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on Regulation |
| By: | David Newbery; Darryl Biggar |
| Keywords: | Transmission constraints, access regimes, variable renewable electricity, marginal curtailment, nodal pricing |
| JEL: | H23 L94 Q28 Q42 Q48 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2401&r=reg |
| By: | Andrei Covatariu; Daniel Duma; Monica Giulietti; Michael G. Pollitt |
| Keywords: | Distribution system operator, distributed energy resources, decarbonisation |
| JEL: | L94 L95 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2315&r=reg |
| By: | Paul Simshauser; David Newbery |
| Keywords: | Renewables, network congestion, curtailment, marginal curtailment, renewable energy zones |
| JEL: | D52 D53 G12 L94 Q40 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:enp:wpaper:eprg2322&r=reg |
| By: | Adam Fuller (Economics Section, Colorado Public Utilities Commission); Steven M. Smith (Department of Economics and Business and Hydrologic Science and Engineering, Colorado School of Mines) |
| Abstract: | Utilities provide essential services that underpin social welfare and economic activity. There is a robust literature on how to best organize the provision of these activities, but no consensus has emerged on the presence and extent of economies of scope in the utility sector. We consider how the scope of a utility relates to residential prices. In contrast to the existing literature, our study focuses on utilities within the US and that provide services across distinct sectors (water and electricity), and we directly consider price implications. Specifically, we draw on surveys in 2017 and 2021 of around 400 water utilities --- 14 percent of which also provide electricity --- to generate empirical evidence on where joint water-electric utilities tend to operate and their association with retail prices for water and electricity. We find that smaller and less wealthy places are more likely to have joint water-electric utilities, as are cooler and drier places. More notably, we find significant evidence that water charges are 21 percent lower among the joint utilities than water only utilities. Ancillary data and analysis suggest electricity rates are also lower, indicating significant economies of scope are available. Our evidence addresses canonical gaps related to questions of the boundary of the firm and economies of scope in this important supply node of the water-energy nexus that can inform considerations of restructuring the provision of these services. |
| Keywords: | utilities, boundaries of the firm, residential electricity, residential water |
| JEL: | D23 L25 L97 Q25 Q41 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp202402&r=reg |
| By: | J V M Sarma ((Corresponding Author)Professor in charge of the Centre for Public Finance, Madras School of Economics, Chennai) |
| Abstract: | Non-tax revenues in the form of cost recoveries of public services provided by governments are the most important source of revenue for urban local governments in India. However, most governments lack rational pricing policy for these services and generally charge token prices, which may hardly relate to their supply and distribution costs. The financial sustainability of the drinking water supply system involves ‘cost recovery’ principle, and the tariff rate structures should be designed in such a way that revenue yield should compensate the operation and maintenance cost. However, the current water pricing practices are deficient in the sense that often the price of urban water supply is lower than the costs incurred for its provision. In this paper it is attempted to design an objective tariff system that is efficient, adequate, equitable and is suitable for recovery of the costs involved in the drinking water sector. The model basically aims at linking the water tariff rates to the volumetric consumption of water, with adequate progressivity. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2023-244&r=reg |
| By: | Galarza, Francisco (Universidad del Pacífico); Carbajal Navarro, Max Arturo (Pontificia Universidad Católica del Perú); Aguirre Montoya, Julio (Universidad del Pacífico) |
| Abstract: | We study the willingness to pay (WTP) for a large set of improvements in water service related to water quality, continuity, and securing access for people with no house piped water during the COVID-19 pandemic. Using data from urban Peru, and the contingent valuation method, we estimate a mean WTP of around PEN 4.3 (USD 1.05), 3.7 and 1.8, respectively, for the aforementioned sets of improvements, with the combined WTP representing a 23% increase in the households’ water service monthly bill. We find that the WTP for all sets of improvements is influenced by the expenditure in bottled water (which acts as a substitute for tap water) and a proxy variable for household assets. The influence of the individual characteristics typically scrutinized by the literature (e.g. sex, age, and education) varies with the type of improvement examined. We find a significant heterogeneity in WTP across providers and calculate the users’ contribution to a water fund that could crowd-in the public investment in water infrastructure. |
| Keywords: | Access to tap water, Contingent valuation method, Continuity, COVID-19, Households, Quality, Safe water, Willingness to pay. |
| JEL: | C25 D12 I10 L95 Q25 Q51 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:pai:wpaper:22-03&r=reg |
| By: | Defilippi, Enzo (Universidad del Pacífico); ; |
