Market opportunities and threats to the U.S. pork industry posed by traceability systems

This paper demonstrates that the U.S. pork industry is lagging its principal international competitors and major international customers in terms of developing programs for traceability, transparency, and assurance (TTA). The primary areas of weakness in U.S. TTA programs are at the producer-level and in the area of providing consumers quality assurance regarding inputs used in producing pork products. We conclude that the U.S. pork industry may diminish its competitive advantage in world pork markets if it fails to enhance its TTA programs.     

Risks of Hazardous Waste Sites versus Asteroid and Comet Impacts: Accounting for the Discrepancies in U.S. Resource Allocation

Approximately $6 billion is spent annually in the United States on the cleanup of sites regulated under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, or Superfund). The current health risks posed by such sites are thought to be quite small; the expenditures are justified primarily as protecting hypothetical future residents of these sites. Approximately 0.05% of this amount, or $3 million, is spent annually by the U.S. government on the detection of asteroids or comets that could strike the earth. Such damaging impacts do occur from time to time--most recently in 1908 in an unpopulated region of Siberia--but no person is confirmed ever to have died as a result. Anticipated impacts over the course of 1 million years would yield deaths that, when annualized, total approximately 4,000 per year. The risk reduction goal for CERCLA is 15 orders of magnitude greater than that for asteroid/comet detection. A modest increase in resources devoted to asteroid detection would greatly increase the chances of early detection of a threatening object, allowing an effective defense to be attempted. This article argues that the much lower risk-to-resources ratio for CERCLA cleanups than for asteroid and comet detection can be explained by four primary factors: (1) the regard for future generations, since CERCLA benefits mainly the unborn; (2) concrete fears, since toxics are much more feared than asteroids or comets; (3) the source of the threat, since toxic contamination is caused by human beings, unlike impacts from space objects; and (4) the greater political constituencies for hazardous waste cleanup than for space object detection.     

The Economic Impacts of a Terrorist Attack on the U.S. Commercial Aviation System

We use data on air passenger travel expenditures per passenger as well as statistical analysis of the air traffic lost for the two-year aftermath of the September 11, 2001, attacks to estimate direct demand losses for air transportation services. These are used along with a national input-output model to assess the full costs of these losses. Depending on assumptions made, the full losses to the U.S. economy were between $214.3 and $420.5 billion. These estimates are similar to those from other studies of such an event, and suggest that the high costs of effective countermeasures may be justified.     

The Role of Behavioral Responses in the Total Economic Consequences of Terrorist Attacks on U.S. Air Travel Targets

U.S. airports and airliners are prime terrorist targets. Not only do the facilities and equipment represent high‐value assets, but the fear and dread that is spread by such attacks can have tremendous effects on the U.S. economy. This article presents the methodology, data, and estimates of the macroeconomic impacts stemming from behavioral responses to a simulated terrorist attack on a U.S. airport and on a domestic airliner. The analysis is based on risk‐perception surveys of these two scenarios. The responses relate to reduced demand for airline travel, shifts to other modes, spending on nontravel items, and savings of potential travel expenditures by U.S. resident passengers considering flying domestic routes. We translate these responses to individual spending categories and feed these direct impact results into a computable general equilibrium (CGE) model of the U.S. economy to ascertain the indirect and total impacts on both the airline industry and the economy as a whole. Overall, the estimated impacts on GDP of both types of attacks exceed $10B. We find that the behavioral economic impacts are almost an order of magnitude higher than the ordinary business interruption impacts for the airliner attack and nearly two orders of magnitude higher for the airport attack. The results are robust to sensitivity tests on the travel behavior of U.S. residents in response to terrorism.     

The derived demand for imported cheese in Hong Kong

The objective of this paper was to provide the U.S. dairy industry with empirical estimates of Hong Kong’s derived demand for imported cheese differentiated by source country of production. These estimates were used to simulate the effects of European Union (EU) subsidy reductions on the U.S. share of Hong Kong cheese imports. Simulation results suggested that Oceania was the primary beneficiary from EU subsidy reductions. Hong Kong cheese imports from the U.S. were expected to increase by 12% if subsidy reductions continue at the same pace as the 1994 GATT agreement and 21% if reductions were twice the pace.     

