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CBO — The Renewable Fuel Standard: Issues for 2014 and Beyond

July 30, 2014 Comments off

The Renewable Fuel Standard: Issues for 2014 and Beyond
Source: Congressional Budget Office

The Renewable Fuel Standard (RFS) establishes minimum volumes of various types of renewable fuels that must be included in the United States’ supply of fuel for transportation. Those volumes—as defined by the Energy Independence and Security Act of 2007 (EISA)—are intended to grow each year through 2022 (see the figure below). In recent years, the requirements of the RFS have been met largely by blending gasoline with ethanol made from cornstarch. In the future, EISA requires the use of increasingly large amounts of “advanced biofuels,” which include diesel made from biomass (such as soybean oil or animal fat), ethanol made from sugarcane, and cellulosic biofuels (made from converting the cellulose in plant materials into fuel).

One of the main goals of the Renewable Fuel Standard is to reduce U.S. emissions of greenhouse gases, which contribute to climate change. EISA requires that the emissions associated with a gallon of renewable fuel be at least a certain percentage lower than the emissions associated with the gasoline or diesel that the renewable fuel replaces. Advanced biofuels and the subcategory of cellulosic biofuels are required to meet more stringent emission standards than those that apply to corn ethanol.

Policymakers and analysts have raised concerns about the RFS, particularly about the feasibility of complying with the standard, whether it will increase prices for food and transportation fuels, and whether it will lead to the intended reductions in greenhouse gas emissions. Because of those concerns, some policymakers have proposed repealing or revising the Renewable Fuel Standard.

In this analysis, CBO evaluates how much the supply of various types of renewable fuels would have to increase over the next several years to comply with the RFS. CBO also examines how food prices, fuel prices, and emissions would vary in an illustrative year, 2017, under three scenarios for the Renewable Fuel Standard…

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State Prison Health Care Spending

July 30, 2014 Comments off

State Prison Health Care Spending
Source: Pew Charitable Trusts

This report finds that state spending on prisoner health care increased from fiscal 2007 to 2011, but began trending downward from its peak in 2009. Nationwide, prison health care spending totaled $7.7 billion in fiscal 2011, down from a peak of $8.2 billion in fiscal 2009. In a majority of states, correctional health care spending and per-inmate health care spending peaked before fiscal 2011. But a steadily aging prison population is a primary challenge that threatens to drive costs back up. The share of older inmates rose in all but two of the 42 states that submitted prisoner age data. States where older inmates represented a relatively large share of the total prisoner population tended to incur higher per-inmate health care spending.

Health, Work and Working Conditions: A Review of the European Economic Literature

July 30, 2014 Comments off

Health, Work and Working Conditions: A Review of the European Economic Literature
Source: OECD

Economists have traditionally been very cautious when studying the interaction between employment and health because of the two-way causal relationship between these two variables: health status influences the probability of being employed and, at the same time, working affects the health status. Because these two variables are determined simultaneously, researchers control endogeneity bias (e.g., reverse causality, omitted variables) when conducting empirical analysis. With these caveats in mind, the literature finds that a favourable work environment and high job security lead to better health conditions. Being employed with appropriate working conditions plays a protective role on physical health and psychiatric disorders. By contrast, non-employment and retirement are generally worse for mental health than employment, and overemployment has a negative effect on health. These findings stress the importance of employment and of adequate working conditions for the health of workers. In this context, it is a concern that a significant proportion of European workers (29%) would like to work fewer hours because unwanted long hours are likely to signal a poor level of job satisfaction and inadequate working conditions, with detrimental effects on health. Thus, in Europe, labour-market policy has increasingly paid attention to job sustainability and job satisfaction. The literature clearly invites employers to take better account of the worker preferences when setting the number of hours worked. Overall, a specific “flexicurity” (combination of high employment protection, job satisfaction and active labour-market policies) is likely to have a positive effect on health. This Working Paper relates to the 2014 OECD Economic Survey of the United States (www.oecd.org/eco/surveys/United States ).

