Top PDF Willingness to pay and the sovereign debt contract

Willingness to pay and the sovereign debt contract

Willingness to pay and the sovereign debt contract

There are two groups of critics of the IMF: on the one hand are those who consider the IMF as not aggressive enough in providing liquidity, thinking that financial distress is the result of weak aggregate demand and should be corrected with more government spending, more borrowing, and fiscal expansion; on the other hand are those considering that the IMF intervention implies a serious moral hazard for the official sector, and in some instances improper liquidity assistance helped to postpone structural reforms financing capital flights aggravating the severity of the crisis. For this last group the IMF seems to act as a natural predator to vultures, on the one hand providing liquidity when nobody would, except vultures, and on the other hand urging sovereign bond issuers to modify their contracts enabling easier restructurings through majority actions, or collective action clauses (CACs), instead of unanimity clauses. Supposedly these modifications would help the extinction of most vultures’ holdouts (Krueger 2002). But sovereigns, investment funds, and some economic research argued that sovereign immunity plus weak CACs could accelerate the extinction of both, vultures and international private lending to emerging markets. The argument is that UACs, and other contractual provisions affecting the probability of successful renegotiation, enforce the debtor’s willingness to pay. Allowing partial coalitions of bondholders to relax incentive constraints would weaken the willingness to pay, jeopardizing international capital flows to emerging markets.
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Patient preferences and willingness to pay for innovations in intermittent self-catheters

Patient preferences and willingness to pay for innovations in intermittent self-catheters

Methods: A discrete choice experiment survey was conducted to evaluate the patients’ per- ceived value of catheter features. Attributes were selected based upon a literature review of the most important characteristics of catheters and the survey was developed and validated with input from patients and medical experts. Data were analyzed using the conditional logit model whereby the coefficients obtained from the model provided an estimate of the (log) odds ratios of preference for attributes. Willingness to pay was estimated for all levels of the attributes. Results: Two-hundred and eighty-three participants completed the questionnaire and were included in data analysis. Risk of infection had the highest odds ratios as preferred important attribute for all three countries followed by ease of insertion. “Pre-coated catheters” was found to be valued as the most preferred coating technology across all countries. Out of pocket cost was a significant influence on patients’ choice.
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Adoption of weather index insurance: Learning from willingness to pay among a panel of households in rural Ethiopia

Adoption of weather index insurance: Learning from willingness to pay among a panel of households in rural Ethiopia

Understanding determinants of preferences for insurance offered through different modalities can help inform us about the drivers of demand. Marketing to groups rather than individuals may have a number of advantages. Not only does it reduce the cost of marketing and increase group members’ trust in the insurance being offered, but when it is combined with informal risk sharing within the group, it can allow individuals to manage small levels of risk within the group and use group insurance purchases to insure larger or more covariate risks (Clarke and Dercon 2009; Dercon et al. 2010). The groups we consider are traditional funeral associations called iddirs that are widespread in Ethiopia. Second, we examine how willingness to pay would be affected were a household to experience downside basis risk, in particular if its members were to pay for an insurance contract, realize a year of bad weather, and not receive a payout (due to the difference between the index and the rainfall on their field). Weather index insurance is characterized by basis risk, and understanding how downside basis risk affects demand—and whether there are some individuals who may be particularly affected—is important to assessing the long-term sustainability of an index insurance market.
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THE DISPARITY BETWEEN ONE’S WILLINGNESS TO ACCEPT AND WILLINGNESS TO PAY

THE DISPARITY BETWEEN ONE’S WILLINGNESS TO ACCEPT AND WILLINGNESS TO PAY

There is controversy in behavioral economics regarding the gap between one’s willingness to pay (WTP) and willingness to accept (WTA). Economic theory states that WTA and WTP should be the same, but they are almost always different when observed. Some economists believe this is due to an individual’s risk attitudes. Some believe experience and age are factors. Others are convinced that there really is no disparity. This paper will outline several experiments for each disparity factor considered and show that there is still no consensus among researchers. I also conducted my own experiment among college students which shows there is a significant gap between WTA and WTP when emotions are taken into consideration. Overall, in order to better understand consumer behavior, researchers should focus less on what causes this gap and more on which factors affect the gap most significantly given the type of good and the market the good is in.
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The Attitude and the Willingness to Pay of the Climbers for Repairment of the Climbing Path on Mount Talang

