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on Regulation |
| By: | Pon, Shirley (Department of Agricultural and Resource Economics - University of Maryland) |
| Abstract: | Real time information feedback combined with various pricing schemes has been found to reduce residential energy consumption more than information and pricing policies alone. I examine the effect of information provision with bi-monthly, monthly, and real time pricing with in-home displays with a time-of-use pricing scheme on consumption over each month of the Irish Consumer Behavior Trial. I find that time-of-use pricing with real time pricing information reduce electricity usage up to 8.7 percent during peak times at the start of the trial but the effect decays over the first three months and after three months the trial group is indistinguishable from the control group. I do not find statistically significant improvements in energy savings when comparing monthly and bi-monthly billing treatments. These findings suggest that increasing billing reports to the monthly level or a web application providing real time information may be more cost effective than providing in-home displays. |
| Keywords: | time-of-use pricing; information provision; feedback; energy efficiency behavior |
| JEL: | D04 D12 Q41 Q48 Q49 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2015_008&r=all |
| By: | Schober, Dominik; Weber, Christoph |
| Abstract: | In the context of yardstick regulation with long-lived assets, the influence of heterogeneous investment cycles on the ability to recover capital is found to be important. The application of efficient firm standards based on historic (straight-line) depreciation given heterogeneous investment and cost cycles will cause instantaneous yardstick levels below the long-run refinancing level. The efficient firm standard will prevent capital recovery in later periods. An illustrating example from electricity distribution illustrates the relevance of the problem. Finally, two alternatives, branch average cost yardstick determination and correction factors based on the share of capital under depreciation, are discussed. |
| Keywords: | yardstick regulation,infrastructure investment,capital-recovery,sustainable refinancing,electricity distribution |
| JEL: | L51 L52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:15065&r=all |
| By: | Mark Armstrong |
| Abstract: | I survey the use of nonlinear pricing as a method of price discrimination, both with monopoly and oligopoly supply. Topics covered include an analysis of when it is profitable to offer quantity discounts and bundle discounts, connections between second- and third-degree price discrimination, the use of market demand functions to calculate nonlinear tariffs, the impact of consumers with bounded rationality, bundling arrangements between separate sellers, and the choice of prices for upgrades and add-on products. |
| Keywords: | Price discrimination, nonlinear pricing, bundling, product-line pricing, screening, discrete choice. |
| JEL: | D11 D21 D42 D86 L13 M31 |
| Date: | 2015–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:756&r=all |
| By: | Jihad C. Elnaboulsi (CRESE, Univ. Bourgogne Franche-Comté) |
| Abstract: | This paper presents an analysis of environmental policy in imperfectly competitive markets. We investigate how environmental taxes should be optimally levied in a precommitment policy game and their e¤ects on social welfare. The paper also examines the potential impacts of the regulator?s environmental conscience on policy setting. We start the analysis with a benchmark model where all players are environmentally dirty in the marketplace. We then extend the model to the case in which the market is composed of a mix of dirty and clean strategic players. We show that, in both cases, the regulator must necessarily trade o¤ between regulation of environmental quality and the industry production ine¢ ciency problems. Furthermore, the results show how higher levels of concern for environmental issues outweigh the under taxation problem that arises in order to avoid further reductions in welfare. Finally, we show that the existence of clean players produces positive social externalities. Under an ex ant environmental policy game, higher social welfare outcomes are possible. |
| Keywords: | Environmental Policy, Emissions Tax, Environmental Conscience, Social Welfare, Strategic Behavior, Oligopoly Competition. |
| JEL: | D60 D82 L13 Q28 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:crb:wpaper:2015-11&r=all |
| By: | Matthias Firgo (Austrian Institute of Economic Research (WIFO)); Dieter Pennerstorfer (Department of Economics, Vienna University of Economics and Business; Austrian Institute of Economic Research (WIFO)); Christoph R. Weiss (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station located most closely to the market center - defined as the 1-median location - exerts the strongest effect on pricing decisions of other stations. We conclude that centrality influences firms' pricing behavior and further find that the importance of centrality increases with market size. |
| Keywords: | Network Centrality, Spatial Competition, Retail Markets, Gasoline Prices |
| JEL: | C21 D43 L11 L81 R12 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp206&r=all |
| By: | Daniel J. Graham |
