For decades, the U.S. Air Force has contemplated replacing the A-10 Thunderbolt II “Warthog” with a newer fighter aircraft. However, a quantitative analysis comparing the Warthog’s performance and costs with those of its intended replacement, the F-35 Lightning II Joint Strike Fighter, shows that retiring the Warthog would be operationally unsound and fiscally imprudent. The rationale for the replacement is that it would increase airpower capability while controlling costs. That rationale does not withstand scrutiny. An effectiveness analysis based on results from a survey of joint terminal attack controllers indicates that the A-10 vastly outperforms the F-35 in providing close-air support (CAS), a critical requirement for future conflicts against terrorists and insurgents. A cost analysis demonstrates that replacing the A-10 before its service life ends in 2035 would cost at least $20.9 billion. The replacement plan would waste substantial resources and seriously impair U.S. military capabilities. Given that constrained future budgets and low-intensity conflicts requiring precision CAS can be expected, the U.S. air fleet should include the A-10 Thunderbolt II.

Two important developments in recent policy analysis are behavioral economics and subjective-well-being (SWB) surveys. What is the connection between them? Some have suggested that behavioral economics strengthens the case for SWB surveys as a central policy tool, e.g., in the form of SWB-based cost-benefit analysis. This article reaches a different conclusion. Behavioral economics shows that individuals in their day-to-day, “System 1” behavior are not expected utility (EU-) rational – that they often fail to comply with the norms of rationality set forth by EU theory. Consider now that the standard preference-based view of individual well-being looks to individuals’ rational preferences. If the findings of behavioral economics are correct, an individual’s answer to a question such as “How satisfied are you with your life?” is not going to tell us much about her rational (EU-compliant) preferences. Behavioral economics, by highlighting widespread failures of EU rationality, might actually argue for an objective-good (non-preference-based) view of well-being. However (except in the limiting case of an objective-good view positing a single mentalistic good, happiness), SWB surveys will not be strong evidence of well-being in the objective-good sense. In short, SWB surveys are no “magic cure” for the genuine difficulties in inferring rational preferences and measuring well-being underscored by behavioral economics.

Technical efficiency measure can be classified as either radial or nonradial. While the theorical question of which is the better type of measure is unresolved, the radial measures enjoy much greater popularity than the nonradial measures in the empirical literature. To assess the impact of choice of measure, this paper offers an empirical comparison of one radial and three nonradial measures of technical efficiency, relative to a variable returns to scale DEA model with strong disposability. The distributions and ranking of these efficiency scores are examined for a sample of US banks.

The dramatic rise in bank failures over the last decade has led to a search for leading indicators so that costly bailouts might be avoided. While the quality of a bank’s management is generally acknowledged to be a key contributor to institutional collapse, it is usually excluded from early-warning models for lack of a metric. This paper describes a new approach for quantifying a bank’s managerial efficiency, using a data-envelopment-analysis model that combines multiple inputs and outputs to compute a scalar measure of efficiency. This new metric captures an elusive, yet crucial, element of institutional success: management quality. New failure-prediction models for detecting a bank’s troubled status which incorporate this explanatory variable have proven to be robust and accurate, as verified by in-depth empirical evaluations, cost sensitivity analyses, and comparisons with other published approaches.

In the United States credit unions are not-for-profit cooperative financial institutions, owned by and operated for the benefit of their members. Being part of a cooperative movement enhances the likelihood that credit unions will share performance-enhancing ideas, for the benefit of weak credit unions and the movement as a whole. In this paper we show how a conventional performance evaluation methodology has evolved into a novel performance enhancement methodology. The evolution of the methodology is the result of cooperations among individual credit union managements, movement officials and the authors. The evolution is illustrated with 1990 data on nearly 9,000 credit unions.