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Do Coastal Building Codes Make Stronger Houses?

July 22, 2014 Comments off

Do Coastal Building Codes Make Stronger Houses? (PDF)
Source: Cato Institute

The National Flood Insurance Program (NFIP), which provides federal flood insurance to property owners in participating communities, is currently $24 billion in debt. The shortfall has long been foreseen by policymakers because the insurance is underpriced, effectively subsidizing property owners of coastal properties. Congress attempted to curtail that subsidy with the 2012 Biggert–Waters Flood Insurance Reform Act, which was intended to put the burden of flood risk squarely on property owners rather than taxpayers. However, beneficiaries of the subsidies rallied against the legislation, and earlier this year both houses of Congress passed, and President Obama signed, legislation delaying the 2012 subsidy reform.

Communities that participate in the NFIP must adopt the program’s building code, which incorporates minimum building standards set forth by the Federal Emergency Management Agency (FEMA). Economists have theorized that building codes associated with the provision of subsidized insurance may create moral hazard by inducing risk taking. That is, the acquisition of insurance against some contingency is associated with a decreased incentive to avoid or prevent the insured loss because policyholders do not bear the full consequences of their actions. Independent of any insurance provision, moral hazard can also result from a false perception of safety if building codes are not effective.

This article examines the effectiveness of the NFIP’s building code in reducing damages to barrier island property in a hurricane. We determine whether similarly located properties fare better or worse in a hurricane based on the code regime under which they were constructed. We use data from Lee County, Fla., where 2004’s Hurricane Charley made landfall. Our findings raise questions about the optimal scale of code design, and about unintended consequences from building code changes.

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New From the GAO

July 22, 2014 Comments off

New GAO Reports and Testimony
Source: Government Accountability Office

Reports

1. Small Business Administration: Office of Advocacy Needs to Improve Controls over Research, Regulatory, and Workforce Planning Activities. GAO-14-525, July 22.
http://www.gao.gov/products/GAO-14-525
Highlights - http://www.gao.gov/assets/670/664930.pdf

2. Managing for Results: Enhanced Goal Leader Accountability and Collaboration Could Further Improve Agency Performance. GAO-14-639, July 22.
http://www.gao.gov/products/GAO-14-639
Highlights - http://www.gao.gov/assets/670/664922.pdf

3. Telecommunications: FCC Should Improve the Accountability and Transparency of High-Cost Program Funding. GAO-14-587, July 22.
http://www.gao.gov/products/GAO-14-587
Highlights - http://www.gao.gov/assets/670/664940.pdf

Testimony

1. Large Partnerships: Growing Population and Complexity Hinder Effective IRS Audits, by James R. White, director, strategic issues, before the Permanent Subcommittee on Investigations, Senate Committee on Homeland Security and Governmental Affairs. GAO-14-746T, July 22.
http://www.gao.gov/products/GAO-14-746T
Highlights - http://www.gao.gov/assets/670/664918.pdf

Chart Book: Social Security Disability Insurance

July 22, 2014 Comments off

Chart Book: Social Security Disability Insurance
Source: Center on Budget and Policy Priorities

Disability Insurance (DI) is an integral part of Social Security. It provides modest but vital benefits to workers who can no longer support themselves on account of a serious and long-lasting medical impairment. The Social Security Administration (SSA) administers the DI program.

In December 2013, 8.9 million people received disabled-worker benefits from Social Security. Payments also went to some of their family members: 160,000 spouses and 1.9 million children.

DI benefits are financed primarily by a portion of the Social Security payroll tax and totaled about $140 billion in 2013. That’s 4 percent of the federal budget and less than 1 percent of the gross domestic product (GDP). Employers and employees each pay a DI tax of 0.9 percent on earnings up to a specified amount, currently $117,000. Financial transactions are handled through a DI trust fund, which receives payroll tax revenues and pays out benefits and which is legally separate from the much larger Social Security retirement fund. Under current projections, the DI trust fund will need replenishment in 2016.

USPS OIG — Package Services: Get Ready, Set, Grow!

July 22, 2014 Comments off

Package Services: Get Ready, Set, Grow! (PDF)
Source: U.S. Postal Service, Office of Inspector General

The package delivery market has been growing considerably. Between 2008 and 2013, the U.S. Postal Service experienced a more than 20 percent increase in package volume. The main reason is the growing popularity of e-commerce, particularly online shopping. American businesses and consumers spent more than $68 billion to ship packages domestically in 2013. E-commerce sales in the U.S. alone this year will top $430 billion; global e-commerce will exceed $1.5 trillion.

