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on Regulation |
| By: | Randy A. Becker; Carl Pasurka, Jr.; Ronald J. Shadbegian |
| Abstract: | It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity - that is, their pollution abatement operating costs per unit of economic activity - as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms. |
| Keywords: | environmental regulation, costs, business size, U.S. manufacturing |
| JEL: | Q52 L51 L6 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:12-25&r=reg |
| By: | Carolyn Fischer, Mads Greaker and Knut Einar Rosendahl (Statistics Norway) |
| Abstract: | Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage. For most types of pollution, abatement technologies are available for firms to produce with lower emissions. However, the suppliers of those technologies tend to be less than perfectly competitive, particularly when both emissions regulations and advanced technologies are new. In this context of twin market failures, we consider the relative effects and desirability of subsidies for abatement technology. We find a more robust recommendation for upstream subsidies than for downstream subsidies. Downstream subsidies tend to increase global abatement technology prices, reduce pollution abatement abroad and increase emission leakage. On the contrary, upstream subsidies reduce abatement technology prices, and hence also emissions leakage. |
| Keywords: | Emissions leakage; Abatement subsidies; Upstream technology market |
| JEL: | Q54 H23 L13 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:708&r=reg |
| By: | Ricard Gil (Carey Business School, Johns Hopkins University); Mitsukuni Nishida (Carey Business School, Johns Hopkins University) |
| Abstract: | Although we have many tools to understand the effect of regulation on competition, we know little about the importance of enforcement in explaining the impact of regulation. For this purpose, this paper uses data from Spanish local television industry in Spain from 1995 through 2001, which provide an unique opportunity for examining how competition changes with the introduction of regulation and a posterior liberalization. During this period, the television industry transitioned from a state of alegality (no regulation in place) to being highly regulated and finally to being deregulated. Using a firm entry model from Bresnahan and Reiss (1990, 1991), we estimate local TV station entry thresholds by number of entrants across years. We decompose the ratio into the fixed costs and variable profits, and find both an increase in the fixed-costs ratios and decrease in the variable-profit ratios drive the departure in the entry threshold from the one in other years. We find the model parameters are informative about the nature of the regulation and how strongly the government enforces the regulation. |
| Keywords: | Regulation, Competition, Television, Liberalization |
| JEL: | L51 L82 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1205&r=reg |
| By: | Ragona, Maddalena; Mazzocchi, Mario; Rose, Martin |
| Abstract: | Regulatory impact assessment (RIA) for food safety policy interventions faces major obstacles, like scarce data availability and quality, especially when estimating their future effects on consumer health. In this paper, we run a preliminary RIA exercise on alternative EU policy initiatives to address the problem of dioxins in food, through a fuzzy multi-criteria analysis (FMCA) approach. 5 policy options are considered: the status quo situation (non-harmonised and non-efficient application of EU mandatory maximum levels in food and feed across Member States), a regulation imposing stricter (halved) limits, a stricter enforcement of the current regulation, and a co-regulatory version of the fourth option (with industry undertaking their own testing, and public authorities provide auditing and controls in a harmonized effort across all EU countries). A structured qualitative assessment of the considered options is performed regarding 14 categories of potential impacts, with consideration of uncertainty in the assessment. Different weights are assigned to each impact category to reflect the importance of some impacts compared to others. Finally, policy options are compared on a pairwise basis and ranked through a FMCA, considering uncertainties in qualitative assessment and explicit weights assigned to impact categories. Our preliminary results show that, among the 5 policy options considered, the ‘co-regulation’ approach appears to be the preferable option. |
| Keywords: | Food safety regulations, Regulatory impact assessment, Multi-criteria analysis, Fuzzy logic, Dioxins, Food Consumption/Nutrition/Food Safety, D81, Q18, |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc12:135093&r=reg |
| By: | Aurora Garcia-Gallego (Laboratorio de Economia Experimental and Economics Department, Universitat Jaume I); Nikolaos Georgantzis (Laboratorio de Economia Experimental, Universitat Jaume I and Economics Department, Universidad de Granada); Gerardo Sabater-Grande (Laboratorio de Economia Experimental and Economics Department, Universitat Jaume I) |