| Abstract: | Jorge Chavez International Airport (JCIA) is Peru’s main airport, handling 95% of the country’s international traffic. Since its concession in 2001 international transfers have grown 15 times and in 2019 represented 42% of the international outbound traffic. This substantial increase, and the fact that transfer passengers do not pay a fee for the use of the airport’s infrastructure, suggest a misalignment between the incentives faced by concessionaire and the public interest. This misalignment has the potential of reducing the Peru’s air connectivity in the future. The goal of this paper is to assess: (i) if it is convenient to authorize the JCIA’s concessionaire to charge a transfer fee to foreign nationals even though this might generate economic rents, and (ii) if so, whether this fee should be set by the market or by the regulator. Results suggest that it would be desirable to allow the concessionaire to charge a transfer fee even if this results in economic rents, and that JCIA faces competition within the geographic market of international transfer services, which implies that if fee is authorized it should not be set by the regulator. |
| Keywords: | air connectivity, economic regulation, airport regulation, airport competition, transfer traffic. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:pai:wpaper:23-01&r=reg |
| By: | William E. Bendinelli; Alessandro V. M. Oliveira |
| Abstract: | Flight delays are a reality in the modern air industry worldwide. However, studies in the literature have investigated the competitive determinants of delays arising from factors originating at the airport and along the route separately. This work aims to present a national study that used a unifying approach from the literature, considering the local and global effects of competition on delays. The analysis took into account a phenomenon known as the "internalization of externalities" of airport congestion. Furthermore, it discusses the relationship between quality and competition on the route and the impacts of the entry of a low-cost carrier (LCC) on the delays of incumbent airlines in the Brazilian air market. The literature suggests that there is evidence of congestion internalization at Brazilian airports, in parallel with competition for quality at the route level. Additionally, the potential competition caused by the presence of the LCC leads to a global effect that suggests the existence of impacts other than prices on routes where it has not entered. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2402.11373&r=reg |
| By: | Bruno F. Oliveira; Alessandro V. M. Oliveira |
| Abstract: | This work focuses on trying to understand how the construction of an airline's network is made. For this purpose, the case of Azul was studied, investigating which and how factors affect the decision of this airline to enter domestic routes, in addition to analyzing how the merger of Azul with the regional airline Trip affected the company's network planning. For this, an academic study was conducted using an econometric model to understand the airline's entry model. The results show that Azul's business model is based on connecting new destinations, not yet served by its competitors, to one of its hubs, and consistently avoiding routes or airports dominated by other airlines. Regarding the effects of the merger, the results suggest that Azul moved away from its original entry model, based on JetBlue, to a model more oriented towards regional aviation, entering shorter routes and regional airports. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2402.13278&r=reg |
| By: | Igor R. S. Brito; Alessandro V. M. Oliveira |
| Abstract: | In this study, we will address some topics related to the privatization of airports in the scientific literature, in an attempt to provide an answer to the following question: does the privatization of airports bring positive results? Firstly, we turn our attention to the motivations leading to privatization, considering the two main parties involved, the government and the private sector. After all, the success of such a decision will be relative to the reasons that justify it. In a second moment, we will consider the regulatory issue, whose influence on the airport's financial performance is consolidated in the literature. In the third part, we address the main documented results of privatization, with special attention to productive efficiency, whose improvement is the most popular motivation for privatization. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2402.13279&r=reg |
| By: | Gaenssle, Sophia; Budzinski, Oliver; Stöhr, Annika |
| Abstract: | Der vorliegende Beitrag betrachtet die wettbewerbs- und medienökonomischen Eigenschaften und Effekte von algorithmischen Such- und Empfehlungssystemen und ihrer Regulierung. Dabei werden nach einer einführenden Klarstellung des Sinns und der Notwendigkeit solcher Systeme in der digitalen Welt (Abschnitt I) zunächst die nachfrage- und angebotsseitigen ökonomischen Effekte wie die Nutzung personalisierter Daten, der Erfahrungs- bzw. Vertrauensgutcharakter algorithmischer Rankings, Selbstbevorzugung und Gatekeeper-Macht thematisiert (Abschnitt 2). Anschließend widmet sich der Beitrag den jüngsten europäischen Regulierungspaketen für digitale Dienste (Digital Markets Act und Digital Services Act) und beschreibt die hierdurch anstehenden Regulierungswirkungen (Abschnitt 3). Schließlich diskutiert der Beitrag, ob die aktuellen Regulierungen geeignet sind, die erfassten Problemfelder adäquat zu regulieren. |
| Keywords: | algorithmische Such- und Empfehlungssysteme, digitale Dienste, Gatekeeper, Digital Markets Act, Digital Services Act |
| JEL: | L86 L40 D83 D18 K21 L50 L82 Z10 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuiedp:284376&r=reg |
