Welfare Economic Perspective Research Articles

An empirical study on urban integration of Chinese elderly individuals with migration in periods of economic transformation: Internal mechanism and economic effects

This study used CMDS2018 data to conduct an empirical study on the urban social inclusion of elderly migrants from the welfare economics perspective. Regression results from fuzzy set theory and several other methods show that living with children positively affects urban social inclusion, while living with their daughters has a greater impact. Migration distance and family wealth negatively impact the urban integration of the elderly. In contrast, the impact of family cohabitation and the economic environment on elderly migrants is strengthened through urban inclusion mechanisms. A higher degree of urban inclusion can effectively mitigate negative effects and enhance positive effects. This study provides empirical evidence from the welfare economics perspective for the urban integration of elderly Chinese individuals with migration in economic transformation.

Toward Optimal Meat Pricing: Is It Time to Tax Meat Consumption?

Livestock is known to contribute significantly to climate change and to negatively impact global nitrogen cycles and biodiversity. However, there has been little research on economically efficient policies for regulating meat production and consumption. In the absence of first-best policy instruments for the livestock sector, second-best consumption taxes on meat can address multiple environmental externalities simultaneously as well as improve diet-related public health. In this article, we review the empirical evidence on the social costs of meat and examine the rationales for taxing meat consumption in high-income countries. We approach these issues from the perspective of public, behavioral, and welfare economics, focusing in particular on (1) the interaction of multiple environmental externalities of meat production and consumption, (2) “alternative protein” technologies, (3) adverse effects on human health, (4) animal welfare, and (5) distributional effects of meat taxation. We present preliminary estimates of the environmental social costs associated with meat consumption and find that meat is significantly underpriced. We conclude by identifying several directions for future research on optimal meat taxation.

Analysis of China’s Soybean Import: Based on the Perspective of Welfare Economics

China’s soybean import meets the growing nutritional demand of Chinese residents, but the continuous increase in soybean import quantity has also caused disputes about over import. The continuous importation of soybean in China gradually forms a path dependence on some major exporting countries. On the analytic basis of soybean supply and demand in China, this paper employs CR index and HHI index to measure the import concentration of soybean, and analyzes the monopoly pricing mechanism of international soybean by adopting welfare economics method. The results show that the imported soybean has gained strengthened monopoly in China’s market, thus increasing the risk of consumers’ welfare in loss. From the demand perspective, the loss of consumer welfare can be reduced by lessening soybean demand and increasing demand elasticity. From the perspective of supply, the same objective can be also achieved by increasing market competition in diversification and reducing monopoly transaction costs. As a result, some policy suggestions can be thus put forward: firstly, it’s suggested to control the importation of soybean and augment the imported alternative products. Secondly, it’s recommended to reduce the transaction cost of the major exporters to China, and to promote an imported strategy in diversification by strengthening the cooperation with countries that join in the “belt and road initiative”.

A Theoretical Approach to Welfare-Optimal Calculation of Direct Costs in European Rail Regulation

The regulation of track access charges within the European Union is based on the economic principles of first and second best pricing. In order to obtain an allocative efficiency it is crucial to determine the marginal costs of operating the train services – the so-called direct costs. Even though the Implementing Regulation (EU) 2015/909 specifies the modalities for the calculation of direct costs, a broad range of different values for direct costs can be observed across Member States. However, the discussion of the level of direct costs is driven in particular by econometric, engineering and cost accounting aspects – an economic analysis is missing despite the welfare-economic concept of track access charges. For that reason, this paper discusses the welfare economic effects of different suitable values for direct costs.It will be shown that both a welfare maximising first best track access charging and, in most cases, also a second best charging will result in boundary solutions for direct costs. However, it also becomes obvious that from a welfare-economic perspective there is no general recommendation for adopting the lowest suitable direct costs. Any allocatively efficientregulation of track access charges must consequently consider the specific situation of each market segment separately.

