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on Regulation |
| By: | Joanna Piechucka |
| Abstract: | We study the impact of different regulatory designs on the cost efficiency of operators providing a public service, exploiting data from the French transport industry. The distinctive feature of the study is that it considers regulatory regimes as endogenously determined choices, explained by economic, political, and institutional variables. Our approach leans on a positive analysis to study the determinants of regulatory contract choices, which, in turn, affect the costs of operating urban public transport. Our results show that given similar network characteristics, networks operated under fixed-price contracts exert lower costs than those regulated under cost-plus contracts. This finding is in line with the theoretical prediction of new regulatory economics that fixed-price contracts provide more incentives for efficiency. Importantly, ignoring the endogeneity of contractual choices would lead to significantly underestimating the impact of contract type on cost efficiency. Our findings provide useful policy implications suggesting that the move toward more high-powered incentive schemes is indeed associated with significant cost efficiencies. Moreover, they highlights the importance of accounting for the endogeneity of regulatory contract choices. |
| Keywords: | Cost-efficiency; Endogenous contract choices; Transport industry |
| JEL: | L51 L92 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1851&r=all |
| By: | Tal, Gil PhD; Chakraborty, Debapriya PhD; Jenn, Alan PhD; Lee, Jae Hyun PhD |
| Abstract: | The public sector and the private sector, which includes automakers and charging network companies, are increasingly investing in building charging infrastructure to encourage the adoption and use of plug-in electric vehicles (PEVs) and to ensure that current facilities are not congested. However, building infrastructure is costly and, as with road congestion, when there is significant uptake of PEVs, we may not be able to “build out of congestion.” We modelled the choice of charging location that more than 3000 PEV drivers make when given the options of home, work, and public locations. Our study focused on understanding the importance of factors driving demand such as: the cost of charging, driver characteristics, access to charging infrastructure, and vehicle characteristics. We found that differences in the cost of charging play an important role in the demand for charging location. PEV drivers tend to substitute workplace charging for home charging when they pay a higher electricity rate at home, more so when the former is free. Additionally, socio-demographic factors like dwelling type and gender, as well as vehicle technology factors like electric range, influence the choice of charging location. |
| Keywords: | Engineering, Electric vehicle charging, electric vehicles, energy consumption, costs, demand, workplaces, dwellings, choice models, energy storage systems |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt1jh8127j&r=all |
| By: | Cardenas,Helena; Whittington,Dale |
| Abstract: | In Addis Ababa, an increasing block tariff has been used to calculate households'monthly bills for electricity and water services. This study estimates the magnitudes of the combined water and electricity subsidies received by households with private connections to the electricity grid and piped water network in 2016, and it evaluates the distribution of these subsidies among wealth groups. Customer billing data supplied by utility companies are matched with socioeconomic information collected through a household survey. It is the first detailed analysis of the combined effects of increasing block tariffs for electricity and water in an urban area in a developing country. The results show that the combined subsidies are large. The average household receives a subsidy of US$26 per month, about 6 percent of household income. The findings also show that electricity and water subsidies under the increasing block tariff disproportionately accrue to richer households, with even less targeting when both sectors are considered jointly. The poorest quintile receives 12 percent of the total subsidies for electricity and water services, while the richest quintile receives 31 percent. The water increasing block tariff's targeting of subsidies was somewhat worse than that of the electricity increasing block tariff. |
| Keywords: | Hydrology,Water Supply and Sanitation Policy, Legislation and Regulation,Economic Assistance,Services&Transfers to Poor,Access of Poor to Social Services,Energy Policies&Economics,Disability,Small Private Water Supply Providers,Water and Human Health,Environmental Engineering,Sanitary Environmental Engineering,Water Supply and Sanitation Economics,Engineering,Sanitation and Sewerage,Town Water Supply and Sanitation |
| Date: | 2019–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9025&r=all |
| By: | Burke, Andrew PhD; Miller, Marshall PhD |