Out-of-Pocket Health Care Expenses by Age and Insurance Coverage, 2011

July 29, 2014 Comments off

Out-of-Pocket Health Care Expenses by Age and Insurance Coverage, 2011
Source: Agency for Healthcare Research and Quality

Highlights

  • In 2011, an average of $703 was paid out of pocket for health care among people with some health care expenses. However, the median out-of-pocket amount was notably lower ($237).
  • Nearly one-fifth of people with some health care expenses had out-of-pocket expenses greater than $1,000 while 8.2 percent had out-of-pocket expenses greater than $2,000.
  • Average out-of-pocket expenses increased with age, ranging from $283 for children under 18 to $1,215 for people age 65 and older.
  • On average, the uninsured paid nearly two-thirds of their health care expenses out of pocket while people under age 65 covered by public insurance and people age 65 and older covered by Medicare and other public insurance paid a substantially lower percentage (only 9–11 percent).

China’s digital transformation

July 29, 2014 Comments off

China’s digital transformation
Source: McKinsey & Company

As individual companies adopt web technologies, they gain the ability to streamline everything from product development and supply-chain management to sales, marketing, and customer interactions. For China’s small enterprises, greater digitization provides an opportunity to boost their labor productivity, collaborate in new ways, and expand their reach via e-commerce. In fact, new applications of the Internet could account for up to 22 percent of China’s labor-productivity growth by 2025.

Yet the Internet is not merely a tool for automation and efficiency; it also expands markets rapidly. Greater adoption of web technologies in China could lead to the introduction of entirely new products and services if government and industry take the right steps to maximize the potential (exhibit). A new report from the McKinsey Global Institute (MGI), China’s digital transformation: The Internet’s impact on productivity and growth, projects that new Internet applications could fuel some 7 to 22 percent of China’s incremental GDP growth through 2025, depending on the rate of adoption. That translates into 4 trillion to 14 trillion renminbi in annual GDP in 2025.

New From the GAO

July 29, 2014 Comments off

New GAO Reports and Testimonies
Source: Government Accountability Office

Reports

1. USDA Farm Programs: Farmers Have Been Eligible for Multiple Programs and Further Efforts Could Help Prevent Duplicative Payments. GAO-14-428, July 8.
http://www.gao.gov/products/GAO-14-428
Highlights – http://www.gao.gov/assets/670/664671.pdf

2. 401(K) Plans: Improvements Can Be Made to Better Protect Participants in Managed Accounts. GAO-14-310, June 25.
http://www.gao.gov/products/GAO-14-310
Highlights – http://www.gao.gov/assets/670/664392.pdf

3. National Flood Insurance Program: Additional Guidance on Building Requirements to Mitigate Agricultural Structures’ Damage in High-Risk Areas Is Needed. GAO-14-583, June 30.
http://www.gao.gov/products/GAO-14-583
Highlights – http://www.gao.gov/assets/670/664517.pdf

4. Medicaid Financing: States’ Increased Reliance on Funds from Health Care Providers and Local Governments Warrants Improved CMS Data Collection. GAO-14-627, July 29.
http://www.gao.gov/products/GAO-14-627
Highlights – http://www.gao.gov/assets/670/665076.pdf

Testimonies

1. Screening Partnership Program: TSA Has Improved Application Guidance and Monitoring of Screener Performance, and Continues to Improve Cost Comparison Methods, by Jennifer Grover, acting director, homeland security and justice, before the Subcommittee on Transportation Security, House Committee on Homeland Security. GAO-14-787T, July 29.
http://www.gao.gov/products/GAO-14-787T
Highlights – http://www.gao.gov/assets/670/665067.pdf

2. Budget Issues: Opportunities to Reduce Federal Fiscal Exposures Through Greater Resilience to Climate Change and Extreme Weather, by Alfredo Gomez, director, natural resources and environment, before the Senate Committee on the Budget. GAO-14-504T, July 29.
http://www.gao.gov/products/GAO-14-504T
Highlights – http://www.gao.gov/assets/670/665090.pdf

3. Federal Real Property: Better Guidance and More Reliable Data Needed to Improve Management, by David J. Wise, director, physical infrastructure issues, before the Subcommittee on Government Operations, House Committee on Oversight and Government Reform. GAO-14-757T, July 29.
http://www.gao.gov/products/GAO-14-757T
Highlights – http://www.gao.gov/assets/670/665086.pdf

