nep-reg New Economics Papers
on Regulation
Issue of 2018‒10‒08
eleven papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. Market diffusion of residential PV and battery systems driven by self-consumption: A comparison of Sweden and Germany By Klingler, Anna-Lena; Luthander, Rasmus
  2. Challenges in Better Co-ordinating Tokyo’s Urban Rail Services By Hironori Kato
  3. Photovoltaic self-consumption after the support period: Will it pay off in a cross-sector perspective? By Klamka, Jonas; Wolf, André; Ehrlich, Lars G.
  4. Mergers in Nonrenewable Resource Oligopolies and Environmental Policies By Ray Chaudhuri, A.; Benchekroun, H.; Breton, Michele
  5. Planning for a (Less) Rainy Day: Evaluating the Regional Welfare Impacts of Water Infrastructure Investment By Zhong, Hua; Taylor, Michael H.; Rollins, Kimberly S.; Manning, Dale; Goemans, Christopher
  6. The Economics of Enhancing Accessibility: Estimating the Benefits and Costs of Participation By Bridget R.D. Burdett; Stuart M. Locke; Frank Scrimgeour
  7. Institutional flexibility, political alternation and middle-of-the-road policies By Ascensión Andina Díaz; Francesco Feri; Miguel A. Meléndez-Jiménez
  8. Regulating Cancellation Rights with Consumer Experimentation By Florian Hoffmann; Roman Inderst; Sergey Turlo
  9. Social Comparisons Versus Information Provision in Residential Water Consumption: Evidence from a Randomized Controlled Trial By Lurbe, Salvador; Burkhardt, Jesse; Goemans, Christopher; Manning, Dale
  10. Welfare impacts of optimal virtual bidding in a multi-settlement electricity market with transmission line congestion By Kim, Hyungkwan; Preckel, Paul; Gotham, Douglas; Liu, Andrew
  11. Changing Consumer Willingness to Pay: a time series evaluation of factors impacting Floridians’ desire to preserve water resources By McKee, Brandon; Lamm, Alexa; McFadden, Brandon

  1. By: Klingler, Anna-Lena; Luthander, Rasmus
    Abstract: With increasing number of installations of photovoltaic (PV) systems and lower equipment costs, the subsidies dedicated to residential PV systems are reduced in many countries. Instead of the subsidies for selling PV electricity, prospectively self-consumption is the key parameter for the profitability of PV systems. In this paper, we study the market diffusion of residential PV systems for de-tached houses in Germany and Sweden. For this, we develop a hybrid model of the adoption of PV installations driven by self-consumption. We model the profitability and investment decisions for PV systems in a first step and account for inhibiting factors by introducing an adoption rate. The adoption rate is based on empirical data from the market diffusion of heat pumps in Sweden. We also study the market diffusion of battery systems aimed to increase self-consumption. A base case with several sensitivities on long-term trends of different parameters is analysed to examine the variation of the market diffusion until 2040. The results show a large difference in the market share of PV systems in Germany and Sweden in 2040. A base case scenario results in a market share for PV systems of 65% of the German detached houses in 2040, compared to 12% in Sweden. The results show that the market share in Sweden is most sensitive to electricity price changes, whereas the German market is most sensitive to changes in the adoption rate. Since the high electricity price in Germany makes PV profitable for most of the households at an early stage, it is mainly the adoption rate that limits the market diffusion in Germany. For Sweden, where the electricity price is less than half of the German price, the profitability is the main limiting factor. This is reflected in the hybrid adoption model, where the market diffusion is dependent on both the profitability and the adoption rate. The market share for battery systems is 5% in Germany and 0% in Sweden in 2040 in the base case scenario. The results show the influences of several parameters on the market diffusion based on the different initial mar-ket conditions, which can be extended to other national markets.
    Keywords: Market diffusion,self-consumption,PV,battery,technology adoption
    Date: 2018
  2. By: Hironori Kato (University of Tokyo)
    Abstract: This paper describes Tokyo’s urban rail market, which has traditionally been privately funded and operated; and discusses policies aimed at better coordinating public transport services. Although the industry has delivered high quality infrastructure and services for most users, the existence of many different private operators and owners of tracks means that services and station facilities are not always well connected to one another. Individual private parties often lack sufficient incentives to invest in connectivity improvements, such as installing elevators in stations or implementing missing connections between lines, since these do not usually directly increase their profits. Three case studies explore different policy responses to the challenge of balancing competing wishes of private actors with the needs of travellers. In all cases the government has intervened through legislation and grants to try to stimulate connectivity investment and to do so in consultation with local communities. The recent government interventions into the Tokyo rail market represent a gradual evolution in market structure with the goal of better meeting social needs.
    Date: 2016–09–29
  3. By: Klamka, Jonas; Wolf, André; Ehrlich, Lars G.
    Abstract: We quantify the cost savings potential of photovoltaic self-consumption by single-family houses with small-scale roof-top photovoltaic (PV) systems in Germany against the background of recent storage applications after the end of the legal support period. We analyze different systems where an already installed PV system is combined with battery storage and/or a power-to-heat solution (heating rod plus thermal storage). A comparison is made in terms of a household's electricity and heating costs under cost-minimizing operation of each system. For this purpose, we carry out comprehensive simulations of site-specific PV production and determine the optimal selfconsumption as well as the optimal charging of the hot water thermal storage and the battery system. We use 25 representative electricity load profiles, which differ only in the temporal distribution of consumption, to obtain a broader picture of the cost savings potential. Results suggest that the major share of the savings potential is due to direct PV self-consumption and thus concerns the electricity costs. A profitability analysis reveals that the inclusion of a hot water thermal storage and/or a battery storage system does not pay off when juxtaposing cost savings and investment expenses, at least at current prices.
