Value Approach Research Articles

Eliciting SF-6Dv2 health state utilities using an anchored best-worst scaling technique

There is an increasing interest in using ordinal data collection methods, such as the best-worst scaling (BWS), to develop preference-based tariffs (value sets) for health-related quality of life instruments, yet the evidence on their performance is limited. This paper proposed to use an anchored BWS technique (in which the state of “death” served as an anchoring state) to directly develop a utility weight that lies on a scale anchored at 0 = death and 1 = full health for the Simplified Chinese version of the Short Form 6 Dimension version 2 (SF-6Dv2). An online panel from the general population of Mainland China completed an online survey between 20th July and 19th August, 2019 and 463 respondents were included in the main analysis. The Conditional Logit (CL) model, which assumes a homogeneous preference, as well as a Hierarchical Bayes (HB) model, which accounts for preference heterogeneity, were used to analyze the BWS data. The model performances were evaluated based on monotonicity and model-fit statistics. The majority of respondents indicated that the BWS questions were easy to understand and complete. Initial analyses suggested that the best and worst choices should not be pooled together. Based on model fit statistics of separated estimations and previous literature on health state valuation studies using BWS, the best choices were used for developing the final algorithm. The HB estimates were found to have better model performance than the CL estimates. This study provides an essential insight into using an anchored BWS approach in health state valuation. Furthermore, it demonstrates the advantage of using HB compared to the traditional CL model in producing preference values.

The value of health—Empirical issues when estimating the monetary value of a quality‐adjusted life year based on well‐being data

Decisions on interventions or policy alternatives affecting health can be informed by economic evaluations, like cost‐benefit or cost‐utility analyses. In this context, there is a need for valid estimates of the monetary equivalent value of health (gains), which are often expressed in € per quality‐adjusted life years (QALYs). Obtaining such estimates remains methodologically challenging, with a recent addition to the health economists' toolbox, which is based on well‐being data: The well‐being valuation approach. Using general population panel data from Germany, we put this approach to the test by investigating several empirical and conceptual challenges, such as the appropriate functional specification of income utility, the choice of health utility tariffs, or the health state dependence of consumption utility. Depending on specification, the bulk of estimated € per QALY values ranged from €20,000–60,000, with certain specifications leading to more considerable deviations, underlining persistent practical challenges when applying the well‐being valuation methodology to health and QALYs. Based on our findings, we formulate recommendations for future research and applications.

PERBANDINGAN PENGUKURAN NILAI WILLINGNESS TO PAY PER QUALITY ADJUSTED LIFE YEAR TERAPI PENYAKIT MODERATE BERDASARKAN PENDAPATAN MASYARAKAT DI KOTA BANJARMASIN

The health services in Indonesia have not been maximal in fulfilling the needs of the patients with terminal illnesses. Cost utility analysis (CUA) is a pharmacoeconomic approach recommended in order to control the quality and cost of health programs. The costeffectiveness threshold is needed for the interpretation of the value of the cost-effectiveness ratio in determining whether a health technology is costeffective or not. One approach that can be used is to estimate the value of willingness to pay per quality adjusted life years (WTP per QALY).The purpose of this study was to determine the comparative measurement of the estimated value of willingness to pay per quality adjusted life year (WTP per QALY) for moderate disease in the community of Banjarmasin by their income. The design of this study uses a cross-sectional approach. The stated preference method with a contingent valuation approach was used in a survey conducted on the general population in the City of Banjarmasin. The number of samples is 100 respondents and 64 respondents are willing to pay. The research instrument is a questionnaire consisting of measuring the value of willingness to pay (WTP) using the dichotomous bidding game method, measuring utility using the visual analogscale (VAS) and EuroQoL 5-Dimensions (EQ-5D) based on a hypothetical scenario of utility value in moderate disease. WTP measurement per QALY used the formula of comparison between the maximum WTP and QALY gained. The results showed that of only 64 of 100 respondents were willing to pay. The utility gained EQ-5D was 0.544 and the utility gained VAS was 0.169. Based on the income of the people in Banjarmasin, the comparison of measurement of willingness to pay per quality adjusted life year is IDR 23,594,155 for low income and IDR 79,265,583 for high income. This result is expected to give more information to CE-Threshold based on community income preferences.

