the optimal performance of the global firm formalizing and extending the integration responsiveness framework with the increasing globalization of business there has been growing interest in how to create and manage a successful international enterprise although researchers and practitioners have grappled with the issue of globalization for some time there is no one model that encompasses the range of phenomena we observe in the global economy nor have those models that do exist been precisely formalized this paper provides an expanded approach to thinking about the organizational forms and linkages that exist in international business operations building on the popular integrationresponsiveness framework of international strategic orientation we develop a more expansive approach that is better able to account for the diversity of organizational forms and strategic choices open to managers by adding a third set of environmental pressures incorporating the beliefs of managers and by employing the idea of efficient frontiers we reformulate the integration responsiveness framework making it more consistent with modern economic models of the firm our integration responsiveness completeness irc model argues that global firms can respond to these fundamental and competing pressures by configuring themselves in a variety of ways rather than normatively prescribing that the transnational form is optimal in addition our model has methodological ramifications its formal structure suggests that empirical techniques that focus on the best rather than average performance are necessary to adequately investigate the performance differences among alternative organizational forms this may explain the paradoxical lack of empirical support for a link between organizational form and performance

the differential impact of low carbon technologies on climate change mitigation cost under a range of socioeconomic and climate policy scenarios this paper considers the effect of several key parameters of low carbon energy technologies on the cost of abatement a methodology for determining the minimum level of performance required for a parameter to have a statistically significant impact on co2 abatement cost is developed and used to evaluate the impact of eight key parameters of low carbon energy supply technologies on the cost of co2 abatement the capital cost of nuclear technology is found to have the greatest impact of the parameters studied the cost of biomass and ccs technologies also have impacts while their efficiencies have little if any sensitivity analysis of the results with respect to population gdp and co2 emission constraint show that the minimum performance level and impact of nuclear technologies is consistent across the socioeconomic scenarios studied while the other technology parameters show different performance under higher population lower gdp scenarios solar technology was found to have a small impact and then only at very low costs these results indicate that the cost of nuclear is the single most important driver of abatement cost and that trading efficiency for cost may make biomass and ccs technologies more competitive

a geographically resolved method to estimate levelized power plant costs with environmental externalities in this analysis we developed and applied a geographically resolved method to calculate the levelized cost of electricity lcoe of new power plants on a county by county basis while including estimates of some environmental externalities we calculated the lcoe for each county of the contiguous united states for 12 power plant technologies the minimum lcoe option for each county varies based on local conditions capital and fuel costs environmental externalities and resource availability we considered ten scenarios that vary input assumptions we present the results in a map format to facilitate comparisons by fuel technology and location for our reference analysis which includes a cost of 62 tco2 for co2 emissions natural gas combined cycle wind and nuclear are most often the lowest lcoe option while the average cost increases when internalizing the environmental externalities carbon and air pollutants is small for some technologies the local cost differences are as high as 0 62 kwh for coal under our reference analysis these results display format and online tools could serve as an educational tool for stakeholders when considering which technologies might or might not be a good fit for a given locality subject to system integration considerations

costs of nuclear power plant construction theory and new evidence studies of the cost of construction of nuclear power plants rely upon a measure of cost called overnight cost that contradicts accepted capital theory the studies report evidence that construction cost per megawatt of capacity decreases as plant scale increases we employ a more correct measure of cost and compare the results of this measure versus overnight cost for japanese nuclear power plants using overnight cost the results give evidence of economies of scale in japanese power plants but when the correct measure of cost is substituted the scale variable is not statistically significant

does corporate strategy matter a revisionist view that corporate strategy does not matter has gained considerable influence in recent years this view largely stems from empirical results of early variance decomposition studies that found negligible corporate effects associated with profitability differences between businesses our analysis of the variance decomposition literature shows this view to be incorrect not only do the studies as a group show that factors at the corporate level of organizations contribute to profitability differences but also evidence suggests that factors specifically associated with corporate strategy contribute to corporate effects corporate strategy in fact does matter copyright 2001 john wiley sons ltd

sensitivity of willingness to pay estimates to bid design in dichotomous choice contingent valuation models this paper addresses the sensitivity of dichotomous choice contingent valuation method dc cvm based mean willingness to pay wtp estimates to the dc cvm sample design and to alternative measures of wtp this issue is examined both analytically and empirically the analysis of ten different dc cvm data sets revealed a sensitivity in estimated mean wtp to the sample design and to the measure chosen to calculate mean wtp

