|
on Regulation |
| By: | John A. List; Robert D. Metcalfe; Michael K. Price; Florian Rundhammer |
| Abstract: | The literature has shown the power of social norms to promote residential energy conservation, particularly among high usage users. This study uses a natural field experiment with nearly 200,000 US households to explore whether a financial rewards program can complement such approaches. We observe strong impacts of the program, particularly amongst low-usage and low-variance households, customers who typically are less responsive to normative messaging. Our data thus suggest important policy complementarities between behavioral and financial incentives: whereas non-pecuniary interventions disproportionately affect intense users, financial incentives are able to substantially affect the low-user, “sticky households.” |
| JEL: | C93 D03 Q4 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23355&r=reg |
| By: | Jessica Raasch; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen (Campus Essen)) |
| Abstract: | With a smart grid environment, flexible load devices and provided local price incentives a more efficient grid usage may be achieved in the future. Bidirectional communication, smart devices and shiftable loads as electric vehicles and heat pumps have the potential to be coordinated with local supply when suitable incentives are provided. This can bring relief especially for distribution grid areas where infeeds from fluctuating renewable energy sources increase. This paper presents a decentralized local pricing mechanism, aiming at local prices that reflect the current load situation. That is in case of congestion a local price, deviating from the wholesale market price, is determined. With an iterative search algorithm suitable prices can be computed without gathering full-fledged bidding data. Simultaneously self-reinforcing effects are avoided. Further on this concept can be implemented rather easily precisely where and when required so that only areas with grid congestion are affected. |
| Keywords: | Smart Grid, Real-Time Pricing, Network Pricing, Agent-Based Modeling, Price-Elastic Behavior |
| JEL: | Q40 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1704&r=reg |
| By: | Clemens Gerbaulet; Casimir Lorenz |
| Abstract: | This Data Documentation presents a dynamic investment and dispatch model for Europe named dynELMOD. The model endogenously determines investments into conventional and renewable power plants, different storage technologies including demand side management measures, and the electricity grid in five-year steps in Europe until 2050 under full or myopic foresight. The underlying electricity grid and cross-border interaction between countries is approximated using a flow-based market coupling approach using a PTDF matrix. Carbon emission restictions can be modeled using an emission path, an emission budget, or an emission price. For the investment decisions a time frame reduction technique is applied, which is also presented in this document. The code and the dataset are made publicly available under an open source license on the website of DIW Berlin. The model results show that under almost complete decarbonization renewable energy sources in conjunction with storage capacities will provide the majority of the electricity generation in Europe. At the same time with a rising renewables share, especially after 2040, the need for storage capacities increases. No additional capacity from nuclear energy or fossil fuels is installed, due to high costs and in order to meet the greenhouse gas emission target. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwddc:dd88&r=reg |
| By: | Patrice Bougette (Université Côte d'Azur; GREDEG CNRS); Christophe Charlier (Université Côte d'Azur; GREDEG CNRS) |
| Abstract: | The paper analyzes the interactions between trade and renewable energy policies based on the EU--China Solar Panel dispute which is the most significant antidumping (AD) complaint in Europe. We build a price competition duopoly model with differentiated products and intra-industry trade in photovoltaic equipment. We provide two relevant types of AD duties. The optimal AD which maximizes social domestic welfare always increases with the feed-in tariff (FIT) program set in the home country. The appropriate AD -- equalizing the foreign firm's price on the domestic market with the foreign market price -- decreases with the FIT program. We show that the optimal FIT increases with the AD duty. Therefore, trade and renewable energy optimal policies may complement one another. When setting AD duties in clean energy sectors, it is important not to ignore the extent to which renewable energy is subsidized. |
| Keywords: | Antidumping, FIT, Solar Panels, Renewable Energy, Trade disputes, EU, China |
| JEL: | F18 L52 Q42 Q48 Q56 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2017-17&r=reg |
| By: | Davide Cerruti (ETH Zurich, Switzerland); Anna Alberini (University of Maryland,USA); Joshua Linn (Resources of the Future, USA) |
