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This paper is motivated by the ongoing debate on university reform in Vietnam. In particular, there is a need to quantify the level of governmental support for public universities and examine whether or not such a support is adequate. To this end, the present paper estimates training costs per student in different disciplines within the Vietnamese public university education system in 2010. The various estimates of unit costs are based on the definitional approach which defines unit cost as the ratio of total costs over output. In measuring total costs, private costs incurred by university students (apart from formal tuition fees) are excluded. Further, the opportunity cost method employed emphasizes implicit costs such as imputed land rent. The total output is based on weighted student numbers. Unit costs are then estimated using a variety of primary (from survey) and secondary data sources. The results obtained suggest that the unit costs of public university education in Vietnam vary considerably between disciplines. The results also support the presence of economies of scale and scope in higher education and a negative relationship between unit costs and teaching quality proxies. The overall unit cost of public universities in Vietnam is very low in absolute terms when comparing with other countries. However, unit cost relative to GDP per capita in Vietnam is more comparable with those of neighboring countries. Nevertheless, the findings of the paper imply that more resources need to be allocated to the public university sector as part of an urgently needed university reform in Vietnam.

We investigate the role of dynamic production inputs and their associated adjustment costs in shaping the dispersion of static measures of capital misallocation within industries (and countries). Across nine data sets spanning 40 countries, we find that industries exhibiting greater time-series volatility of productivity have greater cross-sectional dispersion of the marginal revenue product of capital. We use a standard investment model with adjustment costs to show that variation in the volatility of productivity across these industries and economies can explain a large share (80–90 percent) of the cross-industry (and cross-country) variation in the dispersion of the marginal revenue product of capital.

According to a growing tradition in International Relations, one way governments can credibly signal their intentions in foreign policy crises is by creating domestic audience costs: leaders can tie their hands by publicly threatening to use force since domestic publics punish leaders who say one thing and do another. We argue here that there are actually two logics of audience costs: audiences can punish leaders both for being inconsistent (the traditional audience cost), and for threatening to use force in the first place (a belligerence cost). We employ an experiment that disentangles these two rationales, and turn to a series of dispositional characteristics from political psychology to bring the audience into audience cost theory. Our results suggest that traditional audience cost experiments may overestimate how much people care about inconsistency, and that the logic of audience costs (and the implications for crisis bargaining) varies considerably with the leader's constituency.

Objective:To assess the cost effectiveness of the Expert Patients Programme (EPP) intervention compared to a treatment as usual alternative.Design:Two-arm pragmatic randomised controlled trial design with waiting list control.Setting:Community settings in England.Patients:Patients with a wide range of self-defined long-term conditions.Intervention:The EPP based on the US chronic disease self management program (CDSMP), a lay-led self-care group involving six weekly sessions to teach self-care support skills.Main outcome measures:Costs estimated over a 6-month period from a societal perspective. Health outcomes estimated in terms of quality adjusted life years (QALYs) generated by patients’ response to the EQ5D at baseline and 6-month follow-up.Results:The intervention group is associated with better patient outcomes, at slightly lower cost. Specifically, the intervention group has a 0.020 QALY gain compared with the control group, and a reduced cost of around £27 per patient. The intervention would therefore be considered dominant. While the QALYs gained are small in absolute terms, an additional 0.02 QALY is equivalent to an extra one week of perfect health per year. When the value of a QALY is £20 000 the EPP has a probability of 94% of being cost effective. Indeed, for all plausible values of willingness-to-pay for a QALY the EPP group is more likely to be cost effective than the control group.Conclusions:The EPP intervention evaluated in this trial is very likely to provide a cost effective alternative to usual care in people with long-term conditions.

A quantitative investigation of financial intermediation in the United States over the past 130 years yields the following results: (i) the finance industry's share of gross domestic product (GDP) is high in the 1920s, low in the 1960s, and high again after 1980; (ii) most of these variations can be explained by corresponding changes in the quantity of intermediated assets (equity, household and corporate debt, liquidity); (iii) intermediation has constant returns to scale and an annual cost of 1.5-2 percent of intermediated assets; (iv) secular changes in the characteristics of firms and households are quantitatively important.

