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on Regulation |
| By: | Darius Corbier; Frédéric Gonand; Marie Bessec |
| Abstract: | The development of decentralised sources of power produced out of renewable energies has been triggering far-reaching consequences for DSOs over the past decade. Our paper benchmarks across more than 20 European countries the impact of the development of renewables on the physical characteristics of power distribution networks and on their investments. It builds quantitative indicators about the dynamics of installed capacity of and generation from renewable sources of electricity, electric independence, quality of electric distribution, the amount of smart grids investments, DSOs capital expenditures, the length of the distribution networks, overall costs of power networks paid by private agents, and electric losses, all in relation with the development of decentralised generation. The heterogeneity of these indicators across Europe appears to be wide notably because of physical constraints, historic legacies or policy and regulatory choices. A cluster analysis allows for deriving 5 groups of countries that display statistically homogenous characteristics. Our results may provide decision makers and regulators with a tool helping them to concentrate on the main issues specific to their countries as compared to the European median, and to look for possible solutions in the experience of other clusters which are shown to perform better for some indicators. |
| Keywords: | Renewables, Electric utilities, Distribution networks, Cluster analysis. |
| JEL: | C38 L94 Q42 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1509&r=all |
| By: | Luis Angeles; Robin G Milne |
| Abstract: | A major initiative of the Thatcher and Major Conser vative administrations was that public sector ancillary and professional services provided by inc umbent direct service organisations [DSOs] be put out to tender. Analyses of this initiative, in the UK and elsewhere, found costs were often reduced i n the short run. However, few if any studies went be yond the first round of tendering. We analyze data collected over successive rounds of tendering for cleaning and catering services of Scottish hospitals in order to assess the long term consequences of this initiative. The experience o f the two services was very different. Cost savings for cleaning services tended to increa se with each additional round of tendering and became increasingly stable. In accordance with prev ious results in the literature, DSOs produced smaller cost reductions than private contractors: p robably an inevitable consequence of the tendering process at the time. Cost savings from D SOs tended to disappear during the first round of tendering, but they appear to have been more perman ent in successive rounds. Cost savings for catering, on the other hand, tended to be much smal ler, and these were not sustained. |
| Keywords: | Competitive Tendering; Scottish Hospitals; Cleanin g services; Catering services |
| JEL: | H11 H51 H57 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2015_19&r=all |
| By: | Sebastian Jobjornsson; Martin Forster; Paolo Pertile; Carl-Fredrik Burman |
| Abstract: | We present a model combining the two regulatory stages relevant to the approval of a new health technology: the authorisation of its commercialisation and the insurer’s decision about whether to reimburse its cost. We show that the degree of uncertainty around the true value of the insurer’s maximum willingness to pay for a unit increase in effectiveness has a non-monotonic impact on the price of the innovation, the firm’s expected profit and the optimal sample size chosen for the clinical trial. A key result is that there exists a range of values of the uncertainty parameter over which a reduction in uncertainty benefits the firm, the insurer and patients. We consider how different policy parameters may be used as incentive mechanisms, and the incentives to invest in R&D for marginal projects such as those targeting rare diseases. The model is calibrated using data on a new treatment for cystic fibrosis. |
| Keywords: | Rare Diseases; Pharmaceutical Pricing and Reimbursement; Optimal Sample Size |
| JEL: | L5 H51 I11 I18 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:15/16&r=all |
| By: | Yacoub Bahini; Cuong Le Van |
| Abstract: | In this paper we use the CMM model (Chakravorty et al.,2006) in |
| Keywords: | Dynamic optimization, Natural resources, Energetic transition, Environment. |
| JEL: | P28 Q01 Q32 Q42 Q48 Q52 |
| Date: | 2015–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2015-629&r=all |
| By: | Andre Boik (Department of Economics, University of California (Davis), One Shields Avenue, Davis CA, 95616) |
| Abstract: | Universal service is a policy objective that all individuals or households have access to some service. Subsidy policies to accomplish universal service may arise when private provision is non-universal. In the context of rural high speed wired broadband subsidies, this paper exploits household-level cable and satellite broadband subscription data from North Carolina to examine household adoption and substitution patterns and to evaluate how many currently unserved regions warrant an entry subsidy. This paper has three main findings: (i) fewer than 47% of households adopt high speed broadband in areas currently served by a single broadband provider, (ii) there exists a significant elasticity of substitution between high speed wired broadband and the lower speed options of satellite broadband and DSL, and (iii) a generous upper bound on the number of regions that warrant an entry subsidy is 67%. These results suggest a policy of universal service in North Carolina would be unlikely to achieve universal adoption, would connect many households already with internet access and who would not substitute, and in many regions would be prohibitively costly even assuming very generous estimates of the consumer surplus generated. From the perspective of social welfare, to connect the 5% least dense areas of North Carolina would require each adopting household value broadband access at more than $1550 per month. |
| Keywords: | Universal service; entry subsidies; broadband; telecommunications |
| JEL: | L96 L97 L51 H71 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1511&r=all |
| By: | Hampf, Benjamin; Rødseth, Kenneth Løvold |
