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In 2014, the National Highway Traffic Safety Administration finalized its rear visibility regulation, which requires cameras in all new vehicles, with the goal of allowing drivers to see what is behind them and thus reducing backover accidents. In 2018, the Trump administration embraced the regulation. The rear visibility rule raises numerous puzzles. First, Congress’ grant of authority was essentially standardless – perhaps the most open-ended in all of federal regulatory law. Second, it is not easy to identify a market failure to justify the regulation. Third, the monetized costs of the regulation greatly exceeded the monetized benefits, and yet on welfare grounds, the regulation can plausibly be counted as a significant success. Rearview cameras produce a set of benefits that are hard to quantify, including increased ease of driving, and those benefits might have been made a part of “breakeven analysis,” accompanying standard cost-benefit analysis. In addition, rearview cameras significantly improve the experience of driving, and it is plausible to think that in deciding whether to demand them, many vehicle purchasers did not sufficiently anticipate that improvement. This is a problem of limited foresight; rearview cameras are “experience goods.” A survey conducted in 2019 strongly supports this proposition, finding that about 56 % of consumers would demand at least $300 to buy a car without a rearview camera, and that fewer than 6 % would demand $50 or less. Almost all of that 6 % consists of people who do not own a car with a rearview camera. (The per-person cost is usually under $50.) These conclusions have general implications for other domains in which regulation has the potential to improve social welfare, even if it fails standard cost-benefit analysis; the defining category involves situations in which people lack experience with a good whose provision might have highly beneficial welfare effects.
Various methods have been applied to evaluating the economic viability of public investments in tourism. In this article, we capitalize on the strengths of computable general equilibrium and cost-benefit analytical techniques and develop an integrated approach to evaluating public investments in tourism. We apply the approach to the evaluation of a US$6.25 million investment in tourism in Uruguay from the perspective of a multilateral development bank and a beneficiary government. These perspectives differ in a cost-benefit analysis (CBA) due to the timing of the costs incurred. The integrated approach is powerful in that it captures first and subsequent rounds of investment impacts of benefits and costs; resource diversion and constraints are accounted for, and the estimation of benefits is consistent with the welfare economics underpinnings of CBA.
Traditional cost-benefit analyses (CBAs) of flood risk reduction measures usually ignore distributions of damages over populations, which disadvantages the poor. Instead, a CBA based on social welfare includes individual social vulnerability through relative impacts on consumption. If vulnerabilities are high, floods are catastrophic and cause poverty, migration or indirect deaths, and risk reductions have high social welfare values. For non-catastrophic risks, social welfare values of risks are relatively higher for vulnerable low-income households. We present a framework to integrate social vulnerability into CBAs, and show how financial protection reduces social flood vulnerability and provides welfare benefits. A case study illustrates that traditional CBAs underestimate the social welfare value of flood risk reduction measures, up to a factor of 30. Data on financial protection is however scarce, which hampers estimation of the social welfare value in practice. A solution is to increase financial protection of individuals, in addition to offering physical flood protection.
Two cost-benefit analysis methods developed from differing economic situations and analytical objectives in the 1960s and 1970s. The Trade Policy Approach of Ian Little and James Mirrlees analyzed international competitiveness of projects producing private goods and physical infrastructure in markets severely distorted by trade protectionism; it was adopted in 1975 by the World Bank; the multilateral regional development banks followed suit. The Public Finance Approach of Arnold Harberger developed from comparative statics analyses of public projects and policies in the United States and was adopted at the US Agency for International Development and in several Latin American countries. The original Trade Policy Approach included social analysis too tedious for everyday application, leading an efficiency-only version to emerge and be popularized by teaching materials from Price Gittinger and colleagues in the World Bank’s Economic Development Institute. It proved the right method for World Bank use until Washington Consensus reforms, the GATT and WTO reduced price distortions, and slowly restored private international financial flows gave private industry access to international private investment capital. Official Development Assistance (ODA) portfolios responded by refocusing on public goods and market failures, leading to decreased utility of the Trade Policy Approach and decreased use of cost-benefit analysis at the World Bank. A 1990s drive in the World Bank to switch from the Trade Policy Approach to the increasingly relevant Public Finance Approach resulted in an internal manual and operational guidelines, but not a book from a distinguished university press, commonly presumed to signal official Bank policy. It is time for that long-overdue book to be published.
