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on Regulation |
| By: | Brucal, Arlan; Tarui, Nori |
| Abstract: | Revenue decoupling (RD) is a regulatory mechanism that allows adjustments of retail electricity rates for the regulated utility to recover its required revenue despite fluctuations in its sales volume. The U.S. utility data in 2000–2019 reveals that RD is associated with about a 4-percentage point higher growth rate of residential electricity prices within the first year after RD is implemented relative to carefully matched non-decoupled utilities with similar pre-RD sales trends. Theoretically, unexpected sales declines would lead to higher electricity prices while unexpected sales increases would lead to lower prices. While RD adjustments have reportedly yielded both refunds and surcharges, our analysis indicates that electricity prices demonstrate downward rigidity and statistically significant upward adjustments for the utilities subject to RD. The asymmetric movement in retail prices may be associated with the political economy underlying the adoption and the implementation of RD. |
| Keywords: | electricity sector; revenue decoupling; utility regulation |
| JEL: | L94 Q41 Q48 |
| Date: | 2021–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:111535&r=reg |
| By: | Sandrine Michel (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier); Alexis Vessat (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier) |
| Abstract: | In sub-Saharan Africa (SSA), the energy access gap between urban and rural populations remains considerable, even among households and businesses with potential access to the grid. As the interface between electricity generation conditions, the end user and public energy-access policy, tariff structures are the major instrument of access. This article evaluates how electricity tariff structures contribute to the continued existence of the energy access gap and looks at whether this gap is primarily between rural and urban populations. Using a dynamic panel model with random effects (1990-2012; 33 countries divided into 4 groups; 17 variables related to residential and non-residential consumption, production and share of income spent on electricity), the article shows the systematically regressive effect of electricity pricing on access to both residential and non-residential consumption. We find that electricity pricing fails to provide reduced rates that enable access to the poor, neglects households that have passed the threshold of the first consumption block and is ineffective at addressing energy poverty in both urban and rural households. For households to access a centralised power grid, we find that the criterion of location is less important than the economic conditions of the customers served. |
| Keywords: | Power tariff structures, Electricity access, Urban on-grid access, Rural on-grid access, Rural electrification, Sub-saharan africa, JEL Q48, JEL I38, JEL N17, JEL O11 |
| Date: | 2023–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04158100&r=reg |
| By: | Armin Pourkhanali; Peyman Khezr; Rabindra Nepal; Tooraj Jamasb |
| Abstract: | Fuel price caps are one of the potential regulatory tools for controlling wholesale electricity prices when fuel prices are volatile. In this paper, we introduce a theoretical model to study the effects of such caps on firms’ bidding behavior and clearing prices in spot market auctions. We then use data from the Australian National Electricity Market (NEM), which recently implemented such caps, to empirically test and compare their effectiveness in three different states. Our theoretical findings suggest that fuel price caps can be binding, especially when electricity demand is lower and competition among generators is higher. When demand is high, alternative policy tools, such as market price caps, may be more effective in controlling auction prices. Our empirical analysis employs various techniques, such as Generalized Additive Models (GAM) and machine learning algorithms, to test the effectiveness of price caps in the NEM. We find mixed results regarding the effectiveness of fuel price caps in different states. Specifically, fuel price caps reduced wholesale electricity prices in Queensland and New South Wales, while they were not effective in controlling wholesale prices in Victoria. |
| Keywords: | electricity markets, price caps, fuel price |
| JEL: | L94 L51 D4 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2023-39&r=reg |
| By: | Gregory M. Dickinson |
| Abstract: | Lawmakers around the country are crafting new laws to target "dark patterns" -- user interface designs that trick or coerce users into enabling cell phone location tracking, sharing browsing data, initiating automatic billing, or making whatever other choices their designers prefer. Dark patterns pose a serious problem. In their most aggressive forms, they interfere with human autonomy, undermine customers' evaluation and selection of products, and distort online markets for goods and services. Yet crafting legislation is a major challenge: Persuasion and deception are difficult to distinguish, and shifting tech trends present an ever-moving target. To address these challenges, this Article proposes leveraging state private law to define and track dark patterns as they evolve. Judge-crafted decisional law can respond quickly to new techniques, flexibly define the boundary between permissible and impermissible designs, and bolster state and federal regulatory enforcement efforts by quickly identifying those designs that most undermine user autonomy. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2307.07888&r=reg |
| By: | Yassine Lefouili; Leonardo Madio; Ying Lei Toh |
| Abstract: | We analyze how a privacy regulation taking the form of a cap on information disclosure affects quality-enhancing innovation incentives by a monopolist—who derives revenues solely from disclosing user data to third parties—and consumer surplus. If the share of privacy-concerned users is sufficiently small, privacy regulation has a negative effect on innovation and may harm users. However, if the share of privacy-concerned users is sufficiently large, privacy regulation has a positive effect on innovation. In this case, there is no trade-off between privacy and innovation and users always benefit from privacy regulation. |
| Keywords: | privacy regulation, data disclosure, innovation |
| JEL: | D83 L15 L51 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10545&r=reg |
| By: | Megy, C.; Massol, O. |