There is no doubt that packages are growing in importance to the Postal Service’s future. To meet emerging customer demands, the Postal Service needs to position itself for long-term success and broaden its role across the package delivery value chain. The Postal Service has already taken some steps towards enhancing its ability to handle an increase in packages. However, it needs a strategy that includes expanding beyond the traditional postal expertise of last-mile delivery to offer one-stop.

Defense offsets: From ‘contractual burden’ to competitive weapon

July 22, 2014 Comments off

Defense offsets: From ‘contractual burden’ to competitive weapon
Source: McKinsey & Company

Western defense companies now need to look outside their core markets for growth. In the aftermath of the global economic crisis and over a decade of engagement in southwest Asia, many Western countries have scaled back their defense budgets, favoring instead more targeted spending and austerity plans. In Europe, ministries of defense are downsizing their military operations and procurement programs, and in the United States, the effects of the Budget Control Act of 2011 and sequestration will restrict defense spending through 2021 absent congressional action. By contrast, many countries representing addressable markets in Asia, the Middle East, and South America are investing in defense-modernization programs and over the past few years have increased their defense spending at compound annual growth rates of between 5 and 10 percent.

VA OIG — Administrative Investigation, Prohibited Personnel Practice and Preferential Treatment, National Cemetery Administration, VA Central Office

July 22, 2014 Comments off

Administrative Investigation, Prohibited Personnel Practice and Preferential Treatment, National Cemetery Administration, VA Central Office (PDF)
Source: U.S. Department of Veterans Affairs, Office of Inspector General

The former Under Secretary for Memorial Affairs engaged in a prohibited personnel practice when he created a position and preselected an employee for that position. He also engaged in preferential treatment of an NCA contractor when he developed a less-than-arm’s-length relationship with the contractor. Further, NCA improperly gave the contractor sole-source contracts to provide one-to-one services to select NCA employees.

Moving Up or Standing Still? Access to Middle-Skilled Work for Newly Arrived Migrants in the European Union

July 22, 2014 Comments off

Moving Up or Standing Still? Access to Middle-Skilled Work for Newly Arrived Migrants in the European Union
Source: Migration Policy Institute

Over the past 15 years, migration in Europe has changed considerably. The economic boom in the early and mid-2000s and expanded mobility owing to European Union enlargement helped create new populations of migrants from both within and beyond the European Union. These recent migrants are more educated than earlier arrivals and many are highly skilled. Against the backdrop of the global economic crisis, which profoundly affected many migrant-receiving countries in Europe, governments are grappling with questions of how to ensure that immigrants are able to find employment and progress into better jobs over time.

This overview report caps a series of six country case studies evaluating the employment outcomes for foreign-born workers in the Czech Republic, France, Germany, Spain, Sweden, and the United Kingdom. The study examines how easy it is for newcomers in the European Union to establish themselves in destination-country labor markets in the first ten years after arrival, and how well they are able to move out of unskilled work and into middle-skilled jobs.

A Trail Guide to Publishing Success: Tips on Writing Influential Conceptual, Qualitative, and Survey Research

July 21, 2014 Comments off

A Trail Guide to Publishing Success: Tips on Writing Influential Conceptual, Qualitative, and Survey Research
Source: Journal of Business Logistics

Publishing in top journals is difficult. Common challenges undermine authors’ attempts to explain and influence their discipline’s understanding and practice. We identify and describe these roadblocks to publishing success. We also benchmark best practice in management, marketing, and supply chain journals to provide a trail guide for writing—and publishing—influential conceptual, qualitative, and survey research. Given equifinality in research, our trail guide should not be viewed as the only way to craft excellent, influential research. However, if we agree on the basics, we can (1) increase consistency in the review process, (2) reduce publication cycles, and (3) begin to roll back the length of articles.

Continuity of Care and the Cost of Treating Chronic Disease

July 21, 2014 Comments off

Continuity of Care and the Cost of Treating Chronic Disease
Source: RAND Corporation

Strengthening coordination of care in the U.S. health care system is a priority for policymakers and the medical community. Poor coordination of care can drive up costs and harm patient health, especially for patients with chronic illnesses who see many different providers across many different settings. Some new models of care, such as the patient-centered medical home, focus on improving coordination as a way to provide affordable, high-quality care. Are these new models having the desired effect?