autonomy and procedural justice a framework for evaluating subsidiary strategy using the well supported dimensions of autonomy and procedural justice a four quadrant model of subsidiary strategy is proposed and a four part typology hypothesized partner collaborator militant and vassal subsidiaries a clustering process is used to develop a four group taxonomy that corresponds with the induced model the four groups of subsidiaries are analysed across seven alternative strategic dimensions integration responsiveness coordination configuration market scope product scope and value added scope the external and internal validity of the framework is confirmed and its utility discussed in terms of subsidiary s movement from one strategy state to another

the second french nuclear bet following the first oil crisis france launched the world s largest ever nuclear energy program commissioning 58 new reactors these reactors are now reaching 40 years of age the end of their technological lifetime this places france at an energy policy crossroads should the reactors be retrofitted or should they be decommissioned the cost optimal decision depends on several factors going forward in particular the expected costs of nuclear energy production electricity demand levels and carbon prices all of which are subject to significant uncertainty to deal with these uncertainties we apply the robust decision making framework to determine which reactors should be retrofitted we build an investment and dispatch optimization model calibrated for france then we use it to study 27 retrofit strategies for all combinations of uncertain parameters with nearly 8000 runs our analysis indicates that robust strategies involve the early closure of 10 to 20 reactors while extending the life of all other reactors these strategies provide a hedge against the risks of unexpected increases in retrofit costs low demand and low carbon prices our work also highlights the vulnerabilities of the official french government scenarios and complements them by suggesting new robust strategies these results provide a timely contribution to the current debate on the lifetime extension of nuclear plants in france

valuation of natural resource improvements in the adirondacks for 20 years acid rain in the adirondack park has been a central issue in the debate about clean air regulation based on a contingent valuation survey of new york residents our study quantifies the total economic value of expected ecological improvements in the park from forthcoming policies our preferred estimates of the mean household willingness to pay range from 48 to 107 annually which imply total statewide benefits ranging from 336 million to 749 million annually alternative assumptions about ecological changes yield benefits up to 1 1 billion the instrument passes external scope sensitivity to bid and sample selection tests

economic and environmental costs of replacing nuclear fission with solar and wind energy in sweden nuclear power is facing an uncertain future in sweden due to political directives that are seeking to phase out this energy source over coming decades here we examine the environmental and economic costs of hypothetical future renewable energy focused cases compared with the current nuclear and hydroelectricity centred mix in sweden we show that if wind and photovoltaics replace entire nuclear power while maintaining the current level of dispatchable backup capacity including hydroelectric power and peak gas power 154 gw of wind power will be required and will generate 427 1 twh compared with the actual demand of 143 7 twh to reliably meet demand each hour of the year as a consequence the annual spending on electricity systems will be five times higher than the status quo increasing dispatchable power increasing transmission capacities to other countries and generating electricity from combined heat and power plants even when there is no heat demand will together reduce the required capacities of wind and solar photovoltaic by half but it will double the greenhouse gas emissions during the combustion process in conclusion our economic and greenhouse gas emissions analyses demonstrate that replacing nuclear power with renewables will be neither economic nor environmentally friendly with regards to the climate

generalized additive models for nonmarket valuation via revealed or stated preference methods single site recreation demand and dichotomous choice contingent valuation analyses are typically conducted by implementing models containing strong parametric assumptions which are rarely underpinned by theoretical arguments this work illustrates how these assumptions can be relaxed and the estimation conducted semiparametrically by using generalized additive models gams this approach directly estimates the degree of the variables nonlinearities from the data thereby avoiding subjective choices on the smoothing parameters and offering many advantages when compared to the conventional modeling techniques that dominate the environmental economics literature additionally this paper illustrates how gams can be specified to construct theoretically consistent willingness to pay measures jel c14 q51

apples and oranges comparing nuclear construction costs across nations time periods and technologies abstract the literature on energy technology costs diffusion and learning has been characterized by data limitations partial or arbitrary data sets apples to oranges comparisons and imprecision in the use of key concepts and terminology two responses to our paper lovering et al 2016 by koomey et al and gilbert et al reflect many of these problems conflating learning curves with experience curves trends in actual costs with the relationship between cost estimates and final construction costs and component costs with total installed costs the respondents use inconsistent definitions of demonstration first of a kind and commercial deployment across different energy technologies they also propose to compare final installed costs for nuclear power plants encompassing construction and finance costs across different national economies and time periods encompassing a wide range of macro economic circumstances and finance arrangements that overwhelm any signal from trends associated with the actual construction costs of the plants in question in this response we address the specific issues raised in these papers and suggest better practices for comparing energy technology costs trends and technological learning

