nep-reg New Economics Papers
on Regulation
Issue of 2021‒02‒22
sixteen papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. Abolishing Environmental Regulation: Strategic E§ects and Welfare Implications By Espinola-Arredondo, Ana; Munoz-Garcia, Felix
  2. Policies for low-carbon and affordable home heating: A French outlook By Louis-Gaëtan Giraudet; Cyril Bourgeois; Philippe Quirion
  3. Quantifying the Externalities of Renewable Energy Plants Using Wellbeing Data: The Case of Biogas By Christian Krekel; Julia Rechlitz; Johannes Rode; Alexander Zerrahn
  4. Congestion in highways when tolls and railroads matter: evidence from European cities By Miquel-Àngel Garcia-López; Ilias Pasidis; Elisabet Viladecans-Marsal
  5. Static Pricing in Dynamic Sales By Martino Banchio; Frank Yang
  6. A Retrospective Study of State Aid Control in the German Broadband Market By Tomaso Duso; Mattia Nardotto; Jo Seldeslachts
  7. How Effective has the Electricity Social Rate been in Reducing Energy Poverty in Spain? By Lisa Bagnoli; Salvador Bertomeu
  8. Power and Purpose:Canadian Municipal Law in Transition By Zack Taylor; Alec Dobson
  9. Entry Deterrence and Free Riding in License Auctions: Incumbent Heterogeneity and Monotonicity By Biung-Ghi Ju; Seung Han Yoo
  10. Supportive 5G infrastructure policies are essential for universal 6G: Evidence from an open-source techno-economic simulation model using remote sensing By Edward J. Oughton; Ashutosh Jha
  11. Paying extra for better wind nearshore By Minh Ha-Duong
  12. Inferring Modal Split from Mobile Phones: Principles, Issues and Policy Recommendations By Norbert Brändle
  13. Demand elasticities at the intensive and extensive margins for advertising mail traffic in the UK By Frédérique Fève; Thierry Magnac; Soterios Soteri
  14. Corporate govermance for sustainability By Andrew Johnston; Jeroen Veldman; Robert G. Eccles; Simon Deakin; Jerry Davis; Marie-Laure Salles-Djelic; Blanche Segrestin; Cynthia Williams; David Millon; Paddy Ireland; Beate Sjafjell; Christopher Bruner; Lorraine Talbot; Hugh Willmott; Charlotte Villiers; Carol Liao; Bertrand Valiorgue
  15. On the relevance of values, norms, and economic preferences for electricity consumption By Elke D. Groh; Andreas Ziegler
  16. Pro-environmental attitude and behaviours: an investigation on the role of pro-sociality By Caterina Giannetti; Pietro Guarnieri; Tommaso Luzzati

  1. By: Espinola-Arredondo, Ana (Washington State University); Munoz-Garcia, Felix (Washington State University)
    Abstract: This paper considers an environmental policy that may be rolled back in future periods by anew administration. We examine how this policy uncertainty reduces firms' incentives to invest in green R&D before the policy is scheduled to come into e§ect, increasing as a result polluting emissions. We then evaluate the welfare loss generated by policy uncertainty and compare it against the welfare loss due to abolishing environmental regulation. We identify industries where policy uncertainty can yield larger welfare losses than those from an unregulated externality. We also Önd under which settings Örm proÖts are larger when environmental policy is likely to remain into e§ect than rolled back.
    Keywords: Environmental policy; Rolled back regulation; Green R&D investment; Welfarelosses; Policy uncertainty
    JEL: L13 L51 Q55 Q58
    Date: 2021–01–28
  2. By: Louis-Gaëtan Giraudet (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ENPC - École des Ponts ParisTech); Cyril Bourgeois (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, ENPC - École des Ponts ParisTech, CNRS - Centre National de la Recherche Scientifique); Philippe Quirion (CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique)
    Abstract: Energy demand for residential heating is targeted in France by a number of subsidy programmes (tax credits, zero-interest loans, reduced VAT, white certificates and the carbon tax. We assess the cost-effectiveness and distributional impacts of these policies using Res-IRF, an energy-economy model that integrates relevant economic, behavioural and technological processes. We find that, without further specification of revenue recycling, the carbon tax is the most effective, yet most regressive, policy. Subsidy programmes save energy at a cost of €0.05-0.08 per lifetime discounted kilowatt-hour, or €300-800/tCO2-eq; one euro of public money spent on subsidy programmes induces €1.0-1.4 private investment in home energy retrofits. Targeting subsidies towards low-income households, who tend to live in energy inefficient dwellings, increases leverage, thus reconciling economic efficiency and equity. The public cost of subsidies – €3 billion in 2013 – is outweighed by carbon tax proceeds from 2025 onwards, were the tax rate to grow as initially planned by the government. Meeting the long-term energy saving targets set by the government however requires adjusting subsidy programmes to better address rental housing. Lastly, an order-of-magnitude discrepancy between simulated and observed numbers of zero-interest loans points to economic and psychological barriers that require further investigation.
