the efficiency of producing alcohol for energy in brazil brazil is one of the few countries actually producing renewable fuels as a substitute for opec oil there are now 150 distilleries producing five billion liters of ethanol a year from sugar cane with another 100 distilleries in the planning and construction stages the current stability of world oil prices however does not make alcohol substitution economically efficient for brazil and costs foreign exchange the authors analyze the economics of alcohol production in two regions and find it to be socially unprofitable in terms of breaking even although it does serve to dampen any impact from increasing oil prices 5 tables dck

the brazilian national alcohol programme an economic reappraisal and adjustments abstract the recent economic reappraisal presented in this study shows that the social viability of ethanol production in brazil will only became a reality with considerable increases in productivity and with international oil prices above us 30 00 factors which are only likely to come about at the end of the 1990s however if one accepts that the investments already undertaken in the alcohol production sector can be considered as sunk costs then the prospect of viability is not so remote and perfectly feasible with oil prices in the us 15 20 range the adjustment on fiscal policy discussed here is designed precisely to guarantee the continuation of proalcool with the production of alcohol limited to the sector s current capacity in other words its purpose is to achieve an evolution in the demand for alcohol so as to ensure compatibility with the supply derived from investments already undertaken in the sector through basically an increase in tax on alcohol car sales

designing and rating an area yield crop insurance contract this article documents the design and rate making procedures used in the development of the group risk plan grp the new federal crop insurance product that insures based on area yield the authors of this article worked closely with personnel in the federal crop insurance corporation and others in developing methodological and practical constraints needed in implementing a workable area yield contract grp indemnity payments are made based on percentage shortfalls in actual county yields relative to a forecasted yield historical county yield data are used to develop forecasted yields and premium rates

rockets and feathers understanding asymmetric pricing prices rise like rockets but fall like feathers this stylized fact of most markets is con rmed by many empirical studies in this paper i develop a model with competitive rms and rational partially informed consumers where such asymmetric response to costs by rms emerges naturally in contrast to public opinion and past work collusion is not necessary to explain such result using a rich dataset of retail gasoline prices i nd the observed price dispersion pattern to be consistent with the model s prediction

optimal producer behavior in the presence of area yield crop insurance optimal producer behaviour in the presence of area yield insurance is studied the producer s optimal production and insurance choices are characterized the effect of the provision of area yield insurance on production patterns is studied and sufficient conditions for the provision of area yield insurance to increase the riskiness of the individual producer s decisions are derived a separation result is derived for area yield insurance contracts and stochastic technologies

interfirm rivalry in a repeated game an empirical test of tacit collusion rivalry in the vancouver retail gasoline market is modeled as a repeated game service station demand cost and intertemporal reaction functions are estimated from daily data on individual station prices costs and sales these functions are then used to calculate noncooperative and cooperative solutions to the constitutent game and the actual outcome of the repeated game the actual outcome is found to be substantially less lucrative than the monopoly solution nevertheless all stations are better off than if they played their noncooperative strategies in every period copyright 1987 by blackwell publishing ltd

multitask agency and contract choice an empirical exploration the multitask agency problem is examined empirically using contracts between private integrated oil companies and their service stations in the city of vancouver the empirical tests assess how variations in the characteristics of one task affect the choice of agent compensation scheme for another comparative statics from the model predict that higher powered incentives will be offered for gasoline sales when the secondary activity is not highly complementary with gasoline retailing where complementarity is measured by the cross price demand effect the covariation in uncertainty and the degree of effort substitutability copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

food versus fuel an updated and expanded evidence abstract this paper replicates the study of zhang et al 2010 food versus fuel what do prices tell us energy policy 38 pp 445 451 we confirm the findings of the original paper that there was only a weak relationship between ethanol and food commodities in the period between march 1989 and july 2008 in addition we extend that study and examine the cointegration relationship between biofuels and related commodities for a considerably enlarged dataset 3 vs 1 market 26 vs 8 commodities analysis up till 2017 vs 2008 weekly vs monthly data frequency focusing on the biofuel markets of brazil the eu and the usa in the three separate periods before during and after the food crisis of 2007 and 2008 we show that studying the time variation of the relationships plays an essential role in their proper understanding our results help to clarify the wide extensive discussion about the role of biofuels prices in food shortages manifested particularly during the food crises in agreement with the original study we confirm that price series data do not support strong statements about biofuels uniformly serving as main leading source of high food prices and consequently the food shortages

evolution of the economics of agricultural policy agricultural economists helped develop farm programs to respond to the dire economic situation of the 1920s and 1930s some early authors appreciated that such policies created problems in markets for commodities and inputs over time our understanding of agricultural issues and policies has deepened through the application of improved models and tools of analysis to more extensive data we have developed better answers to old questions and have responded to changing policy instruments market contexts and policy concerns this article traces the evolution of our deepening economic understanding of the causes and consequences of agricultural policy

the effects of different contractual arrangements the case of retail gasoline markets the change in the contractual arrangement at a gasoline station from a refiner controlled to a franchise operation implies different incentives for the individual who sets prices and determines hours but reflects no change in the product nor the market environment the outcome can lead to higher prices and reduced hours at the station affected the divorcement experience in maryland illustrates how change can be imposed by the legal system average self service and full serve prices rose and hours of operation fell relative to those of competitors even though refiner operations that were forced to franchise had previously had prices below the competition the evidence of an effect on the prices and hours of competitors is less convincing 16 references 2 tables

does market competitiveness significantly affect public intervention in agricultural insurance the case in italy analyses of agricultural insurance failures often assume the existence of competitive supply tracing the reasons for high insurance cost and limited farmer participation to informational problems and suggesting the need for premium subsidization in order to increase participation however in countries such as spain and italy where agricultural insurance is most highly subsidized it could be that supply is not fully competitive in this article we explore the incidence of public subsidies to agricultural insurance premia when supply is noncompetitive through the use of a simple empirical model of an insurance market it is shown that while in the case of a competitive supply subsidies to insurance would benefit farmers a monopolistic supply would capture most of the subsidy thus eliminating the potential incentive towards wider participation by farmers the model is applied to a panel of italian farms for different levels of risk aversion to demonstrate the limited effect that a subsidy to a hyp

price discrimination and retail configuration the hypothesis that price discrimination based on willingness to pay for quality can occur in multifirm markets is confirmed using microdata on gasoline retailing a test that discriminates between price structures associated with discrimination and with cost driven competitive differentials is developed and implemented with controls for variation in outlet and market characteristics a second test based on profitability variation rejects a competitive peak load pricing explanation for the observed price dispersion the data suggest that price discrimination at the retail level adds at least 9 a gallon to the average price of full service gasoline