Is Meat Too Cheap? Towards Optimal Meat Taxation

Livestock is known to play a significant role in climate change and to negatively impact global nitrogen cycles and biodiversity. However, economically efficient policies for regulating meat production and consumption are under-researched. In the absence of first-best policy instruments for the livestock sector, second-best consumption taxes on meat can address multiple environmental externalities simultaneously, while improving diet-related public health. Here, we review the empirical basis for the ‘social costs of meat’ and study rationales for regulatory efforts to tax meat in high-income countries from the perspective of public, behavioural and welfare economics: (i) multiple environmental externalities, (ii) adverse effects on one’s own health, (iii) animal welfare, (iv) learning curves for 'alternative protein technologies', and (v) distributional effects. We conclude that meat is significantly underpriced and provide preliminary estimates of the environmental social costs associated with meat consumption. We identify several directions for future research towards optimal meat taxation.

SROI with Assurance Can Help Contributors Distinguish Hypocritical Organizations from Genuine NFPs

The American film Poverty, Inc. alerted citizens to the fact that some “not-for-profit” organizations impair public benefit and seek profit. To avoid to contributing to such hypocritical organizations, this paper considers the possible use of SROI. SROI is an accounting concept used to evaluate NFPs. There is a problem called overhead aversion among contributors. It is hypothesized that spreading the use of assurance on SROI will face this problem. If so, a measure against this is necessary. This paper builds its theory on the existence of negative SROI as a tool to distinguish hypocritical organizations from genuine NFPs from the perspective of welfare economics, and argues that, theoretically, SROI can be negative. This paper then uses a questionnaire-based survey and conducts various statistical analysis to show that disclosure of SROI with assurance is practical. Nevertheless, it is also shown that assurance on SROI faces overhead aversion, a measure against which is provided by an influential paper. Spreading the use of SROI with assurance will trigger a shift from contribution to hypocritical organizations to contributions toward genuine NFPs. Such a shifts in contributions may also improve welfare. The main conclusion of this paper is that SROI with assurance can help contributors distinguish hypocritical organizations from genuine NFPs. Doi: 10.28991/esj-2021-01253 Full Text: PDF

Research on the Impact on the Local Economy from the Perspective of Welfare Economics by the Collusion of Grassroots Governments, Interest Groups and Bank Branches

China's economic development is disconnected, not only between local governments, but also the local and the central government. Because of the performance appraisal and the status quo of political power structure, grassroots governments and local interest groups must be closely connected, and at the same time, they also form an alliance with the local bank branches that did not belong to any of the above branches, forming a trilateral conspiratorial economic development model. This model has far-reaching and perilous impacts on local economic development.

A welfare-theoretic model consistent with the practice of cost-effectiveness analysis and its implications

I look at three debates in the health economics literature in the context of cost-effectiveness analysis (CEA): 1) inclusion of future costs, 2) discounting, and 3) consistency with a welfare-economic perspective. These debates thus far have been studied in isolation leading to confusion and lingering questions. I look at these three debates holistically and present a welfare theoretic model that is consistent with the practice of CEA and can help inform all of these three debates. It shows rationales for the recommendations of the Second Panel and clarifies some nuanced implications for the practice of CEA when taking a societal perspective in the context of distributional CEA and multi-sectorial budgets.

광우병 위기 이후 도입된 유럽연합의 식품안전정책에 대한 평가 : 사회후생 및 정치경제적 관점

광우병 위기 이후 도입된 유럽연합의 식품안전정책에 대한 평가 : 사회후생 및 정치경제적 관점

Disentangling Distance and Country Effects on the Value of Conservation across National Borders

Coordination of conservation policies and conservation actions between countries is expected to reduce overall costs and increase effectiveness. It rests on the assumption that, as a global public good, the provision of biodiversity conservation is independent of geographical and political jurisdictions. However, from a welfare economic perspective this assumption requires testing and justification. Indeed, distance may matter, as may the country of provision. This study applies a choice experiment to estimate individuals' marginal willingness to pay for comparable biodiversity conservation measures and outcomes across country borders, and with different distances from their place of residence to conservation locations in Denmark and in Southern Sweden. The case is designed to distinguish the effect of distance from the effect of country of residence versus country of provision. We find a clear and distinguishable effect of both location and country of provision. We find distance-related attributes to reflect bridge tolls and per-kilometre transport costs, and Swedes and Danes to prefer provision in their own country, over provision in the neighbouring country. The results of this study may be useful in discussing cooperation on regional and even global biodiversity conservation efforts.