a perspective on regional and global strategies of multinational enterprises multinational enterprises mnes are the key drivers of globalization as they foster increased economic interdependence among national markets the ultimate test to assess whether these mnes are global themselves is their actual penetration level of markets across the globe especially in the broad triad markets of nafta the european union and asia yet data on the activities of the 500 largest mnes reveal that very few are successful globally for 320 of the 380 firms for which geographic sales data are available an average of 80 3 of total sales are in their home region of the triad this means that many of the world s largest firms are not global but regionally based in terms of breadth and depth of market coverage globalization in terms of a balanced geographic distribution of sales across the triad thus reflects a special and rather unusual outcome of doing international business ib the regional concentration of sales has important implications for various strands of mainstream ib research as well as for the broader managerial debate on the design of optimal strategies and governance structures for mnes journal of international business studies 2004 35 3 18 doi 10 1057 palgrave jibs 8400073

configurations of strategy and structure in subsidiaries of multinational corporations a three fold typology of subsidiary roles world mandate specialized contributor local implementer was induced from the literature and its empirical validity was confirmed adopting a configurational approach we then explored the ways in which subsidiary structural context varies across subsidiary role types structural context characteristics were determined through a discussion of the underlying principles of the hierarchy and heterarchy models of multinational organization the key findings were a higher strategic autonomy in world mandates than in local implementers b a more internationally configured value chain in world mandates and specialized contributors than local implementers c lower levels of internal product flows in world mandates than the other two types and d a significantly lower performance in specialized contributors implications for a configurational model of subsidiary management and for heterarchy as a higher level conceptualization are discussed

effects of technological learning and uranium price on nuclear cost preliminary insights from a multiple factors learning curve and uranium market modeling this paper studies the effects of returns to scale technological learning i e learning by doing and learning by searching and uranium price on the prospects of nuclear cost decrease we use an extended learning curve specification named multiple factors learning curve mflc in a first stage we estimate a single mflc in a second stage we estimate the mflc under the framework of simultaneous system of equations which takes into account the uranium supply and demand this permits not only to enhance the reliability of the estimation by incorporating the uranium price formation mechanisms in the mflc via the price variable but also to give preliminary insights about uranium supply and demand behaviors and the associated effects on the nuclear expansion results point out that the nuclear cost has important prospects for decrease via capacity expansion i e learning by doing effects in contrast they show that the learning by searching as well as the scale effects have a limited effect on the cost decrease prospects conversely results also show that uranium price exerts a positive and significant effect on nuclear cost implying that when the uranium price increases the nuclear power generation cost decreases since uranium is characterized by important physical availability and since it represents only a minor part in the total nuclear cost we consider that in a context of increasing demand for nuclear energy the latter result can be explained by the fact that the positive learning effects on the cost of nuclear act in a way to dissipate the negative ones that an increase in uranium price may exert further results give evidence of important inertia in the supply and demand sides as well as evidence of slow correlation between the uranium market and oil market which may limit the inter fuels substituability effects that is nuclear capacity expansion and associated learning by doing benefits

dual paths to performance the impact of global pressures on mnc subsidiary conduct and performance over the last decade the international business literature has placed ever greater emphasis on the role that learning and innovation play in determining multinational and multinational subsidiary performance the present research seeks to understand the organizational paths leading to such desirable outcomes as greater learning increased innovation and improved performance using a model tested with data collected through a survey of managers in subsidiaries of multinational firms we find dual independent paths to improved performance one through networking and inter unit learning and the other through subsidiary autonomy and innovation a particular feature of these findings is that they can be shown to be robust after controlling for a wide range of environmental pressures and firm and industry factors however in the absence of environmental controls the dual path finding is rejected these conflicting findings support the imperative to test models that include a diverse range of environmental pressures so that the true effects of organizational factors on learning innovation and performance can be identified

a new paradigm for valuing non market goods using referendum data maximum likelihood estimation by censored logistic regression abstract this paper challenges the w m hanemann amer j agr econom 66 332 341 1984 and c sellar j p chavas and j r stoll j environ econom management 13 382 390 1986 utilizations of logit models to estimate the value of non market resources from referendum survey data these data are more informative than conventional choice data the random utility interpretation of logit models is therefore too restrictive bypassing the utility function entirely it will be shown that parameters and standard errors for utility theoretic inverse hicksian demand functions can be extracted directly and much more simply estimated demand functions need not be limited to those corresponding to the linear in parameters utility difference specifications which can be handled by packaged logit programs