optimum area yield crop insurance cet article determine le contrat optimal d assurance dont l indemnite depend du rendement agrege sur recoltes d un bassin de production le schema optimal d assurance est base sur le coefficient individuel de regression qui mesure la sensibilite du rendement agrege a des variations du rendement agrege une indemnite est versee lorsque le rendement agrege est inferieur superieur a un rendement critique si le coefficient de regression est positif negatif le contrat optimal contient une franchise evanescente si le coefficient de regression est superieur a l unite

considering macroeconomic indicators in the food before fuel nexus abstract a structural vector autoregression svar model along with a direct acyclic graph is employed to decompose how supply demand structural shocks affect food and fuel markets the results support the hypothesis that fundamental market forces of demand and supply are the main drivers of food price volatility increased biofuel production may cause short run food price increases but not long run price shifts decentralized freely operating markets will mitigate the persistence of any price shocks and restore prices to their long run trends the main policy implications are that oil gasoline and ethanol market shocks do not spillover into grain prices which indicates no long run food before fuel issue in the short run grain prices can spike due to market shocks so programs designed to blunt these price spikes may be warranted

spatial price equilibrium with product variety chain stores and integer pricing an empirical analysis a spatial model that incorporates store locations and city topographic features is developed for the edmonton alberta video cassette rental market bertrand nash equi librium prices are computed using a grid search algorithm that maximizes goodness of fit against observed prices the fit is improved by taking into account differences between stores in product variety the tendency of chains to set a common price for all member stores and the tendency of chains to set whole dollar prices implications for further empirical research in spatial pricing are drawn

empirical studies of gasoline retailing a guide to the literature abstract this paper surveys the empirical literature on gasoline retailing which has been growing rapidly over the last three decades possibly in response to antitrust and regulatory concerns and increased availability of pricing data studies of both pricing and non price decision variables are considered in general it is found that crude oil prices are the primary driver of national price movements over time however market structure has been identified as playing a role in price dynamics equilibrium selection and price differentials across markets and stations the economic literature emphasizes the importance of heterogeneity across stations and coordination problems faced by retailers several directions for future work are suggested including the development of theory and demand estimation using high frequency station level data

global oil prices and local food prices evidence from east africa it is widely believed that oil prices impact food prices in developing countries yet rigorous evidence on this relationship is scarce using maize and petrol price data from east africa we show that global oil prices do affect food prices but primarily through transport costs rather than through biofuel or production cost channels we find that global oil prices transmit much more rapidly to the pump and then to local maize prices than do global maize prices suggesting that the immediate effects of correlated commodity price shocks on local food prices are driven more by transport costs than by the prices of the grains themselves furthermore we present suggestive evidence that for markets furthest inland changes in world oil prices have larger effects on local maize prices than do changes in world maize prices

do auctions and forced divestitures increase competition evidence for retail gasoline markets to foster competition governments can intervene by auctioning licenses to operate or by imposing divestitures the dutch government has done exactly that organizing auctions to redistribute tenancy rights for highway gasoline stations and imposing divestitures of such stations on the four major companies we evaluate this policy experiment and find that the auctioning of licenses without an obligation to divest has no discernible effect on prices an obligation to divest lowers prices by 1 3 2 3 at divested sites moreover prices decrease by 0 9 1 2 at sites nearby this suggests that the observed price decreases are at least partly due to competitive spillovers

vertical integration and firm boundaries the evidence since ronald h coase s 1937 seminal paper a rich set of theories has been developed that deal with firm boundaries in vertical or input output structures in the last twenty five years empirical evidence that can shed light on those theories also has been accumulating we review the findings of empirical studies that have addressed two main interrelated questions first what types of transactions are best brought within the firm and second what are the consequences of vertical integration decisions for economic outcomes such as prices quantities investment and profits throughout we highlight areas of potential cross fertilization and promising areas for future work

effect of floating pricing policy an application of system dynamics on oil market after liberalization abstract upon the implementation of the floating price mechanism taiwan s gasoline and diesel prices returned to market mechanism which terminated the phenomenon of the public paying for the losses of the state owned oil company chinese petroleum corporation taiwan cpc furthermore the relatively low production costs of the privately owned formosa petrochemical corporation fpcc disclosed the pricing mechanism of cpc which inspired fpcc to adopt pricing strategy in order to increase the market share this study aims to establish a system dynamics model to analyze the effects of the floating price mechanism on taiwan s gasoline and diesel markets this model is divided into four sub systems the model of this study passed several validation tests and hence is able to provide a virtual laboratory for policy makers to conduct simulation and scenario analysis the simulation results indicate a feedback mechanism of expected revenues and pricing strategy could efficiently simulate the fpcc pricing mechanism b price competition strategy could increase fpcc revenues although the effect on market share is not remarkable and c fpcc has a higher gas station growth rate scenario analyses found a lowering oil security stockpile would not change fpcc s pricing strategy and b fpcc prefers to follow cpc pricing when it has more gas stations

comparison of fixed versus variable biofuels incentives we evaluated several variants of a variable biofuel subsidy and compared them with the fixed subsidy and renewable fuel standard using two different modeling approaches first we used a partial equilibrium model encompassing crude oil gasoline ethanol corn and ethanol by products second we used a stochastic simulation model of a prototypical ethanol plant from the partial equilibrium analysis it appears the variable subsidy provides a safety net for ethanol producers when oil prices are low yet it does not put undue pressure on corn prices when oil prices are high at high oil prices the level of ethanol production is driven by market forces from the plant level stochastic analysis essentially the same conclusions are reached as with the fixed subsidy the variable subsidy can increase the net present value npv sufficiently to encourage investment but with lower risk for the producer lower probability of a loss from the investment and often lower expected cost to government finally in the us the ethanol industry is up against a blending limit called the blend wall if the blending wall remains in place and no way around it is found it does not matter much what other policy options are used

spatial differentiation and vertical mergers in retail markets for gasoline this paper studies an empirical model of spatial competition applied to gasoline markets the main feature is to specify commuting paths as the locations of consumers in a hotelling style model as a result spatial differentiation depends in an intuitive way on the structure of the road network and the direction of traffic flows the model is estimated using panel data on the quebec city gasoline market and used to evaluate the consequences of a recent vertical merger difference in difference and counterfactual simulation methods are compared and the results to a large extent validate the assumptions of the demand model jel g34 l13 l42 l81 q41 r41

