nep-ene New Economics Papers
on Energy Economics
Issue of 2006‒06‒10
seven papers chosen by
Roger Fouquet
Imperial College, UK

  1. $2.00 Gas! Studying the Effects of a Gas Tax Moratorium By Joseph J. Doyle, Jr.; Krislert Samphantharak
  2. Rational Actors in Balancing Markets: a Game-Theoretic Model and Results By Thomas Rupp
  3. The impact of privatization on the performance of the infrastructure sector : the case of electricity distribution in Latin American countries By Guasch, Jose Luis; Foster, Vivien; Andres, Luis
  4. The Curse of Windfall Gains in a Non Renewable Resource Oligopoly By Hassan Benchekroun; Ngo Van Long
  5. Energy Production with Biomass: What are the Prospects By Gallagher, Paul W.
  6. Energies renouvelables et économie solidaire By Alain MATHIEU
  7. Optimal Taxation of Intermediate Goods in the Presence of Externalities: A Survey Towards the Transport Sector By Ahlberg, Joakim

  1. By: Joseph J. Doyle, Jr.; Krislert Samphantharak
    Abstract: There are surprisingly few estimates of the effect of sales taxes on retail prices, especially at the firm level. Further, along both sides of a state border, a change in one state’s sales tax can shed light on the nature of competition, as a subset of firms effectively experiences a change in its marginal cost. This paper considers the suspension, and subsequent reinstatement, of the 5% gasoline sales tax in Illinois and Indiana following a temporary price spike in the spring of 2000. Earlier laws set the timing of the reinstatements, providing plausibly exogenous changes in the tax rates. Using a unique dataset of daily, gas station-level data, retail gas prices are found to drop by 3% following the suspension, and increase by 4% following the reinstatements. After linking the stations to driving distance data, some evidence suggests that the tax increases are associated with higher prices up to an hour’s drive into neighboring states.
    JEL: H2
    Date: 2006–05
  2. By: Thomas Rupp (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology))
    Abstract: Guided by game theory, we develop a model to explain behavioral equilibria under uncertainty and interaction with the spot market on balancing markets. We offer some insights for the general model and derive explicit solutions for a specific model in which the error distributions and pricing function are given. The most interesting conclusions are the unique existence of an equilibrium and that no participant acts contrary to the aggregate market (either all buy or sell power) and all strategies are, normalized, equal (which is rather counter-intuitive). Furthermore, the aggregate behavior is a stochastic process varying around its own variance.
    Keywords: game theory, nash equilibrium, regulated energy market, balancing power market
    JEL: C73 D58 Q41 D40
    Date: 2006–05
  3. By: Guasch, Jose Luis; Foster, Vivien; Andres, Luis
    Abstract: The authors analyze the impact of privatization on the performance of 116 electric utilities in 10 Latin American countries. The analysis makes a number of contributions to the literature on changes in infrastructure ownership. First, this is the first systemic analysis of the impact of privatization on the distribution of the electricity sector. Second, it constructs an unbalanced panel data set of key indicators for each country. Third, it includes a broader-than in past studies-range of indicators, such as output, employment, productivity, efficiency, quality, coverage, and prices, offering a fuller picture of the effects of privatization on consumers. Fourth, this research covers a longer period of time, and evaluates three stages-before, transition, and after-allowing for the identification of the short- and long-run effects of privatization, as opposed to previous analyses ' short time series data that do not identify long-run outcomes. Finally, the counterfactual is considered through the analysis in trends. The authors apply two different methodologies. The first methodology uses means and medians from each period and tests the significance of the changes between periods. The second methodology consists of an econometric model that captures firm fixed effects, firm-specific time trends, and heteroscedasticity corrections. When needed, the authors used firm-specific time trends to better understand the outcomes. The results suggest that changes in ownership generate significant improvements in labor productivity, efficiency, and product and service quality, and that most of those changes occur in the transition period. Improvements in the post transition period-beyond two years after the change in ownership-are much more modest.
    Keywords: Economic Theory & Research,Energy Production and Transportation,Public Sector Economics & Finance,Labor Markets,Science Education
    Date: 2006–06–01
  4. By: Hassan Benchekroun; Ngo Van Long
    Abstract: We investigate the effect of stock discovery on the profits of non-identical oligopolists. We show that a uniform addition to all stocks could harm firms that are originally larger than average. One conclusion that could be drawn from the results is that a new technology that leads to more efficient exploitation of the available resource is not necessarily welcomed by all firms. <P>On étudie les effets de la découverte des stocks de ressources sur les profits des firmes asymétriques. On montre que l’augmentation uniforme des stocks pour toutes les firmes pourrait désavantager celles qui sont initialement les plus grandes. On déduit que la découverte d’une nouvelle technologie qui permet une augmentation d’efficacité d’extraction pour toutes les firmes pourrait réduire le profit de certaines firmes.
    Keywords: non-renewable resource, oligopoly, stock discovery, découverte des stocks, oligopole, ressources naturelles
    Date: 2006–05–01
  5. By: Gallagher, Paul W.
    Abstract: The advantages and limitations of the U.S. ethanol industry have both become apparent during the current period of high petroleum prices. One advantage is that ethanol is cost-reducing as a gasoline additive and as a gasoline replacement using E85 (motor fuel blends of 85 percent ethanol and just 15 percent gasoline). However, corn supply limits ethanol's role in energy markets; ethanol-based corn demand will surpass exports when the 7.5 billion gallon Renewable Fuel Standard is fully implemented; and even if the Midwest were to secede from The Union, the entire Midwestern corn crop could only supply two-thirds of regional gasoline demand with ethanol. Clearly, a broader resource base and other processing technologies are needed if bioenergy is going to expand its role in the national energy scene. There are wide ranging assessments of biomass-energy's potential role in expanding our national energy supplies. Those accustomed to pumping liquid petroleum scoff at the idea that an energy industry could be based on bulky crops or residues from farm land or forest. Or biotechnologists sometimes multiply laboratory processing yields times the physical intensity of biomass on land times land area, resulting in an enormous estimate for biomass energy potential. Somewhere in between zero and the enormous estimates we should find reality. This paper examines the primary factors that limit the potential size of a biomass-energy industry in the United States. First, the fraction of the existing biomass that can be economically harvested from farmland is reviewed. Second, the current and potential processing technologies and practices are discussed. And finally, the unknowns and uncertainties of bioenergy supply that could be shaped by public policy are also reviewed.
    JEL: Q3
    Date: 2006–03–30
  6. By: Alain MATHIEU
    Date: 2006
  7. By: Ahlberg, Joakim (VTI)
    Abstract: The paper surveys the literature on optimal taxation with emphasis on intermediate goods, or, more specific, freight (road) transport. There are two models frequently used, first, the one emanated from Diamond & Mirrlees' (1971) paper, where the production efficiency lemma made it clear that intermediate goods was not to be taxed. And, second, the Ramsey-Boiteux model where a cost-of-service regulation imposes a budget constraint for the regulated firm. In the latter model, in contrast to the first, freight transports (intermediate goods) are to be taxed in the Ramsey tradition, and thus trades the production efficiency lemma against a budget restriction. The paper also discusses welfare effects due to environmental tax reforms, with emphasis to what has become to known as the double dividend hypothesis. Finally, administrative costs in the context of optimal taxation is touched upon, a subject that is to a large degree repressed in optimal tax theory.
    Keywords: Optimal Taxation; Intermediate Goods; Transport; Welfare Effects; Environmental Tax; Administrative Costs
    JEL: H21 H23
    Date: 2006–06–01

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