historical construction costs of global nuclear power reactors the existing literature on the construction costs of nuclear power reactors has focused almost exclusively on trends in construction costs in only two countries the united states and france and during two decades the 1970s and 1980s these analyses koomey and hultman 2007 grubler 2010 and escobar rangel and leveque 2015 study only 26 of reactors built globally between 1960 and 2010 providing an incomplete picture of the economic evolution of nuclear power construction this study curates historical reactor specific overnight construction cost occ data that broaden the scope of study substantially covering the full cost history for 349 reactors in the us france canada west germany japan india and south korea encompassing 58 of all reactors built globally we find that trends in costs have varied significantly in magnitude and in structure by era country and experience in contrast to the rapid cost escalation that characterized nuclear construction in the united states we find evidence of much milder cost escalation in many countries including absolute cost declines in some countries and specific eras our new findings suggest that there is no inherent cost escalation trend associated with nuclear technology

validation of empirical measures of welfare change a comparison of nonmarket techniques since the passing of the flood control act of 1936 the attention of many resource economists has been directed towards measuring the benefits and costs of alternative uses of natural resources increasingly it has been recognized that the value of some of these uses is not explicitly determined through market transactions this has led to the focus of much attention upon the development of nonmarket methods to estimate the value of these uses in the 1940s the groundwork for the travel cost method was established by hotelling prewitt 1949 following this in the 1960s davis initiated the basic foundation for bidding methods davis 1963 which were later to be subsumed under the heading of contingent valuation methods brookshire randall and stoll 1980 schulze d arge and brookshire 1981 thayer 1981 both of these methods will be further discussed below in addition to these two methods a third approach the unit day value method has been recognized as acceptable but not preferred for the valuation of recreational uses of water and related land resources dwyer kelley and bowes 1977 u s water resources council 1979 given the existence of alternative methods of estimating the value of resource uses several obvious questions arise one of the first of these is under what circumstances is each method most appropriate existing literature has focussed sufficiently on this question and pointed out limitations of each especially the travel cost method and unit day value methods brookshire ives and schulze 1976 dwyer kelly and bowes 1977 freeman 1979 mcconnell 1975 randall ives and eastman 1977 schulze d arge and brook

the eclectic paradigm of international production a restatement and some possible extensions this article reviews some of the criticisms directed towards the eclectic paradigm of international production over the past decade and restates its main tenets the second part of the article considers a number of possible extensions of the paradigm and concludes by asserting that it remains a robust general framework for explaining and analysing not only the economic rationale of economic production but many organisational and impact issues in relation to mne activity as well

optimal response to a shift in regulatory regime the case of the us nuclear power industry this paper studies the impact of the march 1979 three mile island tmi accident on the regulation of nuclear power plants npps and its consequences for the operating behaviour and profitability of the us nuclear power industry we treat the tmi accident as a natural experiment that caused a sudden unexpected and permanent increase in the intensity of safety regulation by the us nuclear regulatory commission nrc and a shift towards increased disallowances of operating costs by state and local public utility commissions pucs we analyse the nuclear power industry s reaction to this shift in regulatory regime using detailed monthly data on npp operations collected by the nrc one of the industry s responses was to increase the planned durations between refuellings from 12 months in the pre tmi period to 18 months in the post tmi period we estimate a simple dynamic programming dp model of npp operations that shows how an operator optimally balances the potential increases in capacity utilization rates associated with longer operating cycles against the increased costs of unplanned and forced outages associated with longer cycles under the maintained hypothesis that npp operators seek to maximize expected discounted profits we use the npp operating data to infer profit functions for npps in the pre and post tmi periods the estimated profit functions reveal that utilities have been responsive to nrc regulation insofar as they impute a significantly higher cost to imprudent operation of a reactor in the post tmi period than in the pre tmi period the results show that utilities responded optimally to the change in regulatory regime since the dp model predicts that optimal planned operating cycles were approximately 12 months in the pre tmi period and 18 months in the post tmi period we find that while npps appear safer in the post tmi period in terms of having a lower rate of forced outages they are also substantially less profitable over 90 of the expected discounted profits from continued operation of existing npps have been eliminated in the post tmi period however since most of the investments in existing npps are already sunk and given the high costs of plant decommissioning the dp model predicts that utilities will continue to operate npps rather than shut them down interestingly we find that the hypothesis of expected discounted profit maximization provides a much better approximation to npp operating behaviour in the post tmi period than in the pre tmi period