4. Tobacco Taxes: Disparities in Rates for Similar Smoking Products Continue to Drive Market Shifts to Lower-Taxed Options, by David Gootnick, director, international affairs and trade, before the Senate Committee on Finance. GAO-14-811T, July 29.
http://www.gao.gov/products/GAO-14-811T
Highlights – http://www.gao.gov/assets/670/665082.pdf

5. Medicaid: Completed and Preliminary Work Indicate that Transparency around State Financing Methods and Payments to Providers Is Still Needed for Oversight, by Katherine M. Iritani, director, health care, before the Subcommittee on Energy Policy, Health Care and Entitlements, House Committee on Oversight and Government Reform. GAO-14-817T, July 29.
http://www.gao.gov/products/GAO-14-817T
Highlights – http://www.gao.gov/assets/670/665070.pdf

6. Combating Nuclear Smuggling: Past Work and Preliminary Observations on Research and Development at the Domestic Nuclear Detection Office, by David C. Trimble, director, natural resources and environment, before the Subcommittee on Cybsersecurity, Infrastructure Protection, and Security Technologies, House Committee on Homeland Security. GAO-14-783T, July 29.
http://www.gao.gov/products/GAO-14-783T
Highlights – http://www.gao.gov/assets/670/665073.pdf

CBO Releases Updated and Complete Cost Estimate for H.R. 3230, the Veterans Access to Care Act of 2014, as Passed by the House

July 29, 2014 Comments off

CBO Releases Updated and Complete Cost Estimate for H.R. 3230, the Veterans Access to Care Act of 2014, as Passed by the House
Source: Congressional Budget Office

Today, as part of its ongoing work to assist the conference committee that is working on H.R. 3230, the Veterans Access to Care Act of 2014, CBO issued an updated and complete estimate of the version of the bill that was passed by the House of Representatives on June 18, 2014. That version of H.R. 3230 would authorize the appropriation of whatever sums are necessary for the Department of Veterans Affairs (VA) to expand, for two years, its use of non-VA health care providers to provide medical services to veterans.

Initially, CBO had issued preliminary estimates for the major provisions of the House-passed and Senate-passed bills. Since then, it has obtained additional information, refined its analysis, and completed estimates of other provisions of those bills. An updated and complete estimate of the Senate version of the bill was issued on July 10. Today, CBO issued an updated and complete estimate of the House version of the bill. Those updated estimates provide a basis for CBO’s analysis of proposals that would modify the earlier versions of the legislation.

Assuming appropriation of the necessary amounts, CBO estimates that implementing the House-passed bill would lead to a net increase of $41 billion in VA’s discretionary spending over the 2014-2017 period, reflecting the expectation that veterans’ utilization of contracted care under this act would ramp up over time. We also estimate that enacting the House version of the bill would reduce direct spending by $80 million during that period. Finally, if the amounts estimated were appropriated, CBO estimates that implementing the bill would lead to savings totaling $7 billion in the Medicare and Medicaid programs and to additional revenues of $2.5 billion over the 2015-2017 period.

The Senate-passed version of H.R. 3230 would authorize and appropriate such sums as may be necessary to carry out a similar expansion of health care services. CBO estimates that enacting the Senate version of H.R. 3230 would increase direct spending by $35 billion and increase revenues by $2.5 billion over the 2014-2024 period, and lead to additional appropriations totaling about $2 billion over the 2014-2019 period.

Debt in America

July 29, 2014 Comments off

Debt in America
Source: Urban Institute

Debt can be constructive, allowing people to build equity in homes or finance education, but it can also burden families into the future. Total debt is driven by mortgage debt; both are highly concentrated in high-cost housing markets, mostly along the coasts. Among Americans with a credit file, average total debt was $53,850 in 2013, but was substantially higher for people with a mortgage ($209,768) than people without a mortgage ($11,592). Non-mortgage debt, in contrast, is more spatially dispersed. It ranges from a high of $14,532 in the East South Central division to a low of $17,883 in New England.

See also: Delinquent Debt in America

Retirement — How Much Should People Save?