Methods for identifying relevant policy impacts for valuation in benefit-cost analyses (BCAs) have received relatively little attention in academic research, applied policy analyses, and guidance documents. In this paper, we develop a systematic, transparent, and replicable process that draws upon information contained in records of Congressional hearings to identify relevant policy impacts for valuation in a BCA. Our approach involves classifying – and subsequently analyzing – statements from witnesses testifying in Congressional hearings on the topic of the BCA. By using Congressional hearings as the basis for our approach, we are identifying potential policy impacts from information provided during the very process the BCA is intended to inform. However, because this approach is quite resource-intensive and would be somewhat burdensome for agencies to implement, it may be best applied in the academic realm, with identified impacts resulting from such applications then made available to agency personnel for potential inclusion in BCAs. Using the case of the Glen Canyon Dam, we demonstrate the approach and its resulting improvements in the quality and transparency of the BCA it was intended to inform.
The mumps vaccine is not included in the national immunisation programme (NIP) of approximately 80 countries including Japan. To investigate the vaccine's cost-effectiveness, we developed a dynamic transmission model for routine one- and two-dose mumps vaccination programs in Japan. We calculated the incremental cost-effectiveness ratio compared with a current programme over a projected 50-year period. We created a Japanese population model and performed dynamic simulation to estimate the number of patients enrolled in the current programme, the routine one-dose programme, and the routine two-dose programme over the next 50 years using the Berkeley Madonna program. We estimated the medical and social costs of natural mumps infections and vaccinations to analyse cost-effectiveness. Finally, we performed a sensitivity analysis with parameters including vaccine cost, vaccine efficacy, medical costs per case, social costs per case, incidence of adverse events and discount rate. Base case analysis showed that both the one-dose and two-dose programmes predominated and that quality-adjusted life years (QALYs) were saved, compared with the current programme. The medical costs, total cost and QALYs saved during the study period in the two-dose programme compared with the current programme were 217 billion JPY, 860 billion JPY and 184 779, respectively. The two-dose programme surpassed the one-dose programme throughout the study period. In all the scenarios of the sensitivity analysis, two-dose vaccination was better than the one-dose programme. This simulation confirmed that the routine two-dose vaccination programme was more cost-effective and QALY-saving than either the one-dose programme or the current programme. Because of the variability of the results between the various models, further simulations with different models should be conducted.
This study investigated which databases and which combinations of databases should be used to identify economic evaluations (EEs) to inform systematic reviews. It also investigated the characteristics of studies not identified in database searches and evaluated the success of MEDLINE search strategies used within typical reviews in retrieving EEs in MEDLINE.
A quasi-gold standard (QGS) set of EEs was collected from reviews of EEs. The number of QGS records found in nine databases was calculated and the most efficient combination of databases was determined. The number and characteristics of QGS records not retrieved from the databases were collected. Reproducible MEDLINE strategies from the reviews were rerun to calculate the sensitivity and precision for each strategy in finding QGS records.
The QGS comprised 351 records. Across all databases, 337/351 (96 percent) QGS records were identified. Embase yielded the most records (314; 89 percent). Four databases were needed to retrieve all 337 references: Embase + Health Technology Assessment database + (MEDLINE or PubMed) + Scopus. Four percent (14/351) of records could not be found in any database. Twenty-nine of forty-one (71 percent) reviews reported a reproducible MEDLINE strategy. Ten of twenty-nine (34.5 percent) of the strategies missed at least one QGS record in MEDLINE. Across all twenty-nine MEDLINE searches, 25/143 records were missed (17.5 percent). Mean sensitivity was 89 percent and mean precision was 1.6 percent.
Searching beyond key databases for published EEs may be inefficient, providing the search strategies in those key databases are adequately sensitive. Additional search approaches should be used to identify unpublished evidence (grey literature).
The aim of this study is to review evidence on the cost-effectiveness of exercise-based interventions in the treatment of chronic conditions a decade after the publication of Roine et al. in 2009 (Roine E, Roine RP, Räsänen P, et al. Int J Technol Assess Health Care. 2009;25:427–454).
We carried out a review of published articles in PUBMED and JSTOR between January 1, 2008, and December 31, 2016. Full economic evaluations of exercise programs targeting patients with a chronic condition were eligible for inclusion. Data on program, design, and economic characteristics were extracted using a predefined extraction form. The quality of the economic evaluations was appraised using the adjusted Consensus Health Economic Criteria List.
A total of 426 articles were identified and thirty-seven studies were selected. Eleven studies dealt with musculoskeletal and rheumatologic disorders, ten with cardiovascular diseases, six with neurological disorders, three with mental illnesses, three with cancers, and four with diabetes, respiratory diseases, or pelvic organ prolapse. In total, 60 percent of exercise programs were dominant or cost-effective. For musculoskeletal and rheumatologic disorders, 72 percent of programs were dominant or cost-effective while this was the case for 57 percent of programs for cardiovascular diseases using a nonsurgical comparator.