| Abstract: | This paper reviews methods that seek to draw causal inference from non-experimental data and shows how they can be applied to undertake ex-post evaluation of transport interventions. In particular, the paper discusses the underlying principles of techniques for treatment effect estimation with non-randomly assigned treatments. The aim of these techniques is to quantify changes that have occurred due to explicit intervention (or ‘treatment’). The paper argues that transport interventions are typically characterized by non-random assignment and that the key issues for successful ex-post evaluation involve identifying and adjusting for confounding factors. In contrast to conventional approaches for ex-ante appraisal, a major advantage of the statistical causal methods is that they can be applied without making strong a-priori theoretical assumptions. The paper provides empirical examples of the use of causal techniques to evaluate road network capacity expansions in US cities and High Speed Rail investments in Spain. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2014/13-en&r=all |
| By: | Roberta De Santis (ISTAT); Cecilia Jona Lasinio (ISTAT) |
| Abstract: | In a globalized framework, environmental regulations can have a decisive role in influencing countries’ comparative advantages. The conventional perception about environmental protection is that it imposes additional costs on firms, which may reduce their global competitiveness with negative effects on growth and employment. However, some economists, in particular Porter and Van der Linde (1995), argue that pollution is often associated with a waste of resources and that more stringent environmental policies can stimulate innovations that may over-compensate for the costs of complying with these policies. This is known as the Porter hypothesis and suggests the existence of a “double dividend”, for both economic and environmental aspects, related to environmental regulation. In this paper, we adopt a macroeconomic approach to investigate the impact of different environmental instruments on the economy as a whole. We investigate the environmental policy impacts on a sample of European economies in 1995-2008. Our findings suggest that the “narrow” Porter Hypothesis cannot be rejected and that the choice of the policy instruments is not neutral. In particular, market based environmental stringency measures look as the most effective to stimulate innovations and productivity. |
| Keywords: | environmental regulation, productivity, innovation, Porter hypothesis. |
| JEL: | D24 Q50 Q55 O47 O31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lui:lleewp:15122&r=all |
| By: | Iñaki Arto (European Commission – JRC - IPTS); Kurt Kratena (WIFO); Antonio F. Amores (European Commission – JRC - IPTS); Umed Temurshoev (European Commission – JRC - IPTS); Gerhard Streicher (WIFO) |
| Abstract: | This document explores the potential for the use of a market-based instrument to contribute to reducing the emissions of particulate matter of less than 10 micrometres from household heating appliances in the framework of the review of the Thematic Strategy on Air Pollution. The study is focused on the assessment of the economic and environmental impacts of possible scrappage policies for promoting the accelerated replacement of existing heating appliances with cleaner ones. Under these policy programmes, households replacing an old appliance with a cleaner one would receive a subsidy from the government. This subsidy would compensate households for the residual value of the scrapped appliance and the opportunity costs of the early investment in a new one. Two different scenarios are analysed: The scrappage and replacement of all the different types of conventional appliances that do not incorporate any emission control technology ('non-controlled'), and the scrappage and replacement of only 'non-controlled' firewood- and hard-coal-fired manual single house boilers. It is assumed that the scrappage programme is in force between 2018 and 2020. For each scenario, the study focuses on the effects of different levels of replacement of the 'non-controlled' appliances and the size of subsidies relative to the investment costs. |
| Keywords: | Market-based Instruments, Emissions reduction, Particles Emissions, Scrappage, Economic Impact |
| JEL: | Q52 C54 D58 D62 H23 H41 I18 D1 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc85940&r=all |
| By: | Brown, David P. (University of Alberta, Department of Economics); Olmstead, Derek (Alberta Market Surveillance Administrator) |
| Abstract: | We measure the degree of market power execution and inefficiencies in Alberta’s restructured electricity market. Using hourly wholesale market data from 2008 to 2014, we find that firms exercise substantial market power in the highest demand hours with limited excess production capacity. The degree of market power execution in all other hours is low. Market inefficiencies are larger in the high demand hours and elevate production costs by 14% - 19% above the competitive benchmark. This reflects 2.35% of the average market price across all hours. A recent regulatory policy clarifies that certain types of unilateral market power execution is permitted in Alberta. We find evidence that suggests that strategic behavior changed after this announcement. Market power execution increased. We illustrate that the observed earnings are often sufficient to promote investment in natural gas based technologies. However, the rents from market power execution can exceed the estimated capacity costs for certain generation technologies. We demonstrate that the energy market profits in the presence of no market power execution are generally insufficient to promote investment in new generation capacity. This stresses the importance of considering both short-run and long-run performance measures. |
