Journal of Economic Impact

The Uncertainty Problem in Cost-Benefit Analysis Expanded: A Current Review

Derek Linton — Mon, 12 Feb 2024 00:00:00 +0000

This article examines the current state of cost-benefit analysis and its limitations. The review was completed by looking at current literature of cost-benefit analysis with the most up to date developments. Currently, it faces known challenges in quantifying subjective human elements, incommensurable costs and benefits, difficulty in measuring and discounting future benefits and costs, and the potential lack of impartiality in regulatory settings. However, this article uniquely addresses a paradox in the analysis process itself related to the discovery of new information. Methods to mitigate risk and uncertainty, such as sensitivity analysis, Monte Carlo simulations, and scenario analysis, are analyzed. Additionally, quasi-option value is addressed as it relates the discovery of new information. Despite these approaches to mitigate uncertainty, uncertainty remains a fundamental challenge in achieving true optimality through cost-benefit analysis. However, it is found that despite the paradox identified in this article, it can still be a useful tool in evaluating decision alternatives.

Subsector Outlook Research in Ethiopia: The Case of Hides and Skins Production, and Marketing

Rehima Mussema — Sun, 04 Feb 2024 00:00:00 +0000

Ethiopia is the 5^th largest livestock producer in the world and ranks first in Africa and the country is home to millions of livestock population that has the potential to produce hides and skins. the study aimed to analyze the status and outlook of hides and skins (HSs) production and marketing in Ethiopia. The study used secondary data and triangulated using KII and FGD, and conducted analysis using different forecasting techniques. Hides production increased by 4.94% annually between 2005/06 and 2021/22. Smallholder HSs sales rate declined while HSs home utilization rate increased between 2008/09 and 2021/22, these might be due to poor HSs quality and marking problems. These suggest that preparing a livestock management training manual and incorporating it into the existing extension package, and linking actors with markets are crucial. From 2002/03-2021/22, the volume of HSs, and leather and leather product (LLP) exports was volatile but reduced from 10.55 to 2.24 thousand MT, and the income reduced from USD 52.22 to 33.2 million. The volume of exports reduced by 43.47% from 2012/13 to 2021/22; this could be the result of the low quality of HSs, and government policy led to low production of tanners and manufacturers to supply to the export market therefore, maintaining the quality of HSs starting from livestock production, slaughter, and post-slaughter through extension service, and revising policies are important. Despite Ethiopia has opportunity for livestock availability, government support of the leather sector, and high demand for HSs in the international market, the leather sector faces production, marketing, and policy challenges. With these challenges, HSs production will continue and increase, while the sales rate will decrease and the utilization rate will continue but never increase for the next ten years. The HS and LLP export will also continue, but never increase in these years.

Energy, Forests and Environmental Sustainability: A Comparative Analysis of Developed and Developing Economies

Muhammad Ghulam Shabeer, Farhat Rasul — Mon, 12 Feb 2024 00:00:00 +0000

The use of fossil fuels is essential for economic growth, but it also creates environmental hazards that cause 5 million people to die every year. The use of renewable energy is limited because of financial constraints, and there is a need to find ways to decouple fossil fuel consumption and pollution. This study provides a way forward by introducing forest as a moderator. This study has taken data from all countries of the world from 2011 to 2021 and estimated the impact of forests, energy consumption, forest-energy moderator, population, and gross fixed capital formation on the environment. Leveraging the Feasible Generalized Least Squares (FGLS) estimation technique to address heterogeneity and outliers, the study reveals that while the effects of forests and energy consumption align, population density and gross fixed capital formation exert disparate influences on the environment in developing and developed nations. The incorporation of forests as a moderator emerges as a consistently effective measure.

The Role of Moderators on Product Quality and Export Flows: The Case of Pakistan

Sumaira Saeed, Miraj ul Haq, Arshad Ali Bhatti — Wed, 21 Feb 2024 00:00:00 +0000

High-quality products are always in demand for both local and international markets. The demand for such products can be increased by the product sales at a domestic level. It can also be helpful to increase the export flows of an economy and hence improve the trade flows. Other factors have a moderating role in determining the relationship between export product quality and trade flows. The objective of this study is to examine the role of moderating variables, which are used to check the strength of the above relationship. There are three variables: financial constraints, firm heterogeneity, and R&D activities are taken as moderators. For this purpose, the data is taken from annual financial reports of non-financial firms which are listed on the Pakistan Stock Exchange. Also, some country-level data is taken from the Pakistan Economic Survey. The objective of the study was achieved by using panel techniques Fixed Effect, Random Effect Model for the period of 1999 to 2020. It is found that firm heterogeneity and R&D activities have positive and financial constraints have negative but significant effects on strengthening the relationship between product quality and export flows. Based on our findings, the government should provide R&D funds and financial aid programs for new investors to improve product quality and increase their sales in local and international markets.

