Mapping EQ-5D utilities to GBD 2010 and GBD 2013 disability weights : results of two pilot studies in Belgium

Background: Utilities and disability weights (DWs) are metrics used for calculating Quality-Adjusted Life Years and Disability-Adjusted Life Years (DALYs), respectively. Utilities can be obtained with multi-attribute instruments such as the EuroQol 5 dimensions questionnaire (EQ-5D). In 2010 and 2013, Salomon et al. proposed a set of DWs for 220 and 183 health states, respectively. The objective of this study is to develop an approach for mapping EQ-5D utilities to existing GBD 2010 and GBD 2013 DWs, allowing to predict new GBD 2010/2013 DWs based on EQ-5D utilities. Methods: We conducted two pilot studies including respectively four and twenty-seven health states selected from the 220 DWs of the GBD 2010 study. In the first study, each participant evaluated four health conditions using the standard written EQ-5D-5 L questionnaire. In the second study, each participant evaluated four health conditions randomly selected among the twenty-seven health states using a previously developed web-based EQ-5D-5 L questionnaire. The EQ-5D responses were translated into utilities using the model developed by Cleemput et al. A loess regression allowed to map EQ-5D utilities to logit transformed DWs. Results: Overall, 81 and 393 respondents completed the first and the second survey, respectively. In the first study, a monotonic relationship between derived utilities and predicted GBD 2010/2013 DWs was observed, but not in the second study. There were some important differences in ranking of health states based on utilities versus GBD 2010/2013 DWs. The participants of the current study attributed a relatively higher severity level to musculoskeletal disorders such as ‘Amputation of both legs’ and a relatively lower severity level to non-functional disorders such as ‘Headache migraine’ compared to the participants of the GBD 2010/2013 studies. Conclusion: This study suggests the possibility to translate any utility derived from EQ-5D scores into a DW, but also highlights important caveats. We observed a satisfactory result of this methodology when utilities were derived from a population of public health students, a written questionnaire and a small number of health states in the presence of a study leader. However the results were unsatisfactory when utilities were derived from a sample of the general population, using a web-based questionnaire. We recommend to repeat the study in a larger and more diverse sample to obtain a more representative distribution of educational level and age

Determinants of the Cost of Electricity Service in PCE Eligible Communities

This report is one of two companion reports ISER prepared for the Alaska Energy Authority. The other report, “True Cost of Electricity in Rural Alaska and True Cost of Bulk Fuel in Rural Alaska,” is dated October 26, 2016. That report estimates the full costs of providing electricity in rural Alaska, including the costs of subsidies provided to lower the price consumers pay. This second report assesses how the costs of electric generation in Power Cost Equalization (PCE) communities are or might be affected by three factors that are not related to the differences in electricity generation costs. Those three factors are the organizational structures of utilities, postage stamp rate design, and managerial information available on energy subsidy programs. 1. Organizational Structures of Utilities Electric utilities in PCE communities are organized as cooperatives, are run by local villages and municipalities, or are investor-owned utilities. The scale of these utilities varies widely, and includes regional utilities that manage separate electric grids in multiple communities. A review of those organizational structures indicates that: 1.1. There are significant differences in distribution, customer service, and general and administrative costs (DCG&A) across utilities. These differences are correlated with the utility size and organizational structure, with the smallest utilities having significantly higher DCG&A costs per kWh. 1.2. Small local utilities that have merged with larger regional utilities have benefited from reduced costs and professional management. Incentives to encourage small local utilities to join larger, more efficient regional utilities should be considered. 1.3. The cost of borrowing for large local and regional electric coops remains low compared with that for stand-alone local villages, municipalities, and investor-owned utilities. 1.4. The state government should consider allowing a return on equity as an allowable expense within the PCE cost of service [AS 42.45.110(a)] to enable utilities to build equity, enhance debt coverage and facilitate the expanded use of private capital, and reduce dependency on limited public capital resources. This private capital may take the form of investor capital for investor-owned utilities or member capital for cooperatives. 2. Postage Stamp Rate Designs 2.1. Postage stamp rate designs—a single rate for electricity for some set of customers—can help reduce costs and improve affordability in smaller, remote communities through an implicit cost subsidization from customers in larger communities. 4 2.2. The subsidies in postage stamp rates may decrease incentives for utilities to manage their costs, because higher costs may be subsidized by postage stamp rate-making. 2.3. The increase in cost in subsidy-providing communities risks inefficient bypass by large commercial or government users. This could increase the total cost of electric service and leave the remaining customers with higher rates and diminished affordability. Separating communities into rate groups according to their cost structure may mitigate, but not eliminate, the risk of self-generators bypassing the local electric utility. 3. Efficiency in Governance of Energy Subsidy Systems 3.1. To assess whether the PCE program is achieving its goals, transparent information about the allocation of the subsidies and about the operation of the subsidized utilities is required. The companion report to this one identified some issues about reliability of information generated under the current reporting system. Improvements in the reporting requirements could address these issues. A common issue is inconsistency in accounting for capital that state and federal agencies contribute to utilities. Those capital contributions include both grants or low-interest loans to finance capital projects as well as sources of short-term government financing, such as annual fuel loans, emergency loans, and write-offs of operating loans for troubled utilities. If capital investments for generation were separated from other capital, investments to reduce fuel costs (such as wind power) could be assessed more directly. 3.2. The PCE program is one of several programs that subsidize energy costs in rural Alaska, and an understanding of the interaction among these programs is required. An annual compilation of all state and federal heating and electrical subsidy support systems by community would enable better understanding of both individual program impact and also the collective programmatic impact of the subsidies on energy affordability. 3.3. Information on system reliability, usually measured as outage hours, is required to fully assess utility performance. 3.4. Currently, there is no information on how well the PCE program and other energy subsidy programs in rural Alaska target families and communities that face the greatest energy affordability challenges. Because of limitations on income data in small rural Alaska communities, assessing how well subsidies are targeted may be challenging. However, in light of general information that energy subsidies are often inefficient at poverty reduction, this is an important question. 3.5. The environmental impact of energy subsidies for rural Alaska, including the PCE program, through CO2 emissions and PM 2.5 emissions, has not been assessed.Alaska Energy AuthorityExecutive Summary / Background / Impact of Alternative Utility Organizational Structures on Cost / Postage Stamp Rate Design Issues for PCE Communities / Energy Subsidy Administration / Summar