| Keywords: | Electricity Markets; Market Power; Regulatory Policy |
| JEL: | D44 L13 L50 L94 Q40 |
| Date: | 2015–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2015_014&r=all |
| By: | Kim, Jinwon |
| Abstract: | This paper shows that a city where both a congestion externality and an externality from greenhouse gas emissions are corrected by efficient policies is more compact than the laissez-faire equilibrium city. Motivated by recent empirical studies showing a positive relationship between population density and vehicle fuel-efficiency, the consumer is assumed to choose vehicle fuel-efficiency jointly with housing consumption and residential location. By incorporating the consumer's vehicle choice into the urban spatial model, we can represent the total amount of vehicle emissions released by the city residents. We first establish the well-known result that the congestion externality as a source of market failure is associated with excessive urban sprawl. We then show that vehicle emissions are an additional source of market failure, which also leads to excessive urban sprawl. The source of excessive sprawl arising from the emission externality is the use of larger and less-fuel efficient vehicles in more sprawled cities, which is different from that of the congestion externality. We also analyze the effect of the Corporate Average Fuel Economy (CAFE) standards on urban spatial structure and its efficacy as a second-best tool for correcting the emission externality. |
| Keywords: | urban sprawl; vehicle fuel-efficiency; emission externality; congestion |
| JEL: | Q53 R14 R41 |
| Date: | 2015–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66922&r=all |
| By: | Declan Conway; Antoine Dechezleprêtre; Nick Johnstone; Ivan HaÅ¡ÄiÄ |
| Abstract: | This paper identifies over 50 000 patents filed worldwide in various water-related technologies between 1990 and 2010, distinguishing between those related to availability (supply) and conservation (demand) technologies. Patenting activity is analysed – including inventive activity by country and technology, international diffusion of such water-related technologies, and international collaboration in technology development. Three results stand out from our analysis. First, although inventive activity in water-related technologies has been increasing over the last two decades, this growth has been disproportionately concentrated on supply-side technologies. Second, whilst 80% of water-related invention worldwide occurs in countries with low or moderate water scarcity, several countries with absolute or chronic water scarcity are relatively specialized in water efficiency technologies. Finally, although we observe a positive correlation between water scarcity and local filings of water patents, some countries with high water availability, in particular Switzerland or Norway, nevertheless appear as significant markets for water-efficiency technologies. This suggests that drivers other than local demand, like regulation and social and cultural factors, play a role in explaining the global flows of technologies. And finally, the extent to which innovation is “internationalised†shows some distinct patterns relative to those observed for innovation in technologies in general. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp196&r=all |
| By: | Grégoire Wallenborn |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/217727&r=all |
| By: | OECD |
| Abstract: | Public-private partnerships (PPPs) have the potential to increase efficiency and improve resource allocation. However, contract renegotiations are common and make us question the benefits to PPPs. Under current accounting standards, PPPs allow intertemporal reallocations of infrastructure spending that do not occur under traditional methods of procuring infrastructure and which allow governments to escape the constraints of congressional purview. We review the theoretical results in Engel et al. [2009a] as well as data from Colombia, Chile and Peru, comprising 610 highway PPPs and 540 renegotiations processes to verify these predictions. The data and original analysis comes from Bitran et al. [2013], complemented with additional descriptive statistics. The empirical evidence supports the predictions of the theoretical model. |
| JEL: | H21 L51 L91 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2014/17-en&r=all |
| By: | Noriaki Matsushima; Ryusuke Shinohara |
| Abstract: | We examine a monopolistic supplier's decision about a pure public good when he/she must negotiate with beneficiaries of the good. In our model, while the level of the public good is decided unilaterally by the supplier, the cost share of the public good is negotiated between the supplier and beneficiaries. Our bargaining model is built on simultaneous bilateral bargaining and the bargaining power of the supplier is a key factor for the analysis. We show that under some mild conditions, the supplier produces the public good at a Pareto-efficient level in equilibrium if and only if his/her bargaining power is sufficiently weak. In addition, under some reasonable parametric functions, we show that the equilibrium likelihood of the efficient provision of the public good diminishes as the number of beneficiaries increases. We show by a numerical example that the source of the inefficient provision of the public good when the supplier's bargaining power is sufficiently strong may be the excessive supply of the public good. |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0948&r=all |