Impact of Financial Distress on Earnings Management with the Moderating Role of Audit Quality: Evidence from Pakistan

Wed, 21 Feb 2024 00:00:00 +0000

The core aim of the financial reports is to provide a firm’s annual results of financial performance and position to stakeholders on time. Several accounting scandals led to the default of many large-scale corporations, leading to investors’ lack of confidence in the reliability of financial information and also putting a question mark on the effectiveness of internal control mechanisms and external audits. Business managers of financially distressed firms use the choice of accrual accounting methods which gives them leverage to misuse their powers and expropriate stakeholders by showing good financial results. So, this study fills this gap by investigating the presence of Financial Distress (FD) and its effect on Earnings Management (EM) with the moderating role of Audit Quality (AQ). The sample of this study contains the data of 96 non-financial listed companies for the period 2017-2022 on the Pakistan Stock Exchange (PSX). This study uses the discretionary accruals as a proxy for the EM and Z-score for FD. The results and analysis find that FD and EM have a significant positive relationship, which reveals that corporate managers of distressed companies do EM while AQ weakens this relationship. This study recommends that professional bodies, regulatory authorities, and corporate governance institutions must design policies that restrict corporate managers from getting involved in earning management practices, especially in the time of FD.

A Comprehensive Farm Efficiency Analysis of Apple Growers in Newley Merged District South Waziristan

Zahid Ullah, Sarfraz Hassan, Azhar Abbas, Raza Ullah — Sat, 24 Feb 2024 00:00:00 +0000

In the apple-producing land of South Waziristan’s three tehsils, Wana, Bermal, and Tiarza, this research paper is designed to analyze farmers' efficiencies, e.g., production, allocative and technical dimensions. Through a Data Envelopment Analysis (DEA) framework, the study evaluates the performance trajectories of 304 apple growers. A multistage sampling technique was used for the farmer’s interview. To the researcher’s knowledge, there is no detailed efficiency analysis of South Waziristan’s apple growers in existing literature, so there is a need to investigate the factors affecting efficiencies in the targeted area. The researcher is therefore encouraged to conduct a study of the farm efficiency of apple growers in South Waziristan. Apple growers' efficiencies were categorized as technical, allocative, and economic efficiency using the DEA approach. Results of the study show that there were tremendous inefficiencies of apple growers, which need to be reduced. This study sheds light on optimal resource allocation, productivity dynamics, and efficiency frontiers within apple cultivation in South Waziristan. The research offers an understanding of agricultural practices, resource utilization patterns, and efficiency benchmarks. The empirical insights derived from this comprehensive analysis facilitate informed decision-making among farmers and provide policymakers, agricultural stakeholders, and development practitioners with actionable recommendations to enhance agricultural productivity, sustainability, and socio-economic well-being in the region. Through empirical evidence and contextual relevance, this paper contributes significantly to the evolving discourse on agricultural efficiency analysis and underscores the imperative of tailored interventions for optimizing apple cultivation practices in South Waziristan.

Equal Educational Opportunities: A Catalyst for Sustainable Economic Development

Hafsa Batool, Urooj Maqbool, Saba Gulzar — Tue, 16 Apr 2024 00:00:00 +0000

The study holds significance in revealing how ensuring fair access to education can fuel economic growth, promote social cohesion, and guide policymaking for sustainable development. The objective of current research is to empirically examine the relationship between gender disparity in educational attainment within social, and ecological systems. The data is collected for the period 1990-2022. In the presence of cross-sectional dependence 2^nd generation unit root test is applied. CS-ARDL technique is considered to examine the short-run as well as the long-run relationship between Gender disparity in education and the socio-ecological system. Achieving environmental sustainability and minimizing our ecological footprints depend critically on gender parity in education. Equal access to high-quality education gives women the knowledge, analytical abilities, and self-assurance to stand up for their communities and themselves. Findings describe that in the long run, there is a statistically significant negative correlation between the GINI-Coefficient and school enrollment tertiary and School enrollment primary. This indicates that, over time, a decrease in income disparity is linked to an increase in enrolment in primary and postsecondary education. In the long run, the GINI-Coefficient and Secondary school enrollment has a positive and statistically significant relationship. The data in Model 2 appear to indicate that the relationship between education and environmental sustainability is more intricate than the EKC hypothesis predicts. Higher education can raise one's knowledge and understanding of environmental issues, but it can also increase consumption and have an adverse effect on the environment. The findings of the study suggest that implementing policies with the goal of removing obstacles to education based on gender. This could entail giving families financial incentives to send their daughters to school and making sure that all genders have access to high-quality education.