Analysis of forces affecting competitive position of Mexico in supplying U.S. winter melon market

An econometric model representing the United States, Mexico and Caribbean nations melon sectors was estimated to analyze the primary economic forces influencing Mexico’s competitiveness in the U.S. winter melon market, a period when about two-thirds of U.S. consumption is imported. Results show peso-devaluation to be important in the short-run and yield-enhancing technology to be important in the short- and long-run. Increased rates of growth in Mexican yields were about six times more effective at increasing market share than NAFTA provisions which phase-out U.S. tariffs. An accelerated rate of growth in Mexican per capita income was found to reduce melon exports about 75% while higher wages would reduce exports about 20% in the long-run.     

Terrorism Risks and Cost‐Benefit Analysis of Aviation Security

We evaluate, for the U.S. case, the costs and benefits of three security measures designed to reduce the likelihood of a direct replication of the 9/11 terrorist attacks. To do so, we assess risk reduction, losses, and security costs in the context of the full set of security layers. The three measures evaluated are installed physical secondary barriers (IPSB) to restrict access to the hardened cockpit door during door transitions, the Federal Air Marshal Service (FAMS), and the Federal Flight Deck Officer (FFDO) Program. In the process, we examine an alternate policy measure: doubling the budget of the FFDO program to $44 million per year, installing IPSBs in all U.S. aircraft at a cost of $13.5 million per year, and reducing funding for FAMS by 75% to $300 million per year. A break‐even cost‐benefit analysis then finds the minimum probability of an otherwise successful attack required for the benefit of each security measures to equal its cost. We find that the IPSB is costeffective if the annual attack probability of an otherwise successful attack exceeds 0.5% or one attack every 200 years. The FFDO program is costeffective if the annual attack probability exceeds 2%. On the other hand, more than two otherwise successful attacks per year are required for FAMS to be costeffective. A policy that includes IPSBs, an increased budget for FFDOs, and a reduced budget for FAMS may be a viable policy alternative, potentially saving hundreds of millions of dollars per year with consequences for security that are, at most, negligible.     

From Soviet to Europe: Returns to Education Puzzle in Bulgaria

This article makes a systematic presentation of returns to education in Bulgaria, a country that has witnessed a number of dramatic structural changes over the last two decades. It examines the headway of returns to education for Bulgaria in two observed economic regimes — from communism to EU membership. The findings show a steady increase in returns to education for both men and women until 2003. The average returns to one additional year of education rose from 1.1 per cent in 1986 to 5.1 per cent in 2003 for men and from 2.1 to 5.9 per cent for women. Quantile regression estimations between 1986 and 2003 evince that the most prominent increase in the wage premium occurred at the top end of the distribution, where the rate of returns to education increased in particular for women — from a negative and insignificant sign in 1986 to 7 per cent in 2003. However, this increasing trend in returns to education seems to take an inverted U‐shape in 2007, the year when the country joined the EU, which poses a new puzzle to be resolved. To this end, the current article introduces possible explanations for such a puzzle and sheds lights on a number of insightful policy implications.     