Brand valuation: an innovative approach based on the risk difference

Research background: Among academicians, a growing interest in brand valuation methods can be observed since the 1980s, when it became obvious that firms have off-balance sheet assets which have a significant effect on their value. Moreover, in a number of cases, the need to value the brand arises due to the reporting requirements or transactional and other intrafirm reasons. The existing methods used so far have commonly focused on changes in variables such as sale prices, changes in customer behaviour, or sales volumes and very often lead to different results, even when valuing the same brand. We believe that the risk factor has been neglected in these methods, although having a significant impact on the brand valuation.
 Purpose of the article: The aim of this paper is to formulate an alternative brand valuation approach based on the risk difference. This is defined as the difference between the risk to which a producer with a certain brand is exposed and the risk of the producer without a brand.
 Methods: Firstly, a set of assumptions was defined concerning the issue what conditions are required to be applied to use the proposed methodological approach. Next, the concept itself is formulated and tested while using the case study approach. Hence, in conditions of a model company, the method was verified with specific data. The results were also compared with the reproduction cost approach.
 Findings & value added: This paper presents a novel brand valuation method based on the risk difference. Building on a thought experiment, we compare an incumbent with a brand rather than with an average producer, which is a commonly used approach, with a new entrant to the market. We argue that in comparison to existing methods, our methodological approach reduces the number of unobservable inputs in the brand valuation process, and thus increases the accuracy and reliability of its results. Our method supports both researchers and practitioners to establish a better understanding between the well-established financial theories and new directions in brand valuation research.

From calculation to deliberation: the contemporaneity of Dewey

ABSTRACT The word crisis comes from Ancient Greek κρίσις which can be translated as ‘power of distinguishing’ and is related to modern κρίνω which means ‘to pick out’. This is apt, because the pandemic of 2020 has exposed the limitation of approaches to social governance premised on calculation. The – some would argue false – choice between either saving lives or the economy, is the highest profile example of the necessity to ‘pick’ between different qualitative options. This has brought into relief something suppressed by the calculation approach, namely the need to adjudicate between multiple and competing value orientations in public life. With this, an alternative way of decision making in the public domain is needed, one that does not revert back to mere politics and subjective decisions. This article turns to the writings of John Dewey to look for alternatives. It shows that the model of deliberative inquiry found in Dewey, even though not without its own challenges, presents a viable option to replace metrics-based valuation approaches, without falling back on the whimsy of political judgement. This suggests that Dewey is not just contemporaneous, but that translating his insights into action could not be more urgent.

Forecasted E/P Ratio and ROE: Shanghai Stock Exchange (SSE), China

This study explores the influence of forecasted earnings to price ratio (E/P) and ROE to explain the part of the variation in the Shanghai Stock Exchange (SSE) returns. The study analyzed the explanatory capacity of fundamental, risk, and combined valuation approaches variables on comparative mode between static and dynamic models with the induction of un-balanced panel data estimation. A linear dynamic panel technique is being undertaken to forecast the variables. The research findings indicate that the forecasted E/P ratio and ROE significantly explain the variation in SSE stock return and remain highly statistically significant after incorporating risk proxy variables. Moreover, the author also confirms the existence of size, momentum, liquidity, and dividend yield in the Shanghai Stock Exchange. The study introduces the fundamental valuation approach to the Chinese market based on its unique features and designs a log-linear model, which comprises forecasted E/P and ROE in addition to current E/P as an estimator for future stock returns. The incorporation of Driscoll and Kraay standard errors (DKSE) and Panel Corrected standard error (PCSE) under static while difference and system GMM under the scope of dynamic panel estimation is considered to be another contribution of the study.

Willingness to Pay for a Hypothetical COVID-19 Vaccine in the United States: A Contingent Valuation Approach.