technological change in energy systems learning curves logistic curves and input output coefficients abstract learning curves have recently been widely adopted in climate economy models to incorporate endogenous change of energy technologies replacing the conventional assumption of an autonomous energy efficiency improvement however there has been little consideration of the credibility of the learning curve the current trend that many important energy and climate change policy analyses rely on the learning curve means that it is of great importance to critically examine the basis for learning curves here we analyse the use of learning curves in energy technology usually implemented as a simple power function we find that the learning curve cannot separate the effects of price and technological change cannot reflect continuous and qualitative change of both conventional and emerging energy technologies cannot help to determine the time paths of technological investment and misses the central role of r d activity in driving technological change we argue that a logistic curve of improving performance modified to include r d activity as a driving variable can better describe the cost reductions in energy technologies furthermore we demonstrate that the top down leontief technology can incorporate the bottom up technologies that improve along either the learning curve or the logistic curve through changing input output coefficients an application to uk wind power illustrates that the logistic curve fits the observed data better and implies greater potential for cost reduction than the learning curve does

an empirical analysis of the integration responsiveness framework u s construction equipment industry firms in global competition in this study businesses competing as part of the global u s construction equipment industry were categorized into three subgroups according to the integration responsiveness framework i r in an attempt to further understand industry pressures confronting businesses that compete internationally the results show that three generic strategies suggested by the i r framework do appear in a single industry context globally integrated locally responsive and multifocal beyond providing additional insight into the nature of competition in a single global industry several broad extensions to the integration responsiveness framework are suggested

nuclear reactors construction costs the role of lead time standardization and technological progress this paper provides the first comparative analysis of nuclear reactor construction costs in france and the united states studying the cost of nuclear power has often been a challenge owing to the lack of reliable data sources and heterogeneity between countries as well as the long time horizon which requires controlling for input prices and structural changes we build a simultaneous system of equations for overnight costs and construction time lead time to control for endogeneity using expected demand variation as an instrument we argue that benefits from nuclear reactor program standardization can arise through short term coordination gains when the diversity of nuclear reactors technologies under construction is low or through long term benefits from learning spillovers from past reactor construction experience if those spillovers are limited to similar reactors we find that overnight construction costs benefit directly from learning spillovers but that these spillovers are only significant for nuclear models built by the same architect engineer a e in addition we show that the standardization of nuclear reactors under construction has an indirect and positive effect on construction costs through a reduction in lead time the latter being one of the main drivers of construction costs conversely we also explore the possibility of learning by searching and find that contrary to other energy technologies innovation leads to construction costs increases

a nuclear to gas transition in south korea is it environmentally friendly or economically viable abstract given the limited potential for renewable energy and high population density of south korea nuclear has been an essential electricity generation option for supply of reliable power whilst reducing greenhouse gas emissions and mitigating air pollution however the recently elected 2017 south korean government has a policy committing them to a phase out of nuclear and coal offset by an increase in the share of variable renewables however the main component of the power transition is set to be liquefied natural gas lng due to technical and economic barriers facing large scale renewables it is therefore critical for south korea to develop an evidence based perspective on the details of the transition before any future energy policy is decided here we review i the national role of renewable sources given technical and economic limitations in south korea ii potential environmental and economic issues with gas and iii potential barriers of and benefits to a nuclear pathway our conclusion is that given the geographical and economic limitations facing south korea and the need to reduce carbon emissions cost effectively a nuclear pathway coupled with a moderate renewable share offers the most viable policy with a gas focused energy future being neither environmentally friendly nor economic

flexible functional form estimation of willingness to pay using dichotomous choice data abstract this paper introduces fully flexible semi nonparametric methods for calculating willingness to pay wtp bounded between zero and the respondent s income for dichotomous choice contingent valuation a method to estimate median wtp using fully flexible functional forms is also presented finally the numerical illustration demonstrates the importance of considering jensen s inequality in calculating wtp with nonlinear models

on the sources of technological change assessing the evidence this paper uses a selective review of the economic literature on technological change to support four points that are important for interpreting and incorporating technological change into formal models of energy and the environment the review 1 supports the notion that no single source dominates the process of technological change it supports roles for rd 3 indicates that these spillovers are often indirect requiring own industry activities to utilize and 4 indicates that simple experience curve calibrations often used in formal models likely include a range of sources of technological change in addition to learning by doing some of which might not be induced by the sorts of policies typically considered in the climate context