    Keywords: residential buildings,space heating,energy-economy modelling,energy efficiency subsidies,carbon tax,fuel poverty,White certificate obligations,Zero-interest rate loans
    Date: 2021
  3. By: Christian Krekel; Julia Rechlitz; Johannes Rode; Alexander Zerrahn
    Abstract: Although there is strong support for renewable energy plants, they are often met with local resistance. We quantify the externalities of renewable energy plants using well-being data. We focus on the example of biogas, one of the most frequently deployed technologies besides wind and solar. To this end, we combine longitudinal household data with novel panel data on more than 13, 000 installations in Germany. Identification rests on a spatial difference-in-differences design exploiting exact geographical coordinates of households, biogas installations and wind direction and intensity. We find limited evidence for negative externalities: impacts are moderate in size and spatially confined to a radius of 2, 000 metres around plants. We discuss implications for research and regional planning, in particular minimum setback distances and potential monetary compensations.
    Keywords: Renewables, Biogas, Externalities, Social Acceptance, Wellbeing, Spatial Analysis
    JEL: C23 Q42 Q51 R20
    Date: 2021
  4. By: Miquel-Àngel Garcia-López (Universitat Autònoma de Barcelona & IEB); Ilias Pasidis (Institut d’Economia de Barcelona (IEB)); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB)
    Abstract: Using data from the 545 largest European cities, we study whether the expansion of their highway capacity provides a solution to the problem of traffic congestion. Our results confirm that in the long run, and in line with the ’fundamental law of highway congestion’, the expansion in cities of lane kilometers causes an increase in vehicle traffic that does not solve urban congestion. We disentangle the increase in traffic due to the increases in coverage and in capacity. We further introduce road pricing and public transit policies in order to test whether they moderate congestion. Our findings confirm that the induced demand is considerably smaller in cities with road pricing schemes, and that congestion decreases with the expansion of public transportation.
    Keywords: Congestion, highways, Europe, cities
    JEL: R41 R48
    Date: 2020
  5. By: Martino Banchio; Frank Yang
    Abstract: A monopolist sells items repeatedly over time to a consumer with persistent private information. The seller has limited commitment: she cannot commit to a long-term contract but always has the option to commit to posted prices for unsold items. We show that a static price path is the unique equilibrium outcome; that is, the seller cannot do better than simply posting the monopoly price for each item. The ratchet effect eliminates price discrimination gains for any degree of persistence of the private information. The paper also shows how dynamic mechanism design can help derive new results in games with limited commitment.
    Date: 2021–02
  6. By: Tomaso Duso; Mattia Nardotto; Jo Seldeslachts
    Abstract: We provide an evaluation of the impact of public subsidy schemes that aimed to support the development of basic broadband infrastructure in rural areas of Germany. Such subsidies are subject to state aid control by the European Commission (EC). While the EC increasingly recognises the role of economic analysis in controlling public aid to companies, there are to date no full retrospective studies performed on state aid control, especially assessing the so-called balancing test. In this study, we do not only analyse whether the aid was effective in solving a market failure – low broadband coverage in rural areas – but also study its impact on competitive outcomes, on both rival firms and consumers. We adopt a difference-in-differences framework after using a matching procedure to account for selection on observables. We find that the aid significantly increased broadband coverage. More importantly, we find that the number of internet providers has significantly increased in the municipalities receiving aid. This additional entry decreased average prices. Therefore, the subsidies complied with EU state aid rules, both in terms of effectiveness and competition.