| By: | Elisabetta Iossa; Simon Loertscher; Leslie M. Marx; Patrick Rey (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - 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) |
| Abstract: | While antitrust authorities strive to detect, prosecute, and thereby deter collusive conduct, entities harmed by that conduct are also advised to pursue their own strategies to deter collusion. The implications of such delegation of deterrence have largely been ignored, however. In a procurement context, we find that buyers may prefer to accommodate rather than deter collusion among their suppliers. We also show that a multi-market buyer, such as a centralized procurement authority, may optimally deter collusion when multiple independent buyers would not, consistent with the view that "large" buyers are less susceptible to collusion. |
| Keywords: | Reserves, Sustainability and initiation of collusion, Coordinated effects |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04459042&r=reg |
| By: | Schmal, Wolfgang Benedikt |
| Abstract: | Collusive agreements in the form of cartels among firms are complex structures. The involved firms need to agree on prices and sales quotas that are legally not enforceable. Market characteristics that foster cartels' failure or success are widely examined. However, the interplay between the involved firms in a collusive agreement, i.e., the governance dimension within a cartel, has received surprisingly low attention. Using a comprehensive dataset of 191 cartels from 2012 - 2018, this paper empirically reveals that polycentric structures within the cartel governance may contribute to longer duration and lower sanctions imposed by competition authorities, especially for large cartels. By that, the paper sheds new light on two aspects: The entangled governance structures of collusive undertakings as well as the relevance of polycentricity in the firm environment. The insights may be helpful for cartel authorities and new research combining institutional and industrial economics. |
| Keywords: | Collusion, illegal cartels, polycentricity, governance, institutions |
| JEL: | A14 D02 D23 K42 L40 O17 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:284409&r=reg |
| By: | Guy Aridor; Yeon-Koo Che |
| Abstract: | We use a novel dataset of online advertiser performance and product sales to quantify the medium-term economic effects of Apple’s App Tracking Transparency Policy (ATT). We find that ATT significantly degraded the ability by Facebook advertisers to target advertisements based on its off-platform data. A within-advertiser comparison reveals that conversion-optimized advertisements, for which such data is crucial for targeting, suffered a 37.1% reduction in click-through rates, compared with clicks-optimized advertisements that depend less on such data, indicating a significant fall in the relevance of the former ads as perceived by users. Although advertisers did appear to substitute away from Facebook for the Google ecosystem, those with higher baseline dependence on Facebook experienced difficulty in customer acquisition, receiving 26.2% fewer orders from new customers. |
| Keywords: | privacy, app tracking transparency, online advertising, privacy regulation, social media |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10928&r=reg |
| By: | Maurizio Trapanese (Banca d'Italia); Riccardo De Bonis (Banca d'Italia) |
| Abstract: | In illustrating the four ages into which the evolution of banking regulation from the 19th century to today can be divided, this paper underlines the links between the supervisory approaches and the prevailing economic theories in each era, and tries to draw from the historical experience indications for the future. The emphasis is on the age of banking deregulation and the subsequent response to the 2007-08 global financial crisis. As regards the current phase, the work underlines how decisions have been taken in some jurisdictions (e.g., US) since 2018 to introduce deviations from the international prudential standards. It is to these elements that the causes of the crises of some American regional banks in the first months of 2023 can be traced. For the future, attention is drawn to the need for the authorities to resist pressure to deregulate the system, introducing instead the possible corrective measures suggested by the recent crisis cases. At the same time, the importance of proceeding with a reduction of regulatory complexity and of pursuing the right balance between regulatory proportionality and the protection of financial stability is underlined. |
| Keywords: | economic thought, financial crises, banks, regulation, economic history |
| JEL: | B20 G01 G21 G39 N20 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_796_23&r=reg |
| By: | Goodhart, C. A. E.; Sato, Hideki |
| Abstract: | Although monetary policy is the main tool for central banking in order to control inflation/deflation, micro- and macroprudential instruments are also essential for crisis management. In this paper, we aim to clarify the differences between European and international banking methodologies. The European approach as represented by the European Banking Union, is based on a harder legalistic approach, whereas the international approach implemented by the Basel Committee on Banking Supervision has a soft-law methodology. We propose two comparative standpoints: “uniformity” versus “diversity”, and a “legislative” versus "principle-based” approach. |
| Keywords: | European Banking Union (EBU); banking regulation and supervision; Basel Committee on Banking Supervision (BCBS) |
| JEL: | E58 F36 G28 |
| Date: | 2024–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122044&r=reg |