| Abstract: | Power-to-gas (PtG), a technology that converts electricity into hydrogen, is expected to become a core component of future low-carbon energy systems. While its economics and performance as a sector coupling technique have been well studied in the context of perfectly competitive energy markets, the distortions caused by the presence of large strategic players with a multi-market presence have received little attention. In this paper, we examine them by specifying a partial equilibrium model that provides a stylized representation of the interactions among the natural gas, electricity, and hydrogen markets. Using that model, we compare several possible ownership organizations for PtG to investigate how imperfect competition affects its operations. Evidence gained from these market simulations show that the effects of PtG vary with the multi-market profile of its operator. Producers of fossil-based hydrogen tend to make little use of PtG, whereas renewable power producers use it more to increase the electricity prices. Although PtG operations are profitable and can be welfare-enhancing, the social gain is either very tiny or negative when PtG is strategically operated in conjunction with variable renewable generation. In that case, PtG also raises environmental concerns as it stimulates the use of polluting thermoelectric generation. |
| Keywords: | Power-to-Gas; Sector coupling; Hydrogen; Renewable energy sources; Multi-market oligopoly; Mixed Complementarity Problem |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:cty:dpaper:23/01&r=reg |
| By: | Gabriel CLAUTIAUX; Grégoire LENA; Christian De GROMMARD; Baptiste COMPAGNON |
| Abstract: | Widely used in the water sector, which is also unprofitable in contexts similar to those prevailing in regions not yet electrified, the Public Service Delegation (PSD) offers a solid regulatory and financial framework that balances Government needs on one side, and greater visibility for private sector operators on the other. It can be applied to all three electrification modes: grid extension, mini-grids, stand-alone PV systems, and is designed to be financially viable. |
| Keywords: | Afrique |
| JEL: | Q |
| Date: | 2023–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:avg:wpaper:en15792&r=reg |
| By: | Gabriel A. Lozada (University of Utah) |
| Abstract: | Some economists argue antitrust policy should be based on empirical methods used by the Industrial Organization subdiscipline of economics, but non-economists must understand that those methods contain certain highly restrictive assumptions. Those assumptions involve econometric "identification, " and treating aggregate demand as if it were generated by a representative consumer (Muellbauer's "generalized linear" preferences). We derive new results illustrating how restrictive the representative consumer assumption is; we explain aggregation bias in Almost Ideal Demand System models; and we show that data limitations make it even harder to justify economists' restricting aggregate demands as one would the demand of a single individual. |
| Keywords: | Antitrust econometrics; Almost Ideal Demand System (AIDS); New Brandeis School |
| JEL: | D12 C43 L4 C54 |
| Date: | 2023–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp203&r=reg |
| By: | Vanessa Cirulli (Italian Agency for Development Cooperation, Italy); Giorgia Marini (Department of Juridical and Economic Studies (DSGE), Sapienza University of Rome); Marco A. Marini (Department of Social Sciences and Economics, Sapienza University of Rome); Odd Rune Straume (NIPE/Center for Research in Economics and Management, University of Minho, Portugal; and Department of Economics, University of Bergen, Norway) |
| Abstract: | We analyse - theoretically and empirically- the effect of hospital mergers on waiting times in healthcare markets where prices are fixed. Using a spatial modelling framework where patients choose provider based on travelling distance and waiting times, we show that the effect is theoretically ambiguous. In the presence of cost synergies, the scope for lower waiting times as a result of the merger is larger if the hospitals are more profit- oriented. This result is arguably confirmed by our empirical analysis, which is based on a conditional flexible difference-in-differences methodology applied to a long panel of data on hospital merger in the English NHS, where we find that the effects of a merger on waiting times crucially rely on a legal status that can reasonably be linked to the degree of profit-orientation. Whereas hospital mergers involving Foundation Trusts tend to reduce waiting times, the corresponding effect of mergers involving hospitals without this legal status tends to go in the opposite direction. |
| Keywords: | Hospital merger; waiting times; profit-orientation |
| JEL: | I11 I18 L21 L41 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:07/2023&r=reg |
| By: | Matthew S. Johnson; Michael Lipsitz; Alison Pei |
| Abstract: | Worker mobility across firms can enhance innovation by spreading knowledge, but such mobility may also hinder innovation by making firms reluctant to invest in R&D. A common way that firms limit workers' mobility is with noncompete agreements (NCAs). We examine how the legal enforceability of NCAs affects innovation, as measured by patenting, using data on every state-level NCA enforceability change between 1991–2014. We find that making NCAs easier to enforce (“stricter” enforceability) substantially reduces the rate of patenting: an average-sized increase in NCA enforceability leads a state to have 16-19% fewer citation-weighted patents over the following 10 years. This effect reflects a true loss in innovation rather than a reduction in useless or strategic patents. We then reconcile these findings with contrasting theoretical predictions. Stricter NCA enforceability reduces job mobility and new business formation in innovative industries, suggesting slower knowledge spread. Within publicly-traded firms, stricter NCA enforceability increases investment, but still leads to less innovation, suggesting that any gains from enhanced incentives to invest are more than offset by other ways that NCAs slow down innovation. Finally, using variation in technology classes’ exposure to NCA enforceability changes, we show that the economy-wide losses to innovation from strict enforceability are even larger than what our state-level estimates imply. |
| JEL: | J38 O31 O38 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31487&r=reg |
| By: | Catherine E. A. Mulligan; Phil Godsiff |
| Abstract: | The increasing use of data in various parts of the economic and social systems is creating a new form of monopoly: data monopolies. We illustrate that the companies using these strategies, Datalists, are challenging the existing definitions used within Monopoly Capital Theory (MCT). Datalists are pursuing a different type of monopoly control than traditional multinational corporations. They are pursuing monopolistic control over data to feed their productive processes, increasingly controlled by algorithms and Artificial Intelligence (AI). These productive processes use information about humans and the creative outputs of humans as the inputs but do not classify those humans as employees, so they are not paid or credited for their labour. This paper provides an overview of this evolution and its impact on monopoly theory. It concludes with an outline for a research agenda for economics in this space. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2307.08049&r=reg |