The Attitude and the Willingness to Pay of the Climbers for Repairment of the Climbing Path on Mount Talang

value of the willingness of the climbers to pay for the repairment of the climbing path on Mount Talang using Contingent Valuation Method (CVM), which identifies the attitude of the climbers and the willingness to pay toward it. The research method employs the survey method of questionnaire and direct interview with 100 samples. The sample of the study is the climbers who have climbed Mount Talang. The result of the willingness value of the climbers with the amount of pay is IDR 11.700, explains that the climbers are willing to pay that amount of IDR 10.000 retribution fee for the previous climb. The total value of the climbers’ willingness is IDR 183.128.400 per year based on the calculation of the willingness value in 2017. The attitude of the climbers toward the climbing path on Mount Talang shows that 54% of the climbers have shown pro- environmental attitude and 46% have not pro- enviromental attitude toward the climbing path of Mount Talang. There is a positive relation between the attitude of the climbers and the willingness to pay in which those climbers who have pro-environmental attitude have a higher willingness value than those climbers who have not.
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Feasibility and willingness to pay for dengue vaccine in the threat of dengue fever outbreaks in Vietnam

Feasibility and willingness to pay for dengue vaccine in the threat of dengue fever outbreaks in Vietnam

The findings of this study would be used to propose several implications. First, appropriate counseling services should be provided to patients with DF helping them increase their psychological health, thus increasing their likelihood of willingness to pay. Second, educational campaigns should be implemented carried out to improve people’s awareness and attitude toward the dengue vaccine, particularly among travelers, resulting in acceptance and WTP of the commu- nity for the vaccine. Third, the findings of this study could be used by policy makers in economic evaluations to have appropriate resource allocation strategies for the introduc- tion of the dengue vaccine. In addition, the understanding of the contextual factors is important in designing vaccina- tion programs as well as marketing strategies in the future. Moreover, this study will give the authorities and vaccine manufactures knowledge of people’s perception of dengue vaccines in a dengue outbreak.
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Patient preference and willingness to pay for knee osteoarthritis treatments

Patient preference and willingness to pay for knee osteoarthritis treatments

local poverty definitions adjusted for size of household. This restriction was included to avoid the anticipated dilution of the measure of willingness to pay due to economic limita- tions; it was estimated that unreimbursed patient co-payments could add up to £500/ € 350 for a single course of treatment on one knee (not including the office visit co-pay). In France, the minimum annual household income required ranged from € 9,640 for a single-person household to € 14,460 for a house- hold of three or more persons. The corresponding minimums in Germany ranged from € 9,910 to € 20,820; in Spain from € 7,530 to € 15,820; in Italy from € 7,140 to € 19,400; and in the UK from £6,450 to £15,600 (mean exchange rate during data collection [November 2012] was 1.23 GBP/EUR). There were two exclusion criteria: participants who had undergone knee-replacement surgery in one or both knees (or who were planning to undergo surgery in the 12 months following participation in the survey), and participants associated with a market research company, pharmaceutical company, drug manufacturer, advertising agency, newspaper, magazine, TV or radio station, or any other news organization.
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Understanding patient preferences and willingness to pay for hemophilia therapies

Understanding patient preferences and willingness to pay for hemophilia therapies

Background: Despite clearly improved clinical outcomes for prophylaxis compared to on-demand therapy, on average only 56% of patients diagnosed with severe hemophilia receive prophylactic factor replacement therapy in the US. Prophylaxis rates generally drop as patients transition from childhood to adulthood, partly due to patients becoming less adherent when they reach adulthood. Assessment of patient preferences is important because these are likely to translate into increased treatment satisfaction and adherence. In this study, we assessed prefer- ences and willingness to pay (WTP) for on-demand, prophylaxis, and longer acting prophylaxis therapies in a sample of US hemophilia patients.
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Demand and willingness to pay for different treatment and care services among patients with heart diseases in Hanoi, Vietnam