| Abstract: | On June 25, 2013, President Obama announced his plan to introduce carbon dioxide emission standards for electricity generation. This paper proposes an efficiency analysis approach that addresses which mission rates (and standards) would be feasible if the existing generating units adopt best practices. A new efficiency measure is introduced and further decomposed to identify different sources' contributions to emission rate improvements. Estimating two Data Envelopment Analysis (DEA) models - the well-known joint production model and the new materials balance model - on a dataset consisting of 160 bituminous-fired generating units, we find that the average generating unit's electricity-to-carbon dioxide ratio is 15.3 percent below the corresponding best-practice ratio. Further examinations reveal that this discrepancy can largely be attributed to non-discretionary factors and not to managerial inefficiency. Moreover, even if the best practice ratios could be implemented, the generating units would not be able to comply with the EPA's recently proposed carbon dioxide standard. |
| Keywords: | Emission standards,Carbon dioxide emissions,Materials balance condition,Electricity generation,Weak G-disposability,Data Envelopment Analysis |
| JEL: | Q53 Q48 D24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:darddp:219&r=all |
| By: | Gregory S. Crawford; Oleksandr Shcherbakov; Matthew Shum |
| Abstract: | We measure the welfare consequences of endogenous quality choice in imperfectly competitive markets. We introduce the concept of a "quality markup" and measure the relative importance for welfare of market power over price versus market power over quality. For U.S. cable-television markets between 1997-2006, we find that prices are 33% to 74% higher and qualities 23% to 55% higher than socially optimal. This "quality inflation" contradicts classic results in the literature and reflects our flexible specification of consumer preferences. Furthermore, we find market power over quality is responsible for 54% of the total welfare change from endogenous prices and qualities. |
| Keywords: | Industrial organization, endogenous quality, imperfect competition, monopoly, cable television, quality distortions, welfare, quality markup |
| JEL: | L15 L13 L82 L96 C51 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:202&r=all |
| By: | Vierth , Inge (VTI); Schleussner , Heike (VTI); Mandell , Svante (KTH/VTI) |
| Abstract: | We compare policy implications from time-based charges on road freight transports, represented by the case of Sweden, to those from distance-based charges, represented by the case of Germany. The analyses based on official statistics from 2005-2014 indicate that the German road freight policy has resulted in substantially larger revenues and a cleaner truck fleet and mileage. Some support is found for that the German policy causes spill-overs to the neighbouring countries. It can be shown that the Swedish hauliers use cleaner trucks for international than for national transports. In general, the firms have incentives to use the cleanest trucks in the countries that have introduced distance-based tolls. As an estimate of the consequences of this in Sweden, the difference in environmental impact is estimated between the case with the actual composition of trucks using the Swedish network and the hypothetical case where the composition is the same as on the German toll roads. The socio-economic costs are estimated to be around € 16 million per year. This puts pressure on countries as Sweden to implement stronger policies to counter the spill-over effect. The time based charges, e.g., the Eurovignette, seem to be outdated. |
| Keywords: | Road freight transport; Road charges; Policy comparison |
| JEL: | R40 |
| Date: | 2015–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2015_016&r=all |
| By: | Shanjun Li (Dyson School of Applied Economics and Management, Cornell University, Ithaca, NY 14853); Yiyi Zhou (Department of Economics, Stony Brook University, Stony Brook, NY 11794) |
| Abstract: | We examine the dynamics of technology adoption and critical mass in network industries with an application to the U.S. electric vehicle (EVs) market. This market exhibits indirect network effects in that consumer EV adoption and investor deployment of public charging stations are interdependent. In markets with positive indirect network effects, multiple equilibria with different level of technology adoption may exist. The diffuion and ultimately the success of technology depend on the equilibrium structure and property. Under certain market conditions, the issue of critical mass arises and the market needs to pass this critical mass in order to reach the high-adoption equilibrium. Using a data set of quarterly EV sales in 354 U.S. metro areas from 2011 to 2013, we quantify indirect network effects and simulate long-run market outcomes in each of the MSAs. Our analysis provides robust and significant evidence of indirect network effects in this market. Simulations show several different market equilibrium outcomes across the 354 MSAs in the long run with a significant number of them exhibiting multiple equilibria and critical mass. Policy suggestions are provided in order to push these markets to pass the critical mass and move towards the high-adoption equilibrium. |
| Keywords: | electric vehicles; indirect network effects; critical mass |
| JEL: | Q4 Q5 R4 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1510&r=all |
| By: | Hampf, Benjamin; Rødseth, Kenneth Løvold |
| Abstract: | In this paper we analyze the economic effects of implementing EPA's newly proposed regulations for carbon dioxide (CO2) on existing U.S. coal-fired power plants using nonparametric methods on a sample of 144 electricity generating units. Moreover, we develop an approach for evaluating the economic gains from averaging emission intensities among the utilities' generating units, compared to implementing unit-specific performance standards. Our results show that the implementation of flexible standards leads to up to 2.7 billion dollars larger profits compared to the uniform standards. Moreover, we find that by adopting best practices, current profits can be maintained even if an intensity standard of 0.88 tons of CO2 per MWh is implemented. However, our results also indicate a trade-off between environmental and profit gains, since aggregate CO2 emissions are higher with emission intensity averaging than with uniform standards. |
| Keywords: | environmental regulation,profit maximization,emission intensity averaging,nonparametric effciency analysis |
| JEL: | D24 L50 Q54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:darddp:dar_68011&r=all |
| By: | Koschatzky, Knut; Kroll, Henning; Meyborg, Mirja; Stahlecker, Thomas; Dwertmann, Anne; Huber, Monika |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisifr:r22015&r=all |