| Abstract: | This report assesses zero emissions medium- and heavy-duty vehicle technologies, their associated costs, projected market share, and possible policy mandates and incentives to support their adoption. Cost comparisons indicate that battery-electric transit buses and city delivery trucks are the most economically attractive of the zero-emission vehicles (ZEVs) based on their break-even mileage being a small fraction of the expected total mileage. These ZEVs using fuel cells are also attractive for a hydrogen cost of $5/kg. The most economically unattractive vehicle types for ZEV adoption are long-haul trucks and inter-city buses. Developing mandates for buses and trucks will be more difficult than for passenger cars for several reasons, including the large differences in the size and cost of the vehicles and the ways they are used in commercial, profit-oriented fleets. The best approach will be to develop separate mandates for classes of vehicles that have similar sizes, cost characteristics, use patterns, and ownership/business models. These mandates should be coupled to incentives that vary by vehicle type/class and by year or accumulated sales volume, to account for the effects of expected price reductions with time. |
| Keywords: | Education, Zero emission vehicles, electric vehicles, fuel cell vehicles, heavy duty vehicles, medium trucks, buses, operating costs, incentives, policy analysis |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt7n68r0q8&r=all |
| By: | Luke Boosey (Department of Economics, Florida State University); Philip Brookins (Department of Economics, University of South Carolina); Dmitry Ryvkin (Department of Economics, Florida State University) |
| Abstract: | We study contests among groups of individuals where each player endogenously decides whether or not to participate in competition as a member of their group. Within-group aggregation of effort is best-shot, i.e., each group's performance is determined by the highest investment among its members. We consider a generalized all-pay auction setting, in which the group with the highest performance wins the contest with certainty. Players' values for winning are private information at the entry stage, but may be disclosed at the competition stage. We compare three disclosure policies: (i) no disclosure, when the number of entrants remains unknown and their values private; (ii) within-group disclosure, when this information is disclosed within each group but not across groups; and (iii) full disclosure, when the information about entrants is disclosed across groups. For the benchmark case of contests between individuals, we show that information disclosure always leads to a reduction in aggregate investment. However, this is no longer true in group contests: Within-group disclosure unambiguously raises aggregate investment, while the effect of full disclosure is ambiguous. |
| Keywords: | group contest, best shot, endogenous entry, information disclosure |
| JEL: | C72 D82 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2020_02_01&r=all |
| By: | James D. Dana Jr. (Northwestern University); Kevin R. Williams (Cowles Foundation, Yale University) |
| Abstract: | This paper develops an oligopoly model in which firms first choose capacity and then compete in prices in a series of advance-purchase markets. We show that when the elasticity of demand falls across periods, strong competitive forces prevent firms from utilizing intertemporal price discrimination. We then enrich the model by allowing firms to use inventory controls, or sales limits assigned to individual prices. We show that competing firms can profitably use inventory controls. Thus, although typically viewed as a tool to manage demand uncertainty, we show that inventory controls can also facilitate price discrimination in oligopoly. |
| Keywords: | Capacity-pricing games, Intertemporal price discrimination, Oligopoly models, Inventory controls |
| JEL: | D21 D43 L13 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2136r3&r=all |
| By: | Burke, Andrew; Miller, Marshall |
| Abstract: | California has a number of programs intended to encourage the introduction of zero- and near-zero emission vehicle (ZEV) technologies into the medium- and heavy-duty truck markets. Meeting the goals of these programs will require the sale of large numbers of battery-electric and hydrogen fuel cell transit buses and trucks by 2025 and beyond. However, several barriers to widespread adoption of these technologies will need to be addressed, including their purchase price, utility, durability and reliability, as well as the cost of energy and the availability of refueling infrastructure. Policies such as mandates or incentives will likely be necessary to overcome these barriers and the uncertainty of adopting a new, unproven technology. These policies must make economic sense to both the bus and truck manufacturers and the vehicle purchasers if they are to be successful in the long term. To gain a better understanding of the financial barriers for ZEV bus and truck adoption, researchers at UC Davis conducted technology and cost assessments for batteryelectric and fuel cell vehicles in the medium- and heavy-duty truck sector. High-level findings and the policy implications of this research are summarized in this brief. |
| Keywords: | Engineering, Zero emission vehicles, electric vehicles, fuel cell vehicles, heavy duty vehicles, medium trucks, buses, operating costs, incentives, policy analysis |
| Date: | 2020–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsdav:qt37m8p885&r=all |
| By: | Marleen Marra (Département d'économie) |