To answer this question, RAND researchers studied one important aspect of care coordination: continuity of care — the extent to which a patient’s care visits occur with the same provider. Researchers reviewed insurance claims data to gauge the association between continuity of care, costs, and patient outcomes during episodes of care for Medicare patients with one or more of three chronic diseases: congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), and type 2 diabetes mellitus (DM).

Researchers used a continuity of care (COC) index to measure the number of providers and/or practices involved in a patient’s care during a 365-day episode of care. The index ranges from 0 (each visit involved a unique provider) to 1 (all visits were billed by a single provider). An increase in the COC index reflects either fewer providers involved in a patient’s care or a concentration of visits among fewer providers.

Findings from this study show that modest improvements in continuity of care correlate with sizable reductions in service use, complications, and costs:

  • Higher levels of care continuity for CHF, COPD, and DM patients were consistently associated with lower rates of hospitalizations, emergency room visits, and complications.
  • An 0.1-unit increase in the COC index (which ranges from 0 to 1) was associated with episode-of-care costs for CHF, COPD, and DM patients that were on average 5 percent lower.

Return on Educational Investment: 2014 — A District-by-District Evaluation of U.S. Educational Productivity

July 21, 2014 Comments off

Return on Educational Investment: 2014 — A District-by-District Evaluation of U.S. Educational Productivity
Source: Center for American Progress

In 2011, the Center of American Progress released the first-ever attempt to evaluate the productivity of almost every major school district in the country. That project developed a set of relatively simple productivity metrics in order to measure the achievement that a school district produces relative to its spending, while controlling for factors outside a district’s control, such the cost of living and students living in poverty.

The findings of that first report were worrisome and underscored the fact that the nation suffers from a productivity crisis. The data suggested that low productivity might cost the nation’s school system billions of dollars a year. What’s more, too few states and districts tracked the bang that they received for their education buck.

In this updated report, CAP uses these same metrics to once again examine the productivity of the nation’s school districts. We embarked on this second evaluation for a number of reasons. In many areas, education leaders continue to face difficult budget choices, and more than 300,000 education-related jobs have been lost since the start of the Great Recession. At the same time, the advent of the new, more rigorous Common Core standards will demand that far more from educators, including better, tougher exams. In short, many educators are being asked to do more with less.

But still, school productivity has not become part of the reform conversation, and with this project, our hope is to shine a light on how productivity differs across districts, as well as to identify key areas of reform. Moreover, for the first time, we conducted a special analysis of educational fiscal practices, diving deep into state budgeting approaches. We believe that if our education system had a more robust way of tracking expenditures, it could do more to increase productivity. Together with this report, we have also released analysis by CAP Senior Policy Analyst Robert Hanna on twin districts. Hanna’s analysis looks more closely at the programs and practices of more effective districts.

State Government Indigent Defense Expenditures, FY 2008–2012

July 21, 2014 Comments off

State Government Indigent Defense Expenditures, FY 2008–2012
Source: Bureau of Justice Statistics

Provides data on state government indigent defense expenditures for fiscal years 2008 through 2012. Trends in spending and comparisons with total state government judicial-legal expenditures are also included. The report uses administrative data from the U.S. Census Bureau’s Government Finance Survey. This is a companion report to the Census Bureau’s report, Indigent Defense Services in the United States, FY 2008-2012.

Highlights:

  • In 2012, state governments spent $2.2 billion nationally on indigent defense, the lowest amount spent during the 5-year period from 2008 to 2012.
  • State government indigent defense expenditures showed an average annual decrease of 1.1% from 2008 to 2012.
  • From 2011 to 2012, state government indigent defense expenditures decreased by $45 million nationally (down 2.0%).
  • As a share of total judicial-legal expenditures by state governments, spending on indigent defense held steady between 9.5% and 10.0% from 2008 to 2012.

Impact of Fed Tapering Announcements on Emerging Markets

July 21, 2014 Comments off

Impact of Fed Tapering Announcements on Emerging Markets
Source: International Monetary Fund

This paper analyzes market reactions to the 2013–14 Fed announcements relating to tapering of asset purchases and their relationship to macroeconomic fundamentals and country economic and financial structures. The study uses daily data on exchange rates, government bond yields, and stock prices for 21 emerging markets. It finds evidence of markets differentiating across countries around volatile episodes. Countries with stronger macroeconomic fundamentals, deeper financial markets, and a tighter macroprudential policy stance in the run-up to the tapering announcements experienced smaller currency depreciations and smaller increases in government bond yields. At the same time, there was less differentiation in the behavior of stock prices based on fundamentals.