difficulties in valuing street light improvement trust surprise and bound effects previous empirical research has demonstrated an internal inconsistency that may occur in response strategies between the first and second valuations made to closed ended contingent valuation questions one possible explanation for this bound effect is the surprise of being asked the second valuation question which may be enhanced where there is a lack of trust this paper considers the use of closed ended contingent valuation to estimate non market benefits for an improved street lighting scheme where there is a lack of trust in the agency responsible for provision the results provide confirmation that surprise is an important determinant of bound effects however efforts to reduce such bias using a prior statement of the bid range were found to be ineffective in increasing trust and reducing surprise given the importance of this area of research directions for future research are considered

an empirical analysis of the integration responsiveness framework in global industries in this study businesses competing in global industries were categorized into three groups according to the integration responsiveness framework for conceptualizing industry pressures confronting business competing internationally using this framework contextual conditions associated with each group were examined competitive attributes distinguishing each group were then identified to clarify alternate business level strategies for competing within a global industry context beyond providing additional insight into the nature of competition in global industries several broad extensions to the integration responsiveness framework are suggested

firm and industry effects within strategic management an empirical examination this study brings out the complementarities between resource based and industrial organization schools within strategic management through an empirical examination of firm and industry effects a variance component analysis of 264 single business companies from 69 industries using 5 and 15 year periods suggests that firm effects are more important than industry effects on firm performance but not on core strategies such as technology and marketing the findings also point to the need to study core strategies at lower levels of aggregation to understand the sources of competitive advantage 1998 john wiley sons ltd

cost estimates for nuclear power in the uk abstract current uk government support for nuclear power has in part been informed by cost estimates that suggest that electricity from new nuclear power stations will be competitive with alternative low carbon generation options the evidence and analysis presented in this paper suggests that the capital cost estimates for nuclear power that are being used to inform these projections rely on costs escalating over the pre construction and construction phase of the new build programme at a level significantly below those that have been experienced by past us and european programmes this paper applies observed construction time and cost escalation rates to the published estimates of capital costs for new nuclear plant in the uk and calculates the potential impact on levelised cost per unit of electricity produced the results suggest that levelised cost may turn out to be significantly higher than expected which in turn has important implications for policy both in general terms of the potential costs to consumers and more specifically for negotiations around the level of policy support and contractual arrangements offered to individual projects through the proposed contract for difference strike price

cost overruns and financial risk in the construction of nuclear power reactors a critical appraisal lovering and colleagues attempt to advance understanding of construction cost escalation risks inherent in building nuclear reactors and power plants a laudable goal although we appreciate their focus on capital cost increases and overruns we maintain in this critical appraisal that their study conceptualizes cost issues in a limiting way methodological choices in treating different cost categories by the authors mean that their conclusions are more narrowly applicable than they describe we also argue that their study is factually incorrect in its criticism of the previous peer reviewed literature earlier work for instance has compared historical construction costs for nuclear reactors with other energy sources in many countries and extending over several decades lastly in failing to be transparent about the limitations of their own work lovering et al have recourse to a selective choice of data unbalanced analysis and biased interpretation

understanding wind turbine price trends in the u s over the past decade understanding wind turbine price trends in the u s over the past decade mark bolinger and ryan wiser lawrence berkeley national laboratory pre print of article submitted to energy policy abstract on a per kw basis wind turbine prices in the u s have declined by nearly one third on average since 2008 after having previously doubled over the period from 2002 through 2008 these two substantial and opposing trends over the past decade and particularly the earlier price doubling run counter to the smooth gradually declining cost trajectories predicted by standard learning curve theory taking a bottom up approach we examine seven possible drivers of wind turbine prices in the u s with the goal of estimating the degree to which each contributed to the doubling in turbine prices from 2002 through 2008 as well as the subsequent decline in prices through 2010 in aggregate these seven drivers which include changes in labor costs warranty provisions manufacturer profitability turbine scaling raw materials prices energy prices and foreign exchange rates explain from 70 to 90 depending on the year of empirically observed wind turbine price movements in the u s through 2010 turbine scaling is found to have been the largest single contributor to the price doubling through 2008 although the incremental cost of scaling has been justified by greater energy capture resulting in a lower cost of wind generation acknowledgments the work described in this article was funded by the u s department of energy s wind water power program within the office of energy efficiency and renewable energy under contract no de ac02 05ch11231 disclaimer this document was prepared as an account of work sponsored by the united states government while this document is believed to contain correct information neither the united states government nor any agency thereof nor the regents of the university of california nor any of their employees makes any warranty express or implied or assumes any legal responsibility for the accuracy completeness or usefulness of any information apparatus product or process disclosed or represents that its use would not infringe privately owned rights reference herein to any specific commercial product process or service by its trade name trademark manufacturer or otherwise does not necessarily constitute or imply its endorsement recommendation or favoring by the united states government or any agency thereof or the regents of the university of california the views and opinions of authors expressed herein do not necessarily state or reflect those of the united states government or any agency thereof or the regents of the university of california ernest orlando lawrence berkeley national laboratory is an equal opportunity employer