| Abstract: | This paper presents, solves, and estimates the first structural auction model with seller selection. This allows me to quantify network effects arising from endogenous bidder and seller entry into auction platforms, facilitating the estimation of theoretically ambiguous fee impacts by tracing them through the game. Relevant model primitives are identified from variation in second-highest bids and reserve prices. My estimator builds off the discrete choice literature to address the double nested fixed point characterization of the entry equilibrium. Using new wine auction data, I estimate that this platform’s revenues increase up to 60% when introducing a bidder discount and simultaneously increasing seller fees. More bidders enter when the platform is populated with lower-reserve setting sellers, driving up prices. Moreover, I show that meaningful antitrust damages can be estimated in a platform setting despite this two-sidedness. |
| Keywords: | Auctions with entry; Two-sided markets; Nonparametric identification; Estimation; Nested fixed point |
| JEL: | D44 C52 C57 L81 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpecon:info:hdl:2441/5kht5rc22p99sq5tol4efe4ssb&r=all |
| By: | Bocklet, Johanna (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Hintermayer, Martin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | This paper uses a discrete-time partial equilibrium model of the European Emissions Trading System (EU ETS) to analyze the impact of the recent reform on allowance prices. By including bounded rationality such as myopia or hedging requirements, we find that the Hotelling price path is no longer visible ex-post even though the Hotelling price rule holds ex-ante in the decision making of the firms. Myopia and hedging requirements have little impact in the pre-reform market but strongly drive market outcomes after the reform. In the post-reform market, hedging requirements in combination with restrictive allowance supply may even cause a physical shortage of allowances. Yet, neither form of bounded rationality can fully explain the market outcomes in the third trading period of the EU ETS. If myopia and edging requirements are considered simultaneously, the price increase in the EU ETS can be attributed to the reform fundamentals. |
| Keywords: | Dynamic Optimization; EU ETS; Bounded Rationality; Hotelling; Hedging; Myopia |
| JEL: | D91 H32 Q58 |
| Date: | 2020–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2020_001&r=all |
| By: | Guin, Benjamin (Bank of England); Korhonen, Perttu (Qatar Financial Centre Regulatory Authority) |
| Abstract: | We examine a unique micro-level data set on residential mortgages in the United Kingdom. Our analyses suggest that mortgages against energy-efficient properties are less frequently in payment arrears than mortgages against energy-inefficient properties. This result is robust when controlling for other relevant determinants of mortgage default including borrower income and the loan to value ratio of the mortgage. We conclude that energy efficiency is a relevant predictor of mortgage defaults. |
| Keywords: | Credit risk; energy efficiency; green mortgages |
| JEL: | G21 Q40 |
| Date: | 2020–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0852&r=all |
| By: | Geoffroy de Clippel; Jack Fanning; Kareen Rozen |
| Abstract: | We study bargaining over contingent contracts in problems where private information becomes public or verifiable when the time comes to implement the agreement. We suggest a simple, two-stage game that incorporates important aspects of bargaining. We characterize equilibria in which parties always reach agreement, and study their limits as bargaining frictions vanish. We show that under mild regularity conditions, all interim-efficient limits belong to Myerson (1984)’s axiomatic solution. Furthermore, all limits must be interim-efficient if equilibria are required to be sequential. Results extend to other bargaining protocols. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2020-13&r=all |
| By: | Simon Berrebi; Taylor Gibbs; Sanskruti Joshi; Kari E Watkins |
| Abstract: | In 2018, bus ridership attained its lowest level since 1973. If transit agencies hope to reverse this trend, they must understand how their service allocation policies affect ridership. This paper is among the first to model ridership trends on a hyper-local level over time. A Poisson fixed-effects model is developed to evaluate the ridership elasticity to frequency using passenger count data from Portland, Miami, Minneapolis/St-Paul, and Atlanta between 2012 and 2018. In every agency, ridership is found to be elastic to frequency when observing the variation between individual route-segments at one point in time. In other words, the most frequent routes are already the most productive. When observing the variation within each route-segment over time, however, ridership is inelastic; each additional vehicle-trip is expected to generate less ridership than the average bus already on the route. In three of the four agencies, the elasticity is a decreasing function of prior frequency, meaning that low-frequency routes are the most sensitive to frequency change. This paper can help transit agencies anticipate the marginal effect of shifting service throughout the network. As the quality and availability of passenger count data improve, this paper can serve as the methodological basis to explore the dynamics of bus ridership. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2002.02493&r=all |