Managers of emerging platforms must decide what level of platform performance to invest in at each product development cycle in markets that exhibit two-sided network externalities. High performance is a selling point for consumers, but in many cases it requires developers to make large investments to participate. Abstracting from an example drawn from the video game industry, we build a strategic model to investigate the trade-off between investing in high platform performance versus reducing investment in order to facilitate third party content development. We carry out a full analysis of three distinct settings: monopoly, price-setting duopoly, and price-taking duopoly. We provide insights on the optimum investment in platform performance and demonstrate how conventional wisdom about product development may be misleading in the presence of strong cross-network externalities. In particular, we show that, contrary to the conventional wisdom about \"winner-take-all\" markets, heavily investing in the core performance of a platform does not always yield a competitive edge. We characterize the conditions under which offering a platform with lower performance but greater availability of content can be a winning strategy.

We empirically characterize the mechanics of trade adjustment during the Argentine crisis. Though imports collapsed by 70 percent from 2000 to 2002, the entry and exit of firms or products at the country level played a small role. The within-firm churning of imported inputs, however, played a sizeable role. We build a model of trade in intermediate inputs with heterogeneous firms, fixed import costs, and roundabout production. Import demand is non-homothetic and the implications of an import price shock depend on the full distribution of firm-level adjustments. An import price shock generates a significant decline in productivity.

This paper examines determinants of sticky cost behavior, costs that increase faster than they decrease as demand fluctuates. The majority of the literature infers that sticky costs arise because managers retain idle capacity as demand falls, but add capacity as demand grows. I use United States Air Transportation industry data to confirm that managers do retain idle capacity when demand falls. However, I also find that sticky costs arise because managers lower selling prices to utilize existing capacity when demand falls, but add capacity (rather than raise selling prices) when demand grows. Finally, I find that sticky costs arise because managers incur more cost when adding capacity as demand grows than they incur when they add capacity as demand falls. Conversely, I find evidence of anti-sticky costs that occur because managers save more cost by removing capacity when demand falls than they save by removing capacity when demand grows.

ObjectiveTo estimate the cost of paediatric asthma from a UK National Health Service (NHS) and societal perspective and explore determinants of these costs.DesignCost analysis based on data from a large clinical trial between 2017 and 2019. Case report forms recorded healthcare resource use and productivity losses attributable to asthma over a 12-month period. These were combined with national unit cost data to generate estimates of health service and indirect costs.SettingAsthma clinics in primary and secondary care in England and Scotland.Main outcome measuresCost per asthma attack stratified by highest level of care received. Total annual health service and indirect costs. Modelled effect of sex, age, severity, number of attacks and adherence on total annual costs.ResultsOf 506 children included in the analysis, 252 experienced at least one attack. The mean (SD) cost per attack was £297 (806) (median £46, IQR 40–138) and the mean total annual cost to the NHS was £1086 (2504) (median £462, IQR 296–731). On average, children missed 6 days of school and their carers missed 13 hours of paid work, contributing to a mean annual indirect cost of £412 (879) (median £30, IQR 0–477). Health service costs increased significantly with number of attacks and participant age (>11 years). Indirect costs increased with asthma severity and number of attacks but were found to be lower in older children.ConclusionsPaediatric asthma imparts a significant economic burden on the health service, families and society. Efforts to improve asthma control may generate significant cost savings.Trial registration numberISRCTN 67875351.

During development of an innovative product there is often considerable uncertainty about component production cost, and it is of interest for both the manufacturer and the supplier to engage in a collaborative effort to reduce this uncertainty and lower the expected cost. Despite the obvious benefits this brings, the supplier may be reluctant to collaborate as he fears revealing his proprietary cost information. We investigate how information asymmetry and procurement contracting strategies interact to influence the supply chain parties' incentives to collaborate. We consider a number of procurement contracting strategies, and identify a simple strategy, expected margin commitment (EMC), that effectively promotes collaboration. The manufacturer prefers EMC if collaboration leads to a large reduction in unit cost and/or demand variability is low. Otherwise, a screening contract based on price and quantity is preferred. We also find that, paradoxically, ex post efforts to enhance supply chain efficiency may hinder ex ante collaboration that precedes production. This paper was accepted by Yossi Aviv, operations management.