantly, life cycle improvement aims at reducing the risk of these consequences occurring to make the product more benign. When the LCA is performed in conjunction with a technoeconomic analysis, the total economic and environmental benefits and short comings of a product or process can be quantified. A methodology has been developed incorporating process performance, economics, and life cycle inventory data to synthesize process systems, which meet life cycle impact‐improvement targets at least cost. The method relies on a systematic description of the product life cycle and utilizes successive Linear Programming to formulate and optimize the non‐linear, constrained problem which results. The practicality and power of this approach have been demonstrated by examining options for the reduction of emissions of the greenhouse gas CO2 from petroleum‐based fuels.

Opportunity Costs Related to Feral Horses: A Wyoming Case Study

Concern over the humane treatment and diminishing numbers of feral horses (Equus caballus) led to their protection under the Wild Free-Roaming Horse and Burro Act of 1971. The potential for rapid population growth coupled with management constraints of the 1971 Act have increased the likelihood of excessive feral horse densities in important public rangeland habitats. Excessive densities can lead to deterioration of the range resource, smaller populations of wildlife and reduced stocking rates for domestic livestock. Consequently, the potential for conflicts between wild horse and burro advocates, wildlife agencies, recreationists and livestock producers is increased. Research concerning wild horses has largely focused on biological and behavioral aspects such as habitat and dietary requirements. Limited economic research concerning wild horses is available to aid public agencies in allocating federal lands in a multiple use context. A case study was used in this analysis to estimate opportunity costs associated with foregone wildlife and domestic livestock due to wild horses on an existing allotment in Wyoming. Results indicate the marginal opportunity costs associated with horse numbers beyond the median target level specified in the allotment management plan are greater than $1,900 per horse. Forage consumption estimates indicate the range resource could face deterioration at higher wild horse population levels. These results suggest the objectives of multiple use, sustained yield and maintaining viable wild horse populations may be met if government agencies are able to remove wild horses in a timely fashion. It is not possible to say, however, that lower wild horse levels represent a more economically efficient allocation of the range resources without estimating the total economic benefits associated with wild horses.

Potential Economic Benefits of Lower-Extremity Amputation Prevention Strategies in Diabetes

To estimate the potential economic benefits of selected strategies from published literature--educational interventions, multidisciplinary clinics, and insurance coverage for therapeutic shoes--to reduce the incidence of lower-extremity amputation among individuals with diabetes. We developed a model to estimate the expected incidence and associated costs of lower-extremity amputation in a hypothetical cohort of 10,000 people with diabetes. Prevention strategies were assumed to be targeted at individuals with a history of foot ulcer, and benefits were estimated over a period of 3 years. The total potential economic benefits (discounted at 5%) of strategies to reduce amputation risk ranged from $2.0 to $3.0 million ($2,900 to $4,442 per person with a history of foot ulcer) over 3 years. Benefits were highest for educational interventions. Most benefits were found to accrue among individuals aged > or = 70 years. Strategies to reduce the risk of lower-extremity amputation may generate substantial economic benefits and should be a standard component of routine diabetes care. Benefits may best be achieved through a partnership of government, private payers, health care service providers and producers, and individuals with diabetes.

Reducing institutional barriers to water conservation

Significant increases in water demands, in conjunction with economic and population growth, stress already scarce water supplies in dry areas. This paper shows that the principle of confronting all water users with the opportunity cost of their actions can be applied to the design of institutions that reduce barriers to water conservation. We apply the principle to the case of temporary water transfers from agriculture to cities, in which the opportunity cost of water used for agriculture is what cities are willing to pay for the water. A significant institutional barrier that blocks temporary market transfers of water is the `use it or lose it' principle of western US water law. Legislation that removes that institutional barrier to conservation by defining short-term water trading to be a beneficial use of water can promote greater total economic benefit from scarce water, if combined with measures for protecting third parties. By removing this barrier to the free flow of information on the opportunity cost of water used in agriculture, legislation can create a market for agricultural water and reduce the cost to cities of securing needed water.