There is clear evidence in favor of exercise-based programs for the treatment of musculoskeletal and rheumatologic disorders and, to a lesser extent, for the treatment of cardiovascular diseases. More research is needed to evaluate the cost-effectiveness of physical activity in the treatment of neurological disorders, mental illnesses, cancers, respiratory diseases, and diabetes/obesity.
Genomic selection is arguably the most promising tool for improving genetic gain in domestic animals to emerge in the last few decades, but is an expensive process. The aim of this study was to evaluate the economic impact related to the implementation of genomic selection in a simulated dairy cattle population. The software QMSim was used to simulate genomic and phenotypic data. The simulated genome contained 30 chromosomes with 100 cm each, 1666 SNPs markers equally spread and 266 QTLs randomly designated for each chromosome. The numbers of markers and QTLs were designated according to information available from Animal QTL (http://www.animalgenome.org/QTLdb) and Bovine QTL (http://bovineqtl.tamu.edu/). The allelic frequency changes were assigned in a gamma distribution with alpha parameters equal to 0·4. Recurrent mutation rates of 1·0e−4 were assumed to apply to markers and QTLs. A historic population of 1000 individuals was generated and the total number of animals was reduced gradually along 850 generations until we obtained a number of 200 animals in the last generation, characterizing a bottleneck effect. Progenies were created along generations from random mating of the male and female gametes, assuming the same proportion of both genders. Than the population was extended for another 150 generations until we obtained 17 000 animals, with only 320 male individuals in the last generation. After this period a 25 year of selection was simulated taking into account a trait limited by sex with heritability of 0·30 (i.e. milk yield), one progeny/cow/year and variance equal to 1·0. Annually, 320 bulls were mated with 16 000 dams, assuming a replacement rate of 60 and 40% for males and females, respectively. Selection and discard criteria were based in four strategies to obtain the EBVs assuming as breeding objective to maximize milk yield. The progeny replaced the discarded animals creating an overlapping generation structure. The selection strategies were: RS is selection based on random values; PS is selection based on phenotypic values; Blup is selection based on EBVs estimated by BLUP; and GEBV is selection based on genomic estimated breeding values in one step, using high (GBlup) and low (GBlupi) density panels. Results indicated that the genetic evaluation using the aid of genomic information could provide better genetic gain rates in dairy cattle breeding programs as well as reduce the average inbreeding coefficient in the population. The economic viability indicators showed that only Blup and GBlup/GBlupi strategies, the ones that used milk control and genetic evaluation were economic viable, considering a discount rate of 6·32% per year.
This paper investigates the role of cost-benefit analysis (CBA) in the context of the European Union (EU) Cohesion Policy. After presenting the EU policy framework and the CBA guidelines adopted by the European Commission, we perform an empirical analysis drawing from a dataset of around 1000 major project applications, submitted during the period 2007–2013 by 22 European countries, and representing almost €180 billion of investment. A distinctive feature of the current CBA approach adopted by the European Commission is that applications for funding must provide a forecast of both the project’s financial rate of return (FRR) and economic rate of return (ERR). While the former represents the financial profitability of the project from a private investors’ perspective, the latter reveals its socio-economic benefits for the whole society. The difference between ERR and FRR mainly depends on the use of shadow prices, the inclusion of externalities and other nonmarket effects in the estimation of ERR, whilst the FRR is based on market prices. We find that, on average, the FRR is slightly negative (
%) and the ERR is positive (16.2%). ERR and FRR are positively correlated on average with differences across sectors. We discuss these findings and suggest further research needs.
The federal government and over thirty states nationwide offer a tax credit in lieu of certain expenditures incurred as part of historic rehabilitation projects. Several economic impact studies have shown the positive effect of the credit on job creation, property values, and environmental friendly behavior in Louisville, KY (Gilderbloom, Hanka & Ambrosius, 2009) and in the state of Maryland (Frizzell & Mitchell, 2002). Most of the studies of historic preservation credits are, however, nonempirical and evaluate only the economic impact of the credit. The societal benefit-cost analysis conducted in this manuscript is the first study of its kind of the Ohio Historic Preservation Tax Credit (OHPTC) program. In addition, this study provides an OHPTC fiscal impact analysis (benefit-cost analysis from the government perspective).
The data for the analysis come from the county auditors’ offices, and multiple proprietary sources, including administrative estimates provided by the agencies managing the OHPTC program, and online survey of the developers. The sensitivity analysis accounts for the differences in discount rates and other factors. The study finds that the overall societal benefits will outweigh overall societal costs by 2023. From the fiscal perspective, the program begins to pay for itself in 2025, but the overall program costs will remain higher than overall benefits during the considered study period (until 2030).
