Arhive: #3 2012
NEW RESEARCHES ON THE ECONOMY OF REGION
-
This paper reviews the evolution of scientific ideas about the regional economy as an independent direction of economic knowledge. The growing interest of scientists, university lecturers and specialists to the regional economy is noticed. The authors pay special attention to the origins of the regional economy, the contribution of Russian scientists to the disclosure of the content and nature of economic regionalization of the country as well as highlight the role of Soviet geographers and economists in developing the theory of clusters and the study of challenges to the rational distribution of production forces. It is emphasized that the new scientific discipline — regional economy — was born in the acute scientific discussions between Soviet geographers and economists, particularly regarding the subject of investigation. The conclusion is substantiated that so far in economic science four major views on the subject of understanding and interpretation of the regional economy were formed. The authors pay attention to the fact that at present there is a further extension of the subject of the regional economy, mainly over the border of the material space and location of productive forces. The paper concludes that the formation of a modern paradigm of regional economy should be based on several basic principles, among which are the following ones: consideration of the regional economy as an evolving complex structural discipline; territoriality as a dominant feature of any research in the regional economy; the imperative of any study that claims to belong to a regional economy is not only to establish general patterns of development and organization of economic life in the territory, but also the identification of its regional (local) specific.
INNOVATION ACTIVITY
-
The authors designate three problems in frames of this paper. First, to analyze the level of research activity of the best Russian universities at the start of the most important stage of higher education system reform — basing on the results of 2009-2010 and to assess what kind of resource they have received at their disposal from the state. Second, to understand which areas of research potential and how should the leading universities try to influence. Third, to assess the gap in the area of research and development potential that exists between the classified leading universities and other ones, to formulate ways to bridge this gap on the example of the Ural region. The approach to the assessment of research and development activity of the universities is suggested to solve these problems of comparison of methodologies for evaluating research results of universities in global rankings of higher education institutions. Basing on the results and conclusions, four key directions for significant growth of international level of scientific productivity of Russian universities are formulated.
-
This paper substantiates the hypothesis of the special role of universities in creating an environment of innovational micro entrepreneurship in a region. The role of business incubators is allocated; the algorithm for selecting projects is described. The results of a three-year organizational and economic experiment (with the changing conditions) on the functioning of the student business incubator in the Ural State University are shown. Various models of the selection of ideas and projects for different cycles of incubation are implemented. A decision on the establishment of the Entrepreneurship Center in the Institute of Management and Entrepreneurship is made. The Center’s main task is to form a series of events to support continuous generation of students’ business ideas, finding resonant response with the University experts and representatives of business environment in the region. A student in the business incubation system plays a new role for a Russian university — a role of a catalyst, i.e., directly acts as an element of positive feedback in the innovational system. It is shown that the catalytic path of the establishment and development of small high-tech business — Science to Business (StB) — leads to the phenomenon of resonance, i.e., sustainable innovation flow generated by the business incubator of the University. The poll of the USU students in 2009-2011 (a sample from 660 to 854 respondents) confirmed their positive attitude towards entrepreneurship and allowed to estimate the structure of the factors that hamper to increase student participation in the innovational business. Three blocks of factors were identified: the reluctance to take risks, inaccessibility of material and financial resources and the turbulence of the environment. A system of monitoring students' attitudes towards entrepreneurship, which allows adjusting the curriculum and creating institutional conditions for activation of innovative entrepreneurship of the youth, is suggested.
-
The consideration in this paper is given to innovative model of development of traditionally industrial territories. We emphasize the following basic approaches to the employment of innovative potential of territories: diversification and restructuring of local economy, integration and disintegration of life-sustaining activity of neighboring territories, progressive economic advance, as well as simultaneous combination of several approaches (mixed model). Progressive model of development is sufficiently popular and is related tothe increasing already existing potential of territories. In practice,it doesn’t generally suppose essential changes in sectoral structure of local economy and means developing existing productions and spheres of activity of territory. Mixed model of structural transformations is characterized through the fact, that it supposes simultaneous use of different elements from the models counted. It allows: firstly, to adopt in a bigger extent a complex of measures to conditions of certain territory; secondly, to take into account a broader range of exogenous and endogenous factors; thirdly, to raise the effectiveness of the program of structural transformations being realized.