    Keywords: State aid, ex-post evaluation, broadband, coverage, entry, competition, prices
    JEL: C23 D22 L1 L4 L64
    Date: 2021
  7. By: Lisa Bagnoli; Salvador Bertomeu
    Abstract: This paper analyzes the effectiveness of the electricity social rate, the Bono Social de Electricidad, introduced in 2009 in Spain's electricity market. It is a policy aimed at increasing the a_ordability of electricity by entailing a discount on prices for vulnerable consumers. Using data from the family budget survey from 2006 to 2017, we rely on a dfference-in-differences approach to measure its causal impact on energy poverty and to further analyze how the introduction of this measure affected the consumption behavior of households. We find that, on average, the introduction of the policy has reduced the likelihood of energy poverty of households eligible to the social rate. Nevertheless, the magnitude of the effect is quite modest as it corresponds in practice to only 59,000 households that are no longer in energy poverty as a result of the measure. We further show that, in reaction to lower effective prices, households do not increase their consumption of electricity. In other words, the increased affordability did not induce a change in the consumption behavior in terms of quantities purchased but it entirely resulted in a decrease in electricity expenditure.
    Keywords: Electricity, energy poverty, policy evaluation, social rate
    Date: 2021–02
  8. By: Zack Taylor (University of Western Ontario); Alec Dobson (Western University)
    Abstract: This overview of municipal law in Canada’s 10 provinces identifies similarities and variations among and within provinces in the articulation of municipal purposes and the provincial-municipal relationship, municipal powers and jurisdiction, the organization of municipal institutions, and finance. The paper also comments on asymmetrical arrangements for large cities, commonly referred to as city charters. Far from being static, Canadian municipal law is in a period of transition. The legal scope of municipal authority has expanded over the past 25 years as most provinces have revised their general municipal acts and adopted special laws for major cities. While the overall trend has been toward more permissive authority and the recognition of municipalities as democratic, accountable, and responsible governments, there are significant variations across the provinces, and some have gone further than others in expanding the legal authority of municipalities. We conclude that the practical potential of this wave of legislative reform remains unknown and perhaps unrealized, and requires further research.
    Keywords: Municipal governance
    JEL: H11 H70
    Date: 2020–02
  9. By: Biung-Ghi Ju (Department of Economics, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, Republic of Korea, 08826); Seung Han Yoo (Department of Economics, Korea University, 145 Anam-ro, Seongbuk-gu, Seoul, Republic of Korea, 02841)
    Abstract: We examine free riding for entry deterrence in license auctions with heterogeneous incumbents. We establish the monotonicity of randomized preemptive bidding equilibria: an incumbent with a higher entry-loss rate has greater free-riding incentive, choosing a lower deterring probability. We then identify conditions for the existence of a series of fully or partially participating equilibria such that two or more incumbents with bounded heterogeneity in their entry-loss rates participate in randomized preemptive bidding. As an application, we examine a simple case of a bipartite group of participating incumbents consisting of one "leader" and many "followers". We show that the policy of limiting the leader's participation (set-asides for entrants, limiting participation of incumbents with excessive market shares, etc.) may or may not increase entry probability.
    Keywords: entry deterrence, free-rider problem, asymmetric auctions
    JEL: D44 D47 L13
    Date: 2021
  10. By: Edward J. Oughton; Ashutosh Jha
    Abstract: Work has now begun on the sixth generation of cellular technologies (`6G`) and cost-efficient global broadband coverage is already becoming a key pillar. Indeed, we are still far from providing universal and affordable broadband connectivity, despite this being a key part of the Sustainable Development Goals (Target 9.c). Currently, both Mobile Network Operators and governments still require independent analysis of the strategies that can help achieve this target with the cellular technologies available (4G and 5G). Therefore, this paper provides quantitative evidence which demonstrates how current 5G policy affects universal broadband, as well as drawing conclusions over how decisions made now affect future evolution to 6G. Using a method based on an open-source techno-economic codebase, combining remote sensing with least-cost network algorithms, performance analytics are provided for different 4G and 5G universal broadband strategies. As an example, the assessment approach is applied to India, the world`s second-largest mobile market and a country with notoriously high spectrum prices. The results demonstrate the trade-offs between technological decisions. This includes demonstrating how important current infrastructure policy is, particularly given fiber backhaul will be essential for delivering 6G quality of service. We find that by eliminating the spectrum licensing costs, full 5G population coverage can viably be achieved using fiber backhaul. In conclusion, supportive 5G infrastructure policies are essential in providing a superior foundation for evolution to 6G.