Analyzing the Homeland Security of the U.S.-Mexico Border

We develop a mathematical optimization model at the intersection of homeland security and immigration, that chooses various immigration enforcement decision variables to minimize the probability that a terrorist can successfully enter the United States across the U.S.-Mexico border. Included are a discrete choice model for the probability that a potential alien crosser will attempt to cross the U.S.-Mexico border in terms of the likelihood of success and the U.S. wage for illegal workers, a spatial model that calculates the apprehension probability as a function of the number of crossers, the number of border patrol agents, and the amount of surveillance technology on the border, a queueing model that determines the probability that an apprehended alien will be detained and removed as a function of the number of detention beds, and an equilibrium model for the illegal wage that balances the supply and demand for work and incorporates the impact of worksite enforcement. Our main result is that detention beds are the current system bottleneck (even after the large reduction in detention residence times recently achieved by expedited removal), and increases in border patrol staffing or surveillance technology would not provide any improvements without a large increase in detention capacity. Our model also predicts that surveillance technology is more cost effective than border patrol agents, which in turn are more cost effective than worksite inspectors, but these results are not robust due to the difficulty of predicting human behavior from existing data. Overall, the probability that a terrorist can successfully enter the United States is very high, and it would be extremely costly and difficult to significantly reduce it. We also investigate the alternative objective function of minimizing the flow of illegal aliens across the U.S.-Mexico border, and obtain qualitatively similar results.     

The benefits and costs of U.S. employer COVID-19 vaccine mandates

In 2021, the Biden Administration issued mandates requiring COVID-19 vaccinations for U.S. federal employees and contractors and for some healthcare and private sector workers. These mandates have been challenged in court; some have been halted or delayed. However, their costs and benefits have not been rigorously appraised. This study helps fill that gap. We estimate the direct costs and health-related benefits that would have accrued if these vaccination requirements had been implemented as intended. Compared with the January 2022 vaccination rates, we find that the mandates could have led to 15 million additional vaccinated individuals, increasing the overall proportion of the fully vaccinated U.S. population from 64% to 68%. The associated net benefits depend on the subsequent evolution of the pandemic—information unavailable ex ante to analysts or policymakers. In scenarios involving the emergence of a novel, more transmissible variant, against which vaccination and previous infection offer moderate protection, the estimated net benefits are potentially large. They reach almost $20,000 per additional vaccinated individual, with more than 20,000 total deaths averted over the 6-month period assessed. In scenarios involving a fading pandemic, existing vaccination-acquired or infection-acquired immunity provides sufficient protection, and the mandates’ benefits are unlikely to exceed their costs. Thus, mandates may be most useful when the consequences of inaction are catastrophic. However, we do not compare the effects of mandates with alternative policies for increasing vaccination rates or for promoting other protective measures, which may receive stronger public support and be less likely to be overturned by litigation.     

Reinhardt on reform. Interview by Donna Vavala

Almost since the federal government took its giant step into health care delivery and financing in 1965 with Medicare and Medicaid, the emphasis in Washington has been on reducing the costs of health care. Almost all federal health law subsequent to those two programs has been aimed at cost control, even when the titles of the bills promised a more noble purpose. The most notable exception is the law establishing end-stage renal disease coverage, but it has become a prime exacerbator of rising costs. Not even the designers of the federal programs envisioned how quickly health care costs would rise and how substantial the increases would be. The federal tab in 1993 was $280.6 billion. In 1960, it was $3 billion and in 1970 it was $17.8 billion. And overall health care costs have followed a similar curve, growing from 5.3 percent of the U.S. GDP in 1960 and 7.4 percent in 1970 to 13.8 percent in 1993. The end is not in sight. Economists are predicting growth to 18 percent of GDP by the next century. Uwe E. Reinhardt, PhD, James Madison Professor of Political Economics in the Woodrow Wilson School at Princeton University, does not believe that the "bite" will become that large, but he does expect increases to continue into the near future. In the interview recorded in this article, Professor Reinhardt assesses both the current and his predicted financial scenario for the health care field.     

A new perspective on quality

The U.S. health care sector consumes nearly 13 percent of our nation's gross national product, $800 billion annually. Our nation allocates the highest amount per capita to health care in the world. Yet many measures of health care outcomes from these expenditures are inferior to other developed nations. The American health care system costs too much, excludes too many, fails too often, contains much excessive and inappropriate care, and knows too little about the effectiveness of the things it does. The purpose of this article is to discuss current payers' perspectives on the potential for quality improvement in the U.S. health care system.     

