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on Regulation |
| By: | Lucas W. Davis; Catherine Hausman; Nancy L. Rose |
| Abstract: | Encouraged by the declining cost of grid-scale renewables, recent analyses conclude that the United States could reach net zero carbon dioxide emissions by 2050 at relatively low cost using currently available technologies. While the cost of renewable generation has declined dramatically, integrating these renewables would require a large expansion in transmission to deliver that power. Already there is growing evidence that the United States has insufficient transmission capacity, and current levels of annual investment are well below what would be required for a renewables-dominated system. We describe a variety of challenges that make it difficult to build new transmission and potential policy responses to mitigate them, as well as possible substitutes for some new transmission capacity. |
| JEL: | L51 L94 Q41 Q48 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31377&r=reg |
| By: | Rey, Patrick; Iossa, Elisabetta; Loertscher, Simon; Leslie M. Marx, |
| 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: | Collusion; Cartel; Auction; Procurement; Reserves; Sustainability and initiation of collusion; Coordinated effects |
| JEL: | D44 D82 H57 L41 |
| Date: | 2023–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128130&r=reg |
| By: | OECD |
| Abstract: | This report focuses on regulatory sandboxes in artificial intelligence (AI), where authorities engage firms to test innovative products or services that challenge existing legal frameworks. Participating firms obtain a waiver from specific legal provisions or compliance processes to innovate. It highlights positive impacts like increased venture capital investment in fintech start-ups. It points out challenges, risks, and policy considerations for AI sandboxes, emphasizing interdisciplinary cooperation, building AI expertise, regulatory interoperability, and trade policy. It also addresses the importance of comprehensive criteria for eligibility and assessing trials, as well as the impact on innovation and competition. |
| Date: | 2023–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:356-en&r=reg |
| By: | Jeon, Doh-Shin; Menicucci, Domenico |
| Abstract: | We study how data portability aspects consumer surplus and firms profits in a two-period model with a switching cost where two rms compete under a non-negative pricing constraint. The firms can circumvent the constraint by tying another complementary free service (called "freebies") with the original service. We consider a general framework of incomplete pass-through of freebies into consumer benet, which includes the two extreme cases of no pass through and full pass through. Regarding the effect on consumer surplus, data portability involves a trade-off between intensifying competition after consumer lock-in and reducing rent dissipation before consumer lock-in. For an intermediate range of pass-through rates, data portability increases both consumer surplus and profits. |
| JEL: | D21 D43 L13 L15 |
| Date: | 2023–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128175&r=reg |
| By: | Jonathan Colmer; Ralf Martin; Mirabelle Muûls; Ulrich J. Wagner |
| Abstract: | In theory, market-based regulatory instruments correct market failures at least cost. How- ever, evidence on their efficacy remains scarce. Using administrative data, we estimate that, on average, the EU ETS – the world’s first and largest market-based climate policy – induced regulated manufacturing firms to reduce carbon dioxide emissions by 14-16% with no de- tectable contractions in economic activity. We find no evidence of outsourcing to unregulated firms or markets; instead firms made targeted investments, reducing the emissions intensity of production. These results indicate that the EU ETS induced global emissions reductions, a necessary and sufficient condition for mitigating climate change. We show that the absence of any negative economic effects can be rationalized in a model where inattentive firms under- invest in energy-saving capital prior to regulation. Guided by the predictions of this model, we classify firms with low initial productivity or high energy intensity as potentially inattentive. We estimate larger reductions in emissions and increases in economic activity for those firms, consistent with regulation-induced cost savings or efficiency increases. |
| Keywords: | Emissions Trading System, carbon leakage, investment, climate policy |
| JEL: | Q54 Q58 H23 L50 F18 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_232v2&r=reg |
| By: | Philipp Andreas Gunkel (Section for Energy Economics and Modelling, DTU Management, Technical University of Denmark, 2800 Kongens Lyngby, Denmark); Febin Kachirayil (Chair of Energy Systems Analysis, Institute of Energy and Process Engineering, ETH Zuerich, 8092 Zuerich, Switzerland); Claire-Marie Bergaentzl\'e (Section for Energy Economics and Modelling, DTU Management, Technical University of Denmark, 2800 Kongens Lyngby, Denmark); Russell McKenna (Chair of Energy Systems Analysis, Institute of Energy and Process Engineering, ETH Zuerich, 8092 Zuerich, Switzerland; Paul Scherrer Institute, Laboratory for Energy Systems Analysis, Forschungsstrasse 111, 5232 Villigen PSI, Switzerland); Dogan Keles (Section for Energy Economics and Modelling, DTU Management, Technical University of Denmark, 2800 Kongens Lyngby, Denmark); Henrik Klinge Jacobsen (Section for Energy Economics and Modelling, DTU Management, Technical University of Denmark, 2800 Kongens Lyngby, Denmark) |