July 29, 2014 Comments off

How Much Should People Save?
Source: Center for Retirement Research at Boston College

The brief’s key findings are:

  • The National Retirement Risk Index framework is used to address how much working-age households need to save for retirement.
  • A typical household should get a third of its retirement income from a savings plan, with the low income needing one quarter and the high income one half.
  • A typical household needs to save about 15 percent of earnings, with the low income requiring less and the high income more.
  • For those with a savings shortfall, the necessary savings hike is much more feasible for younger households than for older households.
  • Starting to save early and retiring late dramatically reduce a household’s required saving rate.

Lack of Planning in $34.4 Million Department of Agriculture Soybean Program in Afghanistan

July 29, 2014 Comments off

Lack of Planning in $34.4 Million Department of Agriculture Soybean Program in Afghanistan (PDF)
Source: Special Inspector General for Afghanistan Reconstruction

The Honorable Tom Vilsack Secretary U.S. Department of Agriculture

Dear Mr. Secretary:

Thank you for your response to my inquiry letter dated April 17, 2014, concerning the Soybeans for Agricultural Renewal in Afghanistan Initiative (SARAI) funded by the U.S. Department of Agriculture (USDA). After examining the materials that you provided, I’m concerned about the viability of the project and the apparent lack of analysis and planning performed prior to the project’s initiation. I’m most troubled by the following issues:

• The USDA confirmed that soybean production in Afghanistan has not met expectations and that there are doubts concerning the long-term sustainability of a soybean processing factory built as part of the project.

• The project’s implementer, the American Soybean Association, did not conduct feasibility or value-chain studies prior to initiation of the project in 2010.

• Scientific research conducted for the UK Department for International Development between 2005 and 2008 concluded that soybeans were inappropriate for conditions and farming practices in northern Afghanistan, where the program was implemented.

• Despite the lack of prior planning and analysis, and despite evidence that may have put the success of the program in doubt, USDA provided $34.4 million in commodities, transportation, and administrative funds to ASA for SARAI.

Census Bureau Releases Industry Series Report on Semiconductors and Related Device Manufacturing

July 29, 2014 Comments off

Census Bureau Releases Industry Series Report on Semiconductors and Related Device Manufacturing
Source: U.S. Census Bureau

The U.S. Census Bureau today released additional figures from the 2012 Economic Census Industry Series reports for the manufacturing sector of the economy. This release includes new statistics for semiconductor and related device manufacturing (NAICS 334413).

Highlights include:

  • The semiconductor and related device manufacturing industry employed 90,244 people in 2012, down 38.3 percent from 146,152 employed in 2007.
  • The total value of industry shipments in the semiconductor and related device manufacturing industry was $72.2 billion in 2012.
  • The cost of gold and other precious metals used as a material in this industry more than doubled from $149.3 million in 2007 to $372.0 million in 2012, an increase of 149.1 percent.

Highlights of value of product shipment data

  • The total value of product shipments in the semiconductor and related device manufacturing industry was $70.7 billion in 2012.
  • Memory increased 24.4 percent from $6.0 billion in 2007 to $7.5 billion in 2012.
  • Transistors decreased 42.2 percent from $938.0 million in 2007 to $542.0 million in 2012.
  • Microprocessors made up 58.6 percent ($41.4 billion) of the total value of product shipments from semiconductors and related devices ($70.7 billion) in 2012.

Additionality in U.S. Agricultural Conservation and Regulatory Offset Programs

July 29, 2014 Comments off

Additionality in U.S. Agricultural Conservation and Regulatory Offset Programs
Source: USDA Economic Research Service

The Federal Government spent more than $6 billion in fiscal year 2013 on voluntary conservation payment programs to encourage the adoption of a wide range of conservation practices that address multiple environmental and resource conservation goals. Conservation payments can also come from private industry, particularly in the context of an agricultural offset market established as part of a cap-and-trade system designed to reduce nutrient or greenhouse gas (GHG) emissions. Payments lead to improvement in environmental quality only if farmers and ranchers who receive them adopt conservation practices that would not have been adopted without the payment.

When a voluntary payment causes a change in practice(s) that leads to improved environmental quality, these changes are “additional.” For any type of voluntary payment, there is some risk that the farmers or ranchers who receive them would have adopted the required practice(s), even without the payment. This study measures additionality for a number of common conservation practices typically supported by voluntary conservation payments and examines ways to increase additionality.

