A guide to extending and implementing generalized risk-adjusted cost-effectiveness (GRACE)

The generalized risk-adjusted cost-effectiveness (GRACE) model generalizes conventional cost-effectiveness analysis (CEA) by introducing diminishing returns to Health-Related Quality of Life (QoL). This changes CEA practice in three ways: (1) Willingness to pay (WTP) increases exponentially with untreated illness severity or pre-existing permanent disability, and WTP ends up lower for mild diseases but higher for severe diseases compared with conventional CEA; (2) Average treatment effectiveness should be adjusted for uncertainty in outcomes; and (3) The marginal rate of substitution between life expectancy and QoL varies with health state. Implementing GRACE requires new parameters describing risk preferences over QoL, the marginal rate of substitution between life expectancy (LE) and QoL, and the variance and skewness of treatment outcomes distributions. In this paper, we provide: (1) a generalized WTP threshold incorporating the possibility of permanent disability; (2) a simpler method to estimate the tradeoff rate between QoL and LE, eliminating the need to carry out treatment-by-treatment estimates; (3) a more-general method to adjust WTP for illness severity that permits non-constant relative risk-aversion in QoL; (4) a new approach to estimating risk-preferences over QoL, leveraging established empirical methods from “happiness” economics; and (5) a step-by-step guide for practitioners wishing to implement multi-period GRACE analyses.

Incentives, ability and disutility of effort

We generalize the disutility of effort function in the linear-Constant Absolute Risk Aversion (CARA) pure moral hazard model. We assume that agents are heterogeneous in ability. Each agent’s ability is observable and treated as a parameter that indexes the disutility of effort associated with the task performed. In opposition to the literature (the “traditional” scenario), we find a new, “novel” scenario, in which a high-ability agent may be offered a weaker incentive contract than a low-ability one, but works harder. We characterize the conditions for the existence of these two scenarios: formally, the “traditional” (“novel”) scenario occurs if and only if the marginal rate of substitution of the marginal disutility of effort function is increasing (decreasing) in effort when evaluated at the second-best effort. If, further, this condition holds for all parameter values and matching is endogenous, less (more) talented agents work for principals with riskier projects in equilibrium. This implies that the indirect and total effects of risk on incentives are negative under monotone assortative matching.

Marginal rate of substitution of multidimensional well-being for affected residents of the dam, Pak Mun Dam.

The marginal rate of substitution shows that negatively affected residents of Pak Mun Dam are willing to trade three units of economic well-being to gain one more unit of social well-being. Marginal rate of substitution (MRS) provides important information to the government regarding such trade-offs. Given the limited budget and resources, the optimal point of the combination of these dimensions of well-being should be determined in order to provide better strategy and policy to improve the conditions for residents affected by the dam’s construction. Structural Equation Model (SEM) was used to find a standardized estimate of each dimension and used it for MRS calculation.

Harm reduction associated with dual use of cigarettes and e-cigarettes in Black and Latino smokers: Secondary analyses from a randomized controlled e-cigarette switching trial

Introduction Most adult cigarette smokers who use e-cigarettes are dual cigarette and e-cigarette (CC-EC) users, yet little is known about relative consumption of cigarettes to e-cigarettes and any associated harm reduction. Methods Rate of substitution from cigarettes to e-cigarettes at week 6 and change in biomarkers of exposure and potential harm were examined among dual CC-EC users [64/114 (56%); 35 Black, 29 Latino] in an e-cigarette switching randomized trial. Results Dual users averaged 79% substitution of cigarettes for e-cigarettes at week 6, resulting in a reduction from baseline of 70.0 ± 54.1 cigarettes per week (p < .001). Total nicotine consumption remained stable (baseline: 1160.5 ± 1042.1 pg/mL of cotinine, week 6: 1312.5 ± 1725.9 pg/mL of cotinine, p = .47), while significant reductions were seen in the potent lung carcinogen 4-(methylnitrosamino)-1-(3-pyridul)-1-butanol (NNAL) (-55.9 ± 88.6 ng/ml, p < .001), carbon monoxide (-6.3 ± 8.6 ppm, p < .001), and self-reported respiratory symptoms (-3.3 ± 8.0, p = .002). No significant changes were found in blood pressure or spirometry. Greater substitution from cigarettes to e-cigarettes was associated with larger reductions in NNAL (r = -.29, p = .02). Conclusions The predominant dual use pattern was characterized by regular e-cigarette and intermittent cigarette use. Findings demonstrate the short-term harm reduction potential of this dual use pattern in Black and Latino smokers and suggest that the greatest benefit, aside from cessation of both products, is achieved by higher substitution of e-cigarettes for cigarettes. Findings need confirmation in a larger sample with longer follow-up in dual users with greater variability in rate of substitution.