a simple spatial model for edgeworth cycles abstract maskin and tirole 1998 formalise edgeworth s 1925 model of a dynamic equilibrium between two players where prices increase sharply and decrease slowly the edgeworth cycle here we present an application of the model showing how edgeworth cycles might arise in a marketplace where spatial competition is important we illustrate the approach using the example of retail gasoline markets where edgeworth cycles have been widely observed

vertical relationships and competition in retail gasoline markets empirical evidence from contract changes in southern california comment this study examines how much if any of the differences in retail gasoline prices between markets is attributable to differences in the composition of vertical contract types at gasoline stations in each market the purchase of the independent retail gasoline chain thrifty by arco provides a unique opportunity to examine the effects of changes in different vertical contract types on local retail prices this event caused sharp changes in the market share of i fully vertically integrated stations and ii independent stations differentially affecting local markets in the los angeles and san diego metropolitan areas using unique and detailed station level data this study examines how these sharp changes affected local retail prices the detailed data and the research design based on the thrifty station conversions allow for credible estimation of the effects of the market share of independent retailers and vertically integrated retailers on local market prices controlling for any omitted factors at the station level and the city level over time results for the los angeles and san diego metropolitan areas indicate that a decrease in the market share of independent stations has a significant positive impact on local retail price however a change in the market share of refiner owned and operated branded stations does not have a significant impact on local market price these results have important implications as policy makers consider the regulation of vertical contracts as a means to increase competition in gasoline markets the research design and detailed data also allow for inference on the underlying nature of retail gasoline competition

clean air and renewable fuels the market for fuel ethanol in the us from 1984 to 1993 abstract ethanol made from corn has become an increasingly important fuel additive in the us over the past decade the market for ethanol has grown from 550 million gallons in 1984 to approximately 1 5 billion gallons in 1995 recent clean air legislation has mandated the use of cleaner burning fuels in the us in specific regions and seasons the fundamental role of fuel ethanol is changing from a gasoline substitute and octane enhancer to being one of a number of possible clean air additives in addition to these changing market conditions the institutional structure surrounding the ethanol market has changed while there is a uniform national subsidy for ethanol use each state has its own supplemental subsidy level which varied from zero to over 0 40 per gallon recently many state subsidy levels have been declining but significant incentives still remain including the federal 0 54 per gallon incentive this paper explores the economic characteristics of the us ethanol market the market supply and demand for ethanol are estimated econometrically the results highlight the importance of the state and federal incentives and mandates along with transportation costs in making corn based ethanol an attractive alternative to gasoline further investigation using a probit model to predict whether a state has an ethanol market or not reinforces the results of the supply demand market model the implications of the market characteristics for current and future us ethanol policy and clean fuels use are discussed

relationship between ethanol and gasoline aids approach abstract ethanol production in the united states has increased significantly due to government support which has begun to dwindle ethanol now seems to compete with gasoline for vehicle fuel but because ethanol is mostly sold as a blend gasoline and ethanol could be complementary fuel sources the study investigates the true relationship between these fuels since it has policy implications results of la aids estimation show the two fuels were substitutes before the rapid expansion of ethanol production but have become complements overtime due to increasing share of ethanol in fuel consumption

selling costs and switching costs explaining retail gasoline margins recent theoretical work has shown that price discrimination can take place in imperfectly competitive as well as monopoly markets the persistence of higher retail margins on unleaded than on leaded gasoline during the 1980s suggests that discrimination may occur even in very competitive markets this article studies a number of cost based explanations for such gasoline pricing as well as the possibility of price discrimination the analysis indicates that gas stations discriminate against groups of customers who are less likely to switch to another station the conclusions highlight the influence of shopping or search costs on pricing decisions even in markets thought to be quite competitive

dynamic pricing in retail gasoline markets supergame models of tacit collusion show that supportable price cost margins increase with expected future collusive profits ceteris paribus as a result collusive margins will be larger when demand is expected to increase or marginal costs are expected to decline using panel data on sales volume and gasoline prices in 43 cities over 72 months we find behavior consistent with tacit collusion in retail gasoline markets controlling for current demand and cost current margins increase with expected next month demand and decrease with expected next month cost the results are not consistent with intertemporal l inkages due to inventory behavior or customer loyalty

a theory of quality related differences in retail margins why there is a premium on premium gasoline this paper develops a theory of vertical and horizontal product differentiation to explain observed price cost margin differentials for goods that differ in quality the difference in price cost margins between the high and low quality goods is shown to depend positively on consumers average valuation for incremental increases in quality and positively on the distance to each competitor s closest rival these predictions are largely supported using an extensive station level data set of premium and regular unleaded gasoline prices from the los angeles basin area from 1992 1995

causality and predictability in distribution the ethanol food price relation revisited abstract this paper examines the relationship between biofuels field crops and cattle prices in the u s from a new perspective we focus on predictability in distribution by asking whether ethanol returns can be used to forecast different parts of field crops and cattle returns distribution or vice versa density forecasts are constructed using conditional autoregressive expectile models estimated with asymmetric least squares forecast evaluation relies on quantile weighed scoring rules which identify regions of the distribution of interest to the analyst results show that both the centre and the left tail of the ethanol returns distribution can be predicted by using field crops returns on the contrary there is no evidence that ethanol can be used to forecast any region of the field crops or cattle returns distributions

price uniformity and competition in a retail gasoline market abstract the purpose of this paper is to examine the price uniformity prediction of the competitive market model of retail gasoline pricing using station specific data on gasoline prices from vancouver bc the specified econometric model also generates results that describe the actual pricing pattern in the market and that permit an assessment of tacit collusion and imperfectly competitive non collusive competition as possible alternative explanations for the results contrary to the competitive model variables measuring brand effects spatial and product characteristics local market structure and time series variation do affect the probability that a station matches the market mode price

efficiency and total factor productivity in ukrainian agriculture in transition this article analyzes efficiency and total factor productivity tfp change of large agricultural enterprises during their transition to a market economy in ukraine efficiency is calculated by data envelopment analysis and productivity change is measured by the malmquist productivity change index in the period between 1990 and 1999 on average tfp declined by 6 annually dropping a total 42 the main reason for the observed tfp decline is a decrease in technical efficiency which is found to be remarkably significant at the same time there is a high variation among individual enterprises the distribution of efficiency scores widens which indicates that the farms diverge with respect to their economic performance a tobit regression analysis is conducted in which efficiency scores are related to factors such as farm type farm size initial conditions and legal form