| Abstract: | Recent years have shown a rapid adoption of residential solar PV with increased self-consumption and self-sufficiency levels in Europe. A major driver for their economic viability is the electricity tax exemption for the consumption of self-produced electricity. This leads to large residential PV capacities and partially overburdened distribution grids. Furthermore, the tax exemption that benefits wealthy households that can afford capital-intense investments in solar panels in particular has sparked discussions about energy equity and the appropriate taxation level for self-consumption. This study investigates the implementation of uniform electricity taxes on all consumption, irrespective of the origin of the production, by means of a case study of 155, 000 hypothetical Danish prosumers. The results show that the new taxation policy redistributes costs progressively across household sizes. As more consumption is taxed, the tax level can be reduced by 38%, leading to 61% of all households seeing net savings of up to 23% off their yearly tax bill. High-occupancy houses save an average of 116 Euro per year at the expense of single households living in large dwellings who pay 55 Euro per year more. Implementing a uniform electricity tax in combination with a reduced overall tax level can (a) maintain overall tax revenues and (b) increase the interaction of batteries with the grid at the expense of behind-the-meter operations. In the end, the implicit cross-subsidy is removed by taxing self-consumption uniformly, leading to a cost redistribution supporting occupant-dense households and encouraging the flexible behavior of prosumers. This policy measure improves economic efficiency and greater use of technology with positive system-wide impacts. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.11566&r=reg |
| By: | Lydia Dimitrakopoulou; Christos Genakos; Themistoklis Kampouris; Stella Papadokonstantaki |
| Abstract: | We examine how competition affects VAT pass-through in isolated oligopolistic markets as defined by the Greek islands. Using daily gasoline prices and a difference-in-differences methodology, we investigate how changes in VAT rates are passed through to consumers in islands with different market structure. We show that pass-through increases with competition, going from 50% in monopoly to around 80% in more competitive markets, but remains incomplete. We also discover a rapid rate of adjustment for VAT changes, as well as a positive relationship between competition and the rate of price adjustment. Finally, we document higher pass-through for products with more inelastic demand. |
| Keywords: | Pass-through, tax incidence, gasoline, Value added tax (VAT), market structure, competition, Greek islands |
| JEL: | H22 L1 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2039&r=reg |
| By: | Khan, Abhimanyu; Peeters, Ronald |
| Abstract: | We develop a framework to analyse stability of cartels in differentiated Cournot oligopolies when multiple cartels may exist in the market. The consideration of formation of multiple cartels is in direct contrast to the existing literature which assumes, without further justification, that at most a single cartel may be formed, and we show that this consideration has markedly different implications for cartel stability. We define a cartel configuration to be stable if: (i) a firm in a cartel does not find it more profitable to leave the cartel and operate independently, (ii) a firm that operates independently does not find it more profitable to join an existing cartel, (iii) a firm in a cartel does not find it more profitable to join another existing cartel or form a new cartel with an independent firm, and (iv) two independent firms do not find it more profitable to form a new cartel. We show that now, when multiple cartels may exist in the market, a single cartel is never stable. |
| Keywords: | multiple cartels; stability; differentiated market. |
| JEL: | C70 D43 L13 |
| Date: | 2023–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117766&r=reg |
| By: | Schmitz, Patrick W. |
| Abstract: | We revisit the contract-theoretic literature on privatization initiated by Hart et al. (1997). This literature has two major shortcomings. First, it is focused on ex-ante investment incentives, whereas ex-post inefficiencies which are ubiquitous in the real world cannot be explained. Second, ownership does not matter when incentive contracts can be written. Both shortcomings are due to the fact that this literature has studied the case of symmetric information only. We explore how asymmetric information leads to different kinds of ex-post inefficiencies depending on the ownership structure. Moreover, we show that under asymmetric information ownership matters even when incentive contracts are feasible. |
| Keywords: | incomplete contracts; privatization; control rights; asymmetric information; investment incentives |
| JEL: | D23 D82 D86 H11 L32 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117742&r=reg |
| By: | MENYHERT Balint (European Commission - JRC) |