-
This paper presents a mathematical model of economic development of an enterprise with a particular point of assessment of capital-labor and ratio capital equipment accumulation conditions and their further changes depending on the strategy of the company. To construct a mathematical model of the economy's growth indicators, Solow model which adequately reflects the key aspects of the economy-wide process of expanded reproduction and helps to highlight the main features of the formal models of the dynamics is applied, as well as Shell model with applying Pontryagin maximum principle. An organization's readiness to investment processes — investment «maturity» — is seen through the current level of technical capacity and current capital-labor ratio. The substantiation of the need for a certain level of saturation of agricultural equipment in the organization as a secure mean of ensuring the optimum performance of work in the most intense phase of the production of complex planting and harvesting is provided. To construct a mathematical model reflecting the dependence of capital-labor productivity on capital-labor ratio, a mathematical model in the form of the production function of Cobb-Douglas type is suggested.
SOCIO-ECONOMIC PROBLEMS OF REGIONS
-
The issue of sustainable socio-economic systems of different hierarchical levels, including the region, includes an extensive list of issues. The task of stimulating innovative activity, improving the competitiveness of the economy, while ensuring its security and stability occupy a special place among these issues. This paper analyzes the place and role of these processes to achieve sustainable socio-economic development. The author's theoretical approach to assessing the relationship of processes of innovation, competitiveness, maintain the economic security of the region and ensure its sustainable socio-economic development, based on the analysis of the leading Russian scientific schools in this area is presented.
-
This paper reviews the demographic policy of birth control developed countries and Russia in order to find ways of increasing its efficiency. With the help of scientific methods carried out a synthesis of existing experience, stimulate the birth rate, revealed the shortcomings of the demographic policy. As a result of formulating proposals to optimize the activity of the authorities to achieve the objectives identified in the Concept of Demographic Policy of Russia up to 2025 results can be used in the formation of regional and / or federal program and target documents of one of the tasks increase in birth rate. It is shown that the effectiveness of population policy in Russia is limited to a number of conditions. This lack of organizational structure, implementing and coordinating actions of the authorities to implement policies, lack of applied economic mechanisms, especially their inability to lead to significant changes in standard of living of families with children, implementation of measures that can be seen as to limit the birth rate (the spread public support contraception, abortion is free); brevity across demographics.
-
Author Mordachev V. D.,This paper analyzes the labor law regulations. In terms of quality they have occurred to be at a low level, and therefore cannot provide the normal process of labor relations, labor rights and guarantees of workers. The paper also gives a critical analysis of a labor contract construction, which contains a lot of fiction, so its content becomes undefined and vague. For the same reason, the execution of such contract becomes difficult also for the workers. And then the chief regulator of the employees’ behaviour becomes the order of the employer. Poor quality of law norms and the presence of fiction in the agreement lead to different traumatic effects in the behavior of workers: the risk of loss of labor efficiency, the risk of being left without protection of labor rights. State guarantees of workers' rights in practice means are weak, as they are not strengthened with enough legal provisions at the law level and the legal responsibility of employers for various violations.
-
Author Loginov V. G.,This paper reviews the problems of socio-economic development of cities in the Russian North. The peculiarities of their formation and evolution from the strong points of reclamation to multifunctional development of urban settlements are shown. The periods are marked and the reasons for the emergence of cities in historical perspective are identified. The peculiarities of placing cities on the territory of the Russian North, and some of its macro-regions defined as compact urban areas are reviewed. A grouping procedure of urban settlements according to the economic specialization and administrative functions is made. A close relationship between the developments of urban settlements with the cyclic use of natural resources is shown; the risks arising from their single-industry development and economic diversification problems of cities associated with the high cost northern factors are noted. The role and influence of cities on the social and economic processes in selected macro regions and subjects of the northern zone of the Russian Federation are revealed. A special role of cities in the socio-economic development of the northern subjects of the Federation is underlined. The main directions of the development of different functionality cities in a promising period are reviewed.