the spanish retail petroleum market new patterns of competition since the liberalization of the industry in this paper we study the recent development of the spanish automotive fuels market in the context of a long process of liberalization and competition our aims are twofold first to overview the market s current patterns of competition while taking into account the political structural and strategic aspects that have marked the industry s recent evolution second to study in depth one competitive strategy that nowadays significantly influences competition and final prices the vertical relationships between operators and service stations our analysis draws attention to several indicators that may demonstrate the success of the opening and liberalization process increased levels of competition have stimulated the sector s growth development and modernization and given national firms an excellent platform for competing with newcomers furthermore studying the vertical agreements has produced interesting results we have found that relative price differences among brands increase in line with perceived quality differences and that the vertical separation of refineries and retailers eases price competition in the final market the empirical evidence was backed up with a database of 4164 spanish service stations

viewpoint replication in economics this examination of the role and potential for replication in economics points out the paucity of both pure replication checking on others published papers using their data and scientific replication using data representing different populations in one s own work or in a comment several controversies in empirical economics are used to illustrate how and how not to behave when replicating others work the incentives for replication are examined and proposals aimed at journal editors and authors are advanced that might stimulate an activity that most economists applaud but few perform

gas wars retail gasoline price fluctuations this paper examines the retail gasoline price fluctuations known as gas wars weekly prices for the los angeles area were examined for the period from january 2 1968 through december 23 1975 the observed fluctuations were remarkably regular and apparently large ly predictable the data appear consistent with the recent game theory model of e maskin and j tirole in which competing firms produce edgeworth cycles by undercutting each other and eventually relenting copyright 1993 by mit press

oligopolistic pricing with sequential consumer search n identical stores compete by choosing prices for a homogeneous good with constant marginal costs consumers search sequentially with perfect recall for the lowest price one class of consumers called shoppers have zero search costs while all other consumers have a positive search cost c there is a unique symmetric nash equilibrium price distribution with the property that it changes smoothly from marginal cost pricing when all consumers are shoppers and or c 0 and monopoly pricing when no consumers are shoppers remarkably as the number of stores increases the nash equilibrium becomes more monopolistic copyright 1989 by american economic association

price matching and the domino effect in a retail gasoline market i introduction for many years there have been competition concerns regarding how retail gasoline prices are set in the united states and canada in several u s states including delaware maryland nevada and virginia such concerns gave rise to divorcement legislation under which refiners are not permitted to own or operate gas stations 1 concerns have also been raised in the united states regarding zone pricing a company that owns and operates gasoline stations might define price zones where prices for all its stations in the zone are the same it has been suggested that zone pricing is a form of price discrimination and thus is an indicator of market power it has also been argued that zone pricing can be used in an anticompetitive fashion to coordinate pricing and to deter entry through localized price cutting 2 in canada consumers have complained about the perceived uniformity of retail gas prices in some markets and the perception that retailers raise their prices at the same time consumers have also been troubled by the observation that retail gasoline prices in some markets rise faster than they fall 3 concerns have also been voiced regarding interjurisdictional differences in retail prices that do not appear to be cost based indicating to consumers that retail gasoline markets are not competitive 4 possibly in response to public concerns canada s gasoline industry has advanced a competitive theory of gasoline pricing to explain certain perceived features of gas pricing that lead to allegations of collusion or anticompetitive behavior under this theory it is assumed that gas is a homogeneous good consumers are willing to drive long distances to save small amounts of money on gas and prices are perfectly observable by consumers and nearby competitors based on these assumptions it is argued that intramarket prices tend to uniformity individual stations quickly match price changes by certain competitors and price changes pass through an entire market almost immediately in a domino fashion 5 while many complaints have been made regarding how retail gas prices are set and the gasoline industry has offered explanations there are almost no publicly available studies of how prices actually change in urban retail gasoline markets using complete station specific data on intraday price changes over a long period of time such data are simply not available for most urban markets and can only be collected through personal observation of prices or possibly via subpoena of retailers pricing records in the course of a formal investigation even here price data may not be complete yet without such data there exists no formal evidence that the stylized facts that the competitive theory attempts to explain are indeed facts and that pricing behavior is consistent with a theory of anti or procompetitive conduct the purpose of this article was to use gasoline station price data collected eight times per day for 103 d for 27 gas stations in guelph ontario to evaluate the accuracy of the received wisdom regarding gas prices and the implications advanced by the informal theory of competitive gas pricing while the informal competitive theory seems to have been accepted by governments in many instances some jurisdictions remain unconvinced for example the sense that consumers concerns regarding gasoline pricing were not being addressed led the house of legislative assembly of nova scotia to establish an all party committee to investigate gasoline pricing in that province in its report the committee made a number of strong recommendations such as retail divorcement or price regulation if divorcement is rejected a prohibition of petroleum product sales below acquisition cost and that refiners must charge the same rack price to all customers 6 these recommendations are clearly motivated by anxieties regarding possible anti competitive conduct which may or may not be supported by a detailed analysis of retail gasoline pricing data

edgeworth price cycles evidence from the toronto retail gasoline market i exploit a new station level twelve hourly price dataset to examine the strong retail price cycles in the toronto gasoline market the cycles appear similar to theoretical edgeworth cycles strongly asymmetric tall rapid and highly synchronous across stations i test a series of predictions made by the theory about how firm behaviors would differentially evolve over the path of a cycle the evidence is consistent with the existence of edgeworth cycles and inconsistent with competing hypotheses while the cycles are an interesting phenomenon for study in their own right the evidence has important policy and welfare implications

supply and demand elasticities in the u s ethanol fuel market abstract the market for ethanol has grown from approximately 1 2 billion gallons in 1997 to almost 5 billion gallons in 2006 with the huge increase in ethanol demand in recent years the growth in derived demand for corn has driven up many food prices this paper uses monthly data from 1997 2006 to estimate the market supply and demand for ethanol at the national level the simultaneous determination of the supply and demand curves using two stage least squares allows for the calculation of supply and demand side elasticities which are important results in light of the tremendous growth in this market and recent legislation concerning ethanol

higher prices at canadian gas pumps international crude oil prices or local market concentration an empirical investigation there is little consensus on whether higher retail gasoline prices in canada are the result of international crude oil price fluctuations or local market power exercised by large vertically integrated firms i find that although both increasing local market concentration and higher average monthly wholesale prices are positively and significantly associated with higher retail prices wholesale prices are more important than local market concentration similarly crude oil prices are more important than the number of local wholesalers in determining wholesale prices these results suggest that movements in gasoline prices are largely the result of input price fluctuations rather than local market structure