New From the GAO

July 21, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Consumer Finance: Credit Cards Designed for Medical Services Not Covered by Insurance. GAO-14-570, June 19.
http://www.gao.gov/products/GAO-14-570
Highlights - http://www.gao.gov/assets/670/664256.pdf
Podcast - http://www.gao.gov/multimedia/podcasts/664738

2. State Department: Implementation of Grants Policies Needs Better Oversight. GAO-14-635, July 21.
http://www.gao.gov/products/GAO-14-635
Highlights - http://www.gao.gov/assets/670/664905.pdf

3. African Growth and Opportunity Act: Observations on Competitiveness and Diversification of U.S. Imports from Beneficiary Countries. GAO-14-722R, July 21.
http://www.gao.gov/products/GAO-14-722R

The Effects of Premium Subsidies on Demand for Crop Insurance

July 21, 2014 Comments off

The Effects of Premium Subsidies on Demand for Crop Insurance
Source: USDA Economic Research Service

Premium subsidies are a major factor in the current success of the Federal crop insurance program. This study measures the change in crop insurance demand across multiple crops and regions following a legislated increase in subsidies. Findings reveal the influence of premium subsidies on participation in the program.

SNAP Error Rates at All-Time Lows; Steady Improvement in Payment Accuracy Reflects Program’s Extensive Quality Control System

July 21, 2014 Comments off

SNAP Error Rates at All-Time Lows; Steady Improvement in Payment Accuracy Reflects Program’s Extensive Quality Control System
Source: Center on Budget and Policy Priorities

The percentage of SNAP (formerly food stamp) benefit dollars issued to ineligible households or to eligible households in excessive amounts fell for the seventh consecutive year in 2013 to 2.61 percent, newly released U.S. Department of Agriculture (USDA) data show. That’s the lowest national overpayment rate since USDA began the current system of measuring error rates in 1981. The underpayment error rate fell to 0.6 percent, also the lowest on record. (See Figure 1.) The combined payment error rate — that is, the sum of the overpayment and underpayment error rates — fell to an all-time low of 3.2 percent.[1] Less than 1 percent of SNAP benefits go to households that are ineligible. In other words, more than 99 percent of SNAP benefits are issued to eligible households.

Evaluating the Effect of Smart Growth Policies on Travel Demand

July 21, 2014 Comments off

Evaluating the Effect of Smart Growth Policies on Travel Demand
Source: Transportation Research Board

TRB’s second Strategic Highway Research Program (SHRP 2) has released a project brief that provides transportation planning agencies with improved tools and methods to accurately and comprehensively integrate transportation investment decision making with land development and growth management.

Cyber Risks: The Growing Threat (III – updated)

July 21, 2014 Comments off

Cyber Risks: The Growing Threat
Source: Insurance Information Institute

Amid a rising number of high profile mega data breaches—most recently at eBay, Target and Neiman Marcus—government is stepping up its scrutiny of cyber security. This is leading to increased calls for legislation and regulation, placing the burden on companies to demonstrate that the information provided by customers and clients is properly safeguarded online.

Despite the fact that cyber risks and cyber security are widely acknowledged to be a serious threat, many companies today still do not purchase cyber risk insurance. However, this is changing. Recent legal developments underscore the fact that reliance on traditional insurance policies is not enough, as companies face growing liabilities in this fast-evolving area.

Specialist cyber insurance policies have been developed by insurers to help businesses and individuals protect themselves from the cyber threat. Market intelligence suggests that the types of specialized cyber coverage being offered by insurers are expanding in response to this fast-growing market need.

There is also growing evidence that in the wake of the Target data breach and other high profile breaches, the number of policies is increasing, and that insurance has a key role to play as companies and individuals look to better manage and reduce their potential financial losses from cyber risks in future.

Impact of San Francisco’s Toy Ordinance on Restaurants and Children’s Food Purchases, 2011–2012

July 21, 2014 Comments off

Impact of San Francisco’s Toy Ordinance on Restaurants and Children’s Food Purchases, 2011–2012
Source: Preventing Chronic Disease (CDC)

Introduction
In 2011, San Francisco passed the first citywide ordinance to improve the nutritional standards of children’s meals sold at restaurants by preventing the giving away of free toys or other incentives with meals unless nutritional criteria were met. This study examined the impact of the Healthy Food Incentives Ordinance at ordinance-affected restaurants on restaurant response (eg, toy-distribution practices, change in children’s menus), and the energy and nutrient content of all orders and children’s-meal–only orders purchased for children aged 0 through 12 years.