FOREIGN EXPERIENCE
-
Author Pichurin I. I.,This paper represents a judgment that the relator of per capita income of the countries is a rough indicator of the ratio of labor productivity in these countries. Accordingly, the analysis of the dynamics of per capita income in the United States and Russia for the period from 1861 to present time is made. The described statistical data shows that the ratio of per capita income in the U. S. and Russia has not changed from 1861 to 1913. Consequently, the nowadays widespread claim that capitalist development in Russia led the country into the category of rapidly developing countries for 50 years after the abolition of serfdom is not true. The gap in labor productivity in Russia compared to theUnited States, Germany, Britain and other developed countries remained unchanged. The sharp decline in per capita income was based on the country's industrialization and appropriate agricultural sphere mechanization. As a result, the gap has narrowed to the mid-sixties of the XX century up to two times, despite the fact those ten years of this period fell out from the normal development in connection with the Second World War and post-war reconstruction of the national economy. After the collapse of the socialist economy, this gap increased up to five times in 2000, and now after the first decade of the XXI century it is about three times. The reasons for these changes in respect to per capita income are analyzed in this paper.
FINANCES OF REGION
-
The objective of the research is to elaborate institutional criteria for the assessment of intellectual products` potential realization in the venture financing system which are not presented in the existing works on venture investments. Research methodology is based on synthesis of institutional and new institutional economics theory, theories of innovations, uncertainty and risk, management of innovations. Essential characteristics of venture financing are structured in the paper, its treatment as an economic category is suggested. A number of common institutional criteria for the assessment of intellectual products` potential feasibility in the system of venture financing are outlined and grounded. The structure of institutional field of venture financing (by the example of Sverdlovsk region) is elaborated with consideration of projected development and coevolution of formal and informal institutions as a favorable environment for drawing into economic turnover and commercialization of technological developments and projects. Analytical investigation of structural elements for creation of institutional field of venture financing in Sverdlovsk region is performed, a range of common and specific problems, contradictions and recommendations are outlined. The paper introduces institutional criteria for the assessment of intellectual products` potential feasibility.
-
Collateral legal relations are an important factor of the investment process development. They reduce opportunistic loan risks and increase partners’ confidence within the transaction. The mortgage fund of Nizhniy Novgorod region is nowadays involved in the implementation of investment and innovation projects up to 70%. Although the institutional environment of regional collateral relation has drastically improved in the last 11 years, the current status is far away from the ideal. Imperfect legal framework of collateral legal relations with the public property leads not only to information asymmetry, but also to a reduced states’ income from these transactions. The paper analyzes the current legislative pledge of state property, describes the main steps of its modernization, identifies the positive aspects and trends, as well as deficiencies, provides and gives a proof of necessary legal framework changes aimed at collateral financial relations efficiency improvement in the region.
ENVIRONMENTAL AND RECOURSE POTENTIAL OF REGION
-
This paper deals with current socio-ecological situation in the field of traditional nature management in Yamal region of Yamal-Nenets autonomous district that takes place against a background of industrial development of hydrocarbon deposits. The emergence of critical situations in the main branches of traditional nature management — reindeer herding and fishery is demonstrated. In reindeer herding the situation is critical mainly due to internal factors — as a result of actions of the Nenets themselves, with their unbridled desire to breed reindeer. Industrial development only exacerbates the problem but is not its main cause.In the fishery, the crisis is caused by external factors — commercial demand when low-control illegal fishing has led to an increase of loads on fish supplies. Strict dependence of indigenous people from biological resources poses a real threat to their existence as an ethnic group.
-
Author Tikhonova T. V.,Features and condition of existing system of especially protected natural territories of the Komi Republic are presented in this paper. Their specific environmental problems are defined. Strong sides and weaknesses of functioning and management of objects of special protection are provided. For approbation of a complex of methods of steady exploitation of this territory modeling objects of special protection are allocated and the economic assessment is carried out them. Potential recipients of benefits from use of bioresources and ecosystem services on modeling objects are revealed. The territories possessing a reserve for increase in use of their resources and services are presented. Offers on strategy of development of a control system of especially protected natural territories of the Komi Republic are developed. Development strategy of control system of especially protected natural territories is consisting of some institutional decisions. This acceptance of federal-regional agreement about management control; creating of regional rules, which regulate the usage of natural resources in especially protected natural territories; application of an integrated approach to the use of territories, which provide the bases to increase recreation and tourist industry; transfer buffer zone territories to biosphere reservation.
-
The development of mineral-raw-material base on underdeveloped territories of the Urals North and Timan is determined by the capabilities of inter-regional cooperation on the basis of the new transport corridors creation. The failure of the «Industrial Ural — Polar Ural» project substantially defined the attitude to the mineral-raw material base of the Ural North; but the actual analysis of the project failure causes does not allow to blame the mineral-raw-material base in that fact. This paper considers the prospects of Timan — North Ural region mineral-raw-material base development and the existing problems of nowadays, The question of revaluation necessity as of the regions existing mineral resource base, as well as the possible variants of its transport development is raised.