productivity growth in pre 1990 mongolian agriculture spiralling disaster or emerging success the reasons for the spectacular collapse of so many centrally planned economies are a source of ongoing debate in this paper we use detailed farm level data to measure total factor productivity tfp changes in mongolian grain and potato farming during the 14 year period immediately preceding the 1990 economic reforms we measure tfp growth using stochastic frontier analysis sfa and data envelopment analysis dea methods our results indicate quite poor overall performance with an average annual tfp change of 1 7 in grain and 0 8 in potatoes over the 14 year period however the pattern of tfp growth changed substantially during this period with tfp growth exceeding 7 per year in the latter half of this period this suggests that the new policies of improved education greater management autonomy and improved incentives which were introduced in final two planning periods in the 1980s were beginning to have a significant influence upon the performance of mongolian crop farming crown copyright c 2002 published by elsevier science b v all rights reserved

optimal area yield crop insurance reconsidered the implementability of area yield insurance contracts in the presence of symmetric and asymmetric information about the farmer s beta linking his yield to the risk pool s yield is examined in the presence of fixed costs and symmetric information mahul s result that optimality requires setting the slope of the indemnity schedule equal to each farmer s beta is confirmed when there is asymmetric information between the insurer and the farmer however this full insurance contract is vulnerable to adverse selection and therefore may not be implementable for general cost structures the optimal area yield insurance contract under asymmetric information is characterized

price ceilings as focal points to reach price uniformity evidence from a chinese gasoline market abstract this paper studies the price uniformity in the chinese gasoline market using station level data of hohhot city inner mongolia we first document that the mode prices of the gasoline stations are consistent with the price ceilings set by the government implying that the price ceiling regulation in the chinese gasoline market may serve as a focal point for the gasoline stations to reach price uniformity we corroborate the focal point hypothesis by providing evidence showing that some stations would jump to the ceilings as their prices approach the ceilings also we find that local market structure distance between stations station capacity market characteristics and past pricing behavior could affect the probability of gas stations to price at the ceilings moreover a higher price ceiling would reduce the probability that stations reach price uniformity our results provide another piece of evidence to the literature regarding the unintended effect of price ceiling regulation

the design of an optimal insurance policy almost every phase of economic behavior is affected by uncertainty the economic system has adapted to uncertainty by developing methods that facilitate the reallocation of risk among individuals and firms the most apparent and familiar form for shifting risks is the ordinary insurance policy previous insurance decision analyses can be divided into those in which the insurance policy was exogenously specified see john gould jan mossin and vernon smith and those in which it was not see karl borch 1960 and kenneth arrow 1971 1973 in this paper the pioneering work of borch and arrow the derivation of the optimal insurance contract form from the model is synthesized and extended

exogeneity tests of market boundaries applied to petroleum products us antitrust law makes market definition and the calculation of marketshare statistics an integral part of the determination of the anticompetitive impact of a merger because markets frequently overlap however market definition is rarely an easy task a statistical test that can be used as an aid in defining markets is proposed here time series techniques are used to test if price in one region is exogenous to the process that determines price in another the rejection of exogeneity can be an indication that the two regions are economically linked and thus may belong to a common geographic market the test is applied to petroleumproduct prices from various regions of the united states time series techniques have long been appreciated by macroeconomists the uses to which they have been put range from testing for the exogeneity of variables used in the construction of macroeconomic models sims 1972 for example to discovering empirical regularities in macroeconomic data without imposing a priori structure on the observations ashenfelter and card 1982 for example in contrast these techniques have not been so

price dispersion and competition with differentiated sellers i measure price dispersion among differentiated retail gasoline sellers and study the relationship between dispersion and the local competitive environment significant price dispersion exists even after controlling for differences in station characteristics and price differences between sellers change frequently the extent of price dispersion is related to the density of local competition but this relationship varies significantly depending on the type of seller and the composition of its competitors these findings are consistent with interactions between seller and consumer heterogeneity that are not well understood in the existing price dispersion literature

nonlinearities in the u s corn ethanol oil gasoline price system we use a smooth transition vector error correction model to assess price relationships within the u s ethanol industry monthly ethanol corn oil and gasoline prices from 1990 to 2008 are used in the analysis results indicate the existence of long run relationships among the prices analyzed strong links between energy and food prices are identified

the demand for ethanol as a gasoline substitute abstract this paper estimates household preferences for ethanol e85 as a gasoline e10 substitute i develop a theoretical model linking the shape of the ethanol demand curve to the underlying distribution among households of willingness to pay for ethanol i estimate the model using instrumental variables techniques and data from many retail fueling stations i find that a 0 10 per gallon increase in ethanol s price relative to gasoline leads to a 12 16 decrease in the quantity of ethanol demanded my findings imply that preferences for ethanol are heterogeneous and that a substantial fraction of households are willing to pay a premium for the fuel this reduces substantially the simulated efficiency cost of an ethanol content standard since some households choose ethanol without large subsidies mitigating deadweight losses

conjectures firm characteristics and market structure abstract this paper makes use of a unique data set to investigate how firms in the vancouver british columbia retail gasoline market view their rivals and how consumers in turn view these firms own and rival price elasticities of demand conjectural variations and lerner indices are estimated for thirteen service stations in a submarket of vancouver these variables are then related to firm characteristics such as type of ownership degree of horizontal and vertical integration and type of service in this way systematic patterns in seller behavior and in buyer attitudes are revealed

dynamic impacts of high oil prices on the bioethanol and feedstock markets this study investigates the impacts of high international oil prices on the bioethanol and corn markets in the us between 2007 and 2008 the prices of major grain crops had increased sharply reflecting the rise in international oil prices these dual price shocks had caused substantial harm to the global economy employing a structural vector auto regression model svar we analyze how increases in international oil prices could impact the prices of and demand for corn which is used as a major bioethanol feedstock in the us the results indicate that an increase in the oil price would increase bioethanol demand for corn and corn prices in the short run and that corn prices would stabilize in the long run as corn exports and feedstock demand for corn decline consequently policies supporting biofuels should encourage the use of bioethanol co products for feed and the development of marginal land to mitigate increases in the feedstock price