Building the 2021 Affordable Military

July 29, 2014 Comments off

Building the 2021 Affordable Military
Source: Center for Strategic & International Studies

The CSIS Affordable Military Working Group, and the earlier CSIS Defense Drawdown Working Group, examined the dramatic effects of both fewer and weaker defense dollars in an effort to deal with a deep budget drawdown without significantly weakening national security. This latest report defines a set of strategy options, each with associated capabilities, gleaned from other leading think tank reports as well as the study team’s analysis. The report identifies capability priorities for the 2021 and beyond security environment and recommends a force structure for a 2021 affordable military.

Promoting Patient Safety Through Effective Health Information Technology Risk Management

July 29, 2014 Comments off

Promoting Patient Safety Through Effective Health Information Technology Risk Management (PDF)
Source: RAND Corporation

The potential for health information technology (IT) to improve health care delivery has been appreciated for decades, but “digitizing” health care can also introduce new risks and even harm. As the use of health IT has grown, these risks have become more apparent. The authors of this report evaluated the efforts of 11 hospitals and ambulatory practices to use an improvement strategy and tools developed to promote safe use of health IT and to diagnose, monitor, and mitigate health IT–related safety risks. Through interviews, the authors discovered that some health care organizations (especially hospitals) with expertise in process improvement were able to identify and begin to mitigate health safety risks, but in most others, awareness of these risks was limited (especially in ambulatory practices). The authors concluded that better tools like the recently released Safety Assurance Factors for EHR Resilience (SAFER) Guides are needed to help organizations optimize the safe use of health IT. However, health care organizations will require a better understanding of the safety risks posed by electronic health record (EHR) use to take full advantage of the SAFER Guides. There may also be a need for additional tools and metrics (and further usability studies of existing tools and metrics) to better support the needs of health care organizations as they increasingly rely on health IT to improve the quality and safety of patient care.

UK Life Insurance Customers Prefer Buying Policies Online but Personal Touch is Important for Advice, According to Accenture Research

July 29, 2014 Comments off

UK Life Insurance Customers Prefer Buying Policies Online but Personal Touch is Important for Advice, According to Accenture Research
Source: Accenture

The most popular way to buy life insurance is now through digital channels but customers still value face-to-face contact for financial advice, according to the latest survey of UK life and pensions customers conducted by Accenture (NYSE: ACN).

According to the poll of 2,870 UK life and pensions customers, 38 percent of consumers purchasing life insurance in the last 12 months, bought online. This included purchases through websites run by insurers, independent financial advisors (IFAs) and banks. By comparison 33 percent bought policies in person and 22 percent completed transactions over the phone.

The survey also reveals that a significant number of customers (19 percent) used price comparison websites to buy a life policy in the last 12 months. In addition, 41 percent of all customer interactions with life insurance providers and 38 percent of interactions with pension providers over the last 12 months were digital, including time spent researching, buying and servicing products.

However, in-person meetings were the preferred way to conduct long-term financial planning. Almost one-third of customers (30 percent) do their planning in this way, and 43 percent would like to do so.

NIH-commissioned Census Bureau report highlights effect of aging boomers

July 28, 2014 Comments off

NIH-commissioned Census Bureau report highlights effect of aging boomers
Source: National Institutes of Health/U.S. Census Bureau

While rates of smoking and excessive drinking have declined among older Americans, prevalence of chronic disease has risen, and many older Americans are unprepared to afford the costs of long-term care in a nursing home, according to a report from the U.S. Census Bureau commissioned by the National Institutes of Health.

The report highlights those trends and others among America’s older population, now over 40 million and expected to more than double by mid-century, growing to 83.7 million people and one-fifth of the U.S. population by 2050. Population trends and other national data about people 65 and older are presented in the report, 65+ in the United States: 2010 (PDF, 12.0M). It documents aging as quite varied in terms of how long people live, how well they age, their financial and educational status, their medical and long-term care and housing costs, where they live and with whom, and other factors important for aging and health.

Social Security Board of Trustees: No Change in Projected Year of Trust Fund Reserve Depletion

July 28, 2014 Comments off

Social Security Board of Trustees: No Change in Projected Year of Trust Fund Reserve Depletion
Source: Social Security Administration

The Social Security Board of Trustees today released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2033, unchanged from last year, with 77 percent of benefits still payable at that time. The DI Trust Fund will become depleted in 2016, also unchanged from last year’s estimate, with 81 percent of benefits still payable.