Use of Ecofriendly Glass Powder Concrete in Construction of Wind Farms

Silicon is the main element in the composition of glass and it has been seen that it can be used as a partial replacement for cement in the manufacture of concrete. Different dosages of glass powder and cement were applied to manufacture the concrete mixes. Initially, the characteristics of fresh concrete were studied, such as consistency, air content, apparent density and workability. Secondly, compressive strength tests were performed on the different concrete mixtures produced. The consistency tests allowed us to classify these concretes within the group of fluids. The air content of these concretes increased with the rate of substitution of cement by glass powder, resulting in lighter concretes. Density tests showed that this parameter decreased as the rate of substitution of cement increased. A coefficient k has been calculated for the substitution of glass powder by cement in the binder, using the Bolomey formula. Also, a mathematical model has been proposed to further analyze the experimental data. Major contributions of this work were to study the possible application of this concrete in different dispersions as a surface protection layer against the action of corrosion, in wind turbine foundations as well as the stabilization of the wind farm roads.

Valuing the impact of Self-rated Health and Social Support on life satisfaction among Hong Kong Chinese population

Background Research has highlighted that satisfaction in health and social support are key areas of life affecting individual’s wellbeing. Many social and public health initiatives use these two intervention mechanisms to improve individual’s wellbeing. For the purpose of cost-benefit assessment, there has been growing interest in expressing these intervention effects in economic terms. However, only a handful of studies have ever estimated these effects in economic terms, and none of which examined in a Chinese context. The aim of this study is to extend this line of valuation work to estimate the implicit willingness-to-pays on the effects of improving individuals’ self-rated health status (SRH) and social support (SS) on their life satisfaction in the Chinese population. Methods Using individual’s life satisfaction data from a two-wave representative panel survey in Hong Kong (n = 1,109), this study first conducted a cross-lagged analysis with structural equation modelling technique to examine the causal effects of SRH and SS on life satisfaction, while simultaneously adjusting their reverse causal influences. The use of this cross-lagged approach was the effort to minimising the endogeneity problem. Then, substituting the respective estimates to the formulae of compensating surplus, the marginal rate of substitution of SRH and SS with respect to individual’s equivalised monthly household were estimated and were then expressed as the willingness-to-pays on the effect of improving individuals’ SRH and SS on their life satisfaction. Results The cross-lagged analysis ascertained the casual effects of SRH (β = 0.078, 95%CI: 0.020, 0.151) and SS on individuals’ satisfaction with life. The sample’s marginal rate of substitution of SRH and SS were found to be 1.28 (95%CI: 0.43, 2.15) and 1.36 (95%CI: 0.23, 2.49) respectively. Translating into the concept of compensating surplus, the implicit monetary values of improving the sample’s SRH from “poor health” to “excellent health” and their SS from “little support” to “a lot of support” are equivalent to an increase in their equivalised monthly household income by HK$56,000 and HK$39,400 respectively. Conclusions This study has implications for the cost-benefit assessment in wellbeing initiatives for the Chinese population.

TWO-FACTOR PRODUCTION FUNCTIONS WITH GIVEN MARGINAL RATE OF SUBSTITUTION

The article is devoted to the study of inverse problems of identifying two-factor production functions from given marginal rate of technical substitution. The analytical forms of twofactor production functions with given linear-fractionalmarginal rate of technical substitution of labor by capital. Classes of two-factor production functions that correspond to given (constant, linear, linear-fractional, exponential, etc.) marginal rate of technical substitution areindicated. The obtained results can be applied in modeling of production processes.

On Quasi-Homogeneous Production Functions

In this paper, we investigate the class of quasi-homogeneous production models, obtaining the classification of such models with constant elasticity with respect to an input as well as with respect to all inputs. Moreover, we prove that a quasi-homogeneous production function f satisfies the proportional marginal rate of substitution property if and only f reduces to some symmetric production functions.