To evaluate the clinical efficacy and cost-effectiveness of ultrasonic shears and the electrothermal bipolar vessel sealing system, in comparison to the traditional cold knife and bipolar forceps, in oral and oropharyngeal cancer surgery.
Patients who underwent oral or oropharyngeal cancer resection and neck dissection with either ultrasonic shears (n = 36) or electrothermal bipolar vessel sealing (n = 32) were enrolled. Surgical time, intra-operative bleeding, blood drainage, post-operative pain, neck oedema, complications and hospitalisation duration were compared to those of an historical cohort of 36 patients treated using a cold knife and bipolar forceps. Additionally, a cost-effectiveness evaluation was performed.
Ultrasonic shears and, in particular, electrothermal bipolar vessel sealing, were advantageous compared to the traditional techniques. The cost of ultrasonic shears and electrothermal bipolar vessel sealing was completely offset by declining time-driven costs for the surgical team and operating theatre.
Ultrasonic shears and, in particular, electrothermal bipolar vessel sealing, are more advantageous compared to the traditional techniques, from both a clinical and economic point of view.
Objectives: This study was designed to assess the sensitivity of three Ovid MEDLINE search filters developed to identify studies reporting health state utility values (HSUVs), to improve the performance of the best performing filter, and to validate resulting search filters.
Methods: Three quasi-gold standard sets (QGS1, QGS2, QGS3) of relevant studies were harvested from reviews of studies reporting HSUVs. The performance of three initial filters was assessed by measuring their relative recall of studies in QGS1. The best performing filter was then developed further using QGS2. This resulted in three final search filters (FSF1, FSF2, and FSF3), which were validated using QGS3.
Results: FSF1 (sensitivity maximizing) retrieved 132/139 records (sensitivity: 95 percent) in the QGS3 validation set. FSF1 had a number needed to read (NNR) of 842. FSF2 (balancing sensitivity and precision) retrieved 128/139 records (sensitivity: 92 percent) with a NNR of 502. FSF3 (precision maximizing) retrieved 123/139 records (sensitivity: 88 percent) with a NNR of 383.
Conclusions: We have developed and validated a search filter (FSF1) to identify studies reporting HSUVs with high sensitivity (95 percent) and two other search filters (FSF2 and FSF3) with reasonably high sensitivity (92 percent and 88 percent) but greater precision, resulting in a lower NNR. These seem to be the first validated filters available for HSUVs. The availability of filters with a range of sensitivity and precision options enables researchers to choose the filter which is most appropriate to the resources available for their specific research.
Objectives: Economic evaluation (EE) is an accepted element of decision making and priority setting in healthcare. As the number of published EEs grows, so does the number of systematic reviews (SRs) of EEs. Although search methodology makes an important contribution to SR quality, search methods in reviews of EEs have not been evaluated in detail. We investigated the resources used to identify studies in recent, published SRs of EEs, and assessed whether the resources reflected recommendations.
Methods: We searched MEDLINE for SRs of EEs published since January 2013 and extracted the following from eligible reviews: databases searched, health technology assessment (HTA) sources searched, supplementary search techniques used. Results were compared against the minimum search resources recommended by National Institute for Health and Care Excellence (NICE) (MEDLINE, Embase, NHS EED, EconLit) for economic evidence for single technology appraisals, and resource types suggested in the summary of current best evidence from SuRe Info (economic databases, general databases, HTA databases, HTA agency Web pages, gray literature).
Results: Sixty-five SRs met the inclusion criteria; data were extracted from forty-two. Five reviews (12 percent) met or exceeded the NICE recommended resources. Nine reviews (21 percent) searched at least four of the five types of resource recommended by SuRe Info. Five reviews (12 percent) searched all five. Twenty-three reviews (55 percent) did not meet the NICE recommendations or four of five of the SuRe Info recommended resource types. Search reporting was frequently unclear or incorrect.
Conclusions: Searches conducted for the majority of recently published SRs of EEs do not meet two published approaches.
This article reviews some of the most effective programmes for saving children from a life of crime, and also presents the results of cost-benefit analyses of some of these programmes. The best programmes include general parent education in home visiting programmes, parent management training, pre-school intellectual enrichment programmes, child skills training, Functional Family Therapy, Multidimensional Treatment Foster Care and Multisystemic Therapy. Communities That Care is a useful overarching programme. Most of these programmes have been shown to reduce crime and save money. The time is ripe to establish national agencies in all countries which will advance knowledge about early risk factors (from longitudinal studies) and about effective developmental interventions (from randomized experiments and cost-benefit analyses).