Cost Efficiency and Scale Economies of Japanese Water Utilities

With the data of 831 Japanese water utilities from 1999 to 2008, we used the stochastic cost frontier analysis with a true fixed-effect model in order to estimate the cost efficiency and scale economies. We found that cost inefficiency was approximately 37%. The economies of water delivery volume were observed and found to be remarkably higher for small water utilities than for large ones. Scale economies were also discovered in small water utilities; however, scale diseconomies are likely to be incurred in larger water utilities. The optimal supply population size of a water utility is estimated to be 85,658 consumers, with a water delivery volume of 15.7 million m3 and a network length of 522 km.Cost Efficiency, Scale Economies, Optimal Size, Japanese Water Utilities

A consistency test of the time trade-off

This paper tests the internal consistency of time trade-off utilities. We find significant violations of consistency in the direction predicted by loss aversion. The violations disappear for higher gauge durations. We show that loss aversion can also explain that for short gauge durations time trade-off utilities exceed standard gamble utilities. Our results suggest that time trade-off measurements that use relatively short gauge durations, like the widely used EuroQol algorithm (Dolan 1997), are affected by loss aversion and lead to utilities that are too high.Cost-Utility Analysis, Time Trade-Off, Loss Aversion

Long-term Framework for Electricity Distribution Access Charges

In order to achieve overall economic efficiency, incentive regulation of electricity distribution utilities must address two important and inter-related issues. First, the utilities’ allowed revenues need to be set at correct levels. Second, the access charging mechanism by which the utilities recover the allowed revenues must give the correct economic signals to generation and load connected to the network. This paper is concerned with the latter aspect of regulation. The paper discusses the main economic principles that should form the basis on which a distribution access charging model is developed. The charging model should have a number of attributes: be calibrated to each existing network; contain an asset register; be able to determine assets needed to meet new demand; find least-cost system expansion; compute network losses and handle ancillary services; estimate incremental operating and maintenance costs; be available to users; and be simple enough for external users to understand

Dividing bads under additive utilities

We compare the Egalitarian rule (aka Egalitarian Equivalent) and the Competitive rule (aka Comeptitive Equilibrium with Equal Incomes) to divide bads (chores). They are both welfarist: the competitive disutility profile(s) are the critical points of their Nash product on the set of efficient feasible profiles. The C rule is Envy Free, Maskin Monotonic, and has better incentives properties than the E rule. But, unlike the E rule, it can be wildly multivalued, admits no selection continuous in the utility and endowment parameters, and is harder to compute. Thus in the division of bads, unlike that of goods, no rule normatively dominates the other

Is a little sunshine all we need? On the impact of sunshine regulation on profits, productivity and prices in the Dutch drinking water sector.

This paper analyzes the conduct of publicly owned monopolistic utilities regulated by a voluntary sunshine regulatory model (i.e. publication of the performances of utilities). In particular, we examine the behaviour of Dutch drinking water utilities before and after the introduction of the sunshine regulation. As during the period 1992-2006 several alternative regulatory reforms including privatization, yardstick competition and profit regulation were also seriously considered, we examine how the discussion and possible implementation of these reforms influenced the behaviour of the utilities. By decomposing profit change into its economic drivers (quantity effect, price effect, operating efficiency, technical progress, scale, etc.), our results suggest that in an appropriate political and institutional context, sunshine regulation can be an effective and appropriate mean of insuring that publicly organised services are effi ciently and profitably provided. In methodological terms, the profit decomposition is extended to robust (i.e. allowing for stochastic elements) and conditional (i.e. accounting for heterogeneity) non-parametric efficiency measures.Regulation; Drinking water utilities; Profit decomposition; Data envelopment analysis;

Consolidation and Market Power of Energy Utilities - The case of US-American and German Utility Takeovers

Between 1990 and 2002 a wave of takeovers was observed in the North American and European energy utilities market. We analyze the impact of these takeovers on market power, studying 70 takeovers of US-American and 69 takeovers of German energy utilities by applying event study methodology. Stock price reactions of acquiring and target firms as well as of their competitors are used as an indicator for market power. While we do not find any significant results pointing in this direction for transactions in the US, our findings clearly indicate that the potential to increase market power is indeed an important motive for takeovers within the German energy utilities market.acquisitions, energy utilities, market power, oligopoly, regulation

A meta-regression analysis of benchmarking studies on water utilities market structure

This paper updates the literature on water utility benchmarking studies carried out worldwide, focusing on scale and scope economies. Using meta-regression analysis, the study investigates which variables from published studies influence these economies. Our analysis led to several conclusions. The results indicate that there is a higher probability of finding diseconomies of scale and scope in large utilities; however, only the results for scale economies are significant. Diseconomies of scale and scope are more likely to be found in publicly-owned utilities than when the ownership is mostly private; as would be expected, multi-utilities are more likely to have scale and scope economies.economies of scale; economies of scope; meta-regression analysis; water utilities