addressing negative willingness to pay in dichotomous choice contingent valuation this paper has four purposes first we outline the controversy surroundingthe issue of negative willingness to pay wtp in contingent valuation cv studies second we use monte carlo simulation to examine theperformance of alternative distributionalassumptions in estimating wtp in the presenceof varying proportions of the populationholding negative wtp values we focus ondichotomous choice cv dc cv where negativewtp values may be especially difficult todetect third we extend the simulation toinvestigate the performance of the mixturemodels that have recently been proposed forhandling identifying non positive wtp values fourth we extend the simulation to investigatethe performance of the nonparametric lowerbound turnbull approach results indicate thatthe relative performance of the dc cv modelingalternatives evaluated here which assumepositive wtp varies across the simulationsetting e g proportion of negative wtp butnone can be said to reasonably solve theproblem ex post this underscores theimportance of ex ante efforts to identify ifnegative wtp is likely to be prominent in agiven valuation setting in such cases appropriately handling negative wtp must beaddressed through ex ante survey design andmodeling choices that allow negative wtp

a conjoint model of quantity discounts quantity discount pricing is a common practice used by business to business and business to consumer companies a key characteristic of quantity discount pricing is that the marginal price declines with higher purchase quantities in this paper we propose a choice based conjoint model for estimating consumer level willingness to pay wtp for varying quantities of a product and for designing optimal quantity discount pricing schemes our model can handle large quantity values and produces wtp estimates that are positive and increasing in quantity at a diminishing rate in particular we propose a tractable wtp function that depends on both product attributes and product quantity and that captures diminishing marginal wtp we show how such a function embeds standard wtp functions in the quantity discount literature as special cases we also demonstrate how to use the model to estimate the consumer value potential which is the product of the premium a consumer is willing to pay and her volume potential finally we propose a parsimonious experimental design approach for implementation we illustrate the model using data from a conjoint study of online movie rental services the empirical results show that the proposed model has good fit and predictive validity in addition we find that marginal wtp in this category decays rapidly with quantity we also find that the standard choice based conjoint model results in anomalous wtp distributions with negative wtp values and nondiminishing marginal willingness to pay curves finally we identify four segments of consumers that differ in terms of magnitude of wtp and volume potential and we derive optimal quantity discount schemes for a monopolist and a new entrant in a competitive market

nonparticipation or misspecification the impacts of nonparticipation on dichotomous choice contingent valuation dichotomous choice or referendum contingent valuation surveys have become the predominate choice for valuing goods and services otherwise not valued in a standard market nonmarket goods and services a number of researchers have recently recommended that dichotomous choice contingent valuation studies include a follow up question to all no responses to determine whether the no response is a result of unwillingness to pay or nonparticipation if the goal of the study is to investigate the impact of covariates on either mean willingness to pay or the probability of nonparticipation simple identification of indifferent individuals will not suffice a simulation study shows that existing econometric models designed to account for nonparticipation are extremely sensitive to misspecification bias accurate identification of the probability of nonparticipation is hampered by potential misspecification of the distribution of willingness to pay

modelling willingness to pay responses from dichotomous choice contingent valuation surveys with zero observations modelling household behaviour with the data from dichotomous choice contingent valuation dccv surveys is often complicated by zero willingness to pay wtp responses in the sample to deal with the zero responses a two equation model is considered which incorporates a two level decision structure a decision on whether to participate in having wtp and a decision on the wtp amount conditional on deciding to participate and two separate stochastic processes that determine the probability and conditional level of wtp are featured the model is empirically applied to household survey data in which the dccv questions concerned the benefits of air quality improvement in korea to put the issue of the two equation model in perspective this paper also experiments with economic and econometric specifications utility theoretic restriction and heteroscedasticity it is shown how failure to allow for the restriction distorts aggregate benefit estimates and the existence of heteroscedasticity in error term is

inference and optimal design for a welfare measure in dichotomous choice contingent valuation this paper considers the use of contingent valuation to estimate non market benefits from separately valued nested goods survey respondents were asked referendum wtp questions regarding either a scheme to protect the whole area of a wetland or a

