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on Regulation |
| By: | Guo, B.; Castagneto Gissey, G. |
| Abstract: | This Cost pass-through rates give a useful perspective of market competition. This paper studies how generation costs are passed through to electricity wholesale prices in Great Britain, both theoretically and empirically, between 2015 and 2018. Our empirical results fail to reject the null of 100% pass-through rates for gas prices, carbon prices, and exchange rates, indicating a competitive GB wholesale electricity market. We observe higher pass-through rates in peak compared to off-peak periods, and argue this results from generators bidding at a lower rate during off-peak periods and supplying at minimum load to avoid the cost of shutting down and starting up. We extend the analysis by assessing generators’ bidding behaviour. The study also considers how two key events occurred during the examined period – the 2016 Brexit referendum, and major reformation of the EU Emission Trading System – have affected electricity costs to a typical domestic household, showing they have increased average annual bills by £41 p.a., constituting a 7% rise. |
| Keywords: | Electricity market, Cost pass-through, Competition, Carbon price, VECM |
| JEL: | L13 Q48 D41 H23 C32 |
| Date: | 2019–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1997&r=all |
| By: | Nicolas Boccard; Axel Gautier; |
| Abstract: | Many jurisdictions use net metering to record the power exchange between solar photovoltaic panels and the grid, thus valuing home production at the electricity retail rate. However, if over the billing period, production exceeds consumption, the surplus remains freely available for consumption. In Wallonia (Belgium), this system was combined with generous subsidies for solar panels that encouraged households to set-up large installations, possibly exceeding their consumption needs. In this context, we test for a possible rebound effect. Based on a large sample of residential PV installations, we observe that a large proportion of households oversized their installation to benefit from the subsidies and, later ended-up consuming most of their excess production. The effect is econometrically highly significant. There are thus evidence of a strong increase in energy consumption by residential PV owners, that runs counter the original policy design. |
| Keywords: | rebound effect, solar PV, net metering |
| JEL: | C51 Q48 Q58 Q41 Q42 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7963&r=all |
| By: | Muehlegger, Erich; Rapson, David |
| Abstract: | Policy makers consider electric vehicles (EVs) an important policy lever to reduce urban air pollution, lower carbon emissions, and reduce overall petroleum consumption. The need to understand purchase patterns for EVs is especially important in light of the bold policy targets set for increasing EV penetration or phasing out internal combustion engines (ICEs) entirely in countries around the world and in California. This policy brief summarizes findings from the project which analyzed data on every EV, including plug-in hybrid (PHEV) and battery electric vehicle (BEV), purchased in California from 2011 to 2015 and random samples of comparable conventional and hybrid vehicles. It examined the proliferation of EVs during a period in which the market has matured to include new technologies, a growing secondary market has evolved, and a suite of policies has been put in place to promote switching away from gasoline-powered cars. Researchers analyzed the data to answer two questions. First, is the conventional wisdom, which suggests that EV adoption is more common among high-income households and less common among minority groups, reflected in purchase data? Second, do two plausible barriers impede low-income and minority car buyers’ adoption of EVs: price discrimination against groups traditionally unlikely to purchase EVs and availability of EVs at dealerships near low-income or minority communities. View the NCST Project Webpage |
| Keywords: | Social and Behavioral Sciences, Automobile dealers, Consumer behavior, Electric vehicles, Market assessment, Plug-in hybrid vehicles, Travel behavior, Used cars, Used vehicle industry |
| Date: | 2019–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt1q259456&r=all |
| By: | Valérie Mignon; Margaux Escoffier; Emmanuel Hache; Anthony Paris |
| Abstract: | This paper investigates the determinants of solar photovoltaic (PV) deployment in the electricity mix for a panel of OECD and BRICS countries from 1997 to 2016 by paying particular attention to the impact of oil market conditions. Relying on a nonlinear, regime-switching specification, we show that rising oil prices stimulate PV deployment only if their growth rate is important, above 6.7%. Although we find that various other determinants matter—with the influence of some of them depending on the situation on the oil market—public policies play a crucial role. In particular, our findings show that feed-in-tariffs should be encouraged to ensure a continuous fight against climate change, whatever the dynamics followed by oil prices. |
| Keywords: | Solar photovoltaic; Renewables deployment; Oil prices; Panel smooth transition regression |
| JEL: | Q4 Q42 C23 C24 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2019-28&r=all |
| By: | Salvador Bertomeu |
| Abstract: | This paper analyzes the quantitative impact of the growing role of non-traditional financial actors, in particular institutional investors, in the financing structure and consumer pricing of regulated private utilities. The focus is on the water sector in England and Wales, where the effect of the firms’ corporate financing strategies on key outcome variables may have been underestimated. The analysis is based on a staggered difference-in-differences estimation of the impacts of the evolution of the ownership of the assets, namely an increased participation of institutional investors, on leveraging and water pricing decisions. It shows a statistically significant positive impact on leverage levels and average consumer prices. |
| Keywords: | regulation; corporate finance; water and sewerage; public utilities |
| JEL: | C23 C51 G32 G38 L50 L51 L95 L97 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/297676&r=all |
| By: | Bladimir Carrillo; Daniel Da Mata; Lucas Emanuel; Daniel Lopes; Breno Sampaio |