Our objective was to estimate the individual willingness to pay (WTP) for a COVID-19 vaccine and evaluate its predictors in the United States. A double-bounded dichotomous choice contingent valuation with open-ended question technique was implemented based on the responses to a national survey administered during the first week of November 2020. The final sample size was 1285. The results showed that individual WTP values increased with income, whether a household member had any pre-existing condition, and perceived threat of the virus. The vaccine efficacy rate and duration of protection were found to be important factors for the respondents. The mean WTP for a vaccine with a 95 percent efficacy rate and 3-year protection (US$318.76) was approximately 35 percent greater than the vaccine with a 50 percent efficacy rate and 1-year protection (US$236.85). The initial aggregate direct benefit of the current vaccination program was estimated to be between 20 and 35.6 billion US dollars depending on the vaccine protection duration.

Challenges Faced By Auditors When Estimating Fair Values. An Experiment in an Emerging Economy

Abstract Risks related to fair value (FV) estimates and their impact on the audit process represent a crucial topic in accounting and audit literature. Therefore, this paper focuses on one of the influential factors of FV estimation and related risks in audit missions, i.e. the valuation process performed (provider and measurement). In doing so, it addressees a less analysed FV level of estimation – level 3 according to IFRS 13, ’the models’, for the case of tangible assets. An experiment is conducted on a group of auditors, members of the Romanian audit professional body. The results reveal that, if the internal control quality is high, auditors differentiate between FV providers in the case of: FV measurement, i.e. income valuation approach versus cost approach, which implies additional effort for verification and risk of misstatement, when the estimation is provided by a third party instead of management. These findings could be related to the volatility of the investigated economic context and the respondents’ level of knowledge and expertise. We infer that respondents have a moderate understanding of valuation logic and methodology while excessively relying on their own valuator.

Методика учета влияния деловой репутации исполнительного органа и членов совета директоров акционерного общества на стоимость бизнеса

According to the modern theory of corporate finance, the goal of managing the company’s finances is to maximize the market value of the business, which is also an opportunity to increase the competitiveness of the business. Аnalysis of price-forming factors of business value is the basis for making effective financial decisions by management. This article is devoted to the analysis of the impact on the business value of the business reputation of the company’s executive body and members of the board of directors. This analysis is also related to corporate governance review of the business, as it is within the framework of corporate governance examines the relationship between management and owners of a company and its impact on business value. The aim of the research is to develop a methodology for accounting for the impact of the business reputation of the executive body of a joint-stock company on the value of its business. The objective of the research is to identify criteria for assessing the impact of the business reputation of the executive body and a member of the board of directors of a joint-stock company on the business value. Research is based on a general scientific methodology, which provides for the use of methods of systematic and comparative analysis, analysis and synthesis, methods and approaches of evaluation activities. The article examines the role of business reputation of members of the management bodies of a joint-stock company at the present stage of corporate governance development and its impact on the business value. As a result, the importance and possibility of using the business reputation indicator to assess the value of a business through the prism of applying a revenue approach in valuation is proved. Accounting for the impact of the business reputation of members of the board of directors and executive bodies of organizations on the business value is considered in two directions: by influencing the amount of cash flow and by taking into account the discount rate.

Economic losses from natural disturbances in Norway spruce forests – A quantification using Monte-Carlo simulations

Changing forest disturbance regimes pose a major challenge for current day forestry. Yet our understanding of the economic impacts of disturbances remains incomplete. Existing valuations of losses from natural disturbances commonly exclude extreme events and neglect impacts on standing timber. Here we develop a new methodology to assess the economic impact of natural disturbances addressing these limitations. We couple an empirical function of forest growth with survival modelling for the example of Norway spruce (Picea abies), using Monte-Carlo simulations to quantify the economic losses from natural disturbances. We illustrate the effect of extreme disturbance events by analyzing the lowest (worst) 5% of simulated economic returns. Ranging between € −2,611 and −34,416 per hectare, disturbance-induced economic losses varied greatly, depending on the valuation approach applied. Accounting for extreme events and disturbance impacts on standing timber resulted in 262–1218% higher losses compared to damages derived with common valuation approaches that neglect these aspects. Furthermore, we demonstrate that refraining from salvage logging after extreme disturbances does not necessarily result in major economic losses for forest owners, indicating a potential cost-effective avenue to improve forest biodiversity. Our approach presents an important step towards quantifying the economic impacts of changing forest disturbance regimes.