-
This paper is devoted to perspective tendencies of use of the land-based and water biological resources of the Pacific Russia in the context of prospects of the world and national markets, global technological trends and scientific development of the Far Eastern scientific organizations. Special attention is paid to the system of the institutional, resource, organizational and technological transformations necessary for realization of these tendencies. The key points of prospective technological development in the sector of biological resources are revealed. The prospects for the involvement into the economy of the Far Eastern stocks of biological resources by 2050, related to both their traditional use on the basis of innovation, as well as to the application of biotechnology, are reviewed.
BRANCH AND INTERBRANCH COMPLEXES
-
Author Maslennikov M. I.,This paper analyzes features of formation and development of vertically and horizontally integrated structures in Russian metallurgical engineering industry; trends in their development, the place and the role they play in the domestic and global economy are shown; real opportunities for modernization and innovation development are identified, dynamics of the major macro-and microeconomic performance of industry in the world, in Russia, in the areas of the Ural region and the largest holding companies — producers of steel, cast iron, rolled steel, copper, titanium, aluminum, zinc and bauxite is shown. A measure of the impact of the global economic crisis on metallurgical engineering industry of Russia in general and steel industry in particular is revealed. It is shown that the crisis has substantially reduced the production and export performance of enterprises engaged in manufacturing of basic metals and fabricated metal products; the processes of concentration and centralization of production and capital through the acquisition and absorption is investigated; the sources of fundings necessary for the development of the industry are analyzed; the mechanism, consequences and possible ways of adaptation of metallurgical enterprises and industries related to Russia’s WTO accession are reviewed.
-
Author Sharf I. V.,The implementation of socio-economic development programs of Tomsk region is largely determined by the activities of oil companies. Analyzing the outcomes of their activity is necessary to reveal the basic trends and influencing factors for the development of measures to support basic industry. The analysis shows that there are few successful companies carrying out the license agreements and plans for oil extraction, as well as investing in exploration and development of new deposits. As a consequence, forecasts for growth of hydrocarbon reserves in the long run and the implementation of the energy strategy of Tomsk region for the period up to 2020 are not promising. The current situation is primarily caused by current tax and investment policies towards small subsoil users who operate small and medium-sized fields in complicated industrial and geological conditions. As a result, we have an increase in costs for growth of hydrocarbon reserves per meter of deep drilling and the costs of preparing each ton of oil, which ultimately leads to lower profitability of oil companies.
-
The non-governmental industrial sector of Russia is growing from year to year as a result of privatization program consistently held by the government. In the beginning of the 90-s, the heads of state have decided not to hold the state industrial policy any more reasoning from the idea of market self-regulation. The enterprises of the military-industrial complex of Russia, as a result, were in a grave condition because there were no state orders anymore. The enterprises were offered to produce civil engineering production because it was considered that there were no more enemies to fight against. As time goes by, some enterprises became bankrupt. But the majority has survived under the direction of smart owners despite but not due to the conditions of survival of that time. The life has shown that the state industrial policy is indispensable, especially when Russia is near to enter into the WTO. There are no more obstacles on the path to this, but nobody knows exactly which enterprises will become bankrupt, what will be with those people who will lose their work and which enterprises will continue working and how. It is not clear neither at federal level nor at regional or municipal. In this paper, the modern operating conditions and opportunities to modernize the non-governmental industrial sector are analyzed. Performatives on education reform regarding the young engineers and economists aimed to reduce the period of their adaptation at work have been formulated.
AGRICULTURAL AND FOOD MARKET: NEW VECTOR OF DEVELOPMENT
-
Author Nosonov A. M.,This paper considers the development of regional systems of agriculture (on the example of the Republic of Mordovia) on the basis of the systemic approach. The original technique of modeling with use of the modernized method of structural and parametrical identification of simulation model is offered. The block diagram of model is represented, the inclusion into its structure of the corresponding components is substantiated: expenses of appliances and work, agroclimatic conditions, indicators of soil fertility, structure of the ground area and the use of processed lands. Coefficients of the importance of the separate parameters influencing criterion function of regional systems of agriculture are revealed. Areas with various economic efficiencies of arable grounds are shown and the factors determining these distinctions are opened. A model of mathematical simulation is developed, allowing to estimate the degree of influence of territorial structure of agriculture and socio-economic factors on the efficiency of regional systems of agriculture and to define various possible scenarios of their sustainable development on the basis of the chosen criterion of stability — of economic efficiency.