Methods
Restaurant responses were examined from January 2010 through March 2012. Parent–caregiver/child dyads (n = 762) who were restaurant customers were surveyed at 2 points before and 1 seasonally matched point after ordinance enactment at Chain A and B restaurants (n = 30) in 2011 and 2012.

Results
Both restaurant chains responded to the ordinance by selling toys separately from children’s meals, but neither changed their menus to meet ordinance-specified nutrition criteria. Among children for whom children’s meals were purchased, significant decreases in kilocalories, sodium, and fat per order were likely due to changes in children’s side dishes and beverages at Chain A.

Conclusion
Although the changes at Chain A did not appear to be directly in response to the ordinance, the transition to a more healthful beverage and default side dish was consistent with the intent of the ordinance. Study results underscore the importance of policy wording, support the concept that more healthful defaults may be a powerful approach for improving dietary intake, and suggest that public policies may contribute to positive restaurant changes.

Flattening Tax Incentives for Retirement Saving

July 19, 2014 Comments off

Flattening Tax Incentives for Retirement Saving
Source: Brookings Institution

The United States’ pension system has failed millions of workers who enter into retirement with very limited assets relative to what they need to live securely the rest of their lives. According to Survey of Consumer Finance data, about 40 percent of households headed by someone near retirement (ages 55–64) do not hold any assets in retirement savings accounts. The median retirement savings account balance for all households in this age group is only $12,000 (Rhee 2013).

At the same time, the pension landscape has been gradually shifting away from defined benefit (DB) pension plans toward defined contribution (DC) plans. The shift is especially pronounced in the private sector. Between 1989 and 2012, the proportion of private industry full-time workers participating in DB pension plans declined from 42 to 19 percent, while the share participating in DC plans increased from 40 to 51 percent (Bureau of Labor Statistics 2013; Wiatrowski 2011). While DB plans often provide significant benefits for the lucky minority who have been in a single job for many years before retirement, DC plans can be more beneficial for a mobile workforce. At the same time, the transition from DB to DC plans has also presented new challenges.

Because DB pensions are tied to employers, long-term workers sometimes achieve adequate protection even without much planning on their own part. They are automatically enrolled and often do not even have to contribute. Benefits are automatically paid when workers retire. With DB pensions, employers bear the responsibility for ensuring that employees receive pension benefits. In contrast, DC retirement accounts are owned by employees. With most DC plans, the most familiar of which are 401(k)-type plans, workers bear the responsibility for their own financial security. Unless such plans include automatic features, workers have to actively decide to participate, how much to contribute, which investments to put their money in, and how to manage their benefits through retirement.

This paper focuses on the effects of the tax preferences for employer-sponsored defined contribution plans. Using two notable microsimulation models, we simulate the effect of changes in contribution limits to retirement plans, the saver’s credit, and the exclusion of contributions from taxable income on current and future taxes and retirement savings. We find that reducing 401(k) contribution limits would primarily increase taxes for the richest taxpayers; expanding the saver’s credit would raise saving incentives and lower taxes for low- and middle-income taxpayers; and removing the exclusion for retirement saving incentives and replacing it with a 25 percent refundable credit will benefit some taxpayers—mainly low- and middle-income taxpayers—while raising taxes and reducing retirement assets for others—primarily those at the top of the income distribution.

CBO — H.R. 4194, Government Reports Elimination Act of 2014

July 18, 2014 Comments off

H.R. 4194, Government Reports Elimination Act of 2014
Source: Congressional Budget Office

H.R. 4194 would eliminate the requirement for 17 federal entities to prepare certain reports for the Congress. Based on information from the Office of Management and Budget and some affected agencies, CBO estimates that implementing this legislation would reduce costs that are subject to appropriation by less than $1 million over the next five years. Enacting H.R. 4194 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.

H.R. 4194 would eliminate the requirement to prepare 66 reports that are produced by numerous federal agencies, including: the Departments of Agriculture, Commerce, Defense, Education, Energy, Homeland Security, Interior, Labor, State, Transportation, Treasury, and Veterans Affairs, and the Corporation for National and Community Service, the Environmental Protection Agency, the Executive Office of the President, the Government Accountability Office, and the Office of the Director of National Intelligence. By reducing the number of reports that must be prepared and printed, implementing H.R. 4194 would reduce the administrative costs of those agencies. However, about 50 of the reports are either duplicative, obsolete, or would remain available online. CBO estimates that eliminating the requirement to produce them would yield a small reduction in administrative costs.

H.R. 4194 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local or tribal governments.

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