nep-reg New Economics Papers
on Regulation
Issue of 2008‒11‒25
twelve papers chosen by
Christian Calmes
Universite du Quebec en Outaouais

  1. Sacred Cars? Optimal Regulation of Stationary and Non-stationary Pollution Sources By Meredith Fowlie; Christopher R. Knittel; Catherine Wolfram
  2. Gouvernance, marché et régulation sociétale : une question de confiance ou de... légitimité ? Retour à l'économie politique. By Jean-Pierre Galavielle
  3. Environmental regulation and horizontal mergers in the eco-industry By Canton, Joan; David, Maia; Sinclair-Desgagne, Bernard
  4. Enforcement Aspects of Conservation Policies: Compensation Payments versus Reserves By Rousseau, S.
  5. An International Rule System to Avoid Financial Instability By Horst Siebert
  6. Environmental regulation and international trade patterns for agro-industrial under a South-North Perspective By Feix, R.D.; Miranda, S.H.G.; Barros, G.S.A.C.
  7. Measuring the Impacts of Food Safety Regulations: A Methodological Review By Ragona, M.; Mazzocchi, M.
  8. Technical Efficiency, Regulation, and Heterogeneity in Japanese Airports By Carlos Pestana Barros; Shunsuke Managi; Yuichiro Yoshida
  9. Geographic Deregulation and Commerical Bank Performance in US State Banking Markets By YongDong Zou; Stephen M. Miller; Bernard Malamud
  10. A multi-level cost benefit approach for regulatory decision support in food safety and quality assurance scenarios By Fritz, M.; Schiefer, G.
  11. Are EU spatial ex ante coexistence regulations proportional? By Demont, M.; Daems, W.; Dillen, K.; Mathijs, E.; Sausse, C.; Tollens, E.
  12. Household Incidence of Pollution Control Policies: A Robust Welfare Analysis Using General Equilibrium Effects By Abdelkrim Araar; Yazid Dissou; Jean-Yves Duclos

  1. By: Meredith Fowlie; Christopher R. Knittel; Catherine Wolfram
    Abstract: For political and practical reasons, environmental regulations sometimes treat point source polluters, such as power plants, differently from mobile source polluters, such as vehicles. This paper measures the extent of this regulatory asymmetry in the case of nitrogen oxides (NOx), the criteria air pollutant that has proven to be the most recalcitrant in the United States. We find significant differences in marginal abatement costs across source types with the marginal cost of reducing NOx from cars less than half of the marginal cost of reducing NOx from power plants. Our findings have important implications for the efficiency of NOx emissions reductions and, more broadly, the benefits from increasing the sectoral scope of environmental regulation. We estimate that the costs of achieving the desired emissions reductions could have been reduced by nearly $2 billion, or 9 percent of program costs, had marginal abatement costs been equated across source types.
    JEL: Q52 Q58
    Date: 2008–11
  2. By: Jean-Pierre Galavielle (Centre d'Economie de la Sorbonne)
    Abstract: The authority of polity is strongly questioned on the grounds of the dogma of ungovernability. In this context of major upheavals resulting from globalisation, polity, until then the legitimate pilot of societal regulation, is progressively outplayed in favour of a market, the shortcomings of which have by no means disappeared. As the need for regulation continues to be manifest, new uncertainties emerge, such as stakeholders, confidence, governance, leadership and so on. All this under the colours of civil society considered here and there as the best regulatory agent of society. The question is thus the following : what is the legitimacy of the civil society to pretend to provide this regulation ?.
    Keywords: Market law, ungovernability, civil society, stakeholders, confidence, leadership, legitimacy.
    JEL: A13 E58 G3 M14
    Date: 2008–07
  3. By: Canton, Joan; David, Maia; Sinclair-Desgagne, Bernard
    Abstract: This paper considers the environmental policy and welfare implications of a merger be- tween environment ¯rms (i.e., ¯rms managing environmental resources or supplying pollution abatement goods and services). The traditional analysis of mergers in Cournot oligopolies is extended in two ways. First, we show how environmental policy a®ects the incentives of environment ¯rms to merge. Second, we stress that mergers in the eco-industry impact wel- fare beyond what is observed in other sectors, due to an extra e®ect on pollution abatement e®orts; this might lead to disagreements between an anti-trust agency seeking to limit market concentration which can be detrimental to consumer surplus and a benevolent regulator who maximizes total welfare.
