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on Regulation |
| By: | Robert Anderton; Barbara Jarmulska; Benedetta Di Lupidio |
| Abstract: | This paper empirically investigates the effects of product market regulation on business churning (i.e. entry and exit of firms) and their impacts on productivity, using annual data for the period 2000-2014 across individual EU countries and sectors. The paper hypothesises that product market reforms, which reduce entry barriers and increase the degree of competition, can allow new firms to enter the market and compete vis-à-vis incumbent firms. The higher competitive pressures can push competitive incumbent firms to innovate while other less productive and inefficient firms may exit. These possible mechanisms can result in improvements to the average industry-level productivity. By using business demography data (i.e, business churning) at the industry and firm size level, we perform a panel data analysis across European countries and sectors to evaluate the effect of product market regulation on firm churning and their impacts on productivity. In particular, we differentiate between micro (less than 10 employees) and other firms given the substantial degree of heterogeneity among these two size classes both in terms of business churning and productivity growth. The paper finds that reducing product market regulation increases business dynamism (i.e. increases the churn rate) by facilitating firms’ entry and exit which, in turn, boosts sectoral total factor productivity. |
| Keywords: | product market regulation; business churning; productivity; EU |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:18/12&r=reg |
| By: | Stef Proost (Catholic University of Leuven) |
| Abstract: | This paper examines the optimal level of public transport pricing in metropolitan areas, using Stockholm and Paris as case studies. It shows that overall welfare improves if public transport prices are increased during peak hours to balance demand and fund additional services in the peak. This report considers the sources of welfare improvements and compares the effect of such pricing policy on cities with and without road pricing. |
| Date: | 2018–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2018/15-en&r=reg |
| By: | Brian McManus (University of North Carolina at Chapel Hill); Aviv Nevo (University of Pennsylvania); Zachary Nolan (Duke University); Jonathan W. Williams (University of North Carolina at Chapel Hill) |
| Abstract: | We model mixed-bundle pricing by internet service providers (ISPs) to study their incentive to steer consumers across different subscription options and influence usage decisions. Using unique panel data from an ISP, we test predictions from the model. We find that the ISP's introduction of internet usage allowances and overage charges steered internet-only consumers into bundled TV and internet subscriptions; this effect was greatest for heavy users of streaming services most similar to conventional TV. Internet usage growth –- especially in streaming video services –- was curtailed for consumers who added TV subscriptions, and it also fell for consumers who did not upgrade their internet usage allowances. We discuss the implications of these findings for antitrust and regulatory issues in the telecommunications industry. |
| Keywords: | Steering; Bundling; Nonlinear pricing; Telecommunications industry; cord-cutting; broadband |
| JEL: | L11 L13 L96 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1812&r=reg |
| By: | Jillian Anable (University of Leeds); Phil Goodwin (University College London) |
| Abstract: | This paper offers new insights into the definition, measurement and operationalisation of different dimensions of social vulnerability to road user charges, using unique data sets available in the UK. Assessing distributional effects of road pricing or congestion charging schemes requires evaluating distributional patterns: who receives the benefits of reduced congestion and who receives the revenues collected? How these impacts change over time also needs consideration. |
| Date: | 2018–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2018/13-en&r=reg |
| By: | Moldovanu, Benny |
| Abstract: | Agents in a finite two-sided market are matched assortatively, based on costly investments. Besides signaling privately known, complementary types, the investments also directly benefit the match partner. The bilateral external benefits induce a complex feedback cycle that amplifies the agents' signaling investments. Our main results quantify how the feedback effect depends on the numbers of competitors on both sides of the market. This yields detailed insights into the equilibria of two-sided matching contests with incomplete information, in particular for markets of small or intermediate size. It also allows us to shed some new light on the relationship between finite and continuum models of pre-match investment. |
| Keywords: | feedback effect; investment; Matching; signaling |
| JEL: | C78 D44 D82 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13258&r=reg |
| By: | Alstadsaeter, Annette; Kopczuk, Wojciech; Telle, Kjetil |
| Abstract: | In 2005, over 8% of Norwegian shareholders transferred their shares to new (legal) tax shelters intended to defer taxation of capital gains and dividends that would otherwise be taxable in the aftermath of 2006 reform. Using detailed administrative data we identify family networks and describe how take up of tax avoidance progresses within a network. A feature of the reform was that the ability to set up a tax shelter changed discontinuously with individual shareholding of a firm and we use this fact to estimate the causal effect of availability of tax avoidance for a taxpayer on tax avoidance by others in the network. We find that take up in a social network increases the likelihood that others will take up. This suggests that taxpayers affect each other's decisions about tax avoidance, highlighting the importance of accounting for social interactions in understanding enforcement and tax avoidance behavior, and providing a concrete example of "optimization frictions" in the context of behavioral responses to taxation. |
| JEL: | D22 H25 H26 H32 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13251&r=reg |
| By: | Faisal Buyinza (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria); Jakob Kapeller (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria) |
| Abstract: | We investigate the impact of household electrification on educational outcomes in Uganda using household panel data and employ a probit model. The findings indicate that electrification increases school enrolment at all education cycles. Also, education level of household head, marital status, gender and good housing increase education outcomes. Our results provide insights on the existing gaps in designing supportive policies for increased access to electricity for rural households where there are high disproportionately poor education outcomes. The results suggest that policies to eliminate all barriers to access to electricity will greatly enhance educational outcomes in Uganda. |