Comparative analysis of cost and income approaches to determining the value of human capital

The relevance of the research topic is to study the methodological foundations of human capital assessment. Purpose: comparative analysis of fundamental methodological approaches to the valuation of human capital. Methods – analysis, synthesis, comparisons and etc. Results of work: the study of the methodology for assessing the development and functioning of human capital is particularly important in modern conditions. The priorities of the global economy indicate the restrictive impact of resource advantages, determining the dominant role of innovative and technological factors, which also include the level of accumulated human capital. Given the low resource intensity of developing economies, the analysis of methodological approaches to assessing the functioning and development of human capital is particularly relevant. Conclusions: the main methodological approaches of human capital valuation are studied. The evolution of their development in the context of various economic doctrines is considered. Formalized algorithms for determining the value of human capital in the context of cost and income evaluation principles are presented. The advantages and disadvantages of the studied methods are revealed and the possibilities of their synergistic use are determined.

Willingness to Pay for Conservation of African Baobab Tree in Ethiopia (A Case Study of Abergele Woreda): Contingent Valuation Approach

ABSTRACT Conservation and restoration measures which consider the participation of the local community are necessary to save the baobab trees from being vanished. This study was conducted to assess communities’ average willingness to pay and identify factors that determines households’ willingness to pay (WTP) for the conservation and restoration of baobab tree. The study used primary data obtained from a survey conducted on 192 randomly selected households. Double bounded dichotomous choice (DBDC) elicitation format of contingent valuation method was employed. The data were analyzed using a bivariate probit model. The response of households’ for the scenario indicated that the mean WTP for the conservation and restoration of baobab tree was found to be 105 birr per year per household. The results of the model revealed that household’s age, annual income of household head, marital status of household head, distance and awareness of household have positive and significant effect on WTP. On the other hand, bid values of have a significant negative effect on WTP indicating that Households that are provided with lower initial bid value are more likely to be willing to contribute for conservation. Improving the livelihood of households, creation of awareness and setting fair contribution need to be considered to enhance community’s participation in baobab tree conservation.

Plural Valuation of Land and Insights for Achieving Sustainable Outcomes in Large-Scale Land Acquisition Projects

Large-scale land acquisition projects by foreign investors, also known as “land grabbing,” raise difficult questions about the processes of valuing land in Sub-Saharan Africa that the current literature does not sufficiently explore. Land acquisitions can help developing countries like Tanzania achieve their economic and development goals. Nonetheless, it can also threaten local livelihoods and well-being due to displacement, lack of access to natural capital, and conflicts between land users. Empirical evidence is limited on how local contexts affect the recognition and incorporation of multiple values that people hold about land into decisions on land acquisition projects in Tanzania. Plural valuation (PV) is needed to design more comprehensive and deliberative policy instruments that enhance nature’s contributions to people. This empirical study uses sociocultural valuation approaches to assess the diverse values of land in the Bagamoyo district of Tanzania, impacts of EcoEnergy land acquisition project on local livelihoods, and contextual factors that enable or hinder incorporating PV into decisions. The findings suggest that synergies and conflicting values of land exist, and PV can serve as a negotiation support tool to reconcile the differences and land conflicts. The success of PV relies on the (1) extent of partnership and participation, (2) design of asset valuation process, (3) stakeholder goals, and (4) sociopolitical context. Currently, the risks of land acquisition projects outweigh the benefits to people in rural Tanzania. However, to realize the sustainable and equitable flow of the contributions of land to Tanzanians, the government should consider improving the valuation processes by (i) fostering recognition of neglected voices and marginalized people, (ii) rectifying power imbalances and injustices that result from current land valuation processes, (iii) reinforcing customary land rights and compensation policies, and (iv) adhering to the principle of free, prior, and informed consent.