vancouver s gasoline price wars an empirical exercise in uncovering supergame strategies this paper uses a unique data set to determine which dynamic model of tacit collusion best describes behaviour in a particular industry the area investigated is a region of the vancouver british columbia retail gasoline market players are service station managers who compete daily firms choose price in each period using strategies that depend on prices chosen in the previous period periodically unanticipated demand shocks precipitate price wars when shocks occur the firms in the market must determine the new demand conditions and adjust their strategies from an econometric point of view slopes of intertemporal reaction functions are latent variables the resulting system of equations with time varying parameters is estimated via the kalman filter different repeated game oligopoly models correspond to different transition matrices for the latent variables the models can thus be assessed in terms of their power to explain firm behaviour in this market

farm acreage shocks and crop prices an svar approach to understanding the impacts of biofuels the last 10 years have seen tremendous expansion in biofuels production particularly in corn ethanol in the united states at the same time that commodity prices e g corn have experienced significant spikes while supporters claim that biofuels are renewable and carbon friendly concerns have been raised about their impacts on land use and food prices this paper analyzes how us crop prices have responded to shocks in acreage supply these shocks can be thought of as a shock to the residual supply of corn for food using a structural vector auto regression framework we examine shocks to a crop s own acreage and to total cropland this allows us to estimate the effect of dedicating cropland or non crop farmlands to biofuels feedstock production a negative shock in own acreage leads to an increase in price for soybeans and corn our calculations show that increased corn ethanol production during the boom production year 2006 2007 explains approximately 27 of the experienced corn price rise

economic efficiency in polish peasant farming an international perspective one decade following the market transition in poland the agricultural sector still exhibits low productivity policy makers often describe the sector as fragmented and inefficient to understand why small scale farming in poland is inefficient despite longstanding secure property rights a survey of economic efficiency in southern agriculture was conducted and compared with limited studies of efficiency in poland the most important issues particularly related to farm size and efficiency are price risk uncertainty and low rural development comparative studies across regions with varying institutional arrangements and economic organization are powerful but must be made carefully and critically

success and failure of reform insights from the transition of agriculture this paper analyzes the linkages between the reform strategies in transition countries and economic performance the authors focus on agriculture because of the sharpness of the policy changes fundamental differences among countries and relative simplicity of agricultural relationships the authors document post reform performance in the transition countries of asia and europe the authors show how a pricing reform and subsidy reductions b land rights reform and policies that affect farm restructuring and c the presence institutions that facilitate exchange either markets or market substitutes affect output and productivity the paper ends with general lessons on reforms and transition

evidence of the empirical relevance of the infant industry argument for the protection of brazilian ethanol production abstract the infant industry argument for protection of import competing industries has a long and almost entirely theoretical history in the literature in this paper the empirical evidence of infant industry dynamics in the brazilian ethanol industry is investigated in brazil ethanol has developed into a primary automotive fuel over the past 18 years this import substitute is attractive because it allows decreased dependence on international oil supplies while at the same time it addresses environmental concerns because it is a clean burning renewable fuel while ethanol was initially a high cost alternative to imported oil observed cost reductions have led to an increased belief that this industry may in fact warrant the subsidization it has received because of infant industry reasons the results of this study suggest that there is no empirical evidence of economies of scale and very little technical change there appears to be no empirical validity to the infant industry argument for subsidization of the brazilian ethanol industry

spatial competition with changing market institutions summary competition across space can be fundamentally altered by changes in market institutions we propose a framework that integrates market altering policy changes in the spatial analysis of competitive behavior and incorporates endogenous breaks in explanatory variables for spatial panel datasets this paper fills a gap in the literature between work focusing on spatial price responsiveness of agents and work on changes in market regulations that affect competition we apply the framework to an important current fishery management policy to explore how a change from aggregate to individual fishing quotas affects the spatial price responsiveness of fish processors copyright 2012 john wiley sons ltd

taking the dogma out of econometrics structural modeling and credible inference without a doubt there has been a credibility revolution in applied econometrics one contributing development has been in the improvement and increased use in data analysis of structural methods that is the use of models based in economic theory structural modeling attempts to use data to identify the parameters of an underlying economic model based on models of individual choice or aggregate relations derived from them structural estimation has a long tradition in economics but better and larger data sets more powerful computers improved modeling methods faster computational techniques and new econometric methods such as those mentioned above have allowed researchers to make significant improvements while angrist and pischke extol the successes of empirical work that estimates treatment effects based on actual or quasi experiments they are much less sanguine about structural analysis and hold industrial organization up as an example where progress is less dramatic indeed reading their article one comes away with the impression that there is only a single way to conduct credible empirical analysis this seems to us a very narrow and dogmatic approach to empirical work credible analysis can come in many guises both structural and nonstructural and for some questions structural analysis offers important advantages in this comment we address the criticism of structural analysis and its use in industrial organization and consider why empirical analysis in industrial organization differs in such striking ways from that in fields such as labor which have recently emphasized the methods favored by angrist and pischke

an analysis of grain production decline during the early transition in ukraine a bayesian inference the first years of reforms in the former soviet union resulted in a sharp decline in agricultural production between 1989 and 1992 ukrainian gross agricultural product dropped some 20 and the output of grain which is produced mostly in the collective sector went down some 25 world bank several reasons for the fall have been advanced in addition to weather variation across years there was a drop in state deliveries of production inputs especially fertilizer and pesticides world bank the emergence of private opportunities resulted in labor and management migration from the large scale collective system csaki and lerman thus reducing the average labor quality in the sector the ability of farms to produce efficiently was also affected by the transition related break in old production ties and networks blanchard and kremer while all three explanations of production differences between years weather variability input quantities decline and loss of production efficiency are plausible little is known about the relative contribution of these factors to the overall decline in production identifying the reasons for the decline in agricultural output in countries like ukraine is not

can the u s ethanol industry compete in the alternative fuels market the u s ethanol fuel industry has experienced preferential treatment from federal and state governments ever since the energy tax act of 1978 exempted 10 ethanol gasoline blend gasohol from the federal excise tax combined with a 54c gal ethanol import tariff this exemption was designed to provide incentives for the establishment and development of a u s ethanol industry despite these tax exemptions until recently the u s ethanol fuel industry was unable to expand from a limited regional market ethanol was dominated in the market by mtbe methyl tertiary butyl ether only after mtbe was found to contaminate groundwater and consequently banned in many states did the demand for ethanol expand nationally limit pricing on the part of mtbe refiners is one hypothesis that may explain this lack of ethanol entry into the fuel additives market as a test of this hypothesis a structural vector autoregression svar model of the ethanol fuel market is developed the results support the hypothesis of limit pricing behavior on the part of mtbe refiners and suggest the u s corn based ethanol industry is vulnerable to limit price competition which could recur the dependence of the corn based ethanol price on supply determinants limits u s ethanol refiners ability to price compete with sugar cane based ethanol refiners without federal support u s ethanol refiners may find it difficult to compete with cheaper sugar cane refined ethanol chiefly from brazil