-
This papers reviews the main threats to the today's consumer market and offers a historic tour of their existence. The results of a comprehensive diagnostics technique of economic safety of the consumer market in the region taking into account the impact of threats are presented. In the basis of the procedure is an indicative method of analysis, in which diagnosis is carried out on a set of criterial parameters. Along with a comprehensive assessment, the paper offers a detailed analysis of one of the method's modules - evaluation of consumer protection as the most vulnerable category of participants in the consumer market. A classification of prejudice of consumers in accordance with international studies is considered. The conducted study showed that, in general, there is a positive trend of economic safety of the consumer market in the region for the period from 2003 to 2010, but, according to some modules (evaluation of consumer protection), the situation has worsened for the majority of the subjects discussed during the reviewed period. The results of economic safety diagnostics of the consumer market actors can be used in the formation of program-target events to neutralize the negative trends in the consumer market.
-
Author Bashmachnikov V. F.,A new way of farming — the peasant (farmer) economy was formed in the agricultural sector in Russia during the reforms of its economy. Prospects for the development of this category of households still do not have an unambiguous assessment. This is explained by differences in economic and often political interests of many participants of the discussions. Stolypin's agrarian reforms are received with little or not at all taking into account the existing historical experience of Russia. Underestimated in this regard and forecasts made by the great Russian scientist of agriculture, A. V. Chayanov. At the same time, the ideas and postulates of Stolypin and Chayanov have received important confirmation in virtually all modern agro-developed countries, not only providing the population with food from their own agricultural production, but also supplying agricultural products in large quantities for export. Organizational structure of agriculture in these countries has common features, mainly related to everything desired by P. A. Stolypin and scientifically predicted by A. V. Chayanov. The modern peasant-farms, armed with high technology, preserved and affirmed as the main elements everywhere in the agroindustrial structures.
-
The purpose of this study is theoretical justification of socio-economic foundations of sustainable livelihoods in rural areas and development of practical recommendations for evaluating and improving quality of life in rural areas. The subject of this study is a system of socio-economic relations that defines processes and patterns of sustainable livelihoods in rural areas. Methodological basis is a systematic approach and method of dialectical cognition, which examine processes of development of rural territories in relationship and complementarity. The results described in this paper are: the degree of differentiation of rural population under qualitative levels of well-being was studied; the authors’ system of indicators of regional socio-economic development on a basis of detailed hierarchical structure was presented; priority areas for improving standards and quality of life of the rural population were identified. A scope of results was developed and science-based recommendations and suggestions for sustainable development of rural territories based on authors’ methodology for evaluating quality life in rural areas may be subject to legislative and executive authorities in development socio-economic projects and programmes aimed at enhancing rural employment and income were made. The conclusions are: sustainable development of rural territories involves not only increase of efficiency of rural economy, but, above all, increasing and improving the quality of life of the rural population; on a system of complementarities, the evaluation of sustainability of livelihood strategies should take into account the economic, environmental, social and institutional factors.
MODERN TOOLS OF ANALYSIS AND MANAGEMENT OF ECONOMIC PROCESSES
-
This paper reviews main approaches to risk assessment. The authors accented attention on the nonlinear approach to the theory of risks. It is proposed to define economic risk as the probability of threats that could have material adverse effect on the economic system under study and to change its current state. The method and the program product designed by the authors integrate a wide range of indicators of economic and financial activities at the regional level in the program-technical complex. This paper describes a new method for assessing synergistic and prediction of risk over long time rows of economic indicators at the regional level, including methods of nonlinear and chaotic dynamics, enabling a pseudo-phase and phase portraits, to determine the volatility, to calculate fractal characteristics and predict the behavior of socio-economic indicators with modernized method of Hurst, to model based on recovery probability distribution function of nonequilibrium potential function, to determine the local and global stability of the regional economy and to identify risks as the probability of the threats of an economic nature.