    Date: 2021–02
  11. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Université Paris-Saclay - AgroParisTech - EHESS - École des hautes études en sciences sociales - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Analysts often divide wind power projects into two categories: onshore and offshore. A third category recently emerged: nearshore projects, built on the intertidal flats. We observe a quasi cross-sectional sample of Vietnam's wind power projects, exhaustive regarding projects at the operating and building stages, comprising projects in the three categories. The median investment for onshore wind power projects in Vietnam is 1 680 USD/kW. It is 2 174 USD/kW for nearshore projects. We computed the relative extra investment distribution for intertidal projects compared to onshore projects in our sample. On average, a MW of generation capacity requires about 50% more investment nearshore than onshore. But variation is considerable, the interquartile range 20%-70% represents the extra cost better. It does not follow that electricity from nearshore stations costs more. Annual generation depends on the capacity factor. Projects developers are paying extra for better wind nearshore.
    Keywords: Wind power,Vietnam,Investment cost,Energy transition
    Date: 2021–02–01
  12. By: Norbert Brändle (Austrian Institute Of Technology)
    Abstract: This paper describes methods to identify trip details, including the mode of transport for each trip, from smartphone app data and from mobile network data. Use cases include travel demand surveys, travel behaviour gamification, mobility-as-a-service and automated ticketing. In the context of transport planning, the paper examines solutions to protect privacy and to enhance the representativeness of mobile phone data samples. It makes recommendations to overcome the many obstacles involved, in particular the scarcity of annotated training data.
    Date: 2021–01–27
  13. By: Frédérique Fève (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Thierry Magnac (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Soterios Soteri (Royal Mail Group - Partenaires INRAE)
    Date: 2020
  14. By: Andrew Johnston (University of Sheffield [Sheffield]); Jeroen Veldman (Nyenrode Business Universiteit); Robert G. Eccles (Saïd Business School - University of Oxford [Oxford]); Simon Deakin (CAM - University of Cambridge [UK]); Jerry Davis; Marie-Laure Salles-Djelic (Sciences Po - Sciences Po); Blanche Segrestin (MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres); Cynthia Williams (University of York [York, UK]); David Millon (WLU - Washington and Lee University); Paddy Ireland (University of Bristol [Bristol]); Beate Sjafjell (UiO - University of Oslo); Christopher Bruner (University of Georgia [USA]); Lorraine Talbot (University of Birmingham [Birmingham]); Hugh Willmott (CASS Business School - London, UK); Charlotte Villiers (University of Bristol [Bristol]); Carol Liao (UBC - University of British Columbia); Bertrand Valiorgue (CleRMa - Clermont Recherche Management - Clermont Auvergne - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne)
    Date: 2019–12
  15. By: Elke D. Groh (University of Kassel); Andreas Ziegler (University of Kassel)
    Abstract: Based on data of more than 3700 citizens in Germany, this paper empirically examines the relevance of several groups of explanatory factors for electricity consumption. Besides controlling for individual housing and dwelling characteristics as well as socio-demographics, we analyze the effect of environmentally-related values and norms. Since behavioral economics reveals the importance of economic preferences for many individual activities, we additionally consider time and risk preferences, altruism, trust, and reciprocity in our econometric analysis. With respect to the latter factors, only patience has a significantly negative effect on electricity consumption. Our estimation results instead suggest a high relevance of individual housing and dwelling characteristics and socio-demographics. The most interesting result is probably that neither environmentally-related values such as ecological policy identification and environmental awareness nor environmentally-related social norms have a significant effect. In contrast to the USA and to the demand for green electricity in Germany, these estimation results suggest that citizens in Germany with strong environmental identity do not consider low electricity consumption as an important direction for environmental and climate protection.
    Keywords: Electricity consumption, values, norms, economic preferences, econometric analysis
    Date: 2021
  16. By: Caterina Giannetti; Pietro Guarnieri; Tommaso Luzzati
    Abstract: The multifaceted nature of contemporary environmental degradation requires an all-round policy approach, that cannot disregard the role of people’s behaviour. To study how to promote environmentally friendly actions, this paper investigates whether pro-sociality triggers pro-environmental behaviours (PEBs). To this aim, we consider not only the direct effect that pro-sociality might have on PEBs but also the indirect effect transmitted through environmental concerns. After outlining a theoretical framework based on the literature on PEBs, we use a Eurobarometer survey to conduct a causal mediation analysis. Our results show that pro social attitudes are actually important, having also a strong indirect effect on PEBs. Furthermore, they suggest that policies promoting pro-social attitudes may be more effective than those simply promoting pro environmental attitudes.
    Keywords: IV-mediation analysis, environmental citizenship, PEBs, EU citizens
    JEL: C36 Q57 Q58
    Date: 2021–02–01

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