Benefit-Cost Analysis in EU Chemicals Legislation: Experiences from over 100 REACH Applications for Authorisation

In this paper we review the benefit-cost analyses (BCAs) made to support applications for authorisations under the EU’s REACH Regulation on hazardous chemicals. Experiences from over 100 cases suggest that there are a number of informational and methodological challenges to overcome in these BCAs. In particular, we find that many REACH applicants have had problems explaining the societal relevance of the regulatory impacts expected to affect them and other market actors. Adapting the framework for regulatory impact assessment proposed by Dudley et al. [(2017). Consumer’s Guide to Regulatory Impact Analysis: Ten Tips for Being an Informed Policymaker. Journal of Benefit-Cost Analysis, 8, 187–204], we discuss these impacts from a welfare economics perspective and make suggestions on how to improve current practices in BCA applied to chemicals risk management. From this discussion we then distill a number of topics that deserve more attention in applied BCAs under the REACH Regulation.

Bedarfsgerechtigkeit ambulanter Pflege: Stärkung der subjektiven Perspektive durch Reformmaßnahmen der sozialen Pflegeversicherung?

AbstractThis paper examines the impacts of a German Social Law reform on the perceived quality of long-term home care. Taking a welfare economics perspective, an improved legal performance in addressing the personal needs of people depending on long-term care was found. Finally, recommendations to better adjust home care to the individual needs are given.

Verweildauer in vollstationärer Dauerpflege 1999–2011: Eine bevölkerungsbezogene Analyse

From the perspective of welfare economics, institutionalised long-term care (ILTC) is expensive and thus requires key figures. This article provides the population-based mean length of stay in ILTC, which is a meaningful measure for monitoring purposes. The Sullivan method was applied to official statistics on population and long-term care between 1999 and 2011. This method splits up the life expectancy at birth into one part in and one part out of ILTC. The part in ILTC can be interpreted as length of stay. In 2011, males in Germany experienced 5.5 months in ILTC, females 14.4 months. In 1999, the length of stay was 3.8 and 11.8 months, respectively. Thus, the length of stay in ILTC has increased over time. However, the increase regarding women stopped in 2007. Furthermore, the onset of ILTC has been protracted. In 2011, the mean age at the start of ILTC was 77.6 years (males) and 81.7 years (females). In 1999 the mean age was 74.5 years (males) and 79.9 years (females). In 2011, males spent 0.6% of their life expectancy in ILTC, females 1.4%. In 1999, this share was 0.4% (males) and 1.2% (females). The utilisation of ILTC needs to be monitored by meaningful key figures over time. The length of stay, as proposed here, provides information on life expectancy and ILTC prevalence collapsed into one measure. This article reports the length of stay and substantiates its increase over time (in women, the increase ended in 2007). It is recommended to regularly update the time series by using official statistics.

The Economics of WTO Rules on Subsidies and Countervailing Measures

This paper evaluates the WTO rules relating to subsidies and countervailing measures from a welfare economics perspective. It concludes that the rules relating to nonviolation subsidies, export subsidies and certain agricultural subsidies have sound economic justification. The rules governing domestic subsidies generally, by contrast, do little to identify or police undesirable subsidies. Further, as has been argued elsewhere, countervailing measures are economically undesirable.

Assessing costs of multifunctional NATURA 2000 management restrictions in continuous cover beech forest management

Programmes for forest habitat protection and some certification schemes restrict forest owners’ choice of regeneration methods, even in continuous-cover systems such as the use of the shelterwood system in beech (Fagus sylvatica L.) forests in Denmark. The aim of this study is to reduce environmental pressure on e.g. groundwater or to protect species dependent on deadwood or undisturbed soils, which is beneficial/important from a welfare economic perspective. Such restrictions come at a cost to both the forest owner and society. Using a case study approach, we investigate the possible financial losses from placing such restrictions on current shelterwood beechmanagementpractices.Apartoftherestrictionsimplieslowerinput,intensityandcostsinregenerationactivities, but this is outweighed by potential future losses arising from incomplete regeneration and prolonged regeneration phases. The cost in terms of present value reductions of a mature stand may be up to 10 per cent (with an interest rate of 3 per cent) but in many cases is much less. Another set of restrictions implies leaving single trees for natural aging and decay, and we estimate the costs of such measures too.