Assessing the Benefits and Costs of Homeland Security Research: A Risk-Informed Methodology with Applications for the U.S. Coast Guard

This article describes a methodology for risk-informed benefit–cost analyses of homeland security research products. The methodology is field-tested with 10 research products developed for the U.S. Coast Guard. Risk-informed benefit–cost analysis is a tool for risk management that integrates elements of risk analysis, decision analysis, and benefit–cost analysis. The cost analysis methodology includes a full-cost accounting of research projects, starting with initial fundamental research costs and extending to the costs of implementation of the research products and, where applicable, training, maintenance, and upgrade costs. The benefits analysis methodology is driven by changes in costs and risks leading to five alternative models: cost savings at the same level of security, increased security at the same cost, signal detection improvements, risk reduction by deterrence, and value of information. The U.S. Coast Guard staff selected 10 research projects to test and generalize the methodology. Examples include tools to improve the detection of explosives, reduce the costs of harbor patrols, and provide better predictions of hurricane wind speeds and floods. Benefits models and estimates varied by research project and many input parameters of the benefit estimates were highly uncertain, so risk analysis for sensitivity testing and simulation was important. Aggregating across the 10 research products, we found an overall median net present value of about $385 million, with a range from $54 million (5th percentile) to $877 million (95th percentile). Lessons learned are provided for future applications.     

The chasm: what can be done, and what should be done

The case study of growth hormone in short-stature children offers an example of the high cost of bioengineered therapies and the attendant ethical concerns. Despite uncertainties as to its efficacy, it is estimated that the annual U.S. expenditure for growth hormone, which costs about $20,000 per year for a 30 kg child, exceeds $375 million dollars. Ultimately, at this point in its evolution, the use of GH therapy illustrates the dilemma commonly created by new medical technology--the chasm between what can be done and what should be done. Unfortunately, the knowledge of what can be done precedes the understanding of what should be done.     

新一轮农产品价格上涨的影响分析

2007年中国居民消费价格持续上涨,全年涨幅有可能达到4.5%￣4.6%。前期CPI上涨的直接诱因是食品价格大幅上涨,而非食品价格涨幅保持在较低水平,因此具有典型的结构性特征。本文利用计量模型分析表明,猪肉价格上涨对CPI具有明显的推动作用,猪肉价格每上涨10%,就会推动CPI上涨0.5%。不同品种农产品之间的价格波动存在传导性和同步性,具有多米诺骨牌效应。农产品价格上涨使农村居民人均增收217元,也在一定程度上增加了城乡居民生活成本。总体而言,目前农产品价格波动仍处于合理范围。     

An Empirical Analysis of Life Jacket Effectiveness in Recreational Boating

This article gives a measure of life jacket (LJ) effectiveness in U.S. recreational boating. Using the U.S. Coast Guard's Boating Accident Report Database from 2008 to 2011, we find that LJ wear is one of the most important determinants influencing the number of recreational boating fatalities, together with the number of vessels involved, and the type and engine of the vessel(s). We estimate a decrease in the number of deceased per vessel of about 80% when the operator wears their LJs compared to when they do not. The odds of dying are 86% higher than average if the accident involves a canoe or kayak, but 80% lower than average when more than one vessel is involved in the accident and 34% lower than average when the operator involved in the accident has more than 100 hours of boating experience. Interestingly, we find that LJ effectiveness decreases significantly as the length of the boat increases and decreases slightly as water temperature increases. However, it increases slightly as the operator's age increases. We find that between 2008 and 2011, an LJ regulation that requires all operators to wear their LJs—representing a 20% increase in wear rate—would have saved 1,721 (out of 3,047) boaters or 1,234 out of 2,185 drowning victims. The same policy restricted to boats 16–30 feet in length would have saved approximately 778 victims. Finally, we find that such a policy would reduce the percentage of drowning victims compared to other causes of death.     