| Abstract: | Policymakers have been considering vehicle and fuel taxes to reduce transportation greenhouse gas emissions, but there is little evidence on the relative efficacy of these approaches. We examine an annual vehicle registration tax, the Vehicle Excise Duty (VED), which is based on carbon emissions rates. The UK first adopted the system in 2001 and made substantial changes to it in the following years. Using a highly disaggregated dataset of UK monthly registrations and characteristics of new cars, we estimate the effect of the VED on new vehicle registrations and carbon emissions. The VED increased the adoption of low-emissions vehicles and discouraged the purchase of very polluting vehicles, but it had a small effect on aggregate emissions. Using the empirical estimates, we compare the VED with hypothetical taxes that are proportional either to carbon emissions rates or to carbon emissions. The VED reduces total emissions twice as much as the emissions rate tax but by half as much as the emissions tax. Much of the advantage of the emissions tax arises from adjustments in miles driven, rather than the composition of the new car sales. |
| Keywords: | CO2 emissions, vehicle registration fees, carbon taxes, vehicle excise duty, UK |
| JEL: | H23 Q48 Q54 R48 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:17-271&r=reg |
| By: | Steve Cicala; Ethan M.J. Lieber; Victoria Marone |
| Abstract: | In health insurance markets, an insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. As part of the goal of reducing the cost of health care coverage, the Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets as of 2011, thereby explicitly capping insurer profit margins, but not levels. This cap was binding for many insurers, with over $1 billion of rebates paid in the first year of implementation. We model this constraint imposed upon a monopolistic insurer, and derive distortions analogous to those created under cost of service regulation. We test the implications of the model empirically using administrative data from 2005–2013, with insurers persistently above the minimum MLR threshold serving as the control group in a difference-in-difference design. We find that rather than resulting in reduced premiums, claims costs increased nearly one-for-one with distance below the regulatory threshold, 7% in the individual market, and 2% in the group market. |
| JEL: | I10 L5 L98 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23353&r=reg |
| By: | Jean-François Houde; Peter Newberry; Katja Seim |
| Abstract: | We examine the economies of density associated with the expansion of Amazon’s distribution network from 2006 to 2018. We demonstrate that, in placing a fulfillment center in a new state, Amazon faces a trade-off between the revenue implications of exposing local customers to sales tax on their purchases and the cost savings from reducing the shipping distance to those customers. Using detailed data on online transactions, we estimate a model of demand for retail goods and show that consumers’ online shopping is sensitive to sales taxes. We then use the demand estimates and the spatial distribution of consumers relative to Amazon’s fulfillment centers to predict revenues and shipping distances under the observed fulfillment center roll-out and under counterfactual roll-outs over this time period. Using a moment inequalities approach, we infer the cost savings from being closer to customers that render the observed network roll-out optimal. We find that Amazon saves between $0.17 and $0.47 for every 100 mile reduction in the distance of shipping goods worth $30. In the context of its distribution network expansion, this estimate implies that Amazon has reduced its total shipping cost by over 50% and increased its profit margin by between 5 and 14% since 2006. Separately, we demonstrate that prices on Amazon have fallen by approximately 40% over the same period, suggesting that a significant share of the cost savings have been passed on to consumers. |
| JEL: | H71 L23 L81 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23361&r=reg |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | We consider a choice of options for a foreign innovating firm to license its new cost-reducing technology to a domestic incumbent firm or to enter the domestic market with or without license under convex cost functions. With convex cost functions the domestic market and the foreign market are not separated, and the results depend on the relative size of those markets. In a specific case with linear demand and quadratic cost, entry without license strategy is never the optimal strategy for the innovating firm; if the ratio of the size of the foreign market relatively to the domestic market is small, license with entry strategy is optimal; and if the ratio of the size of the foreign market relatively to the domestic market is not small, license without entry strategy is optimal. |