| Abstract: | The analysis of unique merged SILC-HBS microdata from Hungary allows for the joint assessment of different forms of energy poverty at the micro level, and yields a series of novel and policy-relevant insights. This JRC Policy Brief finds that existing measures of energy poverty based on subjective valuations and expenditure ratios identify wholly different population segments as energy poor, with less than one in three such households suffering from multiple forms of energy-related deprivation. Different measures also diverge greatly in terms of incidence level, seasonal fluctuations, cross-country comparability, persistence over time, as well as the socio-demographic background, living conditions and AROPE status of those identified as energy poor. These novel findings suggest that energy poverty is very hard to delineate accurately with existing measures. The Brief calls for simultaneous improvements in the existing measurement framework and the exploration of new alternative methods, techniques and data for effective social monitoring and sound evidence-based energy policies. |
| Keywords: | energy poverty, poverty measurement, European household survey data, merged HBS-SILC microdata |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc133806&r=reg |
| By: | Silvana Tiedemann (Hertie School, Centre for Sustainability, Germany); Raffaele Sgarlato (Hertie School, Centre for Sustainability, Germany); Lion Hirth (Hertie School, Centre for Sustainability, Germany; Neon Neue Energie\"okonomik GmbH, Germany) |
| Abstract: | This paper examines empirical methods for estimating the response of aggregated electricity demand to high-frequency price signals, the short-term elasticity of electricity demand. We investigate how the endogeneity of prices and the autocorrelation of the time series, which are particularly pronounced at hourly granularity, affect and distort common estimators. After developing a controlled test environment with synthetic data that replicate key statistical properties of electricity demand, we show that not only the ordinary least square (OLS) estimator is inconsistent (due to simultaneity), but so is a regular instrumental variable (IV) regression (due to autocorrelation). Using wind as an instrument, as it is commonly done, may result in an estimate of the demand elasticity that is inflated by an order of magnitude. We visualize the reason for the Thams bias using causal graphs and show that its magnitude depends on the autocorrelation of both the instrument, and the dependent variable. We further incorporate and adapt two extensions of the IV estimation, conditional IV and nuisance IV, which have recently been proposed by Thams et al. (2022). We show that these extensions can identify the true short-term elasticity in a synthetic setting and are thus particularly promising for future empirical research in this field. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.12863&r=reg |
| By: | Calum Robertson (NUDD - Usages du Numérique pour le Développement Durable - ULR - La Rochelle Université, ULR - La Rochelle Université); Sylvain Dejean (ULR - La Rochelle Université, NUDD - Usages du Numérique pour le Développement Durable - ULR - La Rochelle Université); Raphaël Suire (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - ONIRIS - École nationale vétérinaire, agroalimentaire et de l'alimentation Nantes-Atlantique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université - Nantes Univ - ECN - École Centrale de Nantes - Nantes Univ - Nantes Université, Nantes Univ - Nantes Université) |
| Abstract: | Short-term rental platforms, led by Airbnb, have disrupted the tourism accommodation industry over the last decade. This disruption has encouraged policy-makers to intervene. However, little is known about how effective such interventions are. This paper empirically evaluates the impact Bordeaux's regulation has had on short-term rental (STR) activity through both a differences-in-differences and a triple-difference design. We find that regulation has had a reductive effect of over 322 rented days per month per district on average. This equates to 43% of mean reservation days and over 28 thousand less nights spent per month in STRs across the city. This effect is persistent in peripheral areas of the city, with an average effect of 35% of monthly reservation days. However, the city's attempts to limit activity stemming from targeted (commercial) listings yields mixed results as non-targeted (home-sharing) listings also seem to have modified their behavior. Additionally, analysis in the periphery points paves the way for discussion about the effectiveness of one-size-fits-all STR policy design. |
| Keywords: | Short-term rentals, Regulation, Tourism, Diff-in-diff methodology, Short-term rental Airbnb Regulation Tourism Housing Triple Difference Differences-indifferences, Short-term rental, Airbnb, Housing, Triple Difference, Differences-indifferences |
| Date: | 2023–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04123595&r=reg |
| By: | Cirulli, Vanessa; Marini, Giorgia; Marini, Marco A.; Straume, Odd Rune |
| 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-indifferences methodology applied to a long panel of data on hospital mergers 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: | Health Economics and Policy, Productivity Analysis, Public Economics |
| Date: | 2023–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemwp:337014&r=reg |
| By: | Bauner, Christoph; Hossain, Mallick |
| Keywords: | Consumer/Household Economics, Institutional and Behavioral Economics, Marketing |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335447&r=reg |
| By: | Sarkar, Sampriti; Lupi, Frank |
| Keywords: | Environmental Economics and Policy, Community/Rural/Urban Development, Institutional and Behavioral Economics |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335903&r=reg |