-
This paper is devoted to the analysis of Kaliningrad region’s economy during the regime of special economic zone. For the analysis, we used the methods of structural changes. The study was conducted in major sectors: industry, agriculture, construction, transport and trade. Particular attention is paid to structural changes in the industry and its sectors. The period of analysis is 20 years from 1990 till 2010. As parameters of research we used gross regional product, assets and investments. As a result of research obtained information about the negative structural changes to the product in the industry, and agriculture, the positive dynamics in the sector of the trade and transport. The influence of foreign trade on the region’s economy was studied. The correlation between gross regional product and imports is shown. The authors estimated the influence of the addition of Russia to the WTO to the economy of the Kaliningrad region and give recommendations to overcome the structural contradictions.
-
This paper reviews a methodical approach to solving multi-step dynamic problem of optimal integrated program management of a product portfolio structure of the enterprise. Any multiproduct manufacturing process depends on many factors, that is why the quality criteria in the economic and mathematical model of the dynamics of the product portfolio structure management of a company is a vector one, and therefore, optimization of the integrated product portfolio structure management of a company is multi-criteria optimization problem. With the help of the method of generalized criterion (method of vector criterion scalarization), a formed multicriteria problem is replaced by a one-criterion optimization problem of complex management program of product portfolio structure with a functional of quality, which is a convolution of a set (vector) of the objective functions. The transformed problem is formulated and solved as a problem of optimal terminal program control in a class of linear discrete dynamical systems. The method proposed in this paper allows developing management solutions designed to create the optimal structure of an enterprise's product lines, contributing to optimization of profits as well as maintenance of the desired level of profit for a long period of time.
OPINIONS AND ASSESSMENTS
-
This paper reviews the definition of the notions “stability” and “stable development”, and analyzes the factors influencing the development stability. We suggest the definition of the flax complex stable development and its assessment. We also examine the factors causing the flax complex functioning instability. An integral index was proposed to determine the stability of flax complex; this index takes into account the rate of growth (or decline) of major products manufacturing, commodities, profits from product sales, accounts receivable and accounts payable, investments into fixed capital, labor productivity, coefficient of manufacturing capacity utilization and updating of the basic funds. The paper deals with the problems of its development and modern state of flax sub-complex of agroindustrial complex, as well as with the matters of disproportions between the complex’s branches. It covers the causes of tolling schemes of flax processing businesses work and the role of the state in native market of flax products formation. The necessity of industry diversification and innovation development is substantiated.
-
Author Sirotkin V. A.,With the continuous increase in the cost of real estate caused by its shortage, of great importance become solution schemes aimed to provide housing for the broad strata of population. Basing on the analyzed foreign and domestic experience in providing real estate for the citizens, two main ways to acquire it were identified. For the assessment of the preference of each of these methods for the citizens, calculations showing the profitability of the accumulation of funds were performed. Basing on the thesis above, a model with state funding was proposed, allowing the future owner to live in an apartment from the date of the contract with the state finance and investment corporation and to reduce the overpayment for the acquired real estate compared to a mortgage, almost at 100% of the purchase price. The paper concludes that to address housing problems, the management of public authorities need to use different models and mechanisms to ensure quality of living conditions for the maximum number of citizens.
-
Author Soroka S. A.,This paper is devoted to the issues related to the assessment of business activity of the enterprises in public service sphere. The importance of this problem is in the fact that an assessment of business activity is the basis for optimal management decisions to improve the efficiency of economic activities, sustainable development both of businesses in general and wholesale trade enterprises in particular. Wholesale trade enterprises fulfill a function of sales divisions and departments for the purchase of resources. An assessment of business activity of wholesale trade organizations, circumspected fulfillment of its functions by an organization, formation of complex long-term competitive advantages lead to increased production, restoration of economic connections and inter-regional integration of the consumer market, improve the efficiency of the trading process and sustainable development of the region as a whole.
-
In this paper, the authors classified the methods of evaluation of life and human health, physical and mental suffering, identified influencing factors affecting the value of the estimate cost of living on the basis of generalization of extensive theoretical and empirical material of various domestic and foreign publications. From the perspective of human capital theory, various approaches to modeling monetary value of human life are reviewed, for example, the demographic approach, consequential, direct investments in human lived during the interval years, theory of utility to the human society, the cost of risk unit and society's willingness to pay for the damages, as well as costs to society to reduce the risk of premature death of its member.