Demand and willingness to pay for different treatment and care services among patients with heart diseases in Hanoi, Vietnam

This study has implications in both policy/management and clinical practices. It is recommended that policy makers put forward policies that facilitate home-based care – encouraging hospitals to actively participate in providing home-based services, as well as expanding health insurance coverage to these services. This would assist the reduction of current overload at hospitals while enhancing the effec- tiveness of treatments and experience of patients. On the clinical level, hospitals should improve the quality of their hospital-based services to better cater to high demand from patients and, at the same time, seek to develop different service packages to suit varying patients’ needs. In addition, Table 7 Associated factors with the amount of willingness to pay for different home-based services
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Default Costs, Willingness to Pay and Sovereign Debt Buybacks

Default Costs, Willingness to Pay and Sovereign Debt Buybacks

In the previous section the default decision was an all or nothing matter, as in the standard willingness to pay model. In contrast, as discussed in the Introduction, the standard model used in the buyback literature has been the output tax model. It is assumed that creditors are able to claim some increasing function of output (or exports) which may be linear with slope less than unity as in Bulow and Rogoff (1988), or with slope equal to one (“gunboat technology”), as in Froot (1989). This form may be justified on the basis of being the outcome of bargaining between the sovereign and creditors after the output realisation is observed (e.g., Detragiache (1994)). A key feature of this class of models is that failure to repay the debt in full has no adverse consequences for the sovereign (other than the repayment that is actually made). While this seems highly unrealistic, the advantage of this approach is that it conforms to the observation that outright default on all obligations is nowadays rarely observed.
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Willingness to Pay for Digital Contents in Japan

Willingness to Pay for Digital Contents in Japan

¶ ¶ , divided by the negative of the derivative of utility with respect to price, i.e., the price coefficient. Willingness to pay for switching providers, i.e., the switching cost, is negative 340 Yen (US$3) per month. This amount is approximately the same as the current monthly subscription fee for mobile digital content of 300 yen per month. Meanwhile, for content robustness and content update, consumers are willing to pay 83 Yen and 62 Yen a month more for each unit of increase, respectively.

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Women’s preferences, willingness-to-pay, and predicted uptake for single-nucleotide polymorphism gene testing to guide personalized breast cancer screening strategies: a discrete choice experiment

Women’s preferences, willingness-to-pay, and predicted uptake for single-nucleotide polymorphism gene testing to guide personalized breast cancer screening strategies: a discrete choice experiment

Materials and methods: We administered a discrete choice experiment (DCE) to English- speaking Singaporean women aged 40–69 years without any history of breast cancer, enrolled via door-to-door recruitment with quota sampling by age and ethnicity. DCE attributes comprise: 1) sample type (buccal swab and dried blood spot), 2) person conducting pretest discussion (specialist doctor, non-specialist doctor, and nurse educator), 3) test location (private family clinic, public primary-care clinic, and hospital), and 4) out-of-pocket cost (S$50, S$175, and S$300). Mixed logit model was used to estimate the effect of attribute levels on women’s pref- erences and mWTP. Interactions between significant attributes and respondent characteristics were investigated. Predicted uptake rates for various gene testing scenarios were studied. Results: A total of 300 women aged 52.6±7.6 years completed the survey (100 Chinese, Malay, and Indian women, respectively). Sample type (P = 0.046), person conducting pretest discussion, and out-of-pocket cost (P,0.001) are significantly associated with going for SNP gene testing. Women with higher income and education levels are more willing to pay higher prices for the test. Preferences in terms of mWTP across ethnic groups appear similar, but Chinese women have greater preference heterogeneity for the attributes. Predicted uptake for a feasible scenario consisting of buccal swab, pretest discussion with nurse educator at the hospital costing S$50 is 60.5%. Only 3.3% of women always opted out of the SNP gene test in real life. Reasons include high cost, poor awareness, and indifference toward test results.
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Knowledge, attitude, and practice on and willingness to pay for human papillomavirus vaccine: a cross-sectional study in Hanoi, Vietnam