In the 2014 Annual Report to Congress, the Trustees announced:

  • The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning with 2020, the cost of the program is projected to exceed income.
  • The projected point at which the combined trust fund reserves will become depleted, if Congress does not act before then, comes in 2033 – the same as projected last year. At that time, there will be sufficient income coming in to pay 77 percent of scheduled benefits.
  • The projected actuarial deficit over the 75-year long-range period is 2.88 percent of taxable payroll — 0.16 percentage point larger than in last year’s report.

Deconstructing Canada’s Housing Markets: Finance, Affordability and Urban Sprawl

July 28, 2014 Comments off

Deconstructing Canada’s Housing Markets: Finance, Affordability and Urban Sprawl
Source: OECD

House prices have increased significantly in Canada over the past decade, driving household debt and residential construction activity to historical highs. Although macro-prudential tightening has slowed the pace of household borrowing in the last few years, house prices have continued to trend higher, and affordability remains a major challenge in urban centres. First-time home buyers must therefore spend more of their incomes to purchase a house and are vulnerable to future interest rate hikes. Overbuilding in the condominium sectors of some cities appears to be a source of risk, especially if a major price correction in these segments spills over into other markets. The country benefits from a sound and effective housing finance system, which performed well throughout the global financial crisis thanks to strong regulatory oversight and explicit government backing of the mortgage market. Nonetheless, the dominance of the crown corporation CMHC in the mortgage insurance market concentrates a significant amount of risk in public finances. Improving competitive conditions in the mortgage insurance market could help diversify these risks and reduce taxpayer contingent liabilities, while introducing coverage limits on loan losses would better align private and social interests. There may be a shortage of rental housing in several cities, especially in the range that low-income households can afford. Urban planning policies have resulted in low-density residential development which contributes to relatively high transport-related carbon emissions. Addressing these externalities requires stronger pricing signals for land development, road use, congestion and parking, combined with better integration of public transit planning. To prevent the marginalisation of low-income households, planning policies should support social mix and increase incentives for private-sector development of affordable housing.

New Global Study Finds Companies Advanced in Social Business Actively Leveraging Social Data

July 28, 2014 Comments off

New Global Study Finds Companies Advanced in Social Business Actively Leveraging Social Data
Source: Deloitte/MIT

New research released today by MIT Sloan Management Review and Deloitte reveals that nearly two thirds of surveyed companies around the world find social business initiatives —including social media, social software and social networks—are positively impacting their business outcomes.

The report, Moving Beyond Marketing: Generating Social Business Value Across the Enterprise, based on a global survey of more than 4,800 business executives across 26 industries and 109 countries, found that the level of value companies achieve is related to their social business “maturity.”

Respondents who rated their companies further along the social maturity scale were more likely to report their companies practice the following:

  • Apply social business data in the decision making process: Nearly 80 percent analyze social data, and 67 percent integrate it into systems and processes to improve business decisions.
  • Employ a leadership vision that social can bring about fundamental changes: More than 90 percent of respondents say their leaders believe it can create powerful and positive change.
  • Infuse social business into multiple functions across the enterprise: A total of 87 percent use social business to spur innovation.

The 2013 Federal Reserve Payments Study — Recent and Long-Term Trends in the United States: 2000–2012

July 28, 2014 Comments off

The 2013 Federal Reserve Payments Study — Recent and Long-Term Trends in the United States: 2000–2012 (PDF)
Source: Federal Reserve Board

Underlying the net economic output of the country are billions of transactions between buyers and sellers of goods and services (such as consumers and merchants, factories and suppliers, employers and employees), as well as various financial transactions (such as transfers of balances between accounts, loan originations, and loan payments). The 2013 Federal Reserve Payments Study attempts to measure the number and value of all such transactions conducted over noncash payment systems—including general-purpose and private-label card systems, automated clearinghouse (ACH), and checks. The study builds on the triennial Federal Reserve Payments Study series, conducted since 2001, to paint a more comprehensive picture of the U.S. payments system.

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