    Keywords: Eco-industry, environmental policy, horizontal mergers, Environmental Economics and Policy, Industrial Organization, D62, H23, L11,
    Date: 2008
  4. By: Rousseau, S.
    Abstract: This model explicitly incorporates the dynamic aspects of conservation programs with incomplete compliance and it allows landholders€٠ behaviour to change over time. We find that incomplete and instrument-specific enforcement can have a significant impact on the choice between subsidy schemes and reserves for conservation policies. The results suggest that it is useless to design a conservation scheme for landholders if the regulator is not prepared to explicitly back the program with a monitoring and enforcement policy. In general, the regulator will prefer to use compensation payments, if the cost of using government revenues is sufficiently low, the environmental benefits are equal, and the cost efficiency benefits exceed the (possible) increase in inspection costs. If the use of government funds is too costly, the reserve-type instruments will be socially beneficial.
    Keywords: Monitoring and enforcement, Policy instruments, Conservation policy, Environmental Economics and Policy,
    Date: 2008
  5. By: Horst Siebert
    Abstract: In a series of summits, leading countries of the world will meet to draw up an in¬ternational arrangement for financial stability. Such a rule system should prevent a financial crisis as we have seen it in 2007 and 2008. It should include appropriate principles of mone¬tary policy, rules for financial soundness and agreements on the role of prudent regulation. The paper discusses the lessons from the subprime crisis, failures of regulation, crisis man¬agement in the US and in the EU and considers the problems that have to be solved by an in¬ternational rule system
    Keywords: Financial instability, lessons from the subprime crisis, failures of regulation, crisis management, elements of an international rule system, role of the IMF; climate change, financial crises, the world trading system, oil supplies, immigration
    JEL: E2 E3 E5 F02 F33 F37 F4 F5 G2 P00
    Date: 2008–11
  6. By: Feix, R.D.; Miranda, S.H.G.; Barros, G.S.A.C.
    Abstract: This paper aims at examining the relation between the international trade and the environment, particularly focused on sensitive agribusiness sectors. It consists on an empirical test to the conflicting positions supported by economists, some following the traditional approach (trade-off or neoclassical), while others supporting the Porter€ٳ hypothesis, which considers that impacts of the stricter environmental regulation can benefit the trade competitiveness. A Heckscher-Ohlin- Vanek model was applied to net exports as the dependent variable. The agricultural products analyzed were total agriculture, rice, maize, soybean, wheat, dairy and swine; run for 97 countries, divided as developing and developed, in a cross-section approach. This modeling allows including the environmental endowment as explanatory variables. Moreover the Environmental Performance Index (Esty et al, 2008) was also tried as explanatory variables in order to catch any effect of the environmental regulation on the trade patterns. Results were not conclusively as they show that the net exports of the selected products, considered environmentally sensitive, can be affected even positively or negatively (neoclassical approach) by the environmental regulation. The results depend on the products. A remarkable outcome to highlight is that the dummy for developing countries and developed countries was significant, pointing that for rice, for example, it makes difference being a developing country, as well as it does for wheat, being a developed country.
    Keywords: Trade, environmental regulation, agribusiness, Environmental Economics and Policy, International Relations/Trade,
    Date: 2008
  7. By: Ragona, M.; Mazzocchi, M.
    Abstract: Together with a call for more effective and efficient regulations in the EU, there is a growing demand for transparency in the evaluation methods used to assess their effects. This paper proposes a classification of the impacts that food safety regulations can produce and discusses the quantitative methods that are used in the literature to measure those impacts. Along with the strengths and limitations of each methodological approach, this review highlights other transversal issues relevant when developing assessment strategies, like the unbalance between ex-ante and ex-post evaluation, the lack of adequate data, the difficulty of estimating the dynamic effects of regulations, and the possibility of endogenous relationships.
    Keywords: impact assessment, food safety regulation, quantitative methods, Food Consumption/Nutrition/Food Safety,
    Date: 2008
  8. By: Carlos Pestana Barros; Shunsuke Managi; Yuichiro Yoshida
    Abstract: In this paper, the random stochastic frontier model is used to estimate the technical efficiency of Japanese airports taking into regulation and heterogeneity in the variables. The airports are ranked according to their productivity for the period 1987 to 2005 and homogenous and heterogeneous variables in the cost function are disentangled. Policy implication is derived.
