A quadratic programming model of the Appalachian steam coal market
Abstract The authors report on an extension of recent modelling efforts to analyse the Appalachian steam coal market using a programming approach. The background to these modelling efforts is examined first. The particular aspects of the steam coal market to be modelled are then presented and the corresponding coal model described. Empirical results are analysed for the 1973 base solution and then compared to alternative solutions embodying variations in the parametric structure. Conclusions are drawn regarding potential policy applications.
Have Prices of Internationally Traded Steam Coal been Marginal Cost Based
During 2007 and 2008 steam coal prices soared to unprecedented levels. Since then much has been speculated about the drivers of these price peaks. This paper is concerned with the costs of steam coal allocation in the seaborne market and their influence on the price equilibrium. It presents an optimisation model that differentiates between mining technologies and therefore allows to analyse the effects of input price escalation on marginal costs in detail. Since 2005 input prices of commodities used in coal mining and bulk carrier freight rates increased significantly, causing marginal costs to rise. However, this affected suppliers along the global supply curve differently. We find that low-cost intramarginal suppliers experienced higher cost increases than marginal suppliers due to the different production technologies applied. Based on our results we conclude that prices of internationally traded steam coal are generally marginal cost based. However, the all time price spike of 2008 was not caused by cost escalation. We suppose that short-run capacity scarcity was responsible for the soaring prices in this year. Hence, marginal costs are a major determinant of the price equilibrium in the seaborne steam coal market given that capacity is not scarce.
Public Hospitals : Options for Reform through Public-Private Partnerships
Globally, health expenditures rose from an average of 3 percent of GDP in 1950 to 8 percent (US$3 trillion) in 1999 (WHO 2000). The increase in spending has been driven by rising income, changing demographic and epidemiological trends, and costly new pharmaceuticals and technology. Although technology is allowing a shift to outpatient care, hospitals still account for 30–50 percent of health expenditures. Public funding has not kept pace with the growth in spending. Much of the increase has been financed from private sources (out-ofpocket payments and private insurance), while the share funded publicly (by tax revenue and national insurance) declined by 6 percent between 1977 and 1997. Constraints on public funding, combined with rising costs, have forced public hospitals to cut costs wherever possible while still endeavoring to guarantee universal (and often free) access to public patients.1 Governments have used different strategies to address these problems, such as shifting financing from general tax revenue to payroll-financed national health insurance, narrowing the basic package of services available to all citizens, linking hospital funding to outputs and efficiency, amalgamating hospitals into networks, increasing autonomy and incentives for management, and reducing the number of hospital beds. Some governments have also turned to public-private partnerships to bring private sector efficiency into public hospitals.