Economic Costs and Benefits of Promoting Healthy Takeaway Meals at Workplace Canteens

Canteen Takeaway is a novel concept, which entails workplace canteens to utilise existing production capacity to supply packaged meals for employees to bring home. The concept has a potential to raise the average nutritional quality of employees’ diets. The purpose of the study is to assess the economic net gains for users, and for society as a whole, of promoting healthy canteen takeaway meals, using Danish workplaces as an example. The analytical framework for the study combines direct cost analyses, users’ willingness to pay estimated through a choice experiment and cost-of-illness methods to assess the net society costs and benefits associated with an extended use of canteen takeaway meals as a health promotion strategy. The results show that employees have a positive willingness to pay for health attributes in canteen takeaway meals, but with a minority having a highly negative willingness to pay for the canteen takeaway concept. The potential health effects of a healthy canteen takeaway programme are estimated to be positive, but modest in magnitude. The estimated costs of providing healthy canteen takeaway meals exceed the sum of average direct and indirect benefits. In conclusion, healthy CTA programmes seems to be an economically sustainable intervention at some workplaces, though the analysis does not fully support a full-scale implementation of healthy CTA programmes at Danish workplaces from a welfare economic perspective.

Valuation of morbidity and mortality risk reductions. Does context matter?

The main research purpose of the present study was to test for any differences in the valuation of morbidity and mortality risk reductions across two contexts; traffic and health. A contingent valuation study on preferences for morbidity and mortality risk was carried out in Denmark in 2007. Respondents were randomised into two different arms: one arm in which the valuation took place in the context of health and another arm in which the context was traffic. In both contexts, the inferior health state was described by way of the standardized EQ-5D descriptive system. We obtained a total sample of 520 respondents from an online database. In the present study we found clear evidence of a context effect on expressed valuations of identical risk reductions. This was true irrespective of whether the adverse outcome in question was death or inferior health. This result suggests that interventions targeting risks of death or risks of ill health should not necessarily be valued equally across sectors. From a welfare economic perspective, the use of the same estimates across contexts – and especially across sectors – could be misleading and in worst case lead to inefficient resource allocations.

The social cost of gambling in Macao: before and after the liberalisation of the gaming industry

This paper analyses the social cost of gambling in Macao before and after the liberalisation of the gaming industry from a welfare economic perspective. We identify seven principal items of social cost relating to gambling and, using data from 2003 and 2007, we calculate that the social cost of gambling in Macao rose by 163%, from US$40 million to US$106 million, during this period. We argue that this sharp escalation is the result of both the increasing gambling supply in recent years and the historical effect of the previous underdeveloped monopoly system. We acknowledge that our calculations are underestimations as a result of data limitation and we expect that the social cost of gambling in Macao will continue to rise in the coming years. Moreover, if the calculation is expanded to include the social costs incurred by tourists, the social cost of gambling in Macao should be much higher.

Behind the Curtain: The Within-Household Sharing of Income

The distribution of personal income in a society depends strongly on the within-household distribution of income. Nevertheless, little is known about this phenomenon. I analyze the sharing of income among household partners from a welfare economic perspective. Measures of financial satisfaction for both household partners are used to gain information about the within-household distribution of income-induced well-being. A model of satisfaction differences between household partners is developed and estimated using 10 waves (1999 to 2008) of the German Socio-Economic Panel Study. Differences in financial satisfaction within couples are generally small. However, satisfaction is not a direct measure of welfare. For this reason, covariates are included to control for the partners’ different characteristics, influencing the expression of satisfaction. Using panel data allows us to account for unobserved heterogeneity at the household level, which is one major advancement of this analysis. The results show that the partners’ relative earned income has a substantial effect on the distribution of income-induced well-being, whereas the relative amount of transfer income does not.

Pet Overpopulation: An Economic Analysis

Abstract The market for pets in the U.S. is important economically and socially. Pets differ from standard economic goods in significant ways, and the market displays a number of interesting problems, most notably pet overpopulation. Despite this, the market has been ignored by economists. This paper develops a dynamic model of the market for pets and uses it to study the problem of pet overpopulation. The positive predictions of the model square well with key features of the markets for dogs and cats in the U.S. The model is used to understand, from a welfare economic perspective, the sense in which there is overpopulation of pets and the underlying causes of the problem. The paper also employs the model to consider what policies might be implemented to deal with the problem. A calibrated example is developed to illustrate these corrective policies and quantify the potential welfare gains.