Vestibular rehabilitation therapy is a well-established treatment modality for patients with vestibular problems.
Performing vestibular rehabilitation therapy in a closely monitored setting may result in a better outcome than a home exercise programme.
A retrospective study was conducted of patients undergoing vestibular rehabilitation therapy between June 2005 and November 2012 in a tertiary university hospital. The Dynamic Gait Index, the main outcome measure, was utilised before and after the rehabilitation programme. The magnitude of improvement for all patients was analysed, mainly to compare the home exercise group with the closely monitored therapy group.
Only 32 patients underwent the vestibular rehabilitation therapy programme. In all patients, there was significant improvement in the mean Dynamic Gait Index score (from 11.75 to 17.38; p < 0.01). Dynamic Gait Index improvement was significantly higher with closely monitored therapy (mean improvement of 7.83 vs 2.79; p < 0.01).
The small sample size is a major limitation; nevertheless, closely monitored vestibular rehabilitation therapy resulted in improved performance status. More studies are needed to establish the efficiency of vestibular rehabilitation therapy and compare closely monitored therapy with tailored home exercise rehabilitation.
Objectives: This article presents a cost-utility analysis from the Colombian health system perspective comparing primary prophylaxis to on-demand treatment using exogenous clotting factor VIII (FVIII) for patients with severe hemophilia type A.
Methods: We developed a Markov model to estimate expected costs and outcomes (measured as quality-adjusted life-years, QALYs) for each strategy. Transition probabilities were estimated using published studies; utility weights were obtained from a sample of Colombian patients with hemophilia and costs were gathered using local data. Both deterministic and probabilistic sensitivity analysis were performed to assess the robustness of results.
Results: The additional cost per QALY gained of primary prophylaxis compared with on-demand treatment was 105,081,022 Colombian pesos (COP) (55,204 USD), and thus not considered cost-effective according to a threshold of up to three times the current Colombian gross domestic product (GDP) per-capita. When primary prophylaxis was provided throughout life using recombinant FVIII (rFVIII), which is much costlier than FVIII, the additional cost per QALY gained reached 174,159,553 COP (91,494 USD).
Conclusions: using a decision rule of up to three times the Colombian GDP per capita, primary prophylaxis (with either FVIII or rFVIII) would not be considered as cost-effective in this country. However, a final decision on providing or preventing patients from primary prophylaxis as a gold standard of care for severe hemophilia type A should also consider broader criteria than the incremental cost-effectiveness ratio results itself. Only a price reduction of exogenous FVIII of 50 percent or more would make primary prophylaxis cost-effective in this context.
There is a growing body of research emphasizing the advantages of teaching students social and emotional (SE) skills in school. Here we examine the economic value of these skills within a benefit-cost analysis (BCA) framework. Our examination has three parts. First, we describe how the current method of BCA must be expanded to adequately evaluate SE skills, and we identify important decisions analysts must make. Second, we review the evidence on the benefits of SE skills, again noting key methodological issues with respect to shadow pricing. Finally, we perform BCA of four selected social and emotional learning (SEL) interventions: 4Rs; Second Step, Life Skills Training; and Responsive Classroom. These analyses illustrate both methodological and empirical challenges in estimating net present values for these interventions. Even with these challenges, we find that the benefits of these interventions substantially outweigh the costs. We highlight promising areas of research for improving the application of BCA to SEL.
The small Indian mongoose is among the worst of invasive alien species, yet the implications of managing the species are poorly understood. To address concerns of interest to practitioners and policymakers, we analyze survey data to document the impacts of this species in Fiji and conduct a cost-benefit analysis of management approaches that are both culturally appropriate and readily implementable: live trapping, kill trapping, and hunting. We find that the monetized benefits of kill trapping exceed the benefits of live trapping and hunting. Still, all of these management options are preferred to the status quo of no management.
Although there is growing interest in applying benefit-cost analysis (BCA) to public policy questions, limited information is available on states’ use of this methodology. The nationwide assessment presented here begins to fill that void and finds that states and the District of Columbia are increasingly conducting BCAs and using the results to inform their policy choices. The numbers of reports released by the states and statutory mandates to conduct these studies increased substantially between 2008 and 2011. An analysis of the studies released by states shows that most lack some recommended technical features of rigorous BCA, but the reports are having a reported impact on state policy and budget decisions. Like other forms of policy research, BCA faces challenges including resource and data limitations, timing problems, and gaining policymaker buy-in for the approach and findings.