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ECON180Fall2018Assignment8.docx
1
[Critique] Read the following paper:
Nurhadi, L., Boren, S. & Ny, H. (2014). A sensitivity analysis of total cost of ownership for electric bus transport systems in Swedish medium sized cities. Transportation Research Procedia, 3, pp. 818 – 827. Retrieved from
https://www-sciencedirect-com.ezproxy.library.uvic.ca/science/article/pii/S235214651400221X
Note: As you read the article, you may notice a number of obvious errors and strange decisions in their discounted cash flow analysis – for example, in how they use (P/F,i,N). You may ignore or skim these calculations, especially equations (3) – (6) on p. 821; for our purposes, what is important is how the authors put together their sensitivity analysis.
(12 marks) Write a 3-2-1 report in the usual fashion.
Question 1: In your own words , what are the 3 most important concepts, ideas or issues in the reading? Briefly explain why you chose them.
Concept 1 (In your own words) (2 marks)
Concept 2 (In your own words) (2 marks)
Concept 3 (In your own words) (2 marks)
Question 2: What are 2 concepts, ideas or issues in the article that you had difficulty understanding, or that are missing but should have been included? In your own words , briefly explain what you did to correct the situation (e.g. looked up an unfamiliar word or a missing fact), and the result. Cite any sites or sources used in APA format.
Issue 1 (In your own words) (1 mark)
Citation 1 (in APA format) (1 mark)
Issue 2 (In your own words) (1 mark)
Citation 2 (in APA format) (1 mark)
Question 3: What is the main economic story of the reading? (Economics studies the allocation of scarce resources.)
Story (In your own words) (2 marks)
(3 marks) Look at the spider plots on page 824. The horizontal axis ranges from -30% deviation from baseline to +30% deviation from baseline. Every line on the spider plot extends across the entire horizontal range.
Given what we learned in class about spider plots, is this a mistake? Explain briefly. (50 words or less, plus any calculations you feel you might need).
(Hint: Table 3 on page 823 provides minimum, maximum and baseline values for the variables in the spider plot.)
[Analysis and Theory]
This question is based on material from Lecture 19. You will find it very useful to have those lecture notes nearby when answering this question.
In a recent paper[footnoteRef:1], Abdullah et al. calculated the potential benefits to Canada from having Canadians eat more pulses (such as beans and lentils). Eating more pulses could result in lower rates of diabetes and heart disease, leading to savings in terms of medical costs, avoided deaths and avoided illnesses. [1: Abdullah, M.M.H., Marinangeli, C.P.F., Jones, P.J.H. & Carlberg, J.G. (2017). Canadian Potential Healthcare and Societal Cost Savings from Consumption of Pulses: A Cost-of-Illness Approach. Nuterients, 9(7), pp. 793 – 814. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5537906/ ]
A summary of the results is presented in the table below, which is based on Table 6 in the original paper. You do NOT need to read the original paper .
|
Cost Savings From (Millions of $ CAD) |
Scenario |
||
|
|
Worst Case |
Baseline |
Best Case |
|
Hospital Care |
4.8 |
23 |
48.4 |
|
Physician Care |
9 |
67.4 |
89.9 |
|
Pharmaceuticals |
16.3 |
65.3 |
163.3 |
|
Avoided Death |
0.4 |
1.1 |
3.6 |
|
Avoided Illness |
1.1 |
5.2 |
10.3 |
|
|
|||
|
Total Savings |
31.6 |
162 |
315.5 |
(6 marks) Create a tornado diagram from the information in the table. Show your work. Refer to the lecture notes for Lecture 19 for details on how to do this (instead of ‘lunch cost’, we have ‘total savings’).
(3 marks) For each variable, calculate the minimum and maximum % deviation from baseline. Present this information in a table. Show your work.
(6 marks) Create a spider plot from the information in the table. Show your work. (You can easily do this by hand, if you wish, since you’ll only be plotting straight lines.)