    Keywords: residential photovoltaic,self-sufficiency,battery system,power-to-heat
    Date: 2018
  4. By: Ray Chaudhuri, A. (Tilburg University, Center For Economic Research); Benchekroun, H.; Breton, Michele
    Abstract: We examine the profitability of horizontal mergers within nonrenewable resource industries, which account for a large proportion of merger activities worldwide. Each firm owns a private stock of the resource and uses open-loop strategies when choosing its extraction path. We analytically show that even a small merger (merger of 2 firms) is always profitable when the resource stock owned by each firm is small enough. In the case where pollution is generated by the industry's activity, we show that an environmental policy that increases the firms' production cost or reduces their selling price can deter a merger. This speeds up the industry's extraction and thereby causes emissions to occur earlier than under a laissez-faire scenario.
    Keywords: exhaustible resources; horizontal mergers; environmental regulation; differential games
    JEL: Q39 L41 Q58
    Date: 2018
  5. By: Zhong, Hua; Taylor, Michael H.; Rollins, Kimberly S.; Manning, Dale; Goemans, Christopher
    Keywords: Resource and Environmental Policy Analysis, Natural Resource Economics, Household and Labor Economics
    Date: 2018–06–20
  6. By: Bridget R.D. Burdett; Stuart M. Locke; Frank Scrimgeour
    Abstract: Inclusiveness affects the underlying thinking and consequential analysis of accessibility issues in transport. If the fundamental premise is that all people are equal and should be viewed as stakeholders in matters of public policy then it not only reflects international treaties, such as the Rights of the Child and the Rights of Persons with Disability, it encapsulates these and others in a broader perspective of equality. To claim that inclusiveness in transport policy is a paradigm shift may be an over statement, however, what seems self-evident in our discussion is not reflected in best practice at this time. It is important that some measure of the particular beneficiaries of investment in barrier-free transport is defined. We propose that the use of observable mobility aids, by persons making all manner of trips as pedestrians and public transport users, can be incorporated into cost-benefit appraisal and to inform broader transport planning. The proportion of people using a mobility aid in catchment populations can be estimated so that gaps can be defined between current and desired levels of demonstrated inclusion in transport and especially accessible infrastructure. This indicator is readily operational to estimate benefits and comparative costs of trips not made. These methods ought to be refined to objectively assess accessibility in parallel with other objectives for transport.
    Date: 2017–02–28
  7. By: Ascensión Andina Díaz (Department of Economics, University of Málaga); Francesco Feri (Department of Economics, Royal Holloway, University of London); Miguel A. Meléndez-Jiménez (Department of Economics, University of Málaga)
    Abstract: Empirical observation shows that policies are usually gradually introduced in a society. This paper presents a model of repeated elections that captures this phenomenon, and that allows countries to differ in their institutional flexibility, thus in the speed of implementation of new policies. We show that with gradual implementation of policies there is an incentive for the voters to vote, each election, to a different party. Hence, our model produces equilibria with alternation. We further show that there is a tradeoff between efficiency and stability, with efficiency requiring moderate policies and stability pushing towards polarization. Last, we show that except for the partisan equilibria, the most stable ones convey policies that are bounded away from both the median and the extremes, with policies polarizing more when institutions are either too flexible or sufficiently rigid.
    Keywords: gradual implementation of policies; political alternation; polarization and moderation; efficiency; robustness
    JEL: D02 D72
    Date: 2018–09
  8. By: Florian Hoffmann; Roman Inderst; Sergey Turlo
    Abstract: Embedding consumer experimentation with a product or service into a market environment, we find that unregulated contracts induce too little returns or cancellations, as they do not internalize a pecuniary externality on other firms in the market. Forcing firms to let consumers learn longer by imposing a commonly observed statutory minimum cancellation or refund period is socially efficient only when firms appropriate much of the market surplus, while it backfires otherwise. Interestingly, cancellation rights are a poor predictor of competition, as in the unregulated outcome firms grant particularly generous rights when competition is neither too low nor too high. The overarching theme of our analysis is that both the individual benefits and the welfare consequences of (consumer) experimentation depend crucially on the consumer's reservation value, which is endogenous in a market environment.
    Keywords: Consumer experimentation, cancellation rights, market equilibrium, externality, regulation, consumer protection
    JEL: D82 D86 L51
    Date: 2018–10
  9. By: Lurbe, Salvador; Burkhardt, Jesse; Goemans, Christopher; Manning, Dale
    Keywords: Behavioral & Institutional Economics, Natural Resource Economics, Resource and Environmental Policy Analysis
    Date: 2018–06–20
  10. By: Kim, Hyungkwan; Preckel, Paul; Gotham, Douglas; Liu, Andrew
    Keywords: Industrial Org./Supply Chain Management, Natural Resource Economics, Risk and Uncertainty
    Date: 2018–06–20
  11. By: McKee, Brandon; Lamm, Alexa; McFadden, Brandon
    Abstract: This study sought to gauge Florida’s consumers’ willingness to pay for protecting the future of Florida’s water supply from 2013 to 2016. This study used a value approach for estimating consumer’s willingness to pay for a 10 percent and a 50 percent increase in their water bill. The study also sought to identify dissonance between Florida’s consumers to determine influencers of their willingness to pay. The study found an increasing percentage of consumers willing to support the protection of Florida’s water supply since 2013. As well, income was a common factor influencing respondent’s willingness to pay. Knowing this dissonance can help decision makers make informed polices and regulations about future water conservation strategies for the future.
    Keywords: Environmental Economics and Policy
    Date: 2018–01–17

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