Who Bears the Burden and Who Receives the Gain? - The Case of GWRDC R&D Investments in the Australian Grape and Wine Industry

In 2001, $13 million were invested in various grape and wine R&D programs via the Australian Grape and Wine Research and Development Corporation. Half of the funds come from compulsory levies from grape-growers and winemakers, and the other half from Commonwealth government matching grants. These funds are then allocated to research projects across broad areas such as grape production R&D, wine production R&D and grape and wine quality R&D. The benefit of R&D in one sector of an industry will be distributed across the production and consumption chain. On the other hand, when a levy is charged nominally to one producer group, the real burden of the cost will also be shared among all involved producer and consumer groups. In the case of the Australian grape and wine R&D investments, the net impact will be determined by the distribution of the benefits and costs across grape-growers, winemakers, marketers and retailers, and domestic and overseas consumers. In an ideal situation, if every dollar is invested at exactly the point where it is collected, the percentage distributions of costs and returns coincide. Under this system, presuming R&D projects are successful, all groups will gain in dollar terms, and they will receive benefits in exactly the same proportions as how the burdens of the R&D costs are shared. However, the distributions of costs and benefits will diverge if a levy collected at one point of the production is used to fund research at a different point of the chain. Indeed, in practice, producers often pool levies together to fund R&D programs at places that are not necessarily where the funds are raised. A significant amount of public funds are also invested in Australian agricultural industries that substantially involve foreign processors and consumers. In these situations it is important to note the real incidence of both costs and benefits. The objective of the paper is to examine the distributions of both costs and returns from the Australian grape and wine R&D investments, using results from a multi-sectoral equilibrium displacement model of the industry. The real shares of total R&D costs are estimated and compared with the nominal shares. Divergence between the distributions of costs and benefits is also studied for the three major areas of R&D. Grape-growers, winemakers and overseas consumers are shown to receive bigger proportions of the gains than their proportions of costs, but the Government and other domestic parties as a group bear a much higher proportion of costs than returns. The paper discusses implications of the results to the equity issue between premium and non-premium wine producers, the free-rider issue for overseas consumers, and the issue of justifying government funding of grape and wine R&D.Economics of R&D, R&D policies, incidence of levies, wine, equilibrium displacement modelling.

Heterogeneity in Alcohol Consumption: The Case of Beer, Wine and Spirits in Australia

This paper examines Australians participation in beer, wine and spirits consumption using a trivariate probit model and unit-record data from the National Drug Strategy Household Surveys. It estimates the effects of social, economic and demographic factors on an individuals decisions of alcohol participation. The trivariate probit formulation allows for the potential correlation across the demand for the three products through unobserved personal characteristics. All three beverages are shown to have negative own-price elasticities and to be substitutes in participation. An alarming proportion of young Australians are found to be drinking spirits regularly due to the increasing popularity of pre-mixed sweet drinks.Food Consumption/Nutrition/Food Safety,

What Do the Bingers Drink? Microeconometric Evidence on Negative Externatilities of Alcohol Consumption by Beverage Types

The recent debate on alcohol tax reform and recommendations from the Henry Tax Review in Australia have highlighted the need for quantifying externalities of excessive alcohol consumption by beverage types. This paper presents micro-level information from the Australian National Drug Strategy Household Surveys to examine the association between risky drinking behaviour, drinker characteristics, health and labour market status, and types of alcohol beverages consumed. Drinkers of regular strength beer (RSB) and RTDs in a can (RTDC) have the highest incidences of heavy bingeing, and low alcohol beer and fortified and bottled wine least likely. Bottled spirits (BS), RSB and RTDC are most likely linked to risky behaviour such as property damage and physical abuse under alcohol influence. All three spirit products are overwhelmingly the favourable drinks for the underage and young drinkers. Risky drinking behaviour is not found to be strictly associated with the alcohol strength of the products.Alcohol consumption, alcohol tax, binge drinking, beer, wine and spirits

Regulating stepping during fixed-speed and self-paced treadmill walking

textBackground: Treadmill walking should closely simulate overground walking for research validation and optimal skill transfer. Traditional fixed-speed treadmill (FS) walking may not simulate natural walking because of the fixed belt speed and lack of visual cues. Self-paced (SP) treadmill walking, especially feedback controlled SP treadmill walking, enables close-to-real-time belt speed changes with users' speed changes. Different sensitivity levels of SP treadmill feedback determine how fast the treadmill respond to user's speed change. Few studies have examined the differences between FS and SP treadmill walking, or the difference between sensitivity levels of SP treadmills, and their methods were questionable because of averaging kinematics and kinetics parameters, and failing to examine directly treadmill and subjects' speed data. This study compared FS with two SP modes with variation of treadmill speed and user's speed as dependent variables. Method: Thirteen young healthy subjects participated. Subjects walked on a motorized split-belt treadmill under FS, high sensitivity SP (SP-H) and low sensitivity SP (SP-L) conditions at normal walking speed. Root mean square error (RMSE) for subject's pelvis global speed (Vpg), pelvis speed with respect to treadmill speed (Vpt), and treadmill speed (Vtg) data were collected for all trials. Results: Significant condition effects were found between FS and the two SP modes in all RMSE values (p < 0.001). The two sensitivity levels of SP had similar speed patterns. Large subject × condition interaction effects were found for all variables (p < 0.001). Only small subject effects were found. Conclusions: The results of the study reveal different walking patterns between FS and SP. However, the two sensitivity levels failed to differ much. More habituation time may be needed for subjects to learn to optimally respond to the SP algorithm. Future work should include training subjects for more natural responses, applying a feed-forward algorithm, and testing the effect of optic flow on FS and SP speed variation.Kinesiology and Health Educatio