| By: | Mogens Fosgerau (University of Copenhagen) |
| Abstract: | This paper reiterates the basic principles and rationale for valuing travel time savings. It explains the type of impacts that the valuation of travel time savings intends to capture and discusses whether and how those fundamental principles continue to hold with automation and increased possibility of productive time use while travelling. The paper also discusses implications for traffic management and urban form that follow from increased in-vehicle productivity. |
| Date: | 2019–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaab:2019/10-en&r=all |
| By: | Demirguc-Kunt,Asli; Horvath,Balint Laszlo; Huizinga,Harry P. |
| Abstract: | This paper investigates how international regulatory and institutional differences affect lending in the cross-border syndicated loan market. Lending provided through a foreign subsidiary is subject to subsidiary-country regulation and institutional arrangements. Multinational banks'choices between loan origination through the parent bank or through a foreign subsidiary provide information about these banks'preferences to operate in countries with varying regulations and institutions. The results indicate that international banks have a tendency to switch loan origination toward countries with less stringent bank regulation and supervision consistent with regulatory arbitrage, but that they prefer to originate loans in countries with higher-quality institutions related to financial market monitoring, creditor rights, and the speed of contract enforcement. |
| Date: | 2019–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9037&r=all |
| By: | Andersson, David (Uppsala University); Berger, Thor (Research Institute of Industrial Economics (IFN)); Prawitz, Erik (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We exploit exogenous variation arising from the historical rollout of the Swedish railroad network across municipalities to identify the impacts of lowered interaction costs on innovative activity. A network connection led to a surge in local innovation due to an increased entry, productivity, and specialization of independent inventors. As the railroad network expanded, it further led to the emergence of a national market for ideas: inventors in connected areas began to develop ideas with applications outside the local economy, which were subsequently sold to firms along the network. Our findings suggest that the reduced interaction cost between firms, intermediaries, and inventors was a key driver of the historical emergence of a market for ideas. |
| Keywords: | Technological Change; Infrastructure; Innovation |
| JEL: | N70 O30 O33 |
| Date: | 2020–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1319&r=all |
| By: | Roberto Galbiati (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics) |
| Abstract: | In situations where social payoffs are not aligned with private incentives, enforcement with fines can be a way to sustain cooperation. In this paper we show, by the means of a lab experiment , that past fines can have an effect on current behavior even when no longer in force. We document two mechanisms: a) past fines affect directly individuals' future propensity to cooperate; b) when fines for non cooperation are in place in the past, individuals experience higher levels of cooperation from partners and, consistent with indirect reciprocity motives, are in turn nicer towards others once these fines have been removed. This second mechanism is empirically prevalent and, in contrast with the first, induces a snowball effect of past enforcement. Our results can inform the design of costly enforcement policies. |
| Keywords: | experiments,Laws,social values,cooperation,learning,spillovers,persistence of institutions,repeated games |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01971468&r=all |
| By: | Cali,Massimiliano; Cantore,Nicola; Iacovone,Leonardo; Pereira Lopez,Mariana De La Paz; Presidente,Giorgio |
| Abstract: | This paper provides novel evidence on the impact of changes in energy prices on manufacturing performance in two large developing economies -- Indonesia and Mexico. It finds that unlike increases in electricity prices, which harm plants'performance, fuel price hikes result in higher productivity and profits of manufacturing plants. The results of instrumental variable estimation imply that a 10 percent increase in fuel prices would lead to a 3.3 percent increase in total factor productivity for Indonesian and 1.2 percent for Mexican plants. The evidence suggests that effects are driven by the incentives that fuel price increases provide to plants towards replacing inefficient fuel-powered with more productive electricity-powered capital equipment. These results help to re-evaluate the policy trade-off between reducing carbon emissions and improving economic performance, particularly in countries with large fuel subsidies such as Indonesia and Mexico. |
| Keywords: | Energy Policies&Economics,Energy and Mining,Energy and Environment,Energy Demand,Food&Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,International Trade and Trade Rules,Oil Refining&Gas Industry |
| Date: | 2019–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9039&r=all |