    Keywords: Japan; airports; efficiency; random frontier models; policy implications
    Date: 2008–08
  9. By: YongDong Zou (Sany Group, Changsha, Hunan, CHINA); Stephen M. Miller (Department of Economics, University of Nevada, Las Vegas); Bernard Malamud (Department of Economics, University of Nevada, Las Vegas)
    Abstract: This paper examines the effects of geographical deregulation on commercial bank performance across states. We reach some general conclusions. First, the process of deregulation on an intrastate and interstate basis generally improves bank profitability and performance. Second, the macroeconomic variables -- the unemployment rate and real personal income per capita – and the average interest rate affect bank performance as much, or more, than the process of deregulation. Finally, while deregulation toward full interstate banking and branching may produce more efficient banks and a healthier banking system, we find mixed results on this issue.
    Keywords: commercial banks, geographic deregulation, bank performance
    JEL: E5 G2
    Date: 2009–11
  10. By: Fritz, M.; Schiefer, G.
    Abstract: In complex policy decision situations where policy objectives can only be reached through appropriate activities of individual actors with own decision authority and individual objectives, the classical approaches for measuring the effects of regulatory initiatives through cost-benefit or related types of analysis do not provide the appropriate information for decision support. This paper discusses a framework for a multi-level analysis approach that could provide decision support in multi-level policy decision situations.
    Keywords: cost-benefit analysis, multi-level analysis, policy decision support, impact assessment, Food Consumption/Nutrition/Food Safety,
    Date: 2008
  11. By: Demont, M.; Daems, W.; Dillen, K.; Mathijs, E.; Sausse, C.; Tollens, E.
    Abstract: The EU is currently struggling to implement coherent coexistence regulations on genetically modified (GM) and non-GM crops in all member states. While it stresses that any approach needs to be €ܰroportionate to the aim of achieving coexistence€ݬ very few studies have actually attempted to assess whether the proposed spatial ex ante coexistence regulations (SEACERs) satisfy this proportionality condition. In this article, we define proportionality as a functional relationship which is weakly increasing in the incentives for coexistence. We propose a spatial framework based on an existing landscape and introduce the new concept of shadow factor as a measure for the opportunity costs induced by SEACERs. This enables comparing the proportionality of (i) rigid SEACERs which are based on large isolation distances imposed on GM farmers versus (ii) flexible SEACERs based on pollen barrier agreements between neighboring farmers. Our theoretical and empirical findings argue for flexibility as rigid SEACERs violate the proportionality condition and, hence, are not consistent with the objectives of the EU.
    Keywords: policy analysis, GIS, shadow factor, Agricultural and Food Policy, Crop Production/Industries,
    Date: 2008
  12. By: Abdelkrim Araar (Département d’économique and CIRPEE, Université Laval); Yazid Dissou (Department of Economics, University of Ottawa); Jean-Yves Duclos (Département d’économique and CIRPEE, Université Laval)
    Abstract: This study assesses the incidence of pollution control policies on households. In contrast to previous studies, we employ an integrated framework combining a multisector general equilibrium model with a stochastic dominance analysis using household-level data. We consider three policy instruments in a domestic emission trading system: (i) an output-based allocation of permits (OBA); (ii) the use of the proceeds of permit sales to reduce payroll taxes (RPT); (iii) and the use of these proceeds to reduce consumption taxes instead(UCS). The general equilibrium results suggest that the return to capital is more negatively affected than the wage rate in all simulations, since polluting industries are capital intensive. Abstracting from pollution externalities, the dominance analysis allows us to conclude that all three policies have a normatively robust negative (positive) impact on welfare (poverty). Formal dominance tests indicate that RPT first-order welfare dominates OBA over all values of household incomes. UCS also first-order poverty dominates RPT for any choice of poverty line below $CAN 18,600, and for any poverty line at the second order. Finally, while the three pollution control policies do not have a numerically large impact on inequality (in comparison to the base run), statistical tests indicate that inequality increases statistically more with OBA and RPT than with UCS.
    Keywords: Pollution control policies; household incidence; stochastic dominance; general equilibrium effects.
    JEL: C68 D31 D58 D63 H23 Q52 Q56
    Date: 2008

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