Knowledge, attitude, and practice on and willingness to pay for human papillomavirus vaccine: a cross-sectional study in Hanoi, Vietnam

Data were analyzed using STATA software (version 12.0). For missing data, the highest proportion of missing data was 6.1%, for the desire to be vaccinated. The chi-squared test was used to assess differences in sociodemographic variables (age, education, marital status, and occupation), sources of seeking HPV information, KAP about the HPV vaccine, sexually transmitted infections (STIs), and use of repro- ductive health services between the genders. Logistic and interval regressions were used to identify factors associated with WTP and the amount that people were willing to pay.
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Assessment of recreational value of Golestan Pardisan Forest Park Complex using a contingent valuation method (A case study in Golestan province, Gorgan)

Assessment of recreational value of Golestan Pardisan Forest Park Complex using a contingent valuation method (A case study in Golestan province, Gorgan)

The total weight elasticity with relation to variable of education which equal 0.18, is shown that with another fixed factors of increase one percent in education level, likelihood the willingness to pay for visitors is increased 0.18 percent and its reason is knowledge of persons of Environmental endowments and conservation of them that this subject for indirect results of increasing educational level and information. The quantities of considered elasticity for two independent variables of income of visitors and suggestive price are 0.09 and -0.07 respectively. With increasing one percentage in suggestive price causes decrease percentage of probability acceptance of individual willingness to pay. Marginal effect is respecting two independent variables of education and income which are 0.012 and 0.00000012 respectively. In other words, probability of acceptance of individual willingness is increased 0.012 and 0.00000012 respectively when we increase of one unit mentioned variables. Marginal effect variable of suggestive price equals -0.00012, it means increasing one unit of mentioned variable causes to decrease of probability acceptance of the individual willingness to pay of the required scale 0.00012 percentages. Mean individual willingness to pay are calculated 13000 for pardisan Forest Park complex for each visitor by using function 5: (mean willingness to pay)*(number of annual visitors) = the value of annual recreational Golestan pardisan Forest Park complex
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Sovereign Debt Contract and Optimal Consumption-Investment Strategies

Sovereign Debt Contract and Optimal Consumption-Investment Strategies

At time 0, the sovereign country considers the possibility to augment its initial wealth. Suppose that it has incentives to borrow from abroad by signing a debt contract of the form (I ∗ , C(I ¯ ∗ )) 1 , where I ∗ is the amount borrowed and ¯ C is the corresponding coupon. In the paper we consider a perpetual debt contract, i.e. there is no repayment of the principal amount of the loan, but the borrower commits to pay to the lender a perpetual continuous coupon ßow ¯ C(I ∗ ), where the value of ¯ C(I ∗ ) is deÞned endoge- nously in our model. We also assume that this borrowing technology is static, i.e. the borrower can augment his wealth via external Þnancing only once. Therefore, after the debt contract (I ∗ , C(I ¯ ∗ )) is signed, the notion of ”reputation” vanishes for the borrower. We also assume that the initial wealth of the sovereign country is not that high that it can be treated as a ”safe” borrower. Hence, the debt contract we just described encounters credit risk and the initial yield of the loan must be above the risk-free rate r.
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Sovereign debt buybacks as a signal of creditworthiness

Sovereign debt buybacks as a signal of creditworthiness

money, positively related to the secondary market debt price, and negatively related. to spread, as expected under the willingness-to-pay approach[r]

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Iranian faremers’ willingness to improve water quality in the Zayande River