Evaluation of Scenarios for Reducing Human Salmonellosis Through Household Consumption of Fresh Minced Pork Meat

Nontyphoidal salmonellosis is the second most frequently reported zoonotic disease in the European Union (EU) and is considered to be a major threat to human health worldwide. The most reported Salmonella serovar in the EU is S. Enteritidis, mainly associated with egg contamination, followed by S. Typhimurium, with the latter being the most predominant serovar isolated from pork. These findings suggest that reducing the Salmonella contamination in the pork production might be a good strategy to prevent and control human salmonellosis in the EU. Recently, a quantitative microbial risk assessment (QMRA) has been developed to assess the risks for human salmonellosis due to home consumption of fresh minced pork meat in Belgium.⁽ 1 ⁾ The newly developed risk model is called the METZOON model. In the current study, the METZOON model was used to evaluate the effectiveness of different hypothetical Salmonella mitigation strategies implemented at different stages of the minced pork production and consumption chain by means of a scenario analysis. To efficiently evaluate the mitigation strategies, model results were obtained by running simulations using the randomized complete block design. The effectiveness of a mitigation strategy is expressed using point and interval estimates of the effect size for dependent observations, expressed as the standardized difference in population means. The results indicate that the most effective strategies are taken during the slaughter processes of polishing, evisceration, and chilling, and during postprocessing, whereas interventions in the primary production and at the beginning of the slaughter process seem to have only a limited effect. Improving consumer awareness is found to be effective as well.     

Optimal Tracking and Testing of U.S. and Canadian Herds for BSE: A Value-of-Information (VOI) Approach

The U.S. Department of Agriculture (USDA) tests a subset of cattle slaughtered in the United States for bovine spongiform encephalitis (BSE). Knowing the origin of cattle (U.S. vs. Canadian) at testing could enable new testing or surveillance policies based on the origin of cattle testing positive. For example, if a Canadian cow tests positive for BSE, while no U.S. origin cattle do, the United States could subject Canadian cattle to more stringent testing. This article illustrates the application of a value-of-information (VOI) framework to quantify and compare potential economic costs to the United States of implementing tracking cattle origins to the costs of not doing so. The potential economic value of information from a tracking program is estimated to exceed its costs by more than five-fold if such information can reduce future losses in export and domestic markets and reduce future testing costs required to reassure or win back customers. Sensitivity analyses indicate that this conclusion is somewhat robust to many technical, scientific, and market uncertainties, including the current prevalence of BSE in the United States and/or Canada and the likely reactions of consumers to possible future discoveries of BSE in the United States and/or Canada. Indeed, the potential value of tracking information is great enough to justify locating and tracking Canadian cattle already in the United States when this can be done for a reasonable cost. If aggressive tracking and testing can win back lost exports, then the VOI of a tracking program may increase to over half a billion dollars per year.     

Should Cities Invest in Sheltering‐in‐Place Measures Against Chlorine Truck Attacks by Terrorists?

After an intentional release of chlorine in an office district, public responses such as sheltering‐in‐place could save many lives if rapid enough. However, previous work does not estimate how fast and effective such responses would be for several possible investments in attack detection, public alert, and building ventilation, nor whether such measures would be cost effective. We estimate public response times with investment options in place, and resulting changes in fatalities as well as system costs, including false alarm costs, and cost effectiveness in terms of cost per net death avoided. The measures do have life‐saving potential, especially if all response times are at or near the lower limits of the ranges assumed in this article. However, due to uncertainties, it is not clear that responses would be rapid enough to save many people. In some cases total fatalities would increase, since sheltering after chlorine vapor has already entered buildings can increase occupants’ chlorine exposure. None of the options considered have median cost per statistical life saved meeting a cost‐effectiveness threshold of $6.5 million across all of the chlorine exposure dose‐response and ingress‐delay models considered here, even if there were one attack per year in the area covered by the system. Given these and other issues discussed in this article, at this point investments to improve sheltering‐in‐place capability appear not to be robust strategies for reducing fatalities from chlorine attack in an office district.