| Keywords: | Household electrification, education outcomes, gender, panel data, Uganda |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:ico:wpaper:85&r=reg |
| By: | Henry, Emeric; Loseto, Marco; Ottaviani, Marco |
| Abstract: | Dynamic adoption policies of activities with uncertain returns are characterized by three key decisions: in the ex ante experimentation phase, the decisions when to abandon experimentation and when to introduce to market; in the ex post learning phase, the decision when to withdraw following the accumulation of bad news. In a tractable continuous-time model, we study the optimal mix of the three instruments regulators employ to align the private incentives of firms: ex ante approval regulation, ex post withdrawal regulation, and liability. Our results can rationalize the array of regulatory environments observed across applications ranging from product safety to patent protection. We also consider costly lying and show that the social planner can be better off when the firm privately observes research results. |
| Keywords: | Approval Regulation; Experimentation; Liability; Withdrawal |
| JEL: | D18 D83 K13 K2 M38 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13224&r=reg |
| By: | Bian, Xueying; Fabra, Natalia |
| Abstract: | Energy certificates (ECs) provide information about the houses' energy efficiency, potentially al- lowing owners to earn a premium when renting more efficient houses. In this paper, we build a search model with asymmetric information regarding energy efficiency to shed light on the owners' incentives to obtain and disclose the ECs. From both a theoretical and empirical perspective, we address three questions: (i) is there an efficiency rent premium?; (ii) do owners of inefficient houses have incentives to hide their ECs?; and (iii) how do both questions depend on the disclosure rate of ECs in the local housing market? We document a premium for more efficient houses, both with respect to less efficient houses as well as with respect to unlabeled ones. We also document a rent penalty for unlabeled houses, which is higher the greater the disclosure rate of ECs. Therefore, in local markets with higher disclosure rates, owners face stronger incentives to obtain and disclose their ECs. Through this channel, higher fines for non-compliance can give rise to a virtuous circle of disclosure that goes beyond the direct effects of increasing fines. |
| Keywords: | adoption rate; asymmetric information; energy efficiency; rental market |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13270&r=reg |
| By: | Tracy Snoddon (Wilfrid Laurier University) |
| Keywords: | Energy and Natural Resources; Environmental Policies and Norms;Resources Rights and Management;Resources Taxation and Revenues; Fiscal and Tax Policy; Federalism and Constitution;Federal-Provincial Transfers;Provincial Taxation and Budgets |
| JEL: | Q54 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cdh:ebrief:284&r=reg |
| By: | Juan-José Ganuza (Universitat Pompeu Fabra and Barcelona GSE); Gerard Llobet (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | This paper shows that the concession model discourages firms from acquiring information about the future profitability of a project. Uniformed contractors carry out good and bad projects because they are profitable in expected terms even though it would have been optimal to invest in screening them out according to their value. White elephants are identified as avoidable negative net present-value projects that are nevertheless undertaken. Institutional arrangements that limit the losses that firms can bear exacerbate this distortion. We characterize the optimal concession contract which fosters the acquisition of information and achieves the first best by conditioning the duration of the concession to the realization of the demand and includes payments for not carrying out some projects. |
| Keywords: | Concession contracts, information acquisition, flexible-term concessions. |
| JEL: | D82 D86 H21 L51 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2018_1701&r=reg |
| By: | Naghmeh Niroomand (Cambridge Resources International.Inc); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus) |
| Abstract: | For the decade prior to 2016 Nepal suffered from the worst electricity shortages in South Asia. During this period load shedding occurred for up to 18 hours a day when hydropower generation is low. This research uses parametric and non-parametric models to estimate households’ and businesses’ willingness to pay (WTP) for improved reliability of electricity services in Nepal. A contingent valuation (CV) survey was completed by 1,800 households and 590 businesses. The parametric models are estimated using Logit regressions. The median, Turnbull and the Kriström mean estimation approach were used for the non-parametric estimations. Both households and businesses are willing to pay more to get from a 50% reduction to a complete elimination of outages than they are willing to pay to get from their current situation to a 50% reduction in outages. This difference in the estimates of the WTP for these two options is even more important in the case of businesses than for households. It is estimated that the annual benefit in 2017 from improving the reliability of the electricity service would be approximately US$324 million with a present value over 20 years of between US$2 and 3.8 billion. |
| Keywords: | : Nepal, willingness to pay, electricity outage, contingent valuation, non-parametric methods estimation Electricity. |
| JEL: | D61 Q41 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:404&r=reg |
| By: | Bruce S. Shearer; Nibene Habib Somé; Bernard Fortin |
| Abstract: | We measure the response of physicians to monetary incentives using matched administrative and time-use data on specialists from Québec (Canada). These physicians were paid fee-for-service contracts and supplied a number of different services. Our sample covers a period during which the Québec government changed the prices paid for clinical services. We apply these data to a multitasking model of physician labour supply, measuring two distinct responses. The first is the labour-supply response of physicians to broad-based fee increases. The second is the response to changes in the relative prices of individual services. Our results confirm that physicians respond to incentives in predictable ways. The own-price substitution effects of a relative price change are both economically and statistically significant. Income effects are present, but are overridden when prices are increased for individual services. They are more prominent in the presence of broad-based fee increases. In such cases, the income effect empirically dominates the substitution effet, which leads physicians to reduce their supply of clinical services. |
| Keywords: | Physician Labour Supply,Multitasking,Incentive Pay, |
| JEL: | I10 J22 J33 J44 |
| Date: | 2018–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2018s-19&r=reg |