Iranian faremers’ willingness to improve water quality in the Zayande River

each m 3 deceasing in underground water usage as rewards, will you accept it or not?”. The authors did not compute WTA, but reported that 78.2% of farmers agreed to accept this hypothetical level of a government payment in order to cooperate in a conservation program. The contingent valuation method (CVM) is used to address the objectives of this study. This technique involves soliciting responses to hypothetical questions regarding the value that people place on environmental goods. Pagiola (1996) stressed that CVM can, in principle, be used to value any environmental benefit, since it is not limited to deducing preferences from available data. Where actual market data are lacking, CVM seeks to discover how people would value certain environmental changes by questioning a sample of the population concerned. The most common question asked in CVM is the maximum amount people would be willing to pay (WTP) or willing to accept (WTA) for specific change to occur (Freeman, 1993; and Carson, 2001).
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Small farmers’ preferences for weather index insurance: insights from Kenya

Small farmers’ preferences for weather index insurance: insights from Kenya

The WTP estimates for the different attribute levels can be interpreted as increments over the base value of insurance. That is, the mean WTP for a contract with transparent communication of weather data through weekly text messages would be 7.56 + 0.79 = 8.35% of the expected harvest. The point estimates for the dif- ferent attribute levels are all highly significant but quite small in magnitude, which may be due to the assumed lognormal distribution of the premium rate variable. However, even if the marginal WTP for the attribute levels was underestimated, relative comparisons should still be in order because the same calculation methods were used for all attributes. The highest marginal WTP is observed for the transparency attribute. Transpar- ency also seems to be more important than distance to the weather station. Even though farmers are willing to pay less for contracts with reference stations fur- ther away from their farm, the WTP comparison sug- gests that transparent communication and information provision may have a larger effect on insurance uptake Table 6 Marginal willingness to pay for WII attributes
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Sovereign liquidity crisis: the strategic case for a payments standstill

Sovereign liquidity crisis: the strategic case for a payments standstill

The G-22 Report on International Financial Crises (released at the time of the Fund/Bank Meet- ings in October 1998) has re-emphasized the need for creditor coordination and changes in contracts to secure this. Recognizing that, where a temporary suspension of payments cannot be avoided, “a disorderly workout is against the interest of debtors creditors and the international community”, it argued that the interests of all parties would be furthered by allowing “the international commu- nity to signal its willingness to provide conditional financial support”. It specifically supported an IMF policy of “providing financial support for policy adjustment, despite the presence ... of arrears on the country’s obligations to private creditors, including arrears on marketable debt instruments”, and went somewhat further than its predecessor, the Rey Report, in discussing the idea of amending Article Viii 2(b) of the IMF’s articles of Agreement to provide for a mandatory stay of enforcement of actions against a sovereign or against private debtors in the event of an interruption in debt pay- ments. But not much further; as it concluded “Such an amendment does not appear feasible at the present time.” 27
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The quest for banking stability in the euro area : the role of government interventions.

The quest for banking stability in the euro area : the role of government interventions.

In addition to the above, a CDS can be viewed as an insurance contract that provides protection against a specific default. CDSs are not traded on an exchange, however most CDSs are documented using standard forms drafted by the International Swaps and Derivatives Association (ISDA). CDS contracts provide protection against the default of a corporation, sovereign nation, mortgage payers, and other borrowers. The buyer of protection makes periodic payments, analogous to insurance premiums, at the CDS rate specified in the contract. If the named borrower defaults, the seller of protection must pay the difference between the principal amount covered by the CDS and the market value of the debt. For instance, when Lehman Brothers defaulted, its debt was worth about eight cents on the dollar, hence sellers of protection had to pay about ninety-two cents for each notional dollar of debt they had guaranteed. Following a credit event in a constituent of the index, the ISDA Determinations Committee votes to decide if a credit event has occurred for the entity and if an auction for the defaulted entity is to be held. If the outcome of this vote is positive, Markit publishes a new version of the index zero weighting the relevant entity i.e. the “reduced” index. Recovery rates for the examined indices are 40%. The benchmark Markit iTraxx Senior Financials index consists of 25 equally-weighted large and systemically important European banks.
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