the taxation effect on gasoline price asymmetry nexus evidence from both sides of the atlantic this paper explores the degree of competition in various gasoline markets and infers possible causes of price asymmetry across the globe for this purpose we use the dynamic ordinary least square method in order to estimate price asymmetry in twelve european countries and the united states for a sample of weekly observations which spans the period from june 1996 to august 2011 the results indicate the common perception that less competitive gasoline markets exhibit price asymmetry while highly competitive gasoline markets follow a symmetric price adjustment path finally the inclusion of taxes vat and excise tax into retail gasoline prices supports the existence of price asymmetry in many european countries

assessing the impact of us ethanol on fossil fuel markets a structural var approach abstract despite the growing importance of biofuels the effect of biofuels on fossil fuel markets is not fully understood we develop a joint structural vector auto regression var model of the global crude oil us gasoline and us ethanol markets to examine whether the us ethanol market has had any impact on global oil markets the structural var approach provides a unique method for decomposing price and quantity data into demand and supply shocks allowing us to estimate the distinct dynamic effects of ethanol demand and supply shocks on the real prices of crude oil and us gasoline ethanol demand in the us is driven mainly by government support in the form of tax credits and blending mandates shocks to ethanol demand therefore reflect changes in policy more than any other factor in contrast ethanol supply shocks are driven by changes in feedstock prices a principle finding is that a policy driven ethanol demand expansion causes a statistically significant decline in real crude oil prices while an ethanol supply expansion does not have a statistically significant impact on real oil prices this suggests that even though us ethanol market is small the influence of us biofuels policy on the crude oil market is pervasive we also show that ethanol demand shocks are more important than ethanol supply shocks in explaining the fluctuation of real prices of crude oil and us gasoline

do gasoline mergers affect consumer prices the marathon ashland petroleum and ultramar diamond shamrock transaction abstract in 1999 marathon ashland petroleum map acquired the michigan assets of ultramar diamond shamrock uds which increased map s share of terminal storage in michigan from about 16 percent to about 25 percent and increased the share of gasoline stations bearing a map brand from about 16 percent to about 24 percent in this paper we examine whether this acquisition affected the retail price of gasoline we use a difference in differences model to compare price movements in six michigan cities affected by the acquisition with price movements in two nearby cities unaffected by the acquisition using this model we find no evidence that this acquisition led to higher prices for consumers

the pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices abstract crude and refined oil prices have been relatively high and volatile on a sustained basis since 1999 this paper considers the pass through of oil prices into consumer liquid i e petrol diesel and heating fuel prices in such an environment the pass through of oil prices into consumer liquid fuel prices has already been addressed extensively in the literature nonetheless much of this literature has either focused on the united states or on a time period when oil prices were relatively stable or has used monthly data the main contribution of this paper is a comprehensive combination of many features that have been considered before but rarely jointly these features include 1 the analysis of the euro area as an aggregate and a large number of countries the initial 12 member states 2 the consideration of different time periods 3 the modelling of the data in raw levels rather than in log levels this turns out to have important implications for our findings 4 the use of high frequency weekly data which as results will suggest are the lowest frequency one should consider 5 the investigation of the different stages of the production chain from crude oil prices to retail distribution refining costs and margins distribution and retailing costs and margins 6 the examination of prices including and excluding taxes excise and value added 7 the modelling of prices for three fuel types passenger car petrol and diesel separately and home heating fuel oil 8 lastly we also address the issue of possible asymmetries allowing for the pass through to vary according to a whether price are increasing or decreasing and b whether price levels are above or below their equilibrium level the main findings are as follows first as distribution and retailing costs and margins have been broadly stable on average the modelling of the relationship between consumer prices excluding taxes and upstream prices in raw levels rather than in logarithms has important implications for the stability of estimates of pass through when oil price levels rise significantly second considering spot prices for refined prices improves significantly the fit of the estimated models relative to using crude oil prices it also results in more economically meaningful results concerning the extent of pass through third oil price pass through occurs quickly with 90 occurring within three to five weeks fourth using a relatively broad specification allowing for asymmetry in the pass through from upstream to downstream prices there is little evidence of statistically significant asymmetries furthermore even where asymmetry is found to be statistically significant it is generally not economically significant lastly these results generally hold across most euro area countries with few exceptions

market power vertical integration and the wholesale price of gasoline this paper examines empirically the relationship between vertical integration and wholesale gasoline prices we use discrete and differential changes in the extent of vertical integration generated by mergers in west coast gasoline refining and retailing markets to test for incentives to raise rivals costs the research design allows us to test for a relationship between vertical integration and wholesale prices controlling for horizontal market structure cost shocks and trends we find evidence consistent with the strategic incentive to raise competitors input costs this suggests that vertical integration can have a significant impact on wholesale prices

bayesian estimation of technical efficiency of a single input the authors propose estimation of a stochastic production frontier model within a bayesian framework to obtain the posterior distribution of single input oriented technical efficiency at the firm level this method can be used to estimate the environmental efficiency of agricultural production when the technology interaction with the environment is modeled via public inputs such as soil quality and environmental conditions all computations are carried out using markov chain monte carlo methods the approach is illustrated through its application to production data from ukrainian collective farms

toward an optimal u s ethanol fuel subsidy abstract enhanced environmental quality fuel security and economic development along with reduced prices of ethanol gasoline blends are often used as justifications for the u s federal excise tax exemption on ethanol fuels however the possible effect of increased overall consumption of fuel in response to lower total price mitigating the environmental and fuel security benefits are generally not considered taking this price response into account the optimal u s ethanol subsidy is derived estimated values of the optimal subsidy reveal that the subsidy s environmental and security benefits are questionable however positive environmental and security benefits from the ethanol tax exemption subsidy may be obtained if the subsidy is combined with an increase in the excise tax on gasoline