A structural equation model of adverse events and length of stay in hospitals

Adverse events in hospitals cause significant morbidity and mortality, and considerable effort has been invested into analysing their incidence and preventability. An unresolved issue in models of medical adverse events is potential endogeneity of length of stay (LOS): whilst the probability of suffering a medical adverse event during the episode is likely to increase as a patient stays longer, there are a range of unobservable patient and hospital factors affecting both the occurrence of adverse events and LOS, such as unobserved patient complexity and hospital management. Therefore, statistical models of adverse events which do not account for the potential endogeneity of LOS may generate biased estimates. Our objective is to examine the effects of risk factors on the incidence of adverse events using structural equation models and accounting for endogeneity of LOS. We estimate separate models for three of the most common and serious types of medical adverse events: adverse drug reactions, hospital acquired infections, and pressure ulcers. We use episode level administrative hospital data from public hospitals in the state of Victoria, Australia, for the years 2004/05 and 2005/06 with detailed information on patients, in particular medical complexity and adverse events suffered during admission. We use days and months of discharge as instruments for LOS. Our research helps assessing the costs and benefits of additional days spent in hospital. For example, it can contribute to identifying the ideal time of discharge of patients, or inform whether 'hospital at home' programs reduce rates of hospital acquired infections.Medical errors, complications of care, adverse drug reactions, infections, ulcers, hospital quality

A UNIFIED APPROACH TO SENSITIVITY ANALYSIS IN EQUILIBRIUM DISPLACEMENT MODELS: COMMENT

It is pointed out that the Chebychev confidence intervals and maximum p-values advocated by Davis and Espinoza for sensitivity analysis of equilibrium displacement models are unnecessary. Desired probability intervals and probabilities can be accurately estimated without resorting to gross approximations.simulation, probability distributions, empirical quantiles, Research Methods/ Statistical Methods,

The Econometric Specification of Input Demand Systems Implied by Cost Function Representations

In the case of input demand systems based on specification of technology by a Translog cost function, it is common to estimate either a system of share equations alone, or to supplement them by the cost function. By adding up, one of the share equations is excluded. In this paper it is argued that a system of n-1 share equations is essentially incomplete, whereas if the n-1 share equations are supplemented by the cost function the implied error structure is inadmissible. Similarly, if the technology is specified by a normalized quadratic cost function, it is common to estimate either a system of n-1 demand equations alone, or to supplement them by the cost function. In both cases, the implied error structure is again inadmissible.Cost Function; Input demands; Share equations; Translog; Normalized Quadratic; Error specification.

A Stochastic Frontier Model for Discrete Ordinal Outcomes: A Health Production Function

The stochastic frontier model used for continuous dependent variables is extended to accommodate output measured as a discrete ordinal outcome variable. Conditional on the inefficiency error, the assumptions of the ordered probit model are adopted for the log of output. Bayesian estimation utilizing a Gibbs sampler with data augmentation is applied to a convenient re-parameterisation of the model. Using panel data from an Australian longitudinal survey, demographic and socioeconomic characteristics are specified as inputs to health production, whereas production efficiency is made dependent on lifestyle factors. Posterior summary statistics are obtained for selected health status probabilities, efficiencies, and marginal effects.Bayesian estimation, Gibbs sampling, ordered probit, production efficiency.

Alcohol Consumption in Australia: An Application of the Ordered Generalised Extreme Value Model

The adverse effects of excessive alcohol consumption are well-known. Of great concern to policy makers is to understand the potentially different drivers for consumers of different levels of alcohol consumption. Using unit record data from the Australian Drug Strategy Household Surveys, this paper estimates an Ordered Generalised Extreme Value model to identify the factors that influence differing levels of alcohol consumption. Unlike previous studies using inflexible approaches such as Ordered Probits/Logits or Multinomial Logits, the OGEV model is both flexible and consistent with random utility maximization. The results suggest that important drivers are: age; income; education; gender; and own and cross-pricDrug consumption, discrete ordered data, Ordered Generalised Extreme Value model, random utility maximisation, rational addiction.