| Abstract: | Inspired by the ongoing debate regarding the liberalization of the Spanish railway network, we use real-world information on the features of passenger transportation demand and the existing network infrastructure to build a complex experimental setting. We test the efficiency of alternative service provision obligations imposed to railway companies. Our results show that imposing a minimum service for less profitable connections not only improves consumer and overall welfare but will not harm the companies, because it enhances connectivity and the overall demand on the network. In the absence of such service provision restrictions, the companies failing to recognize the profitability of creating a complete network leave some connections unserved, thus reducing overall demand for passenger services. |
| Keywords: | Transportation sector, Railway network, Experimental Economics |
| JEL: | C92 L33 L51 L92 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1214&r=reg |
| By: | Cathrine Hagem, Bjart Holtsmark and Thomas Sterner (Statistics Norway) |
| Abstract: | We analyze two mechanism designs for refunding emission payments to polluting firms; Output Based (OB) and Expenditure Based (EB) refunding. In both instruments, emissions fees are returned to the polluting industry, possibly making the policy more easily accepted by policymakers than a standard tax. The crucial difference between OB and EB is that the fees are refunded in proportion to output in the former, but in proportion to the firms’ expenditure on abatement equipment in the latter. We show that to achieve a given abatement target, the fee level in the OB design exceeds the standard tax rate, whereas the fee level in the EB design is lower. Furthermore, the use of OB and EB refunding may lead to large differences in the distribution of costs across firms. Both designs do, strictly speaking, imply a cost-ineffective provision of abatement as firms put relatively too much effort into reducing emissions through abatement technology compared with emission reductions through reduced output. However, this may be seen as an advantage by policymakers if they seek to avoid activity reduction in the regulated sector. We provide some numerical illustrations based on abatement cost information from the Norwegian NOx fund. |
| Keywords: | Refunded charge; Output based; expenditure based; NOx; Tax-subsidy; policy design |
| JEL: | Q28 Q25 H2 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:705&r=reg |
| By: | Helmut M. Dietl (Department of Business Administration (IBW), University of Zurich); Martin Grossmann (Department of Business Administration (IBW), University of Zurich); Markus Lang (Department of Business Administration (IBW), University of Zurich); Simon Wey (Department of Business Administration (IBW), University of Zurich) |
| Abstract: | Several countries have implemented bonus taxes for corporate executives in response to the financial crisis of 2007-2010. Using a principal-agent model, this paper investigates the incentive effects of bonus taxes by analyzing the agent's and principal's behavior. Specifically, we show how bonus taxes affect the agent's incentives to exert effort and the principal's decision regarding the composition of the compensation package (fixed salary and bonus rate). We find that, surprisingly, a bonus tax can increase the bonus rate and decrease the fixed salary. In addition, a bonus tax can induce the principal to pay higher bonuses even though the agent's effort always decreases. |
| Keywords: | Principal-agent model, bonus tax, executive compensation, incentive, pay regulation |
| JEL: | H24 J30 M52 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:zrh:wpaper:313&r=reg |
| By: | Meier, H.; Jamasb, T.; Orea, L. |
| Abstract: | The residential demand for energy is growing steadily and the trend is expected to continue for the foreseeable future. Household spending on energy services tends to increase with income. We explore household total spending on energy and on electricity and gas separately. We use an extensive British household panel data with more than 77,000 observations for the 1991-2007 period to explore the determinants of energy spending. We analyse income as a main driver of spending on energy and draw Engel spending curves for these. The lack of household level price data in liberalized retail energy markets is addressed by a new modelling approach to reflect within and between regional differences in energy prices. Also, long run changes in energy spending of households are approximated by exploring unit effects. The main results show the Engel spending curves are S-shaped. Income elasticities for energy spending are U-shaped and lower than unity, suggesting that energy services are a necessity for households. Moreover, the findings show that the income elasticity of energy spending is somewhat higher in the long run. Finally, we find a dynamic link between energy spending and income changes rather than a fixed budget threshold where basic needs are met. Hence, we suggest policy approaches that enable households to find their individual utility maximizing energy spending levels.Keywords: Burr distribution; Durations; Range; Score; Un-observed components; Weibull distribution |
| JEL: | C23 D12 Q41 |
| Date: | 2012–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1239&r=reg |