perfect competition urbanization and tax incidence in the retail gasoline market i introduction in applied tax incidence studies it is typically assumed that prices respond one for one to changes in sales and excise taxes chernick and reschovsky 1997 pechman 1985 shepard 1976 state of wisconsin department of revenue 2004 wiese rose and schluter 1995 zupnick 1975 is this assumption reasonable despite the fundamental role of tax incidence in the study of public finance there is surprisingly little empirical analysis that sheds light on who bears the burden of taxes in this article we examine the incidence of state gasoline excise taxes using monthly price data for all 50 states in the united states over the period 1984 1999 our estimation results generally indicate full shifting of gasoline taxes to the final consumer with changes in gasoline taxes fully reflected in the tax inclusive gasoline price almost instantly we also find that the incidence of excise taxes depends on the competitiveness of retail gasoline markets e g urban vs rural markets gasoline markets in urban states typically exhibit full shifting but those in rural states demonstrate somewhat less than full shifting although the issue of sales and excise tax incidence has received considerable attention over the years most research has focused on tax incidence theory and the standard conclusion of much of this theoretical analysis is that consumers bear the full burden of any sales and excise taxes 1 based primarily on this theoretical foundation most applied incidence studies assume that sales and excise taxes are fully reflected in consumer prices and the distribution of tax burdens across income classes necessarily reflects this assumption however actual empirical testing of this assumption of full forward shifting has been surprisingly sparse 2 in important recent research poterba 1996 and besley and rosen 1999 have conducted empirical analyses of the incidence of excise taxes poterba 1996 uses city specific clothing and personal care price data covering the 1947 1977 and the 1925 1939 periods to examine the degree to which state and local retail sales taxes are shifted to consumers with two data sets based on bureau of labor statistics bls city specific consumer price indices using these bls data on tax inclusive prices poterba 1996 constructs quarterly price indices for each of 28 standard metropolitan statistical areas smsas many of these 28 smsas experienced significant changes in sales tax rates and poterba 1996 uses these tax shocks to determine the incidence of sales taxes his estimation results are somewhat variable but in general he finds for the postwar period that taxes are fully shifted to consumers in some cases he finds limited evidence of overshifting although it is never possible to reject the null hypothesis that prices rise point for point with the changes in the tax and he also finds that full shifting typically though not always occurs in the first quarter of the tax change poterba 1996 also examines tax incidence for individual smsas during the depression era and his results indicate significant differences across metropolitan areas in the degree of tax shifting for example prices on women s clothing in chicago show significant overshifting but atlanta shows negative shifting a result that does not seem plausible besley and rosen 1999 also examine the incidence of sales taxes using price data for 12 narrowly defined commodities in 155 different u s cities using quarterly price data for the period 1982 1990 issued by the american chamber of commerce researchers association accra 3 they not only find full shifting for a number of commodities but also find overshifting for more than half the products a result they attribute to imperfect competition in the retail sector while this recent empirical research has significantly expanded our understanding of the actual nature of sales and excise tax incidence we believe that our work here on gasoline excise taxes makes several contributions to the empirical literature

bayesian estimation of possibly similar yield densities implications for rating crop insurance contracts the agricultural act of 2014 solidified insurance as the cornerstone of u s agricultural policy the congressional budget office 2014 estimates that this act will increase spending on agricultural insurance programs by 5 7 billion to a total of 89 8 billion over the next decade in light of the sizable resources directed toward these programs accurate rating of insurance contracts is of the utmost importance to producers private insurance companies and the federal government unlike most forms of insurance agricultural insurance is plagued by a paucity of spatially correlated data a novel interpretation of bayesian model averaging is used to estimate a set of possibly similar densities that offers greater efficiency if the set of densities are similar while seemingly not losing any if the set of densities are dissimilar simulations indicate that finite sample performance in particular small sample performance is quite promising the proposed approach does not require knowledge of the form or extent of any possible similarities is relatively easy to implement admits correlated data and can be used with either parametric or nonparametric estimators we use the proposed approach to estimate u s crop insurance premium rates for area type programs and develop a test to evaluate its efficacy an out of sample game between private insurance companies and the federal government highlights the policy implications for a variety of crop state combinations consistent with the simulation results the performance of the proposed approach with respect to rating area type insurance in particular small sample performance remains quite promising

empirical investigation of retail fuel pricing the impact of spatial interaction competition and territorial factors abstract this paper explores the determinants of fuel prices by proposing an empirical framework that integrates three kinds of influencing factors spatial interaction competition and territorial factors for competition we define a general variable the presence of competing stations within a radius and two specific variables the presence of low cost stations and the presence of same brand stations we proceed with a step wise adjustment of the radius by gradually increasing it to evaluate the spatial scope of different competition effects using data on prices of fuel stations in rome italy we estimate spatial econometric models that provide evidence of spatial dependence in price between stations we also find that competition affects prices but the relevance of its impact depends on radius length finally the territorial factors remarkably influence prices if these factors are introduced in the model the magnitude of spatial parameters weakens allowing to accurately assess the intensity of spatial dependence

sell or not sell biodiesel local competition and government measures the introduction of biofuels is one of the objectives of the european union for this reason measures to promote the production and consumption of this product have been implemented such as tax exemptions fixing a minimum amount of mixture or the introduction of public transport that consume biofuels in this paper we test different factors that can affect the introduction of biodiesel in the spanish gasoline market these factors are mainly the level of local competition technical difficulties and local government action empirical evidence shows that a higher level of competition more buses that consume biodiesel and a lower adjustment costs increase significantly the probability of sell biodiesel at service stations these results show how the promotion of competition and public procurement of vehicles can improve the commercialization of biofuels

a treatment effect method for merger analysis with an application to parking prices in paris we propose a method of building control groups for retrospective merger evaluation the procedure involves two parameters a distance or radius and an order of exposure reflecting the notion that a merger can affect an outlet in a more or less direct way we implement the method of estimating the price effect of a merger in the paris parking market and illustrate the consequences of including indirectly exposed outlets in the control group the methodology applies to any industry with spatial competition and allows one to check the sensitivity of the results to the choice of the control group

systemic risk reinsurance and the failure of crop insurance markets without affordable reinsurance private crop insurance markets are doomed to fail because systemic weather effects induce high correlation among farm level yields defeating insurer efforts to pool risks across farms using an empirical model of the u s crop insurance market we find that u s crop insurer portfolios are twenty to fifty times riskier than they would be otherwise if yields were stochastically independent across farms we also find that area yield reinsurance contracts would enable crop insurers to cover most of their systemic crop loss risk reducing their risk exposure to levels typically experienced by more conventional property liability insurers copyright 1997 oxford university press

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers