nep-ene New Economics Papers
on Energy Economics
Issue of 2005‒01‒02
four papers chosen by
Roger Fouquet
Imperial College, UK

  1. Willingness to Pay among Swedish Households to Avoid Power Outages - A Random Parameter Tobit Model Approach By Carlsson, Fredrik; Martinsson, Peter
  2. Does it Matter When a Power Outage Occurs? - A Choice Experiment Study on the Willingness to Pay to Avoid Power Outages By Carlsson, Fredrik; Martinsson, Peter
  3. Common and Fundamental Factors in Stock Returns of Canadian Oil and Gas Companies By M. Martin Boyer; Didier Filion
  4. Energy Taxes as a Signaling Device: An Empirical Analysis of Consumer Preferences By Ghalwash, Tarek

  1. By: Carlsson, Fredrik (Department of Economics, School of Economics and Commercial Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Economics and Commercial Law, Göteborg University)
    Abstract: Using a contingent valuation survey, we elicit Swedish households’ willingness to pay (WTP) to avoid power outages. In the study respondents are asked to state their WTP for avoiding nine different types of outages. We therefore apply a random parameter Tobit model since there is cross-sectional heterogeneity and a proportion of zero responses. Based on the estimations, we find that the WTP depends positively on the duration of the outages, and that WTP is significantly higher for unplanned outages. The overall variation in the WTP due to observed heterogeneity in housing and socio-economic variables is small compared to the pure effects of power outages. Policy implications of those findings are discussed. <p>
    Keywords: Power outages; Contingent Valuation; Random parameters; Tobit model
    JEL: C25 C93 D12 Q41
    Date: 2004–12–20
  2. By: Carlsson, Fredrik (Department of Economics, School of Economics and Commercial Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Economics and Commercial Law, Göteborg University)
    Abstract: Using a choice experiment survey, the marginal willingness to pay (WTP) among Swedish households for reductions in power outages is estimated. The results from the random parameter logit estimation indicate that the marginal WTP increases with the duration of the outages, and is higher if the outages occur during weekends and during winter months. The random parameter logit model allows us to estimate a sample distribution of WTP. We find a significant unobserved heterogeneity in some of the outage attributes but not all. Furthermore we show that the sample distribution of WTP does not to any large extent suffer from the problem of reverse sign of the WTP. Therefore, choosing an unconstrained normal distribution might not be as problematic as one would think. Given that households have negative welfare effects from outages, which differ in timing and duration, and are rarely compensated for them, it is important that policy makers consider these negative impacts on households utility when regulating the electricity market. <p>
    Keywords: Choice experiment; Power outages; Random parameters; Willingness to pay
    JEL: C25 C93 D12 Q41
    Date: 2004–12–20
  3. By: M. Martin Boyer; Didier Filion
    Abstract: In this paper, we assess the determinants of Canadian oil and gas stocks returns. We find that the stock return of Canadian energy stock is positively associated with returns on the Canadian stock market, appreciations of crude oil and natural gas prices, growth in internal cash flows and proven reserves, and negatively with interest rates. Surprisingly, however, production volume and a weakening of the Canadian dollar against the U.S. dollar have a negative impact. This latter impact is more pronounced for oil producers than for integrated energy companies. Finally, we find that the influence of the exchange rate, the market return and prices of natural gas on Canadian oil and gas stocks changes significantly over the years 1995-1998 and 2000-2002. <P>Le but de cet article est de mesurer ce qui influence le rendement des actions d'entreprises pétrolières et gazières canadiennes. Nous trouvons que le rendement des actions de ces entreprises énergétiques est influencé positivement par le rendement du marché canadien dans son ensemble, par une appréciation du prix du pétrole et du gaz naturel, par une croissance dans les flux monétaires discrétionnaires de l'entreprise, par la quantité de réserves prouvées de l'entreprise. Nous trouvons également que le volume de production et une dépréciation du dollar canadien par rapport à la devise américaine réduit sensiblement le rendement des titres énergétiques, ce qui va à l'encontre de notre hypothèse initiale. L'impact du taux de change est encore plus marqué pour les producteurs indépendants que pour les entreprises intégrées. En dernier lieu, nous montrons que le marché a subi une cassure significative entre les années 1995-1998 et 2000-2002, spécialement pour ce qui est de l'impact du taux de change, du rendement de marché et du pris du gaz naturel.
    Keywords: stock return valuation, panel data analysis, oil and gas industry, rendement des actions, analyse de données transversales, industrie pétrolière et gazière
    Date: 2004–12–01
  4. By: Ghalwash, Tarek (Department of Economics, Umeå University)
    Abstract: This paper presents an econometric study dealing with household demand in Sweden. The main objective is to empirically examine the differences in consumer reaction to the introduction of, or the change, in environmental taxes. Main focus is on environmental taxes as a signaling device. The hypothesis is that the introduction of an environmental tax provides new information about the properties of the directly taxed goods. This in turn may affect consumer preferences for these goods, hence altering the consumption choice. The result from the econometric analysis shows that all goods have negative own-price elasticities, and positive income elasticities. Concerning the signalling effect of environmental taxes the results are somewhat ambiguous. The tax elasticity for energy goods used for heating seems to be significantly higher than the traditional price elasticity, whereas the opposite seems to be the case for energy goods used for transportation.
    Keywords: Household demand; energy tax; tax elasticities; emissions
    JEL: D12 H31 Q41
    Date: 2004–12–22

This nep-ene issue is ©2005 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.