Measuring the Economic Value of Ecotourism Resources: The Case of South Korea

This article attempts to quantify the economic benefits of ecotourism resources. The contingent valuation method was employed to measure the economic value of ecotourism resources for recreational use at Mt. Minju in South Korea using a dichotomous choice questionnaire. The empirical results show that the economic value of ecotourism resources per recreationist was estimated at 20, 792 won (approximately U.S.$24) and 23,307 won (approximately U.S.$27) using the parametric and nonparametric approaches, re spectively, under the hypothetical market scenario. The total economic benefits then were estimated by multiplying the per capita economic benefit by the number of visitors. The findings are sufficient to demonstrate that ecotourism resources as nonmarket goods have their own economic value and have considerable economic benefits. This implies that significant economic benefits will be lost as a result of the development of a ski resort with golf courses in an environmentally sensitive area.

Short- and Long-Term Effects of World Exposition 1986 on US Demand for British Columbia Tourism

This study is an attempt to evaluate the short- and long-term economic effects of World Exposition 1986 on US demand for British Columbia tourism by integrating Box-Jenkins time series analysis with the theory of consumer demand. The number of more-than-one-day US visitors to British Columbia is used as the measure of demand. Intervention and transfer function models are employed for the estimates which are made separately for US visitors arriving by car, automobile and by plane. The conclusions drawn are that during the six months of Expo 86, an additional 1.58 million more-than-one-day US visitors were attracted to British Columbia (1.41 million by automobile and 0.17 million by aeroplane). The long-term or post-Expo effects of Expo 86 are found to be very large (probably larger in total than the short-term economic benefits). These long-term economic benefits result from the post-Expo visitors who have returned to British Columbia as a result of the world-wide exposure of the Vancouver area by the fair. We have considered only more-than-one-day US visitors to Expo 86 (only part of all visitors to the fair) and only the 1987–93 post-Expo time period, and with that limited visitor group, and that limited time period, we still find long-term economic benefits of $428.9 million (about half the estimated total short-term economic benefits). These estimates take account of the effects of changes in the US–Canada foreign exchange rate, the US travel price index, the BC travel price index and US personal disposable income over the 1981–93 period.

Is dominant use management compatible with basin‐wide economic efficiency?

Managing reservoir systems for economic efficiency requires maximizing total economic benefits over all water uses, time periods, and locations. This paper presents results derived from a basin optimization model that solves both multiple use and dominant use management objective functions. Application of the model to New Mexico's Rio Chama basin for the uses of river recreation, lake recreation, and hydropower indicates a negligible difference in system benefits between managing for multiple use and for a dominant use. However, there is a substantial difference in the distribution of water across reservoirs and economic benefits across uses. Results suggest that in basins where nonconsumptive uses are dominant, managers may have more latitude than previously believed in managing for dominant uses while still meeting a larger economic efficiency objective.

Impacts of global electrification based upon photovoltaic technologies

The impacts of global electrification based upon photovoltaic technologies are examined and estimated from the following points of view: the number of photovoltaic systems in place, the power being delivered by them, the number of persons benefiting from the power being delivered, the total sales and economic benefits, and the number of jobs being created in manufacturing and installing them. Particular attention is given to estimated impacts on global electrification for rural (off-grid) populations in developing countries. The role of photovoltaic power technology as an enabling technology is discussed. Also, the growing impact of photovoltaic power technology as a competitive power technology for grid-connected needs is examined relative to its developing role as an alternative supplier of global electric power in competition with utility-generated power currently dominated by fossil- and nuclear-fueled electric generating plants. Finally, the positive impacts on the earth's environment as a result of generating electric power using photovoltaic technology are discussed relative to not producing carbon dioxide and other gases along with fuel wastes. Published by Elsevier Science Ltd.