bias in discrete response contingent valuation abstract the empirical literature on discrete response contingent valuation has found that seemingly innocuous changes in the statistical models estimated result in significantly different point estimates of willingness to pay this paper hypothesizes and tests several potential explanations for these results first it investigates and compares the biases inherent in single bounded and double bounded maximum likelihood estimation procedures and examines how they react to various bid designs and sample sizes then it examines the presence and identification of outliers in binary choice data and how these outliers influence estimation finally it presents an alternative approach to addressing the issue of outliers which explicitly acknowledges the possibility of upwardly biased response probabilities

referendum models and economic values theoretical intuitive and practical bounds on willingness to pay innovations in the estimation of referendum type contingent valuation models have led to willingness to pay wtp measures inconsistent with consumer preferences and unbounded from above or below we propose a set of criteria which guarantee a bounded measure of wtp the criteria reject the traditional random utility model with unrestricted error terms in favor of the random wtp model with bounds on wtp once wtp is bounded by zero and income the form of the distribution is less consequential a new model for wtp is developed based on the beta distribution and is compared to previously estimated models

statistical approaches to the fat tail problem for dichotomous choice contingent valuation if a cumulative density function esti mated from dichotomous choice data has an unre alistically fat right hand tail mean willingness to pay wtp will be overestimated truncating the range of integration results in a lower bound esti mate of the true mean wtp a normalization pro cedure proposed by boyle welsh and bishop 1988 unnecessarily depresses the estimate further a new statistical approach is presented that allows a best guess estimate of mean wtp because this estimate involves extrapolation beyond the range of the data it tends to be highly variable jel q21

comparing benefit estimates from travel cost and contingent valuation using confidence intervals for hicksian welfare measures an approach to determining whether benefit estimates derived from the travel cost method and contingent valuation method are statistically different is presented unlike past comparisons compensating variation is estimated for both methods benefit comparisons are made more rigorous by use of confidence intervals which are developed using the same krinsky and robb simulation technique for both valution mothods the techniques are applied to deer hunting in california while point estimates of benefits from both truncated and untruncated adjusted travel cost methods are lower than the contingent valuation method the confidence intervals on the untruncated travel cost method do overlap the contingent valution method benefit estimates

the value of household water service quality in lahore pakistan most existing literature focuses on the benefits of establishing basic drinking water access for unserved populations the extensive water supply margin in contrast this article examines the intensive margin the benefits of improving water service to under served households a growing population in developing country cities we use contingent valuation to estimate willingness to pay wtp for improved piped water quality and reductions in supply interruptions among a sample of 193 households in lahore pakistan the distribution of wtp is described using parametric and non parametric models results indicate that households in lahore are willing to pay about 7 50 to 9 per month for piped water supply that is clean and drinkable directly from the tap comparable to the monthly cost of in home water treatment and about three to four times the average monthly water bill for sample households using piped water estimates of wtp for reducing supply interruptions are both smaller and more difficult to interpret since a significant fraction of the estimated wtp distribution for supply improvements is negative all of our wtp estimates are well below 4 of monthly household income the world bank s benchmark upper bound for affordable water service

value of technology in the u s electric power sector impacts of full portfolios and technological change on the costs of meeting decarbonization goals abstract power sector decarbonization is an important pillar of climate mitigation efforts but perspectives differ about the relative competitiveness of generation technologies and how limited portfolio approaches e g where non renewable generation options are prohibited could alter the costs and likelihoods of reaching emissions reduction goals the existing literature on impacts of technological availability and cost on electric sector planning typically use models that do not have sufficient technological spatial and temporal detail to adequately resolve the economic competitiveness of variable renewable energy vis a vis dispatchable generators using a state of the art energy economic model this work examines impacts of technological availability and advanced generation technologies on u s electricity market outcomes across a range of regional market and policy contexts we show that decarbonization costs are 11 76 higher as technological options are removed from consideration incremental compliance costs for a 95 co2 reduction below 2005 levels are roughly twice as high when new nuclear carbon capture equipped units and transmission are not allowed however the economic and technical implications of limited portfolios depend on the market and policy contexts e g costs are higher with stringent targets more extensive end use electrification and lower gas prices and the costs and capabilities of the remaining options the analysis demonstrates how lower temporal and spatial resolution models likely understate the value of technology by omitting key economic and technical features of high variable renewable pathways additionally the analysis quantifies how technological change can lower costs of emissions reductions by 7 73 and how low cost battery storage can provide a hedge against higher costs when technological portfolios are limited