| Abstract: | We study the health consequences of one of the largest environmental disasters of the world mining industry, which largely stemmed from regulatory failure. Exploiting the timing and location of the Mariana mine tailings dam collapse in Brazil, we show that in utero exposure to the tragedy significantly reduced birth weight and increased infant mortality. The adverse effects were stronger for infants born to less educated and single mothers. These findings indicate that poorly enforced environmental regulation may have long-term welfare impacts on local communities. |
| Keywords: | Birth weight; Preventable disasters; Mining; In utero exposure |
| JEL: | I18 I15 J13 Q50 |
| Date: | 2019–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:col:000518:017698&r=all |
| By: | Sunil Dutta; Stefan J. Reichelstein |
| Abstract: | This paper examines the theoretical properties of full cost transfer prices in multi-divisional firms. In our model, divisional managers are responsible for the initial acquisition of productive capacity and the utilization of that capacity in subsequent periods, once operational uncertainty has been resolved. We examine alternative variants of full cost transfer pricing with the property that the discounted sum of transfer payments is equal to the initial capacity acquisition cost and the present value of all subsequent variable costs of output supplied to a division. Our analysis identifies environments where particular variants of full cost transfer pricing induce efficiency in both the initial investments and the subsequent output levels. Our findings highlight the need for a proper integration of intracompany pricing rules and divisional control rights over capacity assets. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7968&r=all |
| By: | Hartleb, J.; Schmidt, M.E. |
| Abstract: | Timetabling for railway services often aims at optimizing travel times for passengers. At the same time, restricting assumptions on passenger behavior and passenger modeling are made. While research has shown that passenger distribution on routes can be modeled with a discrete choice model, this has not been considered in timetabling yet. We investigate how a passenger distribution can be integrated into an optimization framework for timetabling and present two mixed-integer linear programs for this problem. Both approaches design timetables and simultaneously find a corresponding passenger distribution on available routes. One model uses a linear distribution model to estimate passenger route choices, the other model uses an integrated simulation framework to approximate a passenger distribution according to the logit model, a commonly used route choice model. We compare both new approaches with three state-of-the-art timetabling methods and a heuristic approach on a set of artificial instances and a partial network of Netherlands Railways (NS). |
| Keywords: | transportation, timetabling, public transport, route choice, discrete choice model, passenger distribution |
| Date: | 2019–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureri:122487&r=all |
| By: | Evguenia Bessonova (Bank of Russia, Russian Federation) |
| Abstract: | This study provides evidence that productivity growth trends in Russia are similar to those in other countries where technology leaders enjoy productivity growth with a gap increasing between them and other companies. The survival analysis suggests that the most efficient firms quit the market at a faster rate than firms in other efficiency groups in the Russian economy. Survival functions of the least efficient firm do not always differ significantly from those of other companies. Results based on public procurement data provide evidence that additional financing from government contracts helps both the most and the least efficient firms to survive and shelters them from competitive pressure. In the short run, the positive effect of winning government procurement contracts for leaders seems to be only observed in their home regions, providing indirect evidence that the public procurement system does not support all types of firms with growth potential but only those affiliated with local authorities. Intervention in the mechanism of market selection through the system of public procurement could have a strong negative effect on economic growth as it provides incentives for inefficient firms without growth potential to stay in the market longer. |
| Keywords: | TFP growth, efficiency, productivity gap, government procurement contracts, firms’ exits. |
| JEL: | D24 H57 L52 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:wps49&r=all |
| By: | Hastings, Justine S.; Howison, Mark; Lawless, Ted; Ucles, John; White, Preston |
| Abstract: | Published as: Hastings JS, Howison M, Lawless T, Ucles J, White P. Unlocking Data to Improve Public Policy. Communications of the ACM 62(10): 48-53. https://doi.org/10.1145/3335150 |
| Date: | 2019–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:28krq&r=all |
| By: | Gert Bijnens; Joep Konings; Stijn Vanormelingen |
| Abstract: | Belgium is losing manufacturing jobs and it is losing these jobs at a faster pace compared to most other European countries. Whilst the impact of labour costs on the competitiveness of our industry is much debated and documented, the impact of the price of electricity remains unquantified. Using data of 10 European, highly industrialised countries, we estimate the impact of electricity prices on jobs and investment in Belgian manufacturing. We estimate that the elasticity of employment with respect to the electricity price is on average -0.30 and the elasticity of investment equals on average - 0.55. This means that a drop in the price of electricity of 1% would lead, holding all other things equal, to 0.30% extra manufacturing jobs and 0.55% extra manufacturing investment. Our findings are robust to different calculation methods. Others have estimated that electricity prices in Belgium are 10%-35% higher than in the neighbouring countries. Combining this information with the estimated elasticities, we calculate a price drop of 10% of the Belgian electricity price would lead within the manufacturing industry to an increase of 12,000 full-time jobs and an increase of €550 Million in yearly investment. These numbers are likely to be an underestimation of the impact. We take a conservative stance on the price handicap and Belgium has historically specialised in the most electricity intensive sectors. Furthermore, our approach does not quantify spillovers to other manufacturing nor services industries. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:vivwps:632245&r=all |