| Keywords: | license with or without entry, duopoly, foreign and domestic markets, foreign innovating firm |
| JEL: | D43 L13 |
| Date: | 2017–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78996&r=reg |
| By: | YOSHIHARA Keisuke; OHASHI Hiroshi |
| Abstract: | This paper evaluates the impact of renewable energy (RE) sources on market outcomes in Japan. We develop a simulation model to compute the kWh-market equilibrium, and conduct simulation exercises for 2015 and 2030. Using scenarios proposed by the government, we find that the diffusion of RE sources would lower the kWh-market prices and greenhouse gases by reducing fossil fuel consumption in 2030. It would also mothball many of the thermal power plants, which were active and profitable in 2015. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:17063&r=reg |
| By: | David Martimort (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Jérôme Pouyet (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Francesco Ricci (ART-Dev - Acteurs, Ressources et Territoires dans le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVD - Université de Perpignan Via Domitia - Université Paul Valéry - Montpellier III - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We characterize the optimal extraction path when a concessionaire has private information on the initial stock of resource. Under asymmetric information, a `virtual Hotelling rule' describes how the resource price evolves over time and how extraction costs are compounded with information costs along an optimal extraction path. In sharp contrast with the case of complete information, elds which are heterogeneous in terms of their initial stocks follow di erent extraction paths. Some resource might be left unexploited in the long-run as a way to foster incentives. The optimal contract may sometimes be implemented through royalties and license fees. With a market of concessionaires, asymmetric information leads to a `virtual Her ndahl principle' and to a new form of heterogeneity across active concessionaires. Under asymmetric information, the market price converges faster to its long-run limit, exhibiting more stability. |
| Keywords: | Non-Renewable resource, Delegated Management, Optimal,Contract, Asymmetric Information |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01431170&r=reg |
| By: | Ian W.H. Parry; Victor Mylonas; Nate Vernon |
| Abstract: | Spreadsheet models are used to assess the environmental, fiscal, economic, and incidence effects of a wide range of options for reducing fossil fuel use in India. Among the most effective options is ramping up the existing coal tax. Annually increasing the tax by INR 150 ($2.25) per ton of coal from 2017 to 2030 avoids over 270,000 air pollution deaths, raises revenue of 1 percent of GDP in 2030, reduces CO2 emissions 12 percent, and generates net economic benefits of approximately 1 percent of GDP. The policy is mildly progressive and (at least initially) imposes a relatively modest cost burden on industries. |
| Date: | 2017–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/103&r=reg |
| By: | Philippe Gagnepain (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); David Martimort (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | We propose merger guidelines for bidding markets through the construction of a simple test. It is applied in the particular context of the French urban transport industry. It designs the optimal auction and captures two opposite forces at stake: on the one hand, the optimal auction is biased against a merger due to a loss of competition; on the other hand, potential efficiency gains bias the optimal allocation towards the merger firm. The two effects can be nested in a single equation condition which determines whether the merger improves the consumer net surplus. We suggest that the merger between Transdev and Veolia is consumer surplus improving if the efficiency gains from the merger allow both firms to decrease their initial costs inability by at least 17.9% and 17.8% respectively. |
| Keywords: | transports publics urbains |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseose:hal-01314036&r=reg |
| By: | Fix, Blair |
| Abstract: | Why do institutions grow? Despite nearly a century of scientific effort, there remains little consensus on this topic. This paper offers a new approach that focuses on energy consumption. A systematic relation exists between institution size and energy consumption per capita: as energy consumption increases, institutions become larger. I hypothesize that this relation results from the interplay between technological complexity and human biological limitations. I also show how a simple stochastic model can be used to link energy consumption with firm dynamics. |
| Keywords: | Power,Production,Region - North America,Business Enterprise,Conflict & Violence,Cooperation & Collective Action,Distribution,Growth,Industrial Organization,Institutions |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:capwps:201604&r=reg |