The impacts of information technology and E-commerce on operational performances: A two-stage dynamic partial adjustment approach

ABSTRACT This study proposes an unconventional partial adjustment valuation approach, as a comparison to stochastic production frontier approach, to evaluate the business values of information technology and E-commerce. Based on the different settings of the speeds of adjustment, two different cases, constant case and dynamic case, are conducted and compared. With the more realistic model design, we can investigate and compare the business values of information technology and E-commerce with not only the constant but also the time-varying dynamic setting empirically. The empirical results indicate that the adoptions of information technology and E-commerce contribute to operational performances positively in most cases, but the power differs depending on the different industries.

Examining the status of improved air quality in world cities due to COVID-19 led temporary reduction in anthropogenic emissions

Clean air is a fundamental necessity for human health and well-being. Anthropogenic emissions that are harmful to human health have been reduced substantially under COVID-19 lockdown. Satellite remote sensing for air pollution assessments can be highly effective in public health research because of the possibility of estimating air pollution levels over large scales. In this study, we utilized both satellite and surface measurements to estimate air pollution levels in 20 cities across the world. Google Earth Engine (GEE) and Sentinel-5 Precursor TROPOspheric Monitoring Instrument (TROPOMI) application were used for both spatial and time-series assessment of tropospheric Nitrogen Dioxide (NO2) and Carbon Monoxide (CO) statuses during the study period (1 February to May 11, 2019 and the corresponding period in 2020). We also measured Population-Weighted Average Concentration (PWAC) of particulate matter (PM2.5 and PM10) and NO2 using gridded population data and in-situ air pollution estimates. We estimated the economic benefit of reduced anthropogenic emissions using two valuation approaches: (1) the median externality value coefficient approach, applied for satellite data, and (2) the public health burden approach, applied for in-situ data. Satellite data have shown that ~28 tons (sum of 20 cities) of NO2 and ~184 tons (sum of 20 cities) of CO have been reduced during the study period. PM2.5, PM10, and NO2 are reduced by ~37 (μg/m3), 62 (μg/m3), and 145 (μg/m3), respectively. A total of ~1310, ~401, and ~430 premature cause-specific deaths were estimated to be avoided with the reduction of NO2, PM2.5, and PM10. The total economic benefits (Billion US$) (sum of 20 cities) of the avoided mortality are measured as ~10, ~3.1, and ~3.3 for NO2, PM2.5, and PM10, respectively. In many cases, ground monitored data was found inadequate for detailed spatial assessment. This problem can be better addressed by incorporating satellite data into the evaluation if proper quality assurance is achieved, and the data processing burden can be alleviated or even removed. Both satellite and ground-based estimates suggest the positive effect of the limited human interference on the natural environments. Further research in this direction is needed to explore this synergistic association more explicitly.

The value of forest ecosystem services: A meta-analysis at the European scale and application to national ecosystem accounting

A great share of ecosystem services (ES) at the global scale is provided by forest biomes, and acknowledging the value of forest ES is critically important towards sustainable decision making. The literature inventory of forest valuation studies is extensive and thus a significant mass of knowledge is already available concerning the value of forest ES. To this end, meta-analysis is a prominent benefit transfer approach that has been employed in the past to provide value transfers of forest ES taking advantage of contemporary knowledge. For the purposes of conducting a meta-analysis, we collected 158 primary studies, originated in Europe and dated from 2000 to 2017, of which 30 provided relevant information for a statistical meta-analysis, yielding 71 value observations. The results reveal that GDP per capita and the type of ecosystem service are significant determinants in explaining the variation in forest value. We also apply the meta-analysis model results so as to estimate the ES provided by forests in the Czech Republic. We find that the total value of forest is approximately 2842 US$ ha−1 year−1, with regulation and maintenance ES being the most valuable services. We finally attempt to show the prospects of using this method for accounting purposes and illustrate the supply and use forest accounting tables based on the meta-analysis outcomes. Meta-analysis can potentially form a promising decision support tool for start-up accounts considered as a second best valuation approach. Nonetheless, the method still remains questionable due to the great variation in how primary valuation studies are reported and the lack of guidelines with reference to its application in ecosystem accounting as such.

Willingness to join and pay for community-based health insurance and associated determinants among urban households of Cameroon: case of Douala and Yaounde

BackgroundThe risks associated with direct health spending are high in Cameroon, where almost all household income is spent on health care. Moreover, there is no real social security in Cameroon because of the lack of a universal social protection system. ObjectivesThis study aimed to assess the willingness of Cameroonian urban dwellers to subscribe and the amount to pay for voluntary (VCHI) or compulsory community-based health insurance (CCHI). MethodsA cross-sectional study based on a three-stage stratified cluster random sampling design using a bidding game style based on the contingent valuation approach was performed to in the two largest urban areas of Cameroon (Douala and Yaoundé) evaluate the willingness to pay for the VCHI and CCHI. ResultsThe results shown that 46% of respondent were willing to join the CCHI and 41% for VCHI. Furthermore, household income, working sector, chronic disease, health priority, and family size were factors mostly associated (p < 0.001) with the willingness to join CCHI or VCHI. Increase in household income has a positive effect on household's desire for both CCHI and VCHI. While for VCHI, increase of children number resulted in an increment of the premium, contrary to the occurrence of chronic ailment which led in the decrease of the bid. ConclusionsFrom the results, it is clear that city dwellers in Cameroon are ready to join and pay for community health insurance. This willingness was related to their financial power which resulted in an average insurance premium of 9.03 USD and 8.17 USD, respectively for CCHI and VCHI. That bid was found to be enough for an implementation of these types of health insurance in Cameroon.

Social desirability bias in the environmental economic valuation: An inferred valuation approach

Environmental economic valuation allows to derive values from individuals' behaviour in hypothetical markets, but it is not exempt from certain biases. This work aims to evidence the existence of Social Desirability Bias (SDB) in the use of the stated preference method for environmental valuation. SDB is due to the consideration that, when interviewed, people provide responses to match the interviewer's expectations or to be consistent with social norms. The Inferred Valuation Approach (IVA) was used to identify and quantify the social desirability bias in a choice experiment survey conducted to estimate the benefit of protecting a coastal Natura 2000 site. The results revealed the existence of a SDB that increases by 2.8-fold the benefits of the valued environmental assets. It is also found greater differences between use and non-use values when the IVA is used.

Willingness to pay for reliable piped water services: evidence from urban Ghana

The primary objective of this research is to estimate the willingness to pay in Ghana for reliable piped water services. Three competing economic valuation approaches are used to do this: the contingent valuation method (CVM), the hedonic pricing method (HPM) and the travel cost method (TCM). These methods allow for easy robustness tests of the estimates and serves as an improvement on previous research. Using survey data from a sample of 1,650 urban households, we obtain estimates of the willingness of households to pay every month for urban piped water services of: GHS 47.80 or US$15.25 (CVM), GHS 44.73 or US$14.27 (HPM) and GHS 22.72 or US$725 (TCM). Such sums account for 3–8% of household income. These empirical calculations are then used to inform policy choices by determining the economic viability of the participation of the private sector in the water sector in Ghana.

Valuation of brand equity and retailer growth strategies using real options

In marketing, significant attention has been devoted to the study of drivers and outcomes of strategic flexibility drawing on real options theory. However, research that quantifies the specific value of flexibility reflected in a bundle of strategic real options is lacking. To remedy this gap, we develop a real options-based framework that takes account of brand expansion and extension options to value brand equity and retailer growth strategies. We show how to value the bundle of strategic real options associated with a flexible marketing strategic vision and how to assess the growth strategies related to the corporate brand of an international retailer. We apply our method to estimating the brand equity of Starbucks both under growth and adversity conditions. The results reveal that our method can more reliably incorporate the growth potential of the brand under uncertainty conditions. Comparisons with other brand valuation approaches are discussed. Our study helps clarify the links among management’s strategic plans, brand-based marketing strategies and share price, and allows to